Citation Nr: 1428985 Decision Date: 06/26/14 Archive Date: 07/03/14 DOCKET NO. 11-16 295 ) DATE ) ) On appeal from the Department of Veterans Affairs (VA) Regional Office (RO) in St. Louis, Missouri THE ISSUES 1. Whether an overpayment of VA education benefits in the amount of $2,151.73 was validly created and assessed against the Veteran. 2. Whether there was sole administrative error on the part of VA in the creation of the overpayment of VA education benefits in the amount of $2,151.73. 3. Entitlement to a waiver of recovery of an overpayment of VA education benefits in the amount of $2,151.73. REPRESENTATION Veteran represented by: The American Legion ATTORNEY FOR THE BOARD L. Durham, Counsel INTRODUCTION The Veteran served on active duty from March 2000 to December 2003. This case comes before the Board of Veterans' Appeals (Board) on appeal from an April 2011 determination. The Board acknowledges that the RO characterized the issue on appeal as whether the debt determined to be due from the claimant is a valid debt. However, in light of assertions made the Veteran, the Board finds it appropriate to recharacterize the issue on appeal as shown above. The issue of entitlement to a waiver of recovery of an overpayment of VA education benefits in the amount of $2,151.73 is addressed in the REMAND portion of the decision below and is REMANDED to the Agency of Original Jurisdiction (AOJ). FINDINGS OF FACT 1. Due to a change in the Veteran's student status, the Veteran was overpaid education benefits in the amount of $2,151.73, for the period of July 19, 2010, to April 10, 2011. 2. The RO retroactively reduced the Veteran's education benefits for the period of July 19, 2010, through April 10, 2011. 3. The indebtedness was not due to sole administrative error on the part of VA. CONCLUSIONS OF LAW 1. As of July 19, 2010, the Veteran switched from full-time student status to 3/4 -time student status; the overpayment of those benefits, in the amount of $2,151.73 resulted in the valid creation of an indebtedness to VA in that amount. 38 U.S.C.A. §§ 5102, 5103, 5103A, 5302, 5107 (West 2002); 38 C.F.R. §§ 21.7042, 21.4009 (2013). 2. The overpayment of education benefits for the time period from July 19, 2010, to April 10, 2011, in the amount of $2,151.73, was not due to sole administrative error on the part of VA without knowledge of the Veteran, and is a valid debt to VA. 38 U.S.C.A. §§ 5102, 5103, 5103A, 5302, 5107 (West 2002); 38 C.F.R. §§ 21.7042, 21.4009 (2013). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS On April 11, 2011, the Veteran was issued a letter indicating that his education assistance had been changed due to a change in the number of credit hours he enrolled in as of July 19, 2010. It was further noted that this change resulted in an overpayment of $2,151.73. In his April 2011 notice of disagreement (NOD), the Veteran asserted that this overpayment was caused by an error on the part of VA. Specifically, instead of being classified as a 3/4-time student, he was classified as a full-time student by VA for the period of July 19, 2010, to April 10, 2011. The Veteran reported that he found himself in unforeseen hardship due to this error, for which he was not responsible. The Veteran requested that this problem be corrected and a repayment of lost benefits be issued. In his June 2011 substantive appeal, the Veteran asserted that this overpayment was due to the incompetence of VA in failing to update his account and that it would be unethical for VA to hold him responsible for an error that occurred due VA incompetence. Notice and Assistance The Veterans Claims Assistance Act of 2000 (VCAA), now codified at 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5106, 5107, 5126 (West 2002 & Supp. 2013), with implementing regulations published at 66 Fed. Reg. 45, 620 (Aug. 29, 2001) (now codified as amended at 38 C.F.R. §§ 3.102, 3.156(a), 3.159 and 3.316(a) (2013), describes VA's duty to notify and assist claimants in substantiating claims for VA benefits. In a case such as this, where the pertinent facts are not in dispute and the law is dispositive, there is no additional information or evidence that could be obtained to substantiate the claim, and the VCAA is not applicable. See Wensch v. Principi, 15 Vet. App. 362, 368 (2001) (citing Dela Cruz v. Principi, 15 Vet. App. 143 (2001) (holding that VCAA does not apply where there is extensive factual development in a case, reflected both in the record on appeal and the Board's decision, which indicates no reasonable possibility that any further assistance would aid the claimant in substantiating his claim). See also Sabonis v. Brown, 6 Vet. App. 426, 430 (1994); see also Manning v. Principi, 16 Vet. App. 534 (2002); Mason v. Principi, 16 Vet. App. 129 (2002); Livesay v. Principi, 15 Vet. App. 165 (2001); Soyini v. Derwinski, 1 Vet. App. 540, 546 (1991). As will be discussed in further detail below, the Veteran's claim is being denied solely because of a lack of entitlement under the law. Accordingly, the Board has decided the appeal on the current record without any further consideration of the VCAA. However, the Board does note that the Veteran has been provided the opportunity to submit evidence; he was afforded the opportunity to request a hearing before the Board; and all evidence pertinent to his claim has been obtained by VA. Factual Background In April 2005, the Veteran submitted an application for VA education benefits. The Veteran was granted entitlement to 36 months of educational assistance under Chapter 30 or the Montgomery GI Bill. In May 2008, the Veteran submitted a request for change of program or training, in which he indicated that he would be switching from Troy State at Montgomery to Virginia College. In August 2009, the Veteran submitted a request for change of program or training, in which he indicated that he would be switching from Virginia College to Faulkner University. The record reflects that the Veteran actually enrolled in American Intercontinental Online. A Chapter 30 Education Award record from VA reflects that the Veteran was receiving full-time education benefits through October 4, 2009. On October 5, 2009, he began receiving 3/4-time education benefits. On November 9, 2009, his education benefits were switched back to full-time status. A May 27, 2010, VA Form 22-1998 reflected that the Veteran was taking credits on a full-time basis. An Enrollment Certification reflected the courses in which the Veteran was enrolled, to include the credit hours, from July 19, 2010, to March 13, 2011. A notation on this Enrollment Certification reflects that this form was electronically received by VA on July 14, 2010. A July 15, 2010, Web Enabled Approval Management System (WEAMS) record reflected that the Veteran was taking credits on a full-time basis. On April 11, 2011, the Veteran was issued a letter indicating that his education assistance had been changed due to a change in the number of credit hours he enrolled in as of July 19, 2010. It was further noted that this change resulted in an overpayment of $2,151.73. Analysis As noted above, the Veteran has taken issue with the RO's determination that an overpayment of education benefits was created by a change in his student status from full-time status to 3/4-time status, and has also essentially requested a waiver of that overpayment. The Board notes that the Veteran's assertions and the facts of the case have specifically called attention to the underlying issue of whether the creation of the overpayment was due to sole administrative error on the part of VA. The foregoing issues pertaining to validity, including "sole administrative error" must be addressed prior to the exploration of the waiver question. See Schaper v. Derwinski, 1 Vet. App. 430 (1991). An overpayment is created when a payee has received monetary benefits to which he or she is not entitled. 38 C.F.R. § 1.962. 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 (2013). 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). After the evidence has been assembled, it is the Board's responsibility to evaluate the entire record. See 38 U.S.C.A. § 7104(a). When there is an approximate balance of evidence regarding the merits of an issue material to the determination of the matter, the benefit of the doubt in resolving each such issue shall be given to the claimant. 38 U.S.C.A. § 5107; 38 C.F.R. § 3.102. In Gilbert v. Derwinski, 1 Vet. App. 49, 53 (1990), the United States Court of Appeals for Veterans Claims (Court) stated that "a veteran need only demonstrate that there is 'an approximate balance of positive and negative evidence' in order to prevail." To deny a claim on its merits, the preponderance of the evidence must be against the claim. See Alemany v. Brown, 9 Vet. App. 518, 519 (1996), citing Gilbert, 1 Vet. App. at 54. With regard to the lawfulness of the debt, the Veteran has not disputed the existence of the overpayment. As discussed above, the Veteran asserted in his April 2011 NOD that this overpayment was caused by an error on the part of VA. He is not contesting the validity of the debt but is contesting who is at fault for the debt. Essentially, he is claiming that he should not be forced to repay the debt, as it was VA's fault. The Board construes this contention as an assertion that the overpayment in question resulted solely from administrative error on the part of VA in not promptly updating his education records. Under relevant law and regulations, sole administrative error connotes that the Veteran neither had knowledge of nor should have been aware of the erroneous award. Further, neither the Veteran's actions nor his or her failure to act must have contributed to payment pursuant to the erroneous award. 38 U.S.C.A. § 5112(b)(9)(10) (West 2002); 38 C.F.R. § 3.500(b)(2) (2013). The Board has conducted a thorough review of the record in this case in light of the Veteran's contentions. The Board notes that the Enrollment Certification received by VA on July 14, 2010, reflected the courses in which the Veteran was enrolled, to include the credit hours, from July 19, 2010, to March 13, 2011. As such, it appears that the Veteran informed VA of his student status. However, as discussed above, sole administrative error connotes that the Veteran neither had knowledge of nor should have been aware of the erroneous award. The Board finds that the Veteran should certainly have been aware that there was no change in his benefits, despite his reducing his credit hours. Moreover, the record reflects that the Veteran's benefits had previously been switched to a 3/4-time student status for a prior period (October 5, 2009, to November 8, 2009). As such, the Veteran should have been aware of the fact that a reduction in the number of credit hours he was taking resulted in a reduction in his education benefits. Therefore, the Board cannot find that the overpayment of VA education benefits in the amount of $2,151.73 was due to a sole administrative error committed by VA, given that the Veteran should have been aware of the erroneous award. In sum, the Board concludes that the overpayment of VA education benefits received by the Veteran between July 19, 2010, through April 10, 2011, was not due solely to error on the part of VA, without any knowledge of the Veteran. Thus, the overpayment of education benefits in the amount of $2,151.73 is a valid debt to VA. 38 U.S.C.A. §§ 5102, 5103, 5103A, 5302, 5107 (West 2002); 38 C.F.R. §§ 21.7042, 21.4009 (2013). ORDER The overpayment of VA education benefits was validly created in the amount of $2,151.73. In this regard, the appeal is denied. The overpayment of VA education benefits in the amount of $2,151.73 did not result due to sole administrative error on the part of VA, without the Veteran's knowledge that it was erroneous, and this overpayment debt is valid. To this extent, the appeal is denied. REMAND The Board has found that the overpayment of VA education benefits was validly created in the amount of $2,151.73. Thus, the Board is left to consider whether that overpayment, in the amount of $2,151.73, can be waived. With respect to the issue of waiver of the overpayment, it is noted that the only adjudication of that issue was contained in the March 2011 statement of the case, in which the Veteran was not provided with the laws and regulations pertaining to waiver, and therefore did not have a meaningful ability to advance his claim. The Veteran must be apprised of the laws and regulations governing a waiver decision. Further, the Veteran has contended that the repayment of the overpayment would impose upon him an unforeseen hardship. The potential for the imposition of an undue hardship is one of the elements for consideration in the determination of whether the collection of an overpayment would violate the principles of equity and good conscience. 38 C.F.R. § 1.965 (2013). As such, the Veteran should be provided the opportunity to submit an updated financial status report in order to properly assess whether collection of the overpayment would impose an undue hardship upon him. Accordingly, the case is REMANDED for the following action: 1. The Veteran should be provided with a financial status report form (VA Form 5655) and asked to provide a current financial status report. 2. Following the completion of the above, readjudicate the Veteran's claim for a waiver of the overpayment in the amount of $2,151.73. If a complete grant of the claim remains denied, the Veteran should be provided a supplemental statement of the case containing notice of all relevant actions taken on the claim for benefits, to include a summary of the evidence and applicable law and regulations considered pertinent to the issue noted above. The Committee of Waivers and Compromises (Committee) should explain the reasons and bases for that decision, specifically addressing the principles of equity and good conscience, in accordance with 38 C.F.R. § 1.965(a), setting out in detail those laws and regulations. The Veteran and his representative should be given the legally requisite opportunity to respond. The claims folder should be returned to the Board. The Veteran 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 or by the Court 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). ______________________________________________ MICHAEL A. PAPPAS Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs