Citation Nr: 1424751 Decision Date: 06/02/14 Archive Date: 06/16/14 DOCKET NO. 10-00 136A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Manchester, New Hampshire THE ISSUE Entitlement to waiver of recovery of an overpayment of disability compensation benefits in the calculated amount of $8,012.30. (The issues of entitlement to higher ratings for service-connected right ankle disability, degenerative disc disease of the cervical spine, and degenerative disc disease of the thoracolumbar spine, are addressed in a separate decision). REPRESENTATION Appellant represented by: New Hampshire State Veterans Council WITNESS AT HEARING ON APPEAL The Veteran ATTORNEY FOR THE BOARD B. R. Mullins, Counsel INTRODUCTION The Veteran had active service from September 1981 to September 1985, March 1987 to March 1990, March 1999 to January 2000 and from January 2004 to March 2005. His National Guard service includes a period of active duty for special work (ADSW) from April 6, 2005, to May 4, 2005, and a period of Active Guard/Reserve (AGR) from June 1, 2005, to December 6, 2007. This matter comes before the Board of Veterans' Appeals (Board) on appeal from rating decisions by Regional Offices (ROs) of the Department of Veterans Affairs (VA). The RO in Manchester, New Hampshire currently holds jurisdiction over the claims. This issue was previously remanded by the Board in September 2008 and February 2013. In February 2013, the Board concluded that the overpayment of VA disability compensation benefits in the calculated amount of $8,012.30 was not improperly created due solely to administrative error. In October 2007, the Veteran testified at a video conference hearing before the undersigned Veterans Law Judge. The testimony was limited to the waiver of recovery of an overpayment of disability compensation issue as that was the only issue on appeal at that time. FINDINGS OF FACT 1. The Veteran was recalled to active duty in July 2006, and while on active duty, the Veteran concurrently received active duty military pay and VA disability compensation benefits until August 2006, resulting in an overpayment of VA disability compensation in the amount of $8,012.30. 2. The Veteran is not shown to have committed fraud, misrepresentation, or bad faith in the creation of the overpayment. 3. The fault of the Veteran in the creation of this debt outweighs that of VA. 4. Recovery of this debt by VA would not result in undue hardship to the Veteran and it is not against equity and good conscience. CONCLUSION OF LAW The criteria for waiver of recovery of an overpayment of VA disability compensation in the amount of $8,012.30 have not been met. 38 U.S.C.A. §§ 5302, 5304 (West 2002); 38 C.F.R. §§ 1.956, 1.962, 1.963, 1.965, 3.654, 3.700 (2013). REASONS AND BASES FOR FINDINGS AND CONCLUSION Duties to Notify and Assist The Veterans Claims Assistance Act of 2000 (VCAA), Pub. L. No. 106-475, 114 Stat. 2096 (2000), now codified at 38 U.S.C.A. §§ 5102, 5103, 5103A, 5107 (West. 2002 & Supp. 2013), provides that VA will assist the claimant in obtaining evidence necessary to substantiate a claim. The VCAA and the implementing regulation do not apply in waiver cases because the statutory right to request waiver of recovery of indebtedness within Chapter 53 of Title 38 of the United States Code contains its own notice provisions. See Lueras v. Principi, 18 Vet. App. 435 (2004) citing Barger v. Principi, 16 Vet. App. 132 (2002); see also 38 U.S.C.A. § 5302 (West 2002). Nonetheless, the Board finds that VA has explained to the Veteran the bases for the finding that the debt was valid, and for the denial of his request for a waiver of overpayment. The Veteran has not asserted any prejudice in regard to the content or timing of the notice he has received. See Shinseki v. Sanders, 129 S.Ct. 1696 (2009) (reversing prior case law imposing a presumption of prejudice on any notice deficiency, and clarifying that the burden of showing that an error is harmful, or prejudicial, normally falls upon the party attacking the agency's determination). The Veteran has not advised the Board of any other existing evidence not already of record that should be obtained before the appeal is adjudicated. Analysis 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 (West 2002); 38 C.F.R. § 1.962 (2013). A debt is not valid if the claimant was legally entitled to the benefits that resulted in an overpayment. See 38 U.S.C.A. §§ 501, 5112(b)(9), (10) (West 2002); 38 C.F.R. §§ 1.962, 3.500(b) (2013). A debt is also not valid if VA is solely responsible for the overpayment. See id. It was previously determined by the Board in February 2013 that the debt was validly created in this case. Where there is no fraud, misrepresentation or bad faith shown on the Veteran's part with respect to the creation of the overpayment at issue, waiver is not precluded pursuant to 38 U.S.C.A. § 5302(a). Here, the facts of this case do not clearly reveal fraud, misrepresentation, or bad faith on the Veteran's part in the creation of the overpayment in question. As such, the Board must now proceed to the question of whether the collection of the overpayment would be against "equity and good conscience." See 38 U.S.C.A. § 5302(a); 38 C.F.R. § 1.963(a). In determining whether collection of the overpayment would be against "equity and good conscience" consideration is given to the following elements, which are not intended to be all-inclusive: (1) fault of the debtor (where actions of the debtors contribute to the creation of the debt); (2) balancing of faults (weighing fault of the debtor versus fault of VA); (3) undue hardship (whether collection would deprive the 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 relinquishment of a valuable right or incurrence of a legal obligation). See 38 C.F.R. § 1.965. 38 C.F.R. § 1.965 also provides that 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. See 38 C.F.R. § 1.965(a). The Veteran seeks waiver of recovery of an overpayment of VA disability benefits (created during July 2005 and August 2006), asserting that he is not at fault for the creation of the debt and that collection of the debt would result in undue hardship. Turning to the factors of equity and good conscience, the first and second elements pertain to the fault of the debtor (the Veteran) versus the fault of VA. As discussed in great detail in the Board's February 2013 decision finding that the creation of the debt was valid, the Veteran has asserted that he contacted VA to inform them of his return to active duty status and that he was informed by RO staff that he was in proper receipt of these benefits. Without repeating the entire Board decision of February 2013, the Board will simply note that it was found that while VA had some fault in the creation of the overpayment, the Veteran also had fault in the creation of the overpayment. As stated in February 2013: The Veteran himself was in the best position to notify the RO of his actual duty status. At the time of the March 2006 RO decision, the Veteran was provided a copy of the actual rating decision wherein the RO determined that he last served on active duty on March 24, 2005. The Veteran knew, or should have known, that this factual determination was incorrect. There is no documentary evidence of record indicating that the Veteran sought to provide any service department records to correct this error. The Board further noted that: [T]he Veteran accepted the receipt of VA compensation benefits at a time for which he was ineligible based upon his active duty status. It appears that VA had reason to question whether or not the Veteran was in an active duty status, and its failure to inquire does lay some blame on the overpayment in VA's hands. However, this error does not erase the Veteran's acceptance of compensation benefits when, according to his own testimony, he had reason to believe he may not have been entitled. Therefore, the Board has already determined that the Veteran is in fact largely responsible for the debt incurred. Furthermore, the Veteran's acceptance of benefits that he has readily admitted he knew he might not be entitled to suggests that the greater fault lies with the Veteran rather than with VA. At no time did the Veteran attempt to submit any service documentation to verify his actual periods of active duty. As such, the Board finds that the fault in this case lies more with the Veteran. The Board must now determine whether the Veteran would be subjected to undue hardship if the debt were recovered. During his hearing, the Veteran testified that he had experienced a worsening of his financial status. He also reported in a February 2008 statement that he had a financial hardship (no explanatory statement was provided in support of this assertion). As such, the Board remanded the Veteran's case in February 2013 so that the Veteran could be provided the opportunity to submit a new Financial Status Report in support of his claim of undue hardship. The record reflects that the Veteran was contacted by telephone in February 2013 and notified that the Board had requested an updated Financial Status Report. The Veteran acknowledged having received a copy of the Board's decision. A letter was subsequently mailed to the Veteran in February 2013 requesting that he provide an updated Financial Status Report. To this date, VA has not received a response from the Veteran or an updated Financial Status Report. Due to the Veteran's failure to respond, the Board has no choice but to rely on the most recent Financial Status Report of record from November 2006. While VA has a statutory duty to assist in developing evidence pertinent to a claim, the Veteran also has a duty to assist and cooperate with VA in developing evidence - the duty to assist is not a one way street. See Wood v. Derwinski, 1 Vet. App. 190 (1991). According to the November 2006 Report, the Veteran had a monthly net income of more than $4,400.00. He has not provided VA with any evidence to demonstrate how the recovery of a debt that he is largely responsible for would result in undue hardship in light of the circumstances and evidence of record. Finally, the evidence fails to reflect that the recovery of this debt would nullify the objective for which benefits were intended. The Veteran is continuing to receive VA benefits. However, benefits were not intended to compensate the Veteran while on active duty. These additional benefits resulted in an unjust enrichment on the part of the Veteran and there is no evidence of record that the recovery of this debt will result in relinquishment of a valuable right or incurrence of a legal obligation. As such, the evidence demonstrates that a waiver of overpayment is not warranted in this case. In summary, the debt of $8,012.30 was created due more to the fault of the Veteran than the fault of VA. Furthermore, he has not provided VA with information to demonstrate how the recovery of this validly created debt would result in undue hardship. While the Veteran has testified to having numerous children, the most recent evidence of record does reflect a monthly income of more than $4,400.00. Finally, the evidence demonstrates that the Veteran was unjustly enriched as a result of the incurred debt, receiving both VA compensation benefits and active duty pay. As such, the Board finds that the recovery of the debt in question does not go against equity and good conscience. For the foregoing reasons, the Board finds that recovery of the debt of $8,012.30 is warranted, and the Veteran's request for a waiver of overpayment must be denied. (CONTINUED ON NEXT PAGE) ORDER Waiver of recovery of an overpayment of disability compensation benefits in the calculated amount of $8,012.30 is denied. ____________________________________________ DEBORAH W. SINGLETON Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs