Citation Nr: 1630252 Decision Date: 07/28/16 Archive Date: 08/04/16 DOCKET NO. 15-22 975A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in St. Paul, Minnesota THE ISSUE Entitlement to a waiver of recovery of an overpayment of education benefits in the amount of $2,272.97, to include the issue of whether the debt was properly created. REPRESENTATION Appellant represented by: Veterans of Foreign Wars of the United States WITNESSES AT HEARING ON APPEAL Appellant, L.W., and L.B. ATTORNEY FOR THE BOARD M. Katz, Counsel INTRODUCTION The Veteran served on active duty from December 1993 to April 1998. The appellant in this case is the Veteran's daughter. This matter comes before the Board of Veterans' Appeals (Board) on appeal from an October 2014 decision from the Committee on Waivers and Compromises in St. Louis, Missouri. The appellant testified at a hearing before the undersigned Veterans Law Judge in May 2016. A transcript of that hearing is associated with the claims file. Arguments presented during the May 2016 hearing before the Board reflect that, in addition to requesting a waiver of overpayment, the appellant is challenging the validity of the debt. The question of the validity of the debt may be raised at any time as part of the request for waiver. 38 C.F.R. § 1.911(c) (2015). Therefore, the Board has recharacterized the matter on appeal as reflected on the title page, and is remanding it to the Agency of Original Jurisdiction (AOJ). VA will notify the appellant if further action is required. This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2015). 38 U.S.C.A. § 7107(a)(2) (West 2014). The appeal is REMANDED to the Agency of Original Jurisdiction (AOJ). VA will notify the appellant if further action is required. REMAND The appellant in this case requests a waiver of an overpayment debt currently calculated in the amount of $2,272.97. The appellant was approved for Chapter 35 education benefits for participation in classes at a community college beginning in January 2014. The record reflects that, in early February 2014, the appellant withdrew from classes after suffering withdrawal symptoms due to ceasing psychiatric medication as a result of a pregnancy. Although the appellant notified her school liaison of her need to withdraw from classes, VA was not notified that she withdrew from classes until May 6, 2014. In a May 2014 letter, VA notified the appellant that her continued receipt of education benefits after her withdrawal from school created an overpayment in the amount of $2,707.20. In August 2014, the appellant requested a waiver of the overpayment. In an October 2014 decision, the Committee on Waivers and Compromises issued a decision denying the appellant's request for a waiver. The decision reflects an original amount of debt of $5,920.07, but total indebtedness in the amount of $3,108.80. It is unclear from the decision the basis for the difference in the original amount of debt and the total indebtedness found. In May 2015, the appellant filed a notice of disagreement with the Committee's decision. In July 2015, the Committee reduced the amount of the appellant's debt from $3,108.80 to $2,272.97. During her May 2016 hearing before the Board, the appellant raised the issue of the validity of the debt, in addition to her request for a waiver on other grounds. She expressed her confusion as to how the amount of the debt was calculated, noting that the amount of the debt frequently changed. She stated that she requested an audit of her account in November 2014, but did not receive a response. The issue of the validity of a debt is a threshold determination that must be made prior to a decision on a claim of entitlement to waiver of recovery of an indebtedness. Schaper v. Derwinski, 1 Vet. App. 430 (1991). The propriety and amount of the overpayment at issue are matters that are integral to a waiver determination. Id. at 434; see also Narron v. West, 13 Vet. App. 223 (1999); VAOPGCPREC 6-98 (where the validity of a debt is challenged, that issue must be developed before the issue of entitlement to waiver of the debt can be considered.) This must be done prior to Board review. In this case, the issue of the validity of the debt has not been acknowledged or adjudicated in the first instance by the Agency of Original Jurisdiction (AOJ). Accordingly, the appellant's claim must be remanded for the AOJ to adjudicate the validity of the overpayment debt in the first instance. Thereafter, if it is determined that the debt is valid, the AOJ should readjudicate the issue of entitlement to a waiver of overpayment with consideration of all of the evidence in the claims file. 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) (West 2014); 38 C.F.R. §§ 1.962, 1.963, 1.965 (2015). 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). Accordingly, the case is REMANDED for the following action: (Please note, this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c). Expedited handling is requested.) 1. Prepare an audit/accounting of the appellant's VA education benefits, to include an explanation of the creation of the debt referencing the timing of reduction of such benefits, the reasons supporting the reduction, the entire calculated amount of the debt, the individual payments made to the appellant during the relevant time period, the amounts recouped from the appellant and the dates of recoupment, and the impact of the subsequent award of additional education benefits for a separate school program in May 2014. A copy of the written audit should be inserted into the claims file and another provided to the appellant and her representative. 2. Unless it is determined that the overpayment was not properly created, ask the appellant to complete a VA Form 5655 (Financial Status Report), listing her monthly income, monthly expenses, assets, and debts, and include any supporting evidence and/or records. 3. Thereafter, the AOJ must adjudicate the issue of the validity of the entire overpayment amount of $2,272.97. If the AOJ determines that the debt was properly created, readjudicate the issue of entitlement to waiver of recovery of an overpayment of VA benefits with consideration of all evidence in the claims file. 4. If the claim remains denied, the appellant and her representative should be furnished with a supplemental statement of the case and given the opportunity to respond before this case is returned to the Board. The appellant 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 of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West 2014). _________________________________________________ U. R. POWELL Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C.A. § 7252 (West 2014), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2015).