Citation Nr: 1317951	
Decision Date: 06/03/13    Archive Date: 06/11/13

DOCKET NO.  11-24 912	)	DATE
	)
	)

Received from the
Department of Veterans Affairs Regional Office in St. Petersburg, Florida


THE ISSUE

Entitlement to waiver of recovery of an overpayment of special monthly pension benefits based on the need for aid and attendance in the amount of $46,686.00.


REPRESENTATION

Veteran represented by:	The American Legion


WITNESSES AT HEARING ON APPEAL

Veteran and B.B.


ATTORNEY FOR THE BOARD

S. Becker, Associate Counsel


INTRODUCTION

The Veteran served on active duty from October 1950 to October 1952.

This matter comes before the Board of Veterans' Appeals (Board) from a February 2011 decision of the Department of Veterans Affairs (VA) Committee on Waivers and Compromises in Philadelphia, Pennsylvania.  The Veteran's request that recovery of his overpayment in the amount of $46,686.00 be waived was denied therein.  He appealed.

In February 2013, the Veteran testified regarding this matter before the undersigned Veterans Law Judge at a Travel Board hearing.  His sister B.B., who also is his power of attorney, also testified.

The following determination is made based on review of the Veteran's claims file, which was received from the VA Regional Office (RO) in St. Petersburg, Florida, and his Virtual VA "eFolder."  Please note that this matter has been advanced on the Board's docket in light of the Veteran's age.  38 U.S.C.A. § 7107(a)(2); 38 C.F.R. § 20.900(c).

The issue of entitlement to special monthly pension based on the need for aid and attendance has been raised anew by the record as of a February 2011 statement from a private rehabilitation and extended care facility.  It has not been adjudicated by the Agency of Original Jurisdiction (AOJ), which in this case is the RO, yet.  Therefore, the Board does not have jurisdiction over it.  The issue accordingly is referred to the AOJ/RO for appropriate action.


FINDING OF FACT

The Veteran's overpayment, whether $46,686.00 or a lower amount, was not due to fraud, misrepresentation, or bad faith.  The significant fault he bears in creating it is outweighed by the undue hardship he would face to repay it.


CONCLUSION OF LAW

Recovery of an overpayment of special monthly pension benefits based on the need for aid and attendance, whether in the amount of $46,686.00 or some lower amount, would be against equity and good conscience.  38 U.S.C.A. § 5107, 5302 (West 2002); 38 C.F.R. §§ 3.102, 1.962, 1.963, 1.965 (2012).


REASONS AND BASES FOR FINDING AND CONCLUSION

I.  Duties to Notify and Assist

Before addressing the merits, the Board notes that VA has a duty to notify claimants submitting a claim for VA benefits.  38 U.S.C.A. §§ 5103, 5103A; 38 C.F.R. § 3.159.  Discussion of these duties is not necessary here, however.  They indeed are not applicable with respect to a claim for waiver of recovery of an overpayment.  Barger v. Principi, 16 Vet. App. 132 (2002).  Nevertheless, general due process considerations apply.  38 C.F.R. § 3.103.  These include notifying the Veteran of the decision made and affording him the opportunity to present information and evidence.  Such was done here.  To the extent there was any error in this regard, it was harmless.  Waiver of recovery of the overpayment indeed is granted herein.  The benefit sought is allowed, in other words.

II.  Waiver of Recovery of Overpayment

Pension benefits, to include special monthly pension based on the need for aid and attendance, are payable to a Veteran of a period of war who is permanently and totally disabled due to nonservice-connected disabilities.  38 U.S.C.A. § 1521.  These benefits are payable at certain rates reduced by the amount of the Veteran's annual income.  Id.  Payments of any kind from any source will be counted as income during the period in which received unless specifically excluded.  38 U.S.C.A. § 1503(a); 38 C.F.R. § 3.271(a).  Unreimbursed medical expenses in excess of five percent of the maximum annual pension rate (MAPR) are deducted from income.  38 C.F.R. § 3.272(g).  In light of the aforementioned, the Veteran is required to report to VA in writing any material change or expected change in net worth, income, or other circumstance that affects the payment of pension.  38 U.S.C.A. § 1506(3); 38 C.F.R. §§ 3.277(b), 3.660(a).  The Veteran also is required to report unreimbursed medical expenses.

An overpayment is created when a payee Veteran has received monetary benefits to which he is not entitled.  38 C.F.R. § 1.962.  Overpayments created by the retroactive discontinuance of benefits will be subject to recovery from the debtor Veteran unless waived.  38 C.F.R. § 3.660(a)(3).

Prior to consideration of waiver, any challenge raised concerning either the existence of or the amount of an overpayment must be resolved.  38 C.F.R. § 1.911(c)(1); Schaper v. Derwinski, 1 Vet. App. 430 (1991).  Waiver of recovery of an overpayment is precluded if there is an indication of fraud, misrepresentation, or bad faith on the part of the debtor Veteran or another interested person.  38 U.S.C.A. § 5302(c); 38 C.F.R. § 1.965(b); Ridings v. Brown, 6 Vet. App. 544 (1994).  In contrast, recovery must be waived if it would be against equity and good conscience.  38 U.S.C.A. § 5302(a).  Equity and good conscience means arriving at a fair decision between the debtor Veteran and the government.  38 C.F.R. § 1.965(a).  In making a determination in this regard, all relevant factors shall be considered.  Such factors include:  (1) whether the actions of the debtor Veteran contributed to the creation of the debt, (2) balancing, or weighing, of the debtor Veteran's fault against that of VA, (3) whether recovery would pose an undue hardship depriving the debtor or his family of basic necessities, (4) whether recovery would defeat the purpose, or nullify the objective, for which benefits were intended, (5) whether failure to recover would result in unjust enrichment, or unfair gain, to the debtor Veteran, and (6) whether the debtor Veteran changed position to his detriment, such as relinquishment of a valuable right or incurrence of a legal obligation, due to his reliance on benefits.  38 C.F.R. § 1.965(a).

The Veteran prevails if the evidence supports his claim or is in relative equipoise but does not prevail when it is against his claim.  38 U.S.C.A. § 5107; 38 C.F.R. § 3.102; Gilbert v. Derwinski, 1 Vet. App. 49 (1990).  As such, The Board must explain what evidence it finds to be persuasive and unpersuasive and explain why any evidence favorable to the Veteran is unpersuasive.  Gabrielson v. Brown, 7 Vet. App. 36 (1994), Masors v. Derwinski, 2 Vet. App. 181 (1992); Wilson v. Derwinski, 2 Vet. App. 614 (1992); Hatlestad v. Derwinski, 1 Vet. App. 164 (1991); Gilbert, 1 Vet. App. at 49.  Only the most relevant evidence is discussed by the Board herein, however, even though all the evidence has been reviewed.  Gonzales v. West, 218 F.3d 1378 (Fed. Cir. 2000).

Neither the Veteran, his representative, nor B.B. specifically has asserted that there is no overpayment here.  They also have not specifically asserted that the amount of the overpayment is $46,686.00.  Yet the Board finds that this amount is likely incorrect.  One example is particularly notable in this regard.  

Special monthly pension benefits based on the need for aid and attendance were paid to the Veteran throughout 2008.  Their termination was proposed in May 2009 and ultimately undertaken in June 2010, going into effect retroactively as of January 1, 2008, because he was receiving more income and paying less for unreimbursed medical expenses than originally thought based on what was reported.  His verified income for 2008, composed of $2,399.00 per month in a work pension and $195.50 per month from Social Security for an annual total of $31,134.00, was set forth.  So was the fact that identified unreimbursed medical expenses for assisted living, foster home sponsor, and private insurance totaling $28,769.00 could not be deducted therefrom.  It was noted that not enough information, particularly the payment date, was provided regarding them.

Notwithstanding this lack of information, it had been verified that the Veteran resided at two assisted living facilities from February to November 2008.  The fees for these facilities also were verified as $2,500.00 for each of three months at one and as $20,335.21 for all months at the other for a total of $27,835.21.  Further, it was known that the Veteran's premium for Social Security supplementary insurance was approximately $168.50 per month in 2008.  This brings his 2008 unreimbursed medical expenses to at least around $29,857.21.  Such expenses must be excluded from his income since they are far in excess of five percent of the 2008 MAPR for a Veteran with no dependents of $11,181.00.  VA Manual M21-1, Part I, Appendix B.  This yields a figure of $1,276.79.  In sum, it appears that enough already was known to conclude the Veteran's 2008 income was far less than the MAPR for 2008.  It follows that he likely was eligible for benefits then.  Their termination, if he was eligible, then was erroneous.

A recalculation of the amount of overpayment, accounting for the aforementioned as well as any other errors, thus is merited.  However, directing recalculation would require a remand.  Remands which unnecessarily impose additional burdens on VA with no benefit flowing to the claimant are to be avoided.  Sabonis v. Brown, 6 Vet. App. 426 (1994); Soyini v. Derwinski, 1 Vet. App. 540 (1991).  A remand here imposes unnecessary burdens on VA because, regardless of whatever lower amount of overpayment was recalculated, the Board finds that waiver of recovery is warranted.  As such, recalculating the amount of overpayment would not be of any additional benefit to the Veteran.

As the Veteran's power of attorney, B.B. is an interested person.  No indication of fraud, misrepresentation, or bad faith was found below on the part of the Veteran or B.B.  None is found by the Board.  There is, in short, no suggestion that the Veteran or B.B. have been underhanded in any way.  Waiver of recovery of his overpayment, whether $46,686.00 or a lower amount, therefore is not precluded.

Recovery of the overpayment rather would be against equity and good conscience.  It is true that the Veteran, through B.B., contributed substantially to the creation of the overpayment.  Some information on his income and unreimbursed medical expenses was supplied.  However, it was somewhat inaccurate.  More information thus was needed to determine his continued eligibility for special monthly pension benefits based on the need for aid and attendance.  Enough information may already have been available to determine he was eligible for 2008, as discussed above, but he was obligated to supplement it anyhow.  It further appears that enough information was not available following 2008.  The Veteran and B.B. were made aware of the responsibility to provide updated information on his income and unreimbursed medical expenses at the time his benefits were awarded.  Complete information was requested after he and B.B. provided only partial information.  This request was to no avail.  In contrast to the Veteran and B.B., VA did not contribute to the creation of the overpayment.  Any fault on VA's part, as discussed above, rather relates to the amount of the overpayment.

It also is true that recovery would not obviate the purpose or objective for which special monthly pension benefits based on the need for aid and attendance are intended.  Such benefits are meant to provide income for a wartime Veteran who required a great deal of assistance to manage daily living because of his health, cannot earn an income because of his health, and does not otherwise receive much income.  To the extent there is an overpayment to be recovered, it is because the Veteran did not meet all of these requirements.  His health still was such that he required a great deal of assistance and cannot earn an income, but he otherwise received more income than allowable.  Overpayment recovery, to reiterate the above, is required largely because of the failure of the Veteran and B.B. to submit complete information.  Had they submitted complete information in a timely manner, his benefits would have been terminated when he became ineligible to receive them.  It follows that not recovering the overpayment would unjustly enrich the Veteran, since he gained financially in receiving benefits he should not have received. Of further import is that nothing suggests he changed position to his detriment because of his reliance on his benefits.  The only change shown is that he has switched care facilities.  However, receipt of benefits resulting in the ability to afford a more costly and presumably better facility has not been identified as the reason for any of these switches.  Suitability instead specifically was mentioned for one switch.

Overriding the aforementioned factors, recovery of the overpayment would pose an undue hardship.  It was determined below that undue hardship could not be found since only incomplete information had been submitted.  Yet it is clear based on the available information that recovery would deprive the Veteran of basic necessities.  A February 2011 letter from the office manager of a private care facility indicates that the Veteran has been a resident since May 2010.  It further indicates that all of his income less $35.00 per month goes to the facility.  The Veteran confirmed this via a March 2011 statement.  B.B. reported that he had just over $2,000.00 in checking and savings accounts at the end of 2008.  As of late 2010 and early 2011, banking statements reveal that the Veteran had less than $2,000.00 in checking and savings accounts.  He consistently has related that he does not have stocks or bonds and does not own real property, an automobile, or any other valuable property.  B.B. finally testified that she uses his $35.00 monthly allotment to help defray the cost of wheelchair transportation for him.  The Veteran thus has no funds available with which he could pay down on the overpayment.  All indications are that this will continue to be his situation.  He currently is not in receipt of any benefits from VA, and may not be in the future despite the referral made herein.  Recovery of the overpayment therefore cannot be achieved simply by withholding future benefit payments.

Recovery of the overpayment, as it would be against equity and good conscience, must be waived.  This determination is not unduly favorable to the Veteran and is not unduly adverse to VA, a government entity.  It is fair, in other words.  Consideration has been given to reasonable doubt in making the aforementioned determination.  However, it does not apply because it was based on the preponderance of the evidence.  Waiver of recovery of the Veteran's overpayment of special monthly pension benefits based on the need for aid and attendance, regardless of the amount, is granted.


ORDER

Waiver of recovery of an overpayment of special monthly pension benefits based on the need for aid and attendance, whether in the amount of $46,686.00 or some lower amount, is granted.



____________________________________________
F. JUDGE FLOWERS
Veterans Law Judge, Board of Veterans' Appeals


Department of Veterans Affairs