Citation Nr: 1409286 Decision Date: 03/05/14 Archive Date: 03/12/14 DOCKET NO. 11-05 363A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Muskogee, Oklahoma THE ISSUE Entitlement to waiver of the recovery of an advance payment of $3,000.00 for Post-9/11 GI Bill (Chapter 33) education benefits, to include whether the debt was properly created. ATTORNEY FOR THE BOARD A. Shawkey, Counsel INTRODUCTION The dates of all of the appellant's military service are unclear. He did serve on active duty for training from July to September 1997. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a July 2010 decision by the Committee on Waivers and Compromises (COWC) at the Department of Veterans Affairs (VA) Regional Office (RO) in Muskogee, Oklahoma. In that decision the COWC denied the appellant's request for a waiver of the debt of an advance payment of $3,000.00 for education benefits under Chapter 33. A request for waiver of indebtedness must be made within 180 days following the date of notice of the indebtedness issued by VA to the debtor. 38 C.F.R. § 1.962(b)(2) (2013). In the present case, VA established a debt for the advance payment in the amount of $3,000 in May 2010. The appellant requested a waiver of the debt in July 2010. Thus, the waiver of indebtedness request is timely. The appeal is REMANDED to the RO via the Appeals Management Center, in Washington, DC. VA will notify the appellant if further action is required. REMAND As noted above, the dates and type of service performed by the appellant are unclear. Hence, further development is in order. Further, in the present case, the appellant is requesting a waiver, based on financial hardship, of payment in the amount of $3,000.00 that he received as an advance payment of VA educational benefits. In cases where there is no indication of fraud, misrepresentation, or bad faith in the record, the indebtedness shall be waived if the recovery of the overpayment would be against equity and good conscience. 38 U.S.C.A. § 5301(a) (West 2002); 38 C.F.R. §§ 1.962, 1.963, 1.965 (2013). Consideration of equity and good conscience is intended to reach a result that is not unduly favorable or adverse to either the claimant or the Government. It is intended to achieve a result that is fair. 38 C.F.R. § 1.965(a). Six non-exclusive elements are set forth in the regulations that must be addressed to determine whether the facts and circumstances in a particular case dictate that collection of an overpayment would be against equity and good conscience. The following six elements, which are not intended to be all inclusive consist of: (1) the fault of the debtor; (2) balancing of faults between the debtor and VA; (3) undue hardship of collection on the debtor; (4) a defeat of the purpose of an existing benefit to the veteran; (5) the unjust enrichment of the veteran; and (6) whether the veteran changed positions to his/her detriment in reliance upon a granted VA benefit. 38 U.S.C.A. § 5302; 38 C.F.R. § 1.965(a). In the instant case, the appellant electronically applied for VA educational benefits in July 2009. He reported that he had been on active duty with the Army Reserve from January to July 2009. It also shows that he intended to start college classes, including online courses, offered by Walden University in September 2009. Records note that the appellant was issued an advance payment of $3,000 for educational expenses in October 2009, although the specific records regarding this payment are not on file. VA subsequently denied educational benefits in December 2009 finding the appellant ineligible because he did not have the requisite service. See 38 C.F.R. § 21.9520. He requested a waiver of the debt in July 2010 on the basis of financial hardship. He asserted that he had student loans to repay, was responsible for his own health care costs, and made monthly contributions to support his mother and grandmother. He also reported that his total monthly expenses exceeded his total monthly net income. In the July 2010 decision denying the waiver, the RO noted that there was no evidence that the appellant was either enrolled in school for the fall 2009 term or that he had applied for VA educational benefits based on any such enrollment. The RO thus concluded that the appellant knew or should have known that he was not eligible for the advance payment and denied his waiver request on the basis of bad faith. The appellant disagreed with the July 2010 decision arguing that he did apply for educational benefits in July 2009, and was enrolled in school in the fall of September 2009. He denied that his application was made in bad faith or fraud of any sort. Significantly, the January 2011 statement of the case provides a different reason for denying the waiver, i.e., on the basis that the appellant signed and acknowledged that he would repay the advance payment, the RO should clarify the reason for the denial. The statement of the case does not reference or discuss the July 2010 finding of bad faith. If bad faith is no longer found, the elements of equity and good conscience must be considered and addressed. 38 C.F.R. § 1.965. Also, following the issuance of the statement of the case in January 2011, the appellant submitted evidence (in March 2011) showing that he had been laid off from his job. As this represents a change in his financial situation, he needs to complete a new Financial Status Report (VA Form 5655) which the RO must consider if the appellant is found not to have acted in bad faith. Lastly, the agency of original jurisdiction should obtain the documentation (application, forms, notice letters, etc.) associated with the $3,000.00 advance payment as well as request that the appellant submit copies of any documentation he may have that is associated with this payment. Accordingly, the case is REMANDED for the following action: 1. The RO must contact the National Personnel Records Center, the Army Reserve, and the Georgia National Guard in an attempt to verify each and every period of active duty, active duty for training, and inactive duty training. In this regard a report detailing the appellant's award of reserve retirement points will not represent compliance with this instruction. Rather, each and every date of active duty, active duty for training, and inactive duty training must be verified. If the dates of the appellant's service cannot be determined otherwise, the RO must contact the Defense Finance and Accounting Service and request that they review the claimant's pay record to determine the dates and types of military service performed by the appellant. If the RO still cannot locate such records, the RO must specifically document the attempts that were made to locate them, and explain in writing why further attempts to locate or obtain any government records would be futile. The RO must then: (a) notify the claimant of the specific records that it is unable to obtain; (b) explain the efforts VA has made to obtain that evidence; and (c) describe any further action it will take with respect to the claims. The claimant must then be given an opportunity to respond. 2. Obtain all documentation (application, forms, notice letters, etc.) associated with VA's awarding the appellant the $3,000.00 advance payment. If the RO cannot locate such records, the RO must specifically document the attempts that were made to locate them, and explain in writing why further attempts to locate or obtain any government records would be futile. The RO must then: (a) notify the claimant of the specific records that it is unable to obtain; (b) explain the efforts VA has made to obtain that evidence; and (c) describe any further action it will take with respect to the claims. The claimant must then be given an opportunity to respond. 3. Request that the appellant submit copies of any documentation currently in his possession associated with VA's $3,000.00 advance payment award to him. Further, the appellant must and return an updated VA Form 5655 (Financial Status Report). The appellant should be informed as to the relevancy of financial information in determining a claim for waiver of an overpayment. 4. Thereafter, the matter of the validity of the debt and waiver of the overpayment in the amount of $3,000.00 should be re-adjudicated. If the appellant is found to have acted in bad faith the reasons for that finding must be detailed. If bad faith is not found, the RO must consider waiving the debt under the principles of equity and good conscience. The appellant should be provided with a supplemental statement of the case, to include citation and notice of the provisions of 38 C.F.R. § 1.965 (2013), and given an appropriate opportunity to respond. The case should then be returned to the Board for further consideration, if otherwise in order. The appellant has the right to submit additional evidence and argument on the matter or matters 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. 2013). _________________________________________________ DEREK R. BROWN 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) (2013).