Citation Nr: 1626217 Decision Date: 06/30/16 Archive Date: 07/11/16 DOCKET NO. 12-21 168 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Phoenix, Arizona THE ISSUES Whether the creation of a dependency allowance overpayment for the period from August 23, 2002, to September 22, 2009, is valid. REPRESENTATION Appellant represented by: Veterans of Foreign Wars of the United States ATTORNEY FOR THE BOARD N. Snyder, Counsel INTRODUCTION The Veteran had active service from January 1954 to June 1957. This appeal comes before the Board of Veterans' Appeals (Board) from a decision by the Department of Veterans Affairs (VA) Regional Office (RO) in Phoenix, Arizona. The record before the Board consists of the Veteran's electronic records in Virtual VA and the Veterans Benefits Management System. The issue of entitlement to a waiver of the overpayment created from May [redacted], 2003, to September 23, 2009, was raised by the Veteran in a November 2009 statement. Of note, the Veteran contends that a waiver of the overpayment for this period would be "fair and equitable" because he was remarried during this period. This matter has not been adjudicated by the Agency of Original Jurisdiction (AOJ). Therefore, the Board does not have jurisdiction over it, and it is referred to the AOJ for appropriate action. 38 C.F.R. § 19.9(b) (2015). This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2015). FINDINGS OF FACT 1. The evidence of record fails to reflect that VA was solely responsible for the overpayment at issue. 2. The Veteran's divorce from his former spouse, for whom he had been receiving additional compensation as his dependent, became effective in August 2002; he did not notify VA of the divorce or his remarriage until September 23, 2009. CONCLUSION OF LAW The creation of a dependency allowance overpayment for the period from August 23, 2002, to September 22, 2009, was valid. 38 U.S.C.A. § 5112 (West 2014); 38 C.F.R. §§ 3.501, 3.660 (2015). REASONS AND BASES FOR FINDINGS AND CONCLUSION Factual Background In August 2001, the Veteran submitted a VA form 21-0538, Status of Dependents Questionnaire. On the form, he reported being married to N.K.M. In June 2007, VA received an informal claim for increased ratings. In a November 2007 rating decision, the RO denied the claim. The Veteran asked for additional development, and in a May 2008 rating decision, the RO increased the rating for the service-connected bronchial asthma. In the notification letter accompanying the decision, the RO informed the Veteran that he was being paid as a veteran with one dependent. He was informed that his payment included an additional amount for his spouse and that he should let VA know "right away" if there was any change in marital status. On September 23, 2009, the RO contacted the Veteran because the Veteran had not returned a VA form 21-0538. The Veteran reported that he was no longer married to N.K.M. and that he had been married to L. since May [redacted], 2003. In October 2009, the RO issued the Veteran a letter asking him to complete an updated VA form 21-686c. The Veteran subsequently returned a VA form 21-686c and a copy of his marriage certificate to L. He did not provide a date of his divorce from N.K.M. Subsequently, in October 2009, the RO determined the Veteran and N.K.M. divorced in August 2002. In an October 27, 2009, letter, the RO informed the Veteran that his monthly payment amount had been reduced effective September 1, 2002, based on removal of N.K.M. from the award. The letter informed the Veteran that the monthly payment amount had been increased effective October 1, 2009, based on the addition of L. as the Veteran's spouse. The RO informed the Veteran that the change resulted in an overpayment. In November 2010, the Debt Management Center issued a letter to the Veteran informing him that he was paid $4,581 more than he was entitled to receive. Subsequently, in November 2013, the Veteran submitted a statement reporting disagreement with the overpaid amount. The Veteran explained that the overpayment amount should only be for the period he was unmarried. Specifically, he contends that he was entitled to payment for one dependent prior to his divorce from N.K.M. and from May, [redacted], 2003, the date of his marriage to L. and that the overpayment should only reflect the period between these marriages. In other words, he contends that the overpayment should be limited to the amounts paid between August 23, 2002, and May [redacted], 2003. Legal Criteria The issue of the validity of a debt is a threshold determination that must be made prior to a decision on a request for waiver of the indebtedness. See Schaper v. Derwinski, 1 Vet. App. 430 (1991). In order for the Board to determine that the overpayment was not properly created, such that the debt was not valid, it must be established that the Veteran was legally entitled to the benefits in question or, if the Veteran was not legally entitled, then it must be shown that VA was solely responsible for the Veteran 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 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 2014); 38 C.F.R. § 3.500(b)(2) (2015); 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 law provides for the rates of disability compensation, and for payment of additional compensation for dependents, including spouses, of veterans who are rated at least 30 percent disabled for their service-connected disabilities. See 38 U.S.C.A. §§ 1114(c), 1115, 1134, 1135 (West 2014). The effective date of reduction or discontinuance of compensation by reason of divorce of a dependent of a payee shall be the last day of the month in which such divorce occurs. See 38 C.F.R. § 3.501(d)(2) (2015). Additional compensation for a new dependent will be effective the latest of the following dates: (1) date of claim; (2) date the dependency arises; (3) effective date of the qualifying disability rating provided evidence of dependency is received within a year of notification of such rating action; or (4) date of commencement of a veteran's award. 38 U.S.C.A. § 5110(f), (g) and (n) (West 2014); 38 C.F.R. § 3.401(b) (2015). The "date of claim" for additional compensation for dependents is the date of a veteran's marriage, if evidence of the event is received within a year of the event; otherwise, the date is set at the date when the notice is received of the dependent's existence. 38 C.F.R. § 3.401(b)(1). The earliest that the additional award of compensation for a dependent spouse can occur is the first day of the month following the effective date. 38 C.F.R. § 3.31; see also Gold v. Brown, 7 Vet. App. 315 (1995). Analysis After considering all of the evidence, the Board finds the creation of the debt for the period from August 23, 2002, to September 22, 2009, is valid. The record clearly indicates that the Veteran was divorced in August 2002 and remarried in May 2003. However, there is no probative indication that VA was notified of the divorce or remarriage until September 23, 2009, more than one year after the events. In this regard, the Board finds the Veteran's September 2009 history that he notified VA of his remarriage is not credible, and thus not probative, as it is not supported by the record which is absent any such evidence until 2009, after VA contacted the Veteran. As noted above, the effective date for the award of additional compensation for a new dependent is the latest of the following dates: (1) date of claim; (2) date the dependency arises; (3) effective date of the qualifying disability rating provided evidence of dependency is received within a year of notification of such rating action; or (4) date of commencement of a veteran's award. 38 U.S.C.A. § 5110(f), (g) and (n) (West 2014); 38 C.F.R. § 3.401(b) (2015). The "date of claim" is the date VA received notice of the remarriage, September 23, 2009. Thus, the Board finds the Veteran was not legally entitled to benefits between August 23, 2002, and September 23, 2009. Furthermore, the Board finds VA was not solely responsible for the Veteran being erroneously paid benefits for the period from August 23, 2002, to September 22, 2009. The record indicates that the Veteran had been informed of his affirmative duty to inform VA as to any change in the status of his dependents, as reflected in letters of record, and the Veteran had previously provided updates regarding the status of his dependents, including a VA form 21-0538 in August 2001. Additionally, the record indicates that the Veteran was specifically informed to notify VA "immediately" if there was any change in marital status in letters mailed in December 2007 and December 2008. In sum, the Veteran was not legally entitled to the benefits he received, and it cannot be said that the Veteran was unaware that his payments were erroneous. Thus, the debt incurred as a result of an overpayment of VA benefits is valid. (CONTINUED ON NEXT PAGE) ORDER The Board having determined that the creation of a dependency allowance overpayment for the period from August 23, 2002, to September 22, 2009, is valid, the benefit sought on appeal is denied. ______________________________________________ Shane A. Durkin Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs