Citation Nr: 1320003 Decision Date: 06/21/13 Archive Date: 07/02/13 DOCKET NO. 05-32 172 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Winston-Salem, North Carolina THE ISSUE Whether an overpayment of VA compensation benefits in the amount of $3,319.84 was properly created. (The issues of entitlement to higher initial disability ratings for service-connected disabilities and entitlement to service connection for chest pain are addressed in a separate decision). REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD C.L. Krasinski, Counsel INTRODUCTION The Veteran served on active duty from January 1981 to July 2004. He returned to active duty status on October 30, 2006. This matter comes before the Board of Veterans' Appeals (Board) on appeal of a June 2007 determination by the Department of Veterans Affairs (VA) Regional Office (RO) in Winston-Salem, North Carolina, that terminated the Veteran's VA compensation benefits from June 28, 2006. The Veteran filed a notice of disagreement in June 2008. A statement of the case was issued in April 2009. The Veteran filed a substantive appeal and requested a hearing before the Board in May 2009. In April 2012, the Veteran indicated that he wished to cancel his hearing request. Thus, the hearing request is withdrawn. See 38 C.F.R. § 20.704 (2012). A review of the Virtual VA paperless claims processing system does not reveal any additional documents pertinent to the present appeal. FINDINGS OF FACT 1. The Veteran was called to active duty on October 30, 2006. 2. For the period from October 30, 2006 to May 31, 2007, the Veteran was on active duty and received VA compensation benefits to which he was not entitled, because he was also in receipt of active service pay during that same period. CONCLUSION OF LAW The overpayment of compensation benefits in the current amount of $3,319.84 was properly created. 38 U.S.C.A. §§ 5302, 5304, 5112 (West 2002); 38 C.F.R. §§ 1.962, 3.501, 3.654 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Duty to Notify and Assist The Veterans Claims Assistance Act of 2000 (VCAA) enhanced VA's duty to notify and assist claimants in substantiating a claim for VA benefits, as codified in pertinent part at 38 U.S.C.A. §§ 5103, 5103A, 5107, 5126; 38 C.F.R. §§ 3.102, 3.159, 3.326(a). The Board notes that the provisions of law and regulations which set forth notice and assistance requirements on the part of VA, in the adjudication of certain claims, are not applicable to claims involving the validity of the creation of an overpayment of compensation benefits or requests for waiver of recovery of overpayments. Lueras v. Principi, 18 Vet. App. 435 (2004); Barger v. Principi, 16 Vet. App. 132 (2002). II. Analysis The Veteran contends that the overpayment in this case was not validly created. He essentially argues that the overpayment indebtedness that VA initially calculated was not proper because VA calculated the overpayment from June 28, 2006. The Veteran asserts that he returned to active duty on October 30, 2006. See the Veteran's statements dated in June 2007, June 2008, and August 2008. The preliminary issue of the validity of a debt is a threshold determination that must be made in a benefits overpayment debt collection matter. Schaper v. Derwinski, 1 Vet. App. 430 (1991). An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.962. For a determination that the overpayment was not properly created, such that the debt was not valid, it must be established that the appellant was either legally entitled to the benefits in question or, if the appellant was not legally entitled, then it must be shown that VA was solely responsible for the appellant being erroneously paid benefits. The effective date of discontinuance of pension or compensation to or for a Veteran due to active service pay will be the day preceding entrance on active duty. 38 U.S.C.A. § 5112(b)(3) (West 2002); 38 C.F.R. § 3.501(a). Pension, compensation, or retirement pay on account of any person's own service shall not be paid to such person for any period for which such person receives active service pay. 38 U.S.C.A. § 5304(c). In general, pension, compensation, or retirement pay will be discontinued under the circumstances stated in § 3.700(a)(1) for any period for which the Veteran received active service pay. For the purposes of this section, active service pay means pay received for active duty, active duty for training or inactive duty training. Where the Veteran returns to active duty status, the award will be discontinued effective the day preceding reentrance into active duty status. If the exact date is not known, payments will be discontinued effective date of last payment and as of the correct date when the date of reentrance has been ascertained from the service department. Payments, if otherwise in order, will be resumed effective the day following release from active duty if claim for recommencement of payments is received within 1 year from the date of such release: otherwise payments will be resumed effective 1 year prior to the date of receipt of a new claim. Prior determinations of service connection will not be disturbed except as provided in § 3.105. Compensation will be authorized based on the degree of disability found to exist at the time the award is resumed. Disability will be evaluated on the basis of all facts, including records from the service department relating to the most recent period of active service. If a disability is incurred or aggravated in the second period of service, compensation for that disability cannot be paid unless a claim therefore is filed. In regard to training duty, prospective adjustment of awards may be made where the Veteran waives his or her Department of Veterans Affairs benefit covering anticipated receipt of active service pay because of expected periods of active duty for training or inactive duty training. Where readjustment is in order because service pay was not received for expected training duty, retroactive payments may be authorized if a claim for readjustment is received within 1 year after the end of the fiscal year for which payments were waived. 38 C.F.R. § 3.654. Not more than one award of pension, compensation, or emergency officers', regular or reserve retirement pay will be made concurrently to any person based on his or her own service except as provided in § 3.803 relating to naval pension and § 3.750(c) relating to waiver of retirement pay. Not more than one award of pension, compensation, or dependency and indemnity compensation may be made concurrently to a dependent on account of more than one period of service of a Veteran. Pension, compensation, or retirement pay on account of his or her own service will not be paid to any person for any period for which he or she receives active service pay. 38 C.F.R. § 3.700. In an October 2004 rating decision, the RO granted service connection for right shoulder osteophytosis, lateral epicondylitis of the right elbow, recurrent left ankle sprain, and recurrent right ankle sprain; 10 percent ratings were assigned to each disability from August 1, 2004. Service connection was also granted for degenerative changes of the lumbar spine disability, retropatellar pain syndrome of the right knee, degenerative changes of the left knee, left shoulder osteophytosis, sinusitis, gastritis, bilateral plantar fasciitis and pes cavus, tinea pedis with a scar, eczema, right epididymitis, and carpal tunnel syndrome of the right wrist. Noncompensable ratings were assigned to these disabilities. The Veteran's combined rating from August 1, 2004 was 40 percent. It is undisputed that the Veteran was on active duty from January 1981 to July 2004. Service records show that the Veteran was recalled to active duty effective October 30, 2006. However, in an April 2007 letter, the RO notified the Veteran that it had received information from the Department of Defense that the Veteran returned to active duty on June 28, 2006. The RO informed the Veteran that his compensation payments would be terminated effective June 28, 2006. The RO noted that the total monthly amount that had been paid to the Veteran from June 28, 2006 was $664.00 and the total monthly amount paid to the Veteran from December 1, 2006 was $685.00. The RO informed the Veteran that this may result in an overpayment of benefits. In April 2007, a formal notice was sent to the Veteran from the Department of Treasury. The notice informed the Veteran that he owed $9,639.56. It is not clear from this notice whether this amount included only the overpayment of VA compensation benefits or additional indebtedness. In an April 2009 statement of the case, the RO informed the Veteran that they corrected their records and terminated the Veteran's benefits from October 30, 2006, In an April 2010 letter, the RO informed the Veteran that the amount of his overpayment had been revised and the current amount of his overpayment indebtedness is $3,319.84. The RO indicated that the Veteran was paid the total monthly rate of $664.00 from October 30, 2006 to November 30, 2006 and was paid the total monthly rate of $685.00 from December 1, 2006 to May 31, 2007. The RO indicated that this totaled $4,796.13. The RO subtracted the amount of $1,476.29 which was the amount the Treasury Department collected and the total overpayment balance was $3,319.84 ($4,796.13 - $1,476.29 = $3,319.84). The Board finds that the overpayment indebtedness was properly created. For the overpayment period, the Veteran was paid $4,796.13 in VA disability compensation when he should not have been in receipt of any disability compensation, for the reason that he reentered active service on October 30, 2006 and was thereafter concurrently receiving active service pay and VA disability compensation until May 31, 2007. This is prohibited by law. See 38 U.S.C.A. § 5304(c); 38 C.F.R. §§ 3.654, 3.700. Thus, an overpayment of $4,796.13 was created because he was paid compensation to which he was not legally entitled. The Board finds that the RO's action to retroactively terminate the Veteran's disability compensation effective October 30, 2006, the date the Veteran re-entered active duty was thereby proper. The Board also finds that the amount of the overpayment indebtedness is proper. The Veteran was paid the total monthly rate of $664.00 from October 30, 2006 to November 30, 2006; the total amount paid for that time period was $686.13 (664 + 22.13 (rate for one day) = 686.13). The Veteran was paid the total monthly rate of $685 from December 1, 2006 to May 31, 2007 which totals $4,110.00 (685 x 6 = 4110). The total amount of benefits paid to the Veteran was $4,796.13. The RO subtracted the amount collected by the Treasury Department which was $1,476.29 and the total overpayment balance was $3,319.84 (4,796.13 - 1,476.29 = 3,319.84). The Board notes that in the April 2010 letter, the RO indicated that the total amount of VA benefits paid to the Veteran from December 1, 2006 to May 31, 2007 was $3,984.00. This is incorrect as the total amount of VA benefits paid to the Veteran for this time period was $4,110.00 (685 x 6 = 4,110). It appears that the RO used the monthly benefits amount of $664 for calculating the benefits paid for this time period when the correct amount of the total monthly benefits paid for this time period was $685. However, the RO used the correct calculations when it calculated that the subtotal of benefits paid to the Veteran was $4,796.13 ( 4110 + 686.13 = 4796.13). Thus, the calculation error in the April 2010 letter was harmless error and the RO arrived at the proper amount for the balance of the overpayment indebtedness. In conclusion, the Board finds that the overpayment at issue in this case was properly created and is a valid debt. The Board also finds that the amount of the overpayment indebtedness is proper. A preponderance of the evidence is therefore against the claim and the appeal is denied. 38 U.S.C.A. § 5107(b). ORDER The creation of an overpayment of VA compensation benefits, in the current amount of $3,319.84, was proper, and the appeal is denied. ____________________________________________ K. J. ALIBRANDO Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs