Citation Nr: 1624828	
Decision Date: 06/21/16    Archive Date: 07/11/16

DOCKET NO.  14-25 743	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in Winston-Salem, North Carolina


THE ISSUE

Whether an overpayment of disability compensation benefits in the amount of $7,670.80 was validly created.


REPRESENTATION

Appellant represented by:	Disabled American Veterans


ATTORNEY FOR THE BOARD

J. W. Kim, Counsel






INTRODUCTION

The Veteran had active service from October 1996 to October 2000, August 2005 to May 2006, October 2006 to June 2009, and February 2010 to July 2011.

This case comes to the Board of Veterans' Appeals (Board) from a January 2013 decision by the Department of Veterans Affairs (VA) Debt Management Center in St. Paul, Minnesota.  At that time, the Regional Office (RO) in Houston, Texas had jurisdiction over the case.  Subsequently, jurisdiction over the case was transferred to the RO in Winston-Salem, North Carolina.  

The Board notes that the RO has developed the issue as whether compensation benefits were properly terminated for receipt of military pay.  However, the Veteran has challenged the validity of the overpayment.  Thus, the Board has characterized the issue to more accurately reflect the issue in contention.  As the RO has also adjudicated the issue of the validity of the overpayment, there is no prejudice to the Veteran.  Bernard v. Brown, 4 Vet. App. 384 (1993).  Moreover, the Board is granting the appeal.


FINDING OF FACT

The overpayment of disability compensation benefits in the amount of $7,670.80 was not properly created as it was due to the sole administrative error of VA that benefits continued to be paid.


CONCLUSION OF LAW

Resolving reasonable doubt in favor of the Veteran, the overpayment of disability compensation benefits in the amount of $7,670.80 was improperly created and is not a valid debt.  38 U.S.C.A. §§ 5112, 5302 (West 2014); 38 C.F.R. §§ 1.956, 1.962, 1.963, 1.965 (2015).

REASONS AND BASES FOR FINDING AND CONCLUSION

An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled.  38 U.S.C.A. § 5302 (West 2014); 38 C.F.R. § 1.962 (2015).  When the validity of a debt is challenged, a threshold determination must be made on that question prior to a decision on waiver of indebtedness.  Schaper v. Derwinski, 1 Vet. App. 430, 431 (1991); see also 38 C.F.R. § 1.911(c) (2015); VAOPGCPREC 6-98 (Apr. 24, 1998).  To establish improper creation of an overpayment, i.e. an invalid debt, evidence must show that the claimant was legally entitled to the VA compensation benefits at issue, or, if he was not legally entitled to these benefits, then it must be shown that VA was solely at fault for the erroneous payment of excess benefits.

Sole administrative error connotes that the claimant neither had knowledge of nor should have been aware of the erroneous award or receipt of benefits.  Furthermore, neither the claimant's actions nor his failure to act may have contributed to the erroneous payment of benefits.  See 38 U.S.C.A. § 5112(b) (West 2014); Jordan v. Brown, 10 Vet. App. 171 (1997); 38 C.F.R. § 3.500(b)(2) (2015).  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).  Thus, a finding of sole administrative error requires not only error on the part of VA, but that the claimant was unaware that the payments were erroneous. 

Compensation is discontinued for any period for which a Veteran receives active service pay, such as for reentry into active military service, or for active duty for training or inactive duty for training.  38 C.F.R. § 3.654(a) (2015).  Thus, if a Veteran does not notify VA of such service, or waive his compensation for such periods, an overpayment may result.  38 C.F.R. § 3.700(a)(1) (2015).  

In this case, there has been an overpayment of disability compensation benefits in the amount of $7,670.80.  The overpayment resulted from the concurrent payment of VA disability compensation benefits and active service pay from February 2010 to July 2011 during the Veteran's last period of active service.  The Veteran claims that he notified VA of his return to active service in February 2010 and that, due to his deployment, he was not aware that he was receiving compensation benefits.  

In essence, the Veteran challenges the validity of the creation of the debt, asserting that the overpayment resulted from sole administrative error on the part of VA.

Initially, the Board notes that an overpayment was previously created for the same reason, that of the receipt of both VA compensation benefits and active service pay, for the Veteran's prior periods of active service.  After eventually finding that the Veteran's request for a waiver was timely, the Committee on Waivers granted a waiver of that debt in December 2011.  The award period of that debt was from April 2002 to April 2010.  In a November 2009 statement, the Veteran had stated that he was not aware that he had to notify VA when he returned to active service and that, had he known, he would have not hesitated to immediately contact VA upon activation.

This case began when the Veteran called to notify VA that he had been released from active duty in July 2011.  He called four days after separation from service.  That report of contact notes that he had informed VA of his return to active duty in February 2010 but his benefits were not stopped and that his monthly payments had been going toward a previous debt.

Based on the time period encompassed by the prior overpayment, which extended into the Veteran's last period of active service that began in February 2010, the record indicates that VA was on notice that he had returned to active service as of April 2010.  During his discussions with VA regarding the earlier overpayment, the Veteran indicated that he would contact VA upon any future activation.  

While there is no contemporaneous record that the Veteran notified VA of his activation in February 2010, the Veteran called shortly after his separation in July 2011 to notify VA that he had been released from active duty.  That action, to restart the payment of compensation benefits, indicates that he had previously asked VA to discontinue them.  

Lastly, the July 2011 report of contact notes that the Veteran's compensation benefits were being applied to a previous debt.  As of July 2011, the Committee on Waivers had not granted a waiver of the earlier debt.  As such, even had the Veteran been able to check his bank account while deployed, he likely would not have seen the usual monthly deposits of compensation benefits and, thus, would have been unaware that benefits were still being paid.  

Given the totality of the circumstances, and resolving reasonable doubt in favor of the Veteran, the Board finds that he notified VA of his return to active service in a timely manner and was unaware of his continued receipt of benefits.  38 U.S.C.A. § 5107(b) (West 2014); Gilbert v. Derwinski, 1 Vet. App. 49 (1990).  Accordingly, the overpayment of disability compensation benefits in the amount of $7,670.80 was not properly created as it was due to the sole administrative error of VA that benefits continued to be paid.


ORDER

As the overpayment of disability compensation benefits in the amount of $7,670.80 was not validly created, the appeal is granted.



____________________________________________
THOMAS H. O'SHAY 
Veterans Law Judge, Board of Veterans' Appeals

Department of Veterans Affairs