Citation Nr: 1751365 Decision Date: 11/09/17 Archive Date: 11/17/17 DOCKET NO. 15-32 287 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Milwaukee, Wisconsin THE ISSUE Entitlement to a waiver of overpayment of VA pension benefits in the amount of $33, 268. (The issue of entitlement to service connection for hypertension is addressed in a separate Board decision.) ATTORNEY FOR THE BOARD R. Erdheim, Counsel INTRODUCTION The Veteran served on active duty from May 1969 to February 1971. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a June 2013 determination issued by the Committee on Waivers and Compromises (COWC) of the Department of Veterans Affairs (VA) Pension Management Center in Milwaukee, Wisconsin. The Board notes that the Veteran's former counsel withdrew representation in August 2017, this withdrawal was accepted by the regional office that same month, and the Veteran was informed of his counsel's withdrawal via correspondence. The Veteran has not since retained a new representative. FINDINGS OF FACT 1. The creation of the indebtedness in the amount of $33, 268.00 was the result of the appellant's failure to notify VA of Social Security Administration (SSA) income beginning in January 1, 2009. 2. There was no fraud, misrepresentation, or bad faith on the part of the appellant. 3. The appellant was solely at fault in the creation of the debt. 4. Recovery of the indebtedness in the amount of $33, 268.00 would not violate the standards of equity and good conscience. CONCLUSION OF LAW The requirements for waiver of recovery of the overpayment of the Veteran's pension benefits in an amount calculated as $33, 268.00 have not been met. 38 U.S.C.A. § 5107, 5302 (West 2014); 38 C.F.R. § 1.962, 1.963, 1.965 (2016). REASONS AND BASES FOR FINDINGS AND CONCLUSION VA statutes and regulations relating to notice and development are not applicable to cases involving overpayment and indebtedness. The preliminary issue of the validity of a debt is a threshold determination that must be made in a benefits overpayment debt collection matter. Schaper v. Derwinski, 1 Vet. App. 430 (1991). An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.962. In this case, the Veteran has not questioned the validity of the $33, 268.00 debt. While he argues that he should not be responsible for the payment of the full amount of the debt, he has not stated that the debt was erroneously created. Rather, the evidence demonstrates that the Veteran was in receipt of pension benefits that were not adjusted based upon additional income from the Social Security Administration (SSA), and thus an overpayment of VA benefits resulted. The recovery of overpayments of any benefits made under the laws administered by VA shall be waived if there is no indication of fraud, misrepresentation, or bad faith on the part of the person or persons having an interest in obtaining the waiver and if the recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 38 U.S.C.A. § 5302; 38 C.F.R. § 1.962, 1.963(a), 1.965. The Board finds no evidence of fraud, misrepresentation, or bad faith on the part of the Veteran in the creation of the overpayment. The question then becomes whether the facts dictate that a waiver should be granted under the standard of "equity and good conscience." The phrase "equity and good conscience" means the arrival at a fair decision between the obligor and the Government. In making this determination, consideration will be given to the following elements (which are not intended to be all-inclusive): (1) fault of the debtor, (2) balancing of faults between the debtor and VA, (3) undue hardship of collection on the debtor, (4) defeat of the purpose of an existing benefit to the appellant, (5) unjust enrichment of the appellant, and (6) whether the appellant changed positions to his or her detriment in reliance upon a granted VA benefit. 38 U.S.C.A. § 5302; 38 C.F.R. § 1.965 (a). The standard of "equity and good conscience" will be applied when the facts and circumstances in a particular case indicate a need for reasonableness and moderation in the exercise of the Government's rights. The decision reached should not be unduly favorable or adverse to either side. 38 C.F.R. § 1.965 (a). The evidence shows that the Veteran was awarded benefits from the SSA beginning in January 2009, but that he did not report this new income to the VA until April 2011. At that time, he sent a letter to his regional office reporting the new income, however, the VA made no change to his monthly benefit payment. A little over a year later, in May 2012, the Veteran sent a letter to the Milwaukee pension center again reporting that he was receiving SSA income. Thereafter, in July 2012, after verifying the Veteran's SSA benefits, the VA informed the Veteran that his pension benefits would be adjusted on account of his SSA income. The adjustment was accomplished in April 2013, and the Veteran was informed of the amount of overpayment to be collected as a debt to the VA. The Veteran contends that he informed the VA of the change to his income two years before the adjustment to his benefits occurred, and thus he should not be responsible for the entire overpayment of benefits in light of the VA's delay in changing his monthly payment. However, it is clear that the Veteran did not report his SSA income to the VA in a timely fashion, in that he began to receive SSA benefits in January 2009 and did not report such to the VA until April 2011. The Board further notes that after the Veteran did inform the VA of his SSA income, his monthly benefit payment did not change until April 2013. It is thus reasonable to conclude that he was aware of a continued overpayment of benefits by the VA. Therefore, even though the overpayment continued for approximately two years after the Veteran first reported the SSA income, such does not change the fact that the Veteran was aware of the overpayment. There is no indication that he took further steps to determine the amount to which he was entitled. The Board further finds that collection of the debt would not create an undue burden on the Veteran. For one, the entire debt was collected by the VA by September 2015. A few months later, in November 2015, the Veteran received an award of retroactive benefits in the amount of $14,000, almost half of the amount the he owed to the VA. Given the Veteran's argument that he was responsible for some, but not all, of the debt, it appears that he did essentially pay "out of pocket" half of the debt when taking into account the impact of the retroactive award. In that regard, undue hardship has not been shown. The evidence also does not show that the Veteran changed his position based upon reliance upon the overpayment, especially since he knew beginning in at least April 2011 that he was in receipt of an overpayment. Finally, the Board does not find that the VA was at fault in creating the overpayment, in that once the correct office was notified of the SSA benefits, timely action was taken to adjust the Veteran's pension benefits. The Board has considered the standard of equity and good conscious, but finds that the collection of the Veteran's overpayment does not overly favor the government or create an unfair burden on the Veteran. ORDER Waiver of recovery of the $33, 268.00 overpayment debt is denied. ____________________________________________ M. H. Hawley Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs