Citation Nr: 1416542	
Decision Date: 04/14/14    Archive Date: 04/24/14

DOCKET NO.  14-01 454	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in Milwaukee, Wisconsin


THE ISSUE

Entitlement to waiver of recovery of an overpayment of compensation benefits in the amount of $12,823.00, including the preliminary question of whether this is a valid debt.


REPRESENTATION

Appellant represented by:	The American Legion


ATTORNEY FOR THE BOARD

H. Bunker, Associate Counsel



INTRODUCTION

The Veteran served on active duty from April 1953 to April 1955.

This case comes before the Board of Veterans' Appeals (Board/BVA) on appeal from a September 2013 decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Milwaukee, Wisconsin, which denied the Veteran's request for waiver of indebtedness to VA in the then amount of $83,191.00.  A more recent January 2014 decision determined that waiver was warranted in the amount of $70,368, therefore the remainder still in dispute is $12,823.00.


FINDINGS OF FACT

1.  The Veteran was awarded compensation benefits beginning in May 2003.

2.  Beginning in 2003 an overpayment was created due to his receipt of income from his spouse's benefits from the Social Security Administration (SSA).

3.  The overpayment of VA compensation benefits in the amount of $12,823.00 was properly created.

4.  The Veteran was at fault in the creation of this overpayment, and there is no fault on the part of VA in its creation.

5.  The creation of this overpayment was not due to the Veteran's fraud, misrepresentation, or bad faith, however.

6.  Still, repayment of this debt would not deprive him of the basic necessities of life.

7.  The failure of the Government to insist upon its right to repayment of this assessed overpayment would result in his unjust enrichment.

8.  Recovery of this overpayment would not defeat the purpose of the VA compensation benefits program.

9.  Recovery of this overpayment will not cause the Veteran undue hardship.


CONCLUSIONS OF LAW

1.  The overpayment of compensation benefits in the amount of $12,823.00 was validly created.  38 U.S.C.A. §1521 (West 2002); 38 C.F.R. § 3.665 (2013).  

2.  There is no bar or absolute preclusion to waiving the recovery of this debt, but it would not be against the principles of equity and good conscience to recover the amount of the remaining overpayment.  38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. §§ 1.963, 1.965 (2013).


REASONS AND BASES FOR FINDINGS AND CONCLUSIONS

Standard of Review

In deciding this appeal, the Board has reviewed all the evidence in the Veteran's claims folder, both the physical and electronic portions of his file.  Although the Board has an obligation to review the entire record, the Board does not have to discuss each and every piece of evidence reviewed, certainly not in exhaustive detail.  See Gonzales v. West, 218 F.3d 1378, 1380-81 (Fed. Cir. 2000).  The Veteran must not assume that the Board has overlooked pieces of evidence that are not explicitly discussed.  See Timberlake v. Gober, 14 Vet. App. 122 (2000) (the law requires only that the Board address its reasons for rejecting evidence favorable to the Veteran). 


It is VA's defined and consistently applied policy to administer the law under a broad interpretation, consistent, however, with the facts shown in every case.  When, after careful consideration of all procurable and assembled data, a reasonable doubt arises regarding service origin, the degree of disability, or any other point, such doubt will be resolved in favor of the claimant.  By reasonable doubt it is meant that an approximate balance of positive and negative evidence exists which does not satisfactorily prove or disprove the claim.  Reasonable doubt is a substantial doubt and one within the range of probability as distinguished from pure speculation or remote possibility.  See 38 U.S.C.A. § 5107(b); 38 C.F.R. § 3.102 (2013).

The Duties to Notify and Assist

The Veterans Claims Assistance Act of 2000 (VCAA) and implementing regulations impose obligations on VA to provide claimants with notice and assistance concerning their claims.  38 U.S.C.A. §§ 5102, 5103, 5103A, 5107, 5126 (West 2002); 38 C.F.R. §§ 3.102, 3.156(a), 3.326(a) (2013).  The notice requirements of the VCAA require VA to notify the claimant of what information or evidence is necessary to substantiate the claim; what subset of the necessary information or evidence, if any, the claimant is to provide; and what subset of the necessary information or evidence, if any, VA will attempt to obtain for him.  Id.  These provisions, however, are inapplicable to claims like the one being decided.  See Barger v. Principi, 16 Vet. App. 132 (2002).  In Barger, the United States Court of Appeals for Veterans Claims (Court/CAVC) held that the VCAA, with its expanded duties, is not applicable to cases involving the waiver of recovery of overpayment claims, noting that the statute at issue in such cases is found in Chapter 53, Title 38, United States Code, and that the provisions of the VCAA are instead relevant to a different Chapter (i.e., Chapter 51).


Analysis

The law provides that there shall be no collection of an overpayment, or any interest thereon, which results from participation in a benefit program administered under any law by VA when it is determined that collection would be against equity and good conscience.  The term "overpayment" refers only to those benefit payments made to a designated living payee or beneficiary in excess of the amount due or to which such payee or beneficiary is entitled.  38 U.S.C.A. § 5302(a); 38 C.F.R. § 1.962.

Absent fraud, misrepresentation, or bad faith, a waiver of indebtedness may be authorized in a case in which collection of the debt would be against equity and good conscience.  38 U.S.C.A. § 5302(b); 38 C.F.R. §§ 1.962, 1.963, 1.965.  In essence, the phrase "equity and good conscience" means arriving at a fair decision between the obligor and the Government.  38 C.F.R. § 1.965(a).  

"Equity and good conscience" involves a variety of elements: (1) Fault of the debtor, where the actions of the debtor contribute to creation of the debt; (2) Balancing of faults, weighing fault of the debtor against VA fault; (3) Undue hardship, whether collection would deprive debtor or family of basic necessities;  (4) Defeat the purpose, whether withholding of benefits or recovery would nullify the objective for which benefits were intended; (5) Unjust enrichment, failure to make restitution would result in unfair gain to the debtor; and (6) Changing position to one's detriment, reliance on VA benefits results in the relinquishment of a valuable right or incurrence of a legal obligation.  See 38 C.F.R. § 1.965(a)(1-6).  The list of elements contained in the regulation is not all inclusive.  Ridings v. Brown, 6 Vet. App. 544, 546 (1994).  


In determining whether a waiver of recovery of an overpayment is appropriate, VA's (and the Board's) inquiry is focused on three distinct questions.  First, VA must determine whether the overpayment at issue was validly created.  See Schaper v. Derwinski, 1 Vet. App. 430, 434-35 (1991) (noting that before adjudicating a waiver application, the lawfulness of the overpayment must first be decided); see also VAOPGCPREC 6-98 (holding that where the validity of the debt is challenged, that issue must be developed before the issue of entitlement to a waiver of the debt can be considered).  In the absence of a valid debt, no further inquiry is necessary.

Second, if the debt is valid, VA must determine if fraud, misrepresentation or bad faith played a role in its creation.  If it did, waiver of the overpayment is automatically precluded, and further analysis is not warranted.  See 38 C.F.R. § 1.965(b) (2013); see also Ridings v. Brown, 6 Vet. App. 544 (1994) (holding that the Board must independently address the matter of bad faith before addressing whether waiver would be appropriate).

Finally, after it has been determined that the debt is valid and that fraud, misrepresentation and/or bad faith had no part in its creation, VA must then consider whether collection of the debt would be against equity and good conscience.  See 38 C.F.R. §§ 1.962, 1.963, 1.965 (2013).  The resolution of this question involves the consideration of various elements including, inter alia, the fault of the debtor, the fault of VA, undue hardship, unjust enrichment, whether collecting the debt would defeat the purpose of the benefit, and whether the Appellant changed his or her position to his or her detriment as a result of the overpayment.

There is no question that there was an overpayment of VA benefits.  The Board must initially determine whether that overpayment was validly created. 


Validity of the Debt

The Veteran has been charged with an overpayment in the amount of $12,823.00 for compensation benefits.  The overpayment arose when the Veteran did not report his spouse's income received from the Social Security Administration (SSA), which began in 2003.  

At no time during this appeal has the Veteran challenged the validity of this debt in creation or in number, nor has he made any assertion that his compensation benefits were inaccurate as VA has itemized.  Rather, he has simply applied for a waiver of recovery of this overpayment.

The Board observes nothing in the record that suggests that the overpayment in question was not validly created.  The amount of the overpayment, $12,823.00, appears to have been correctly calculated, and the Veteran has not suggested to the contrary.  The Board will continue its analysis on whether a waiver of overpayment may still be awarded.

Waiver of Overpayment

The Board also finds that the overpayment was not the result of fraud, misrepresentation, or bad faith on the part of the Veteran.  The Veteran's actions simply do not rise to this level.  There is no specific information that he purposefully lied to obtain compensation benefits when he was receiving additional income or that he hid the additional income received when asked about it.  As such, there is no statutory bar to waiver of recovery of the overpayment.

As the evidence does not establish fraud, misrepresentation, or bad faith on the part of the Veteran, the Board will next determine if a waiver of recovery of the VA indebtedness is warranted on the basis of equity and good conscience under 38 U.S.C.A. § 5302(a); 38 C.F.R. §§ 1.963(a), 1.965(a) (2013).  For the reasons discussed below, the Board finds that repayment of the Veteran's indebtedness would not violate principles of equity and good conscience.

The Board finds that the Veteran was at fault in the creation of his indebtedness.  The record shows that the Veteran's wife received income from the SSA beginning in 2003.  The Veteran did not report to VA at any time that his wife was also receiving benefits from the SSA.  Accordingly, VA is not at fault in the creation of this overpayment.

The first two elements for consideration under 38 C.F.R. § 1.965(a) are the fault of the debtor, and balancing the fault of the debtor and VA.  As noted above, the Veteran has not challenged the creation of the debt, the amount of the debt, or his own role in creating the debt by failing to inform VA that his wife was receiving additional income in the form of SSA benefits. The Veteran has stated that he does not remember receiving a letter about income which required him to reply.  See December VA Form 9.  However, the Board observes that the Veteran was sent multiple letters explaining to him that he should notify VA if a member of his family began receiving benefits from the SSA.  See e.g., December 2007 and December 2009 letters.  The Board finds, therefore, that the failure to inform the VA of additional income lies solely with the Veteran, and this represents the greater degree of fault in balancing the actions between the Veteran and VA.

With regard to the other elements pertaining to the principles of equity and good conscience as set forth by 38 C.F.R. § 1.965(a), the Board finds that because the Veteran was in receipt of VA compensation benefits to which he was not entitled, he was clearly unjustly enriched by the amount of the overpayment.  The failure of the Government to insist upon its right to repayment of the assessed overpayment would, therefore, result in unjust enrichment of the Veteran.

Moreover, the Board finds that there is nothing in the record to suggest that recovery of the overpayment would defeat the purpose of the VA compensation pension program.  In that regard, the award and disbursement of compensation pension benefits beginning in 2003 was based on the Veteran's need for additional income due to his limited income.  An inaccurate accounting of his actual income, which generated additional VA benefits, was improper.  Thus, the recovery of the overpayment created by the Veteran's receipt of compensation pension benefits based on a false income would not defeat the purpose of the VA benefits program.  The Board also finds that there is no evidence showing that the Veteran relinquished a valuable right or incurred any legal obligations resulting from reliance on VA benefits.

The Board has also reviewed the Veteran's September 2013 Financial Status Report.  The Veteran reported a monthly net income of $1,986, and total monthly expenses of approximately $1,410 to include rent or mortgage payments, food, utilities, phone, car maintenance, clothing, medication, and life insurance.  The Veteran also reported additional real estate owned and money in savings.  The Board emphasizes that after taking care of basic necessities such as shelter and food, the Veteran is expected to accord a debt to VA the same regard given to any other debt.  Furthermore, an August 2013 statement noted different figures of SSA benefits for the Veteran and his wife which totaled $22,244.00.  Regardless, the Board notes that the Veteran has been offered to make partial payments to take care of his debt in monthly installments.  Given the Veteran's current income and assets, the Board finds that the collection of the $12,823.00 debt would not deprive him of the basic necessities of life.  There is no evidence of record which indicates that he cannot repay the indebtedness, particularly if he is allowed to make payments in installments over a period of time.  38 C.F.R. § 1.914.

The Board's inquiry is not necessarily limited to the six factors discussed above.  However, there is nothing in the record which suggests that any other reason for waiver of the charged indebtedness exists, and the Veteran has pointed to none.
The facts of this case do not demonstrate that recovery of the overpayment would be against the principles of equity and good conscience.  38 C.F.R. §§ 1.963, 1.965 (2013).  For these reasons, the Board finds that a preponderance of the evidence is against the Veteran's claim for a waiver of recovery of the overpayment of VA compensation pension benefits in the amount of $12,823.00.  Because the preponderance of the evidence is against the claim, the benefit of the doubt doctrine is not for application.  See 38 U.S.C.A. § 5107; 38 C.F.R. § 3.102 (2013).



ORDER

A debt was validly created by the overpayment of VA compensation benefits in the amount of $12,823.00; the appeal of this threshold preliminary issue is denied.

The Veteran's request for waiver of recovery of this overpayment of compensation benefits in the amount of $12,823.00 is denied.



____________________________________________
Keith W. Allen
Veterans Law Judge, Board of Veterans' Appeals

Department of Veterans Affairs