Citation Nr: 1645038 Decision Date: 11/02/16 Archive Date: 12/09/16 DOCKET NO. 13-15 531 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Cleveland, Ohio THE ISSUE Entitlement to a waiver of the recovery of an overpayment of VA benefits in the amount of $352,320.40, to include the issue of the validity of the overpayment. REPRESENTATION Appellant represented by: The American Legion WITNESSES AT HEARING ON APPEAL The Veteran and his wife ATTORNEY FOR THE BOARD J. Andrew Ahlberg, Counsel INTRODUCTION The Veteran served on active duty from May 1966 to June 1972. This matter was previously before the Board of Veterans' Appeals (Board) on appeal from a December 2012 decision by the Committee on Waivers and Compromises of the Department of Veterans Affairs (VA) Regional Office (RO) in Milwaukee, Wisconsin which denied the Veteran's request for a waiver of indebtedness to the amount of $352,320.40. Jurisdiction over the appeal now lies with the RO in Cleveland, Ohio. The case was remanded by the Board in June 2015 due to the necessity of resolving the inextricably intertwined matter of the propriety of the reduction in compensation to a rating of 20 percent effective from March 1, 1999. This matter was referred to the RO by a separate Board remand issued simultaneously in June 2015 for the purpose of issuing a statement of the case (SOC) pursuant to Manlincon v. West, 12 Vet. App. 238 (1999). An SOC addressing the propriety of the rating reduction to 20 percent effective from March 1, 1999, was completed in March 2016. As a timely substantive appeal was not filed following the March 2016 SOC, the matter of entitlement to a waiver of the recovery of an overpayment of the VA benefits in question is ripe for review and is the only matter for appellate consideration by the Board. This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2016). 38 U.S.C.A. § 7107(a)(2) (West 2014). FINDINGS OF FACT 1. Based on his receipt of an award of Workers' Compensation benefits coincident with his employment with the United States Postal Service (USPS), the Veteran was informed in January 2012 that his award of VA benefits would be reduced and may have resulted in an overpayment of VA benefits. 2. In February 2012, the VA Debt Management Center (DMC) notified the Veteran that he had received an overpayment of VA benefits to the amount of $352,320.40 of which he was not entitled. 3. In his original application for a total disability rating for compensation based on individual unemployability (TDIU) by way of a VA Form 21-8940 (Veteran's Application for Increased Compensation Based on Unemployability) filed in February 1999, the Veteran informed VA of his award of Workman's Compensation coincident with his employment with the USPS; he also referred to this award in an additional communication filed at that time and there was evidence of record at that time documenting the possibility of such an award. 4. The VA was solely responsible for the overpayment of $352,320.40. CONCLUSION OF LAW The debt from the overpayment of $352,320.40 is not valid. 38 U.S.C.A. §§ 5112, 5302 (West 2014); 38 C.F.R. §§ 1.962, 3.500, 21.7153(c) (2015). REASONS AND BASES FOR FINDINGS AND CONCLUSION The issue of validity of a debt is a threshold determination that must be made prior to a decision on a request for waiver of that indebtedness. Schaper v. Derwinski, 1 Vet. App. 430 (1991). The overpayment in this case was created because the Veteran was receiving worker In order for the Board to determine whether an overpayment was created properly, it must be established that the Veteran was not entitled legally to the benefits in question. If there was no legal entitlement, it must then be shown that VA was not solely responsible for the Veteran being paid benefits erroneously. When an overpayment has been made by reason of an erroneous award based solely upon VA's administrative error, the reduction of that award cannot be made retroactive to form an overpayment of debt owed to VA from the recipient of the erroneous award. 38 U.S.C.A. § 5112(b)(10); 38 C.F.R. § 3.500 (b); see Erickson v. West, 13 Vet. App. 495, 499 (2000), withdrawn on other grounds, Erickson v. Gober, 20 Vet. App. 506 (2000). Administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law. VAOPGCPREC 2-90 (Mar. 20, 1990). Sole administrative error, however, may be found to occur only in cases where the Veteran neither had knowledge of, nor should have been aware of, the erroneous award. Further, such error contemplates that neither the Veteran's actions nor his failure to act contributed to payment pursuant to an erroneous award. 38 U.S.C.A. § 5112 (b)(10); 38 C.F.R. § 3.500 (b)(2); see Jordan v. Brown, 10 Vet. App. 171 (1997) (finding that sole administrative error is not present if the payee knew, or should have known, that the payments were erroneous). The record reflects that by way of a July 1999 rating decision, compensation based on an award of TDIU was granted effective from February 24, 1999. The Veteran was notified-as specified on a VA Form 21-8764 enclosed with a September 20, 1999, notification letter or record-that continuing entitlement to his compensation benefits might be "affected" if he received benefits from the Office of Federal Employees Compensation; and that he was to promptly notify VA if he received such benefits; and that failure to do so immediately might result in a payment to which he was not entitled. Where a person is entitled to compensation from the Federal Office of Workers' Compensation Programs based upon civilian employment and is also entitled to compensation or dependency and indemnity compensation under laws administered by the Department of Veterans Affairs for the same disability or death, the claimant will elect which benefit he or she will receive. On or after September 13, 1960, an award cannot be approved for payment of compensation concurrently with compensation from the Office of Workers' Compensation Programs in such instances and an election to receive benefits from either agency is final. 38 C.F.R. § 3.708(b)(1) (2015). There is no prohibition against payment of benefits under the Federal Employees' Compensation Act concurrently with other benefits administered by the Department of Veterans Affairs when such benefits are not based on the same disability or death. 38 C.F.R. § 3.307(b)(2) (2015). The Veteran was informed in a January 2012 letter (contained in the Virtual VA File) that his award of VA benefits would be reduced due to his receipt of Workers' Compensation benefits, and that this may have resulted in an overpayment of VA benefits. The Veteran was ultimately informed by a letter from the VA Debt Management Center (DMC) dated in February 2012 (also contained in the Virtual VA File) that he had received an overpayment of VA benefits to the amount of $352,320.40 of which he was not entitled. The Veteran has challenged the overpayment. In his sworn testimony at a November 2011 hearing he emphasized that in his application for TDIU, VA Form 21-8940, filed in February 1999, and another communication filed at that time, he informed VA of his award of Workers' Compensation coincident with his employment with the USPS. The record confirms that such is the case. In addition, there was other evidence of record at the time the Veteran filed his claim for TDIU in February 1999 suggesting that he was in receipt of Federal Workers' Compensation benefits. See eg. July 21, 1997, communication from the United States Department of Labor, Office of Workers' Compensation Programs, to R.M.D., D.O, referring to the Veteran having a workplace cervical spine injury. At the time of the award of TDIU, the Veteran's only service connected disability was residuals of a cervical laminectomy, described as intervertebral disc disease. It appears the award of Workers' Compensation benefits was for the same disability for which TDIU was awarded and that the TDIU award was barred by statute and regulation. The Veteran; however, was told only that the VA compensation benefit "may" be "affected" by the Workers' Compensation benefit and that he only needed to "promptly call to [VA's] attention" the receipt of the Workers' Compensation benefit. The Veteran had undisputably complied with this instruction. It was reasonable for him to have relied on VA to determine how the receipt of those benefits "affected" his entitlement to VA compensation. There is no indication that he knew; or should have known; that he was not entitled to the TDIU awarded after he had informed VA of his receipt of Workers' Compensation. In light of the facts as set forth above, the undersigned finds that VA was solely responsible for the Veteran being paid benefits erroneously. Accordingly, the debt of $352,320.40 is invalid, and the Veteran is not responsible for repayment. 38 U.S.C.A. § 5112 (b); 38 C.F.R. § 3.500(b). Thus, the question of entitlement to a waiver is moot and need not be discussed. ORDER The debt from the overpayment of VA benefits in the amount of $352,320.40 was due to VA's sole administrative error and the debt is invalid; the appeal is granted. ____________________________________________ Mark D. Hindin Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs