Citation Nr: 1335903 Decision Date: 11/05/13 Archive Date: 11/13/13 DOCKET NO. 05-17 992 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in New York, New York THE ISSUE Entitlement to waiver of recovery of an overpayment of compensation benefits in the amount of $3,195.93. (The issue of entitlement to an effective date prior to October 19, 2006, for the grant of service connection for coronary artery disease is addressed in a separate decision). REPRESENTATION Appellant represented by: New York State Division of Veterans' Affairs ATTORNEY FOR THE BOARD Megan C. Kral, Associate Counsel INTRODUCTION The Veteran had active service from October 1965 to February 1969. This matter comes before the Board on appeal from a January 2005 decision in which the RO's Committee on Waivers and Compromises (Committee) denied the Veteran's claim for waiver of recovery of an overpayment of compensation benefits in the amount of $3,195.93. This matter was previously before the Board in March 2007. FINDINGS OF FACT 1. The Veteran received additional dependency benefits for his son ("S") during the same period of time that "S" received Dependents' Educational Assistance (Chapter 35) benefits, resulting in an overpayment of $3,195.93. 2. The overpayment in question was not due to fraud, misrepresentation, or bad faith by the Veteran; recovery of the $3,195.93 would not be against equity and good conscience. CONCLUSION OF LAW The criteria for waiver of recovery of the overpayment of compensation benefits in the amount of $3,195.93 plus any accrued interest are not met. 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. §§ 1.962, 1.963, 1.965 (2013). REASONS AND BASES FOR FINDINGS AND CONCLUSION Veterans Claims Assistance Act of 2000 (VCAA) The VCAA, in part, describes VA's duties to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5106, 5107, 5126; 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a). The VCAA applies to the instant claims. The notice provisions of the VCAA are inapplicable to waiver claims. Barger v. Principi, 16 Vet. App. 132 (2002). Nonetheless, the Veteran has been afforded opportunities to present evidence in support of his claim, has been furnished the reasons and bases for the denial of the claim by the Committee, and he has been afforded opportunities to respond. Notably the Veteran was sent letters dated May 2007 and October 2009 requesting additional evidence in support of his claim (specifically updated VA Form 5655 Financial State Report were requested). The Veteran failed to respond. The Board notes that the Veteran has a duty to assist and cooperate with VA in developing evidence. See Wood v. Derwinski, 1 Vet. App. 190, 193 (1991); see Hayes v. Brown, 5 Vet. App. 60, 68 (1993) (VA's duty to assist is not a one-way street; if a veteran wishes help, he cannot passively wait for it in those circumstances where his own actions are essential in obtaining the putative evidence). The Board finds that these actions satisfy any duties to notify and assist owed to the appellant in the development of this claim. Legal Criteria, Factual Background and Analysis When all of the evidence is assembled, VA is responsible for determining whether the evidence supports the claim or is in relative equipoise, with the veteran prevailing in either event, or whether a fair preponderance of the evidence is against the claim, in which case the claim is denied. Gilbert v. Derwinski, 1 Vet. App. 49, 55 (1990). The Board has reviewed all of the evidence in the Veteran's claims file, with an emphasis on the evidence relevant to this appeal. Although the Board has an obligation to provide reasons and bases supporting its decision, there is no need to discuss, in detail, every piece of evidence of record. Gonzales v. West, 218 F.3d 1378, 1380-81 (Fed. Cir. 2000) (VA must review the entire record, but does not have to discuss each piece of evidence). Hence, the Board will summarize the relevant evidence as appropriate and the Board's analysis below will focus specifically on what the evidence shows, or fails to show, as to this claim. Entitlement to Waiver of Overpayment In a rating decision dated March 21, 2003, the RO granted the Veteran individual unemployability benefits effective January 30, 2003; and in a notice of decision dated April 14, 2003, the RO advised the Veteran that he was being paid as a Veteran with two dependents. One of these dependents was "S", who was over age 18 but was attending school. In the same March 21, 2003 rating decision, the RO granted Dependents' Educational Assistance (DEA) under 38 U.S.C.A., Ch. 35, effective from January 30, 2003. Enclosed with the notice letter was VA Pamphlet 22-73-3, "Summary of Education Benefits" and VA Form 22-5490, "Application for Survivors' and Dependents' Educational Assistance." The instructions provided in order to make a claim for DEA benefits, the form must be completed and returned. The Board notes that this notice letter and enclosures were mailed directly to the Veteran. In April 2003, a VA Form 21-8960 was sent to the Veteran notifying him that VA was paying benefits based on his report that "S" was a student attending school. The Veteran responded, confirming that "S" was still enrolled. In September 2003, VA received a completed application for DEA benefits for "S". The RO then sent a letter to "S" advising him that he qualified for DEA benefits and that he could choose the date to begin his benefits. He was provided three options: (1) January 30, 2003, that date the Veteran became permanently and totally disabled; (2) April 14, 2003, the date which the Veteran was notified he was permanently and totally disabled; or (3) any date between those two dates. In November 2003, "S" responded, in which he chose the beginning date of January 30, 2003, for his DEA benefits. In an undated letter to "S", the RO advised "S" that VA paid his education benefits from May 27, 2003 to July 31, 2003. In July 2004, the Veteran was notified that an overpayment of $3,195.93 was created because VA law prohibited the Veteran receiving additional compensation for a child who is receiving DEA benefits. He was notified that his VA benefits would be withheld beginning in October 2004 to recoup the amount overpaid. The Veteran was notified of his right to dispute the debt and the right to request a waiver. Additionally, the Veteran was informed he had the right to request an oral hearing. A Notice of Rights and Obligations was attached. In correspondence received by the RO on July 22, 2004, the Veteran contended that he was not at fault for this overpayment. The Veteran also contended that he should have received additional Chapter 35 benefits for his second son. The Veteran requested that the overpayment identified in the July 2004 letter be waived on the grounds that recovery of the debt would result in financial hardship. In support of his contention, the Veteran submitted a Financial Status Report. The Veteran reported monthly income (his monthly gross salary) of $7,265.00, and monthly expenses of $7,265.00. In a Decision on Waiver of Indebtedness dated January 27, 2005, the Committee noted that the indebtedness resulted from the Veteran's continued receipt of additional benefits for "S" after "S" had been granted Chapter 35 benefits in his own right. The Veteran was not found to be fully at fault in the creation of the debt; the Committee noted that his correspondence demonstrated that he did not understand that his son's Chapter 35 award required his removal as a dependent on the Veteran's award. The Committee then determined that there was no fraud, misrepresentation of a material fact, or showing of bad faith on behalf of the Veteran, but denied the Veteran's request for waiver of the indebtedness of $3,195.93 because he did not demonstrate that repayment of this debt would cause him undue financial hardship. The Committee found the Veteran's income, including his VA compensation benefits, total $9,631.00, with monthly expenses of $7,265.00, an amount significantly below total income. Therefore, the Committee concluded that the recovery of the overpayment would not be against equity and good conscience. The Veteran filed a notice of disagreement in March 2005, asserting that the Committee misrepresented his income. The Veteran stated that his monthly income as reported in his Financial Status Report included his disability benefits. He again requested a waiver based on undue hardship. A Statement of the Case (SOC) dated April 2005 again denied the Veteran's waiver request. The case was appealed to the Board, and in March 2007, the Board remanded the case, ordering an updated Financial Status Report be obtained. In May 2007, the RO sent a letter to the Veteran requesting that an updated VA Form 5665, Financial Status Report, be submitted. The Veteran failed to respond. In October 2009, the RO again requested an updated Financial Status Report be submitted. The Veteran again failed to respond. April 2010 and November 2011 Supplemental SOCs denied the waiver due to the Veteran's failure to supply an updated Financial Status Report and failure to show that repayment of the debt would cause an undue financial hardship. In December 2011, the Veteran submitted correspondence stating that the withholding of benefits to recoup the debt created an undue hardship on him and his family; however, he did not provide updated financial information in support of this contention. The Board notes that the Veteran does not contest the validity of the debt. See Schaper v. Derwinski, 1 Vet. App. 430, 434 (1991); Narron v. West, 13 Vet. App. 223 (1999); VAOPGCPREC 6-98 (where the validity of a debt is challenged, that issue must be developed and decided before the issue of entitlement to waiver of the debt can be considered.) Rather, he asserts that he is not at fault in the creation of this debt, and that collection of it would result in undue hardship to him. Under the criteria set out in 38 U.S.C.A. § 5302(c), a waiver of recovery of an overpayment or the collection of any indebtedness is prohibited where any one of the following is found to exist: (1) fraud, (2) misrepresentation, or (3) bad faith. 38 U.S.C.A. § 5302(c); 38 C.F.R. § 1.962(b). Consequently, before the Board may determine whether equity and good conscience affords the Veteran a waiver, the Board must first determine whether there was an indication of fraud, misrepresentation, or bad faith on his part in connection with the claim. In this case, and as conceded by the Committee, there is no of fraud, misrepresentation, or bad faith on the Veteran's part. Therefore, waiver of indebtedness is not precluded if it would be against the principles of equity and good conscience to require the appellant to repay the debt to the government. 38 U.S.C.A. § 5302; 38 C.F.R. §§ 1.963, 1.965. Pursuant to 38 C.F.R. § 1.965, the standard of equity and good conscience will be applied when the facts and circumstances in a particular case indicate a need for reasonableness and moderation in the exercise of the government's rights. 38 C.F.R. § 1.965(a). The decision reached should not be unduly favorable or adverse to either side. Id. The phrase "equity and good conscience" means arriving at a fair decision between the obligor and the government. Id. In making this determination of whether recovery would be against equity and good conscience, 38 C.F.R. § 1.965(a) requires consideration of each of the following factors, which are not intended to be all inclusive: (1) fault of the debtor; (2) balancing of faults between debtor and VA; (3) undue hardship; (4) whether collection would defeat the purpose of the benefit; (5) unjust enrichment; and (6) whether the debtor changed position to his own detriment through reliance on the benefit. 38 C.F.R. § 1.965(a); see also Ridings v. Brown, 6 Vet. App. 544, 546 (1994). The Committee found the Veteran was not solely at fault for the debt. However, the evidence of record does show the Veteran was advised of his right and obligations following the grant of DEA benefits. The April 2003 notice letter, mailed directly to him, provided him notice of the award, a pamphlet explaining education benefits, and application for benefits. The letter also clearly identified the eligibility date. The Veteran was also informed that he was being paid benefits for two dependents, and affirmatively confirmed one dependent's continued enrollment in school. VA's obligations were satisfied by providing the required notice pertaining to DEA benefits. Therefore, the Board finds that the Veteran's fault outweighs VA's fault, as the Veteran had actual knowledge of what benefits he received and his obligations as they pertained to the award of DEA benefits. The Veteran contends that repayment of the debt would be an undue hardship. He contends that there was an error on the part of the Committee in determining his monthly income. However, the Veteran has not provided any evidence of undue hardship. On three separate occasions (March 2007 remand, May 2007 letter, October 2009 letter) VA has requested the Veteran submit an updated Financial Status Report. To date he has failed to respond. In his July 2004 Financial Status Report, he indicated (line 13) that his income was solely his salary. He indicated "0" for income due to "pension, compensation, or other income" (line 16). Although he later reported that the number he reported as salary included his income due to VA compensation benefits, the Board finds his later statements are not credible as they are self-serving and inconsistent with the information he provided in his July 2004 Financial Status Report. See Pond v. West, 12 Vet. App. 341 (1999) (although the Board must take into consideration the appellant's statements, it may consider whether self-interest may be a factor in making such statements). Therefore, when considering the entirety of the evidence of record, the Board finds that the preponderance of the evidence is against a finding of undue hardship. The evidence further shows that the Veteran would be unjustly enriched by waiving the debt. The Veteran was notified that he was being paid benefits for two dependents, and one specifically because he was enrolled in school. If a waiver of recovery is granted it would create an unfair gain to him because he would be allowed to retain funds to which he was not legally entitled. Double payment of benefits for "S's" education equates to unjust enrichment. Additionally, there is no indication that the Veteran changed his position to his detriment due to the receipt of an additional payment in benefits. After weighing the factors described at 38 C.F.R. § 1.965(a), the Board finds that recovery of the debt is not against equity and good conscience. ORDER Entitlement to waiver of recovery of an overpayment in the amount of $3,195.93 is denied. ____________________________________________ M. C. GRAHAM Acting Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs