Citation Nr: 1324627 Decision Date: 08/02/13 Archive Date: 08/13/13 DOCKET NO. 10-40 669A ) DATE ) ) Received from the Department of Veterans Affairs Regional Office in Chicago, Illinois THE ISSUE Whether the creation of an overpayment of educational assistance benefits is valid. WITNESS AT HEARING ON APPEAL Appellant ATTORNEY FOR THE BOARD M. Hannan, Counsel INTRODUCTION The Veteran appellant served on active duty in the United States Air Force from April 1997 to April 2001. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a June 2010 determination issued by the Department of Veterans Affairs (VA) Education Center in Muskogee, Oklahoma that the Veteran had received an overpayment of VA educational assistance benefits. The case was transferred to the Board from the Regional Office (RO) in Chicago, Illinois. In April 2011, a videoconference hearing was held between the Chicago RO and the Board in Washington, DC, before the undersigned Veterans Law Judge. A transcript of that hearing has been associated with the claims file. 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) (2012); see also VAOPGCPREC 6-98 (Apr. 24, 1998). During her May 2011 videoconference hearing, the Veteran testified that she thought she should have been awarded education benefits at the full-time rate from February 16, 2010 through May 25, 2010, and at the one-quarter rate from January 19, 2010 through February 15, 2010. She maintained that the amount of the overpayment debt was erroneously calculated. She also argued that the overpayment was due to error by VA. The Board therefore finds that the issue of the validity of the debt had been raised by the Veteran. Thus, the issue on appeal is as listed on the title page. In addition to the paper claims file, there is an electronic file (Virtual VA) associated with the claim. Virtual VA currently contains evidence pertinent to the claim that is not already included in the paper claims file - namely a July 2010 demand letter from the VA Debt Management Center in St. Paul, Minnesota. The letter indicated that the Veteran had been overpaid education benefits in the amount of $2,020.55. FINDINGS OF FACT 1. On January 16, 2010, the Veteran was approved for benefits at the one-quarter rate in conjunction with her attendance at a community college from January 19, 2010 to May 15, 2010. 2. On February 5, 2010, VA received the Veteran's VA Form 22-1995, Request for Change of Program or Place of Training; she advised VA that she was starting attendance at the University of Phoenix Online, that she had not stopped training at the community college and that she would complete her community college classes in May of 2010. 3. On April 23, 2010, VA incorrectly processed the Veteran's award and assigned a full-time rate from February 16, 2010 to March 16, 2010, followed by a reduction to the one-quarter rate from March 17, 2010 to May 15, 2010. 4. On May 10, 2010, VA again incorrectly processed the Veteran's award and assigned a full-time rate from March 23, 2010 to April 20, 2010, followed by a reduction to the one-quarter rate from April 21, 2010. 5. In June 2010, VA determined that the Veteran had been in school at the community college from January 19, 2010 through May 14, 2010, and at the University of Phoenix from February 16, 2010 through May 25, 2010. 6. In June 2010, VA also determined that the Veteran should have been paid at the one-quarter rate for the community college attendance from January 19, 2010 through May 14, 2010, and that payment at the full-time rate for the University of Phoenix should have been for the period from May 15, 2010 through May 25, 2010; an overpayment was thereby created. 7. The Veteran was unaware that she could not be certified for attendance at two schools at the same time. 8. The Veteran was unaware that she was in receipt of an incorrect payment amount for her education benefits between February 2010 and May 2010. 9. A July 2010 demand letter from the VA Debt Management Center in St. Paul, Minnesota states that the Veteran had been overpaid education benefits in the amount of $2,020.55. CONCLUSION OF LAW Due to VA's administrative error, the debt created by the overpayment of educational assistance benefits in the amount of $2,020.55 is not valid. 38 U.S.C.A. §§ 3002, 3034, 3680, 3688, 3689 (West 2002 & Supp 2012); 38 C.F.R. § 21.4233, 21.7020, 21.7550 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. VA's Duty to Notify and Assist VA has a duty to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2012). The Board is granting in full the benefit sought on appeal (invalidation of the debt). Accordingly, any error committed with respect to either the duty to notify or the duty to assist was harmless and will not be further discussed. II. The Merits of the Claim In adjudicating a claim, the Board determines whether (1) the weight of the evidence supports the claim or, (2) whether the weight of the "positive" evidence in favor of the claim is in relative balance with the weight of the "negative" evidence against the claim. The appellant prevails in either event. However, if the weight of the evidence is against the appellant's claim, the claim must be denied. 38 U.S.C.A. § 5107(b); 38 C.F.R. § 3.102; Gilbert v. Derwinski, 1 Vet. App. 49 (1990). 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. An overpayment may arise from virtually any benefits program administered pursuant to VA law, including educational assistance benefits. 38 C.F.R. § 1.956(a). Whenever VA finds that an overpayment of educational assistance benefits has been made to a Veteran, the amount of such overpayment shall constitute a liability of such Veteran to the United States and may be recovered in the same manner as any debt. 38 U.S.C.A. § 3685(a), (c); 38 C.F.R. § 21.7644. If the debt were the result solely of administrative error, the effective date of the reduction of benefits would be the date of the last payment based on this error; consequently, there would be no overpayment charged to the veteran for the portion of the overpayment attributable to administrative error. See 38 U.S.C.A. § 5112(b)(10); 38 C.F.R. §§ 3.500(b), 21.7635(q)(2). However, where an erroneous award is based on an act of commission or omission by a payee or with the payee's knowledge, the effective date of the discontinuance of the erroneous payment is the date the award became erroneous, but not earlier than the date entitlement ceased. Jordan v. Brown, 10 Vet. App. 171, 174 (1997). Thus, a finding of administrative error requires not only error on the part of VA, but that the beneficiary be unaware that the payments are erroneous. 38 U.S.C.A. § 5112 (b)(2); 38 C.F.R. § 3.500(b). If the claimant fails to provide full disclosure of facts or due to the amount of the overpayment should know an error has been made, yet accepts the payment, the overpayment will not be considered due to administrative error. An example when administrative error applies is when VA erroneously interprets the law to allow payment of greater benefits than the legislative intent. An example of when administrative error does not apply is when the claimant accepts an amount that is patently excessive. In June 2010, VA determined that the Veteran had been in school at a community college from January 19, 2010 through May 14, 2010, and at the University of Phoenix from February 16, 2010 through May 25, 2010. VA also determined that the Veteran should have been paid her education benefits at the one-quarter rate for the community college attendance from January 19, 2010 through May 14, 2010, and that payment at the full-time rate for the University of Phoenix should have been for the period from May 15, 2010 through May 25, 2010. The Veteran testified at her May 2011 Board videoconference hearing that she was not aware of the regulation and procedures relating to a change in schooling. She stated that she thought, based on the GI Bill website, that she had to be certified for both the community college and the University of Phoenix and did not realize that that concurrent certification was not allowed. The Veteran further testified that she thought she should have been awarded education benefits at the full-time rate from February 16, 2010 through May 25, 2010, and at the one-quarter rate from January 19, 2010 through February 15, 2010. She maintained that the amount of the overpayment debt was thereby erroneously calculated. She also argued that the overpayment was due to error by VA. Sole administrative error connotes that a veteran neither had knowledge of, nor should have been aware of, the erroneous payments. Further, neither the veteran's actions nor her failure to act must have contributed to the erroneously continued payments. 38 U.S.C.A. § 5112(b)(9)(10); 38 C.F.R. § 3.500(b)(2). In this case, VA had notice that the Veteran was attending both a community college and the University of Phoenix at the same time. Her VA Form 22-1995, Request for Change of Program or Place of Training, was received at the Muskogee Education Center on February 5, 2010. That document plainly states that the Veteran was starting attendance at the University of Phoenix Online and that she had not stopped training at the community college. The Veteran further informed VA that she would complete her community college classes in May of 2010. As stated in the September 2010 Statement of the Case (SOC), VA "incorrectly processed" the Veteran's award on April 23, 2010, and assigned a full-time rate from February 16, 2010 to March 16, 2010, followed by a reduction to the one-quarter rate from March 17, 2010 to May 15, 2010. Then, to compound the error, on May 10, 2010, VA again "incorrectly processed" the Veteran's award and assigned a full-time rate from March 23, 2010 to April 20, 2010, followed by a reduction to the one-quarter rate from April 21, 2010. It was clear that VA personnel had reviewed the Veteran's VA Form 22-1995, and that VA was on notice that the Veteran was attending two schools concurrently. Therefore, the Veteran can be assigned no fault in the initial creation of the overpayment since she had fulfilled her duty to notify VA. A more troublesome question is whether there came a point in time when the Veteran knew, or reasonably should have known, that she was receiving VA funds to which she was not entitled. The evidence of record shows that the Veteran's award was changed two times in the short space of time between April 23rd and May 10th, 2010. This indicates that the amount of the award would have reflected at least three different amounts between February and May of 2010. The Veteran was aware that she had submitted a change of program and therefore expected a change in benefit awarded. However, she contends, in essence, that she did not realize she could not be certified for two schools at the same time and that because VA did in fact certify her for two schools at the same time, she had no reasonable way of knowing that she was improperly receiving VA education benefits. The Board accepts her argument as persuasive. The Veteran's acts or omissions did not create the debt. Therefore, the creation of the entire overpayment was improper because the entire overpayment was solely the result of VA administrative error. ORDER The overpayment of education benefits in the calculated amount of $2,020.55 was not properly created; the appeal is granted. ____________________________________________ KATHLEEN K. GALLAGHER Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs