Citation Nr: 1324459 Decision Date: 08/01/13 Archive Date: 08/13/13 DOCKET NO. 12-04 152 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Jackson, Mississippi THE ISSUE Entitlement to a waiver of the recovery of an overpayment of VA compensation benefits in the principal amount of $41,794.00, to include the validity of the debt. REPRESENTATION Veteran represented by: Veterans of Foreign Wars of the United States WITNESS AT HEARING ON APPEAL The Veteran ATTORNEY FOR THE BOARD Kristy L. Zadora, Counsel INTRODUCTION The Veteran had active duty service from June 1971 to June 1973. This matter comes before the Board of Veterans' Appeals' (Board) on appeal from an August 2010 administrative decision issued by the Committee on Waivers and Compromises (Committee) at the Milwaukee, Wisconsin Regional Office (RO). In April 2013, the Veteran testified before the undersigned Veterans Law Judge at hearing at the RO (Travel Board). The Board notes that, in additional to the paper claims file, there is a paperless, electronic (Virtual VA) claims file associated with the Veteran's claim. A review of the Virtual VA claims processing system reveals a copy of the transcript from the April 2013 hearing. Please note this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2012). 38 U.S.C.A. § 7107(a)(2) (West 2002). The appeal is REMANDED to the RO via the Appeals Management Center (AMC), in Washington, D.C. VA will notify the Veteran if further action is required. REMAND Before a decision can be made on whether the Veteran is entitled to a waiver of recovery of the assessed overpayment, it must be determined whether or not the overpayment was properly calculated. See Schaper v. Derwinski, 1 Vet. App. 430, 434 (1991). In general, waiver determinations, which do not involve fraud, misrepresentation, or bad faith by the claimant, should be waived only when it is shown that the recovery would be against the principles of equity and good conscience. 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. § 1.963 (2012). The Board emphasizes that waiver decisions are based upon the evidence of record, which, in essence, places the burden of proof upon the claimants. See 38 C.F.R. § 1.966 (2012). Preliminary review of the current evidentiary record in this case reveals a July 2004 letter to the Veteran indicating that he owed $41,794.00 as his entitlement to Compensation and Pension benefits had changed. An August 2010 administrative decision denied the Veteran's request for a waiver of this debt on the basis of an untimely waiver application. The Veteran argues that repayment of this debt would create a financial hardship for him as he was homeless and had no income. In addition, the Board notes that while the Veteran believes this indebtness was created by earning income in 2000, it is not clear from the current record how this debt was purported to have been created. The United States Court of Appeals for Veterans Claims (Court) has held that when the validity of the debt is challenged, a threshold determination must be made on that question prior to a decision on the waiver of indebtedness. See Schaper, supra. A debtor may dispute the amount or existence of a debt, which is a right that may be exercised separately from a request for waiver or at the same time. See 38 C.F.R. § 1.911(c)(1); see also VAOPGCPREC 6-98. The propriety and amount of the overpayment at issue are matters that are integral to a waiver determination. See Schaper, 1 Vet. App. at 434. As such, the Board believes that further action by the Committee to determine whether the creation of the debt at issue was proper and, if so, the correct amount is needed prior to further appellate consideration. Thus, the Board finds that additional development is necessary before the Board may proceed with further appellate review. It appears that some of the assessed indebtedness in question may have been recouped. Nevertheless, in accordance with Franklin v. Brown, 5 Vet. App. 190 (1993), the Board must consider the entire amount calculated. Moreover, there is no audit in the record showing how the debt was calculated or indicating the amount of any repayments for the period in question. Consequently, if the debt is determined to be valid, the Veteran should be asked to submit a current financial status report (FSR). In its June 2011 statement of the case, the RO indicated that VA received the Veteran's waiver request in July 2010. The July 2004 letter to the Veteran notifying him of his indebtness referred to another letter that had explained that his benefits had changed and presumably detailed how this debt was created However, neither document is contained in the current record. Thus, the RO should contact the VA's Debt Management Center (DMC) to obtain notice issued by the DMC of the overpayment at issue, including notice of the amount and cause of the overpayment. If such a letter of notification of indebtedness is unavailable, documentation confirming the date the notice of the debt was sent to the Veteran and certification that the notice was not returned as undeliverable should be obtained. Accordingly, the case is REMANDED for the following action: (Please note, this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2012). Expedited handling is requested.) 1. Ensure that the VA Debt Management Center (DMC) has sent a letter to the Veteran notifying him of the amount of the overpayment incurred and his right to request a waiver. The RO should obtain and associate with the claims file copies of all outstanding records related to the matter on appeal as held by the DMC, to include a copy of any notice letter to the Veteran concerning the amount and cause of any overpayment incurred and his right to request a waiver as well as his July 2010 waiver request. If such a letter of notification of indebtedness is not available, then a certification from the DMC indicating the date of the demand letter, which contained the Veteran's notice of appellate rights, as well as when and where it was sent and whether it was returned as undeliverable, should be obtained and associated with the claims file. 2. A written paid and due audit of the Veteran's account for the period of the overpayment should be performed. This audit should reflect, on a month-by-month basis, the amounts actually paid to the Veteran, as well as the amounts properly due. In addition, the audit should include the amount of the overpayment, if any, that may have been repaid by the Veteran. A copy of the written audit should be inserted into the claims file and another provided to the Veteran and his representative. 3. After completion of the above development, as well as any other action deemed necessary, adjudicate the issue of whether the overpayment of disability compensation at issue was properly created, including consideration of whether any of the debt was due to sole VA administrative error, and the amount of any overpayment. A comprehensive explanation of the reasons and bases for that decision should be prepared and incorporated into the claims file, to include a discussion of any information obtained from the DMC and the Veteran. If it is determined that any or all of the overpayment at issue was improperly created, award action should be taken to rectify the error. In any case, the Veteran and his representative should be informed of the decision made and should be allowed the requisite period of time for a response. 4. Thereafter, if an overpayment is found to have been properly created, the Veteran should be allowed an opportunity to submit additional evidence pertinent to his request for waiver of recovery of the assessed overpayment, including a current and complete FSR, providing all current income, expenses, and assets. The Veteran is reminded that to obtain appellate review of any issue not currently in appellate status (that is, the validity of the debt), a timely appeal must be perfected. While VA must afford the Veteran and his representative the appropriate time period in which to respond, the appellant should perfect an appeal with respect to the validity of the debt, if desired, as soon as possible to avoid unnecessary delay in the consideration of the appeal. 5. After the actions requested above have been completed, the Committee should review the record and reconsider the Veteran's request for waiver pursuant to the principals of equity and good conscience. A formal, written record of the Committee's decision, including an analysis of the various elements to be considered, should be prepared and placed in the claims file. A supplemental statement of the case (SSOC) is not the appropriate means for accomplishing this task, under proper appellate guidelines. 6. If the Committee's determination remains unfavorable to the Veteran, both he and his representative should be furnished an SSOC, which specifically addresses the issue of creation of the overpayment and which contains a recitation of the pertinent law and regulations governing the issue of proper creation, including 38 U.S.C.A. § 5112; 38 C.F.R. § 1.965(a). This document should further reflect detailed reasons and bases for the decision reached. The Veteran and his representative should be afforded the opportunity to respond thereto; thereafter, the case should be returned to the Board for further appellate consideration, if otherwise in order. The Veteran has the right to submit additional evidence and argument on the matter the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2012). _________________________________________________ MARJORIE A. AUER Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2012).