Citation Nr: 1615883 Decision Date: 04/20/16 Archive Date: 04/26/16 DOCKET NO. 10-18 404A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Muskogee, Oklahoma THE ISSUE Entitlement to waiver of recovery of an overpayment of educational assistance benefits under the Montgomery GI Bill-Selected Reserve program, in the amount of $3,911.98, to include whether the debt was validity created. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD A. Lindio, Counsel INTRODUCTION The Veteran served on active duty from January 1996 to December 1996 and from December 2003 to March 2005. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a decision issued in May 2009 by the Committee on Waivers and Compromises (COWC) at the Muskogee, Oklahoma Regional Office (RO) of the Department of Veterans Affairs (VA). In January 2015, the Board remanded this matter for additional development. The Board notes that, in addition to the paper claims file, there is a paperless, electronic (Virtual VA and VBMS) claims file associated with the appellant's claims. A review of the documents in such file reveals that some of the documents in the Virtual VA paperless claims file, i.e., the September 2004 Debt Management letter, is relevant to the issue on appeal and not duplicative of the evidence in the paper claims file. However, as such evidence was considered by the RO in its preparation of the supplemental statements of the case, there is no prejudice to the Veteran in the Board proceeding to a decision, at this juncture. FINDINGS OF FACT 1. The educational benefits overpayment of $3,911.98 was validly created. 2. The Veteran was at least partially at fault for the creation of the overpayment. 3. A June 2005 Department of Defense (DOD) determination indicated that the Veteran was not eligible for Montgomery GI Bill-Selected Reserve (MGIB-SR) - Chapter 1606 benefits. In a May 2015 letter, DOD indicated that such benefits had been terminated December 7, 1997, when the Veteran was transferred to the individual ready reserve (IRR) for more than one year. 4. In a September 2005 letter, the VA Debt Management Center informed the Veteran that she had been paid $3,911.98 more than she had been entitled to in education benefits, but that she had the right to dispute the debt and to request a waiver. 5. In April 2009, over 180 days following the September 2005 letter, the Veteran filed a request for a waiver of her debt. 6. In May 2009, the COWC denied the Veteran's request, finding that her 180 day time limit to request a waiver had expired, and informed the Veteran of that decision. CONCLUSIONS OF LAW 1. An overpayment of MGIB-SR educational assistance in the amount of $3,911.98 was properly created, and the debt was valid. 38 U.S.C.A. § 5112 (West 2014); 38 C.F.R. § 3.500 (2015). 2. The Veteran's request for a waiver of recovery of an overpayment of benefits in the amount of $3,911.98 was not timely. 38 U.S.C.A. § 5302(a) (West 2014); 38 C.F.R. § 1.963 (2015). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS I. VA's Duties to Notify and Assist Generally, the Veterans Claims Assistance Act of 2000 (VCAA) and its implementing regulations impose obligations on VA to provide claimants with notice and assistance in substantiating a claim. See 38 U.S.C.A. §§ 5102, 5103, 5103A, 5107 (West 2014); 38 C.F.R. §§ 3.102, 3.159 (2015). However, the notice and duty to assist provisions of the VCAA do not apply to waiver claims. See Lueras v. Principi, 18 Vet. App. 435 (2004); see also Barger v. Principi, 16 Vet. App. 132 (2002). Notwithstanding that fact, the appellant has had a fair opportunity to present arguments and evidence in support of her waiver claim. The essential facts in this case have been fully developed and are not in dispute. The appellant does not dispute the amount of the overpayment. Additionally, the VCAA has no effect upon an appeal where the law, and not the underlying facts or development of the facts, is dispositive in the matter. Manning v. Principi, 16 Vet. App. 534 (2002). Moreover, the COWC has explained to the appellant the bases for denial of the claim, and afforded her opportunity to present information and evidence in support of the claim. Any deficiencies in notice or assistance would be relevant to principles of equity and good conscience, and, as such, are discussed in the body of the decision. In January 2015, the Board remanded to obtain a copy of a DOD determination as to the Veteran's eligibility for benefits, a copy of an August 2005 letter noted in the March 2010 statement of the case, and notice provided with the September 2005 denial. The RO obtained the information from DOD in May 2015, and notified the Veteran of such findings that same month. As to the copies of letters requested in the Remand, in the May 2015 supplemental statement of the case, the RO indicated that it was unable to obtain such letters. Although such letters were not obtained, as will be fully explained in the decision herein, sufficient evidence is of record regardless of the presence of the letters to make a determination in this case. Specifically, while the notice letters are not of record, the record does document that the Veteran was apprised of the debt and the opportunity to request a waiver in September 2005. As such, further remand, to obtain more specific notice would serve no useful purpose. See Soyini v. Derwinski, 1 Vet. App. 540, 546 (1991) (strict adherence to requirements of the law does not dictate an unquestioning, blind adherence in the face of overwhelming evidence in support of the result in a particular case; such adherence would result in unnecessarily imposing additional burdens on VA with no benefit flowing to the appellant); Sabonis v. Brown, 6 Vet. App. 426, 430 (1994) (remands which would only result in unnecessarily imposing additional burdens on VA with no benefit flowing to the appellant are to be avoided). Therefore, the Veteran will not be prejudiced as a result of the Board proceeding to the merits of her claims. II. Validity of Debt The Veteran contends that, based on her service, she was eligible for the disputed Montgomery GI Bill-Selected Reserve (MGIB-SR) program (Chapter 1606 of Title 10, United States Code) education benefits, and as such, the overpayment of such benefits should be waived. For a determination that the overpayment was not properly created, such that the debt was not valid, it must be established that the claimant was either legally entitled to the benefits in question or, if the claimant was not legally entitled, then it must be shown that VA was solely responsible for the claimant being erroneously paid benefits. Administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law. VAOPGPREC 2-90 (July 17, 1989), 55 Fed. Reg. 27757 (1990). Sole administrative error connotes that the claimant neither had knowledge of nor should have been aware of the erroneous award. Further, neither the claimant'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); 38 C.F.R. § 3.500(b)(2); Jordan v. Brown, 10 Vet. App. 171(1997) (sole administrative error is not present if the payee knew, or should have known, that the payments were erroneous). Thus, a finding of sole administrative error requires not only error on the part of VA, but that the beneficiary is unaware that the payments are erroneous. The Court noted that, "[s]tated another way, when an overpayment has been made by reason of an erroneous award based solely on administrative error, the reduction of that award cannot be made retroactive to form an overpayment debt owed to VA from the recipient of the erroneous award." Erickson v. West, 13 Vet. App. 495, 499 (2000). The Board will first turn to the question of whether the Veteran was entitled to the education benefits she received. The MGIB-SR program (Chapter 1606 of Title 10, United States Code) is an educational assistance program for members of the Selected Reserve of the Army, Navy, Air Force, Marine Corps, and Coast Guard, and the Army and Air National Guard. 38 C.F.R. § 21.7520. It was established to encourage membership in units of the Selected Reserve of the Ready Reserve. 10 U.S.C.A. § 16131(a). The Reserve components decide who is eligible for the program. VA makes the payments for the program. 38 C.F.R. § 21.7540. Per a March 2010 audit record, the Veteran received education benefits under the MGIB-SR, including from April 2002 to October 2003. A June 2005 DOD record documents that the Veteran was not eligible to receive MGIB-SR benefits. In March 2015, DOD indicated that the Veteran's MGIB-SR benefits had terminated December 7, 1997. In May 2015, DOD clarified that the Veteran was not eligible for MGIB-SR benefits, as such benefits had been terminated for over 17 years, since December 7, 1997, when she transferred to the individual ready reserve (IRR) for more than 1 year. The Veteran's past receipt of the MGIB-SR benefits, and the amount received, is not in dispute. Though the Veteran received MGIB-SR benefits, DOD has determined that she is not eligible for such benefits. As noted above, the Reserve components decide who is eligible for the program; VA only makes the payments for the program. 38 C.F.R. § 21.7540. As DOD has found that the Veteran was not eligible for the MGIB-SR, VA's past payment of MGIB-SR benefits resulted in a payment of benefits that she was not entitled to receive. The Board next turns to the question of whether such debt was due to sole administrative error by VA. To the extent VA was in error by making the educational assistance payments to the Veteran, the Board still finds the Veteran should have known VA's MGIB-SR educational benefit payments were erroneous. A review of the evidence in the claims folder reveals that in December 2001, the Veteran signed a "Notice of Basic Eligibility (NOBE)" to establish entitlement by eligible members of the "Selected Reserve" to GI Bill Educational Assistance benefits. The form noted that VA used the NOBE "to substantiate eligibility for educational assistance under the Montgomery GI Bill." By signing that form, the Veteran indicated that she met basic eligibility criteria, which included "I have agreed to serve six years in the Selected Reserve." The form further noted that "basic eligibility to educational assistance benefits depends upon serving satisfactorily the complete 6-year term in the Selected Reserve." The Veteran has not disputed that she transferred out of the Selected Reserve to the IRR in 1996. (April 2009 claim). However, in the December 2001 NOBE she indicated that she met basic eligibility criteria as a member of the Selected Reserve, though she did not meet the six year criteria noted above. In her April 2009 claim, the Veteran indicated that she had transferred to the IRR due to her pregnancy (in 1996) and her husband being in the military, but that she returned to drilling when she used her education benefits (in 2001). The December 2001 NOBE signed by the Veteran indicated that she could have authorized non-participation in the Selected Reserve of "up to one year of nonavailability, or up to three years...missionary obligation or with approval of the Service Secretary." The NOBE further specifically indicated that "Failure to affiliate with the Selected Reserve at the end of this [non-participation] period will result in permanent ineligibility to benefits." However, the Veteran clearly took more than one year (or rather she took approximately five years) of non-participation in the Selected Reserve and does not appear to have performed a missionary obligation or obtained approval from the Service Secretary for her longer than one year of non-participation. As noted in DOD's May 2015 findings, the Veteran was not eligible for MGIB-SR benefits since December 7, 1997, after she transferred to the IRR for more than the available 1 year non-participation period. The Veteran knew or should have known it was improper to accept and retain thousands of dollars in MGIB-SR educational benefit payments, when she did not meet the eligibility requirements noted in the December 2001 NOBE. Even if the Veteran did not read the NOBE form - wherein she attested to having fulfilled Selected Reserve requirements AND that she had not violated non-participation requirements - persons dealing with the Government are charged with knowledge of federal statutes and lawfully promulgated agency regulations "regardless of actual knowledge of what is in the (r)egulations or of the hardship resulting from innocent ignorance." See Morris v. Derwinski, 1 Vet. App. 260, 265 (1991), citing Fed. Crop Ins. Corp. v. Merrill, 33 U.S. 380, 384-85; 68 S. Ct. 1, 3; 92 L. Ed. 10 (1947). Given the Veteran's signing her December 2001 NOBE, there is insufficient evidence of sole administrative error on behalf of the VA. The Veteran clearly exhibited some fault in the creation of the debt. In view of the finding that the overpayment was not the result of sole administrative error on the part of VA, the Board finds that the AOJ's decision to recoup the debt was proper, as the debt was a valid debt to VA. Therefore, the AOJ's attempt to recover the total of $3,911.98 was proper. 38 U.S.C.A. § 5112(b) (9), (10); 38 C.F.R. § 3.500(b)(2); Jordan v. Brown, 10 Vet. App. 171 (1997). III. Waiver of Overpayment Even if the debt is deemed valid and properly created, the debtor still has the right to request waiver of collection of the debt, as long as a request for waiver is timely raised and recovery of the debt would be "against equity and good conscience." 38 U.S.C.A. § 5302(a). However, any indication of fraud, misrepresentation of a material fact, or bad faith on the part of any person having an interest in waiver of recovery of the overpayment will preclude waiver. 38 U.S.C.A. § 5302(c); 38 C.F.R. §§ 1.962(b), 1.963(a), 1.965(b). It should be emphasized that only one of the three elements (fraud, misrepresentation, or bad faith) need be shown to preclude consideration of waiver of recovery of overpayment under 38 U.S.C.A. § 5302(c). Under the applicable regulations, a request for waiver of a debt, other than for loan guaranty, shall only be considered if made within 180 days following the date of a notice of the indebtedness to the debtor. The 180-day period may be extended if the individual requesting waiver demonstrated to the Chairperson of the Committee that, as a result of an error by either VA or the postal authorities, or due to other circumstances beyond the debtor's control, there was a delay in such individual's receipt of the notification of indebtedness beyond the time customarily required for mailing, including forwarding. If the requester does substantiate that there was such a delay in the receipt of the notice of indebtedness, the Chairperson shall direct that the 180-day period be computed from the date of the requester's actual receipt of the notice of indebtedness. See 38 C.F.R. § 1.963(b); see also 38 U.S.C.A. § 5302(a). A September 2005 letter from the VA Debt Management Center is of record. In the letter, VA indicated that her entitlement to eligibility benefits had changed and that as a result she had been paid $3,911.98 more than she had been entitled to receive. Thus, regardless of whether or not the Veteran had received the earlier letter, presumably sent in August 2005 (as noted in the March 2010 statement of the case and requested in the January 2015 Board remand) the Veteran clearly had notice that the debt existed. Furthermore, the Veteran herself indicated, in her April 2009 claim, that after returning from Iraq in 2005, she had "started receiving letters about owing money to the VA." Such a statement indicates that she was in receipt of VA's letters regarding her indebtedness at that time. The September 2005 VA Debt Management Center letter further stated in bold print, "Information regarding these options is on the enclosed document entitled, Notice of Rights and Obligations. Read it carefully." [As an incidental matter, the Board notes that although the Board remanded in part to obtain such notice and a copy of the enclosed document was not included in the Veteran's claims file (either paper or virtual), the form letter noted that enclosures were included with the letter. Therefore, the Board presumes that the Notice of Rights and Obligations document was sent to the Veteran at her address of record in September 2005, along with the notice of indebtedness. Significantly, the Veteran has not asserted that the Notice of Rights and Obligations document was not enclosed with the September 2005 letter, and no clear evidence has been presented to rebut the presumption of regularity. See generally Mindenhall v. Brown, 7 Vet. App. 271 (1994) (applying the presumption of regularity to official duties of the AOJ).] Furthermore, regardless of whether the Notice of Rights and Obligations document was included with the September 2005 letter, the Board finds that the September 2005 letter itself specifically notified the Veteran that she had the opportunity to request a waiver. That letter included a short explanation of the Veteran's rights, which stated "[y]ou have the right to dispute the debt and the right to request waiver. If you request waiver, you also have the right to request an oral hearing." In April 2009, the Veteran filed her first and only request for a waiver of her education benefits overpayment. The Board again notes that under the applicable regulations, a request for waiver of a debt, other than for loan guaranty, shall only be considered if made within 180 days following the date of a notice of the indebtedness to the debtor. See 38 C.F.R. § 1.963(b); see also 38 U.S.C.A. § 5302(a). The Veteran filed the April 2009 request years after the 180-day period following her receipt of the September 2005 notice of indebtedness. After reviewing the foregoing factual background as well as the evidence of record, it is the Board's opinion that the Veteran's request for a waiver of overpayment was not timely. In particular, the record shows that at the time of the September 2005 letter, the Veteran had notice of her indebtedness. There is nothing in the record to suggest that the letter was returned as undeliverable or that there was a delay in the Veteran's receipt of the letters. Significantly, the Veteran has not argued as such either, and has even indicated that she had received notice of her debt at that time. Therefore, it cannot be said that she was not properly notified both of the creation of the overpayment and of her right to request a waiver of overpayment. The Board further notes, for the sake of argument, that even if the Veteran had not been provided a copy of the Notice of Rights and Obligations document noted in the September 2005 letter, the actual September 2005 letter put her on notice that she had the right to appeal the debt. Furthermore, all persons dealing with the federal government are charged with knowledge of federal statutes and lawfully promulgated agency regulations. Morris v. Derwinski, 1 Vet. App. 261, 265 (1991), citing Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384-85 (1947). As such, a claim of ignorance of the law in not submitting a timely waiver request is without merit. As the Veteran clearly did not file her claim for waiver within the mandatory 180-day time limit, the Board need not make a determination as to whether the collection of the debt would be "against equity and good conscience" or whether there was any indication of fraud, misrepresentation of a material fact, or bad faith of the part of the Veteran in creating the debt. The Board does note, however, that in the prior section of this decision the Board found VA was not solely at fault in the creation of the debt. In conclusion, the facts of the case clearly show that a claim for waiver was not received by VA within the 180-day time limit mandated by law. Indeed, it was not received until several years after the end of the 180-day time limit. The Court has held that in cases such as this, where the law is dispositive, the claim should be denied because of the absence of legal merit. Sabonis v. Brown, 6 Vet. App. 426 (1994). Thus, it is determined that the Veteran's request for a waiver of overpayment was not timely, and as a matter of law, her claim must be denied. ORDER The overpayment of MGIB-SR education benefits is a valid debt and was properly created. Waiver of recovery of an overpayment of $3,911.98 in MGIB-SR education benefits is denied. ____________________________________________ TANYA SMITH Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs