Citation Nr: 1757514	
Decision Date: 12/13/17    Archive Date: 12/28/17

DOCKET NO.  11-23 743A	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Atlanta Education Center in Decatur, Georgia


THE ISSUE

Entitlement to waiver of recovery of an overpayment of Dependents' Educational Assistance (DEA) benefits under Chapter 35, Title 38, of the United States Code (Chapter 35 benefits), in the amount of $3,049.89.


REPRESENTATION

Appellant represented by:	The American Legion


ATTORNEY FOR THE BOARD

L. McCabe, Associate Counsel


INTRODUCTION

The Veteran served on active duty from April 1970 to December 1971.  The appellant is his daughter.

This appeal arises from a July 2010 decision by the Committee on Waivers and Compromises at the Department of Veterans Affairs (VA) Atlanta Regional Office (RO) in Decatur, Georgia, which denied the appellant's request for a waiver of recovery of an overpayment of Chapter 35 benefits.


FINDINGS OF FACT

1.  The overpayment indebtedness of $3,049.89 did not result from fraud, misrepresentation, or bad faith on the part of the appellant.

2.  Recovery of the overpayment of $3,049.89 results in significant undue hardship and thus is against equity and good conscience.


CONCLUSION OF LAW

The overpayment of Chapter 35 educational benefits was not due to fraud, misrepresentation or bad faith of the appellant and recovery of it is against equity and good conscience; therefore, the overpayment is waived.  38 U.S.C. §§ 5107, 5302(a) (2012); 38 C.F.R. §§ 1.962, 1.963, 1.965 (2017).



REASONS AND BASES FOR FINDINGS AND CONCLUSION

An overpayment is created when VA determines that a beneficiary or payee has received benefit payments in excess of the amount due or to which such beneficiary or payee is entitled.  38 C.F.R. § 1.962 (2017).  The debtor may challenge the validity or amount of the debt owed.  See 38 C.F.R. § 1.911(c)(1) (2017); see also VAOPGCPREC 6-98; Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991).  The debtor may also apply for a waiver of any debt found to be valid.  See 38 U.S.C. § 5302 (2012); 38 C.F.R. §§ 1.911(c)(2), 1.963 (2017).

Procedurally, in February 2010, the appellant was notified that, because of a change in her graduate school enrollment status during Fall 2009, she "w[as] paid $3,049.89 more [in Chapter 35 educational assistance benefits] than [she] w[as] entitled to receive."  See February 2010 Letter from VA's Debt Management Center in St. Paul, Minnesota; February 2010 Notification Letter from the Atlanta RO.  Later that month, she requested a waiver of the overpayment, asserting that repayment of the debt would result in undue financial hardship.  See February 2010 Statement in Support of Claim (VA Form 21-4138).  A July 2010 determination of the Committee on Waivers and Compromises denied the appellant's request for a waiver.  See July 2010 Notification Letter; July 2010 Decision on Waiver of Indebtedness (in lieu of VA Form 4-1837).  

At the outset, the Board notes that the appellant has not disputed the validity of the underlying debt.  Moreover, because the Board is granting a waiver of the full amount of the overpayment of VA educational assistance benefits, it need not address the validity issue.


Where, as here, there has been no finding of fraud, misrepresentation, or bad faith on the claimant's part, repayment of the subject debt may be waived.  38 U.S.C. § 5302(a).  Waiver will be granted when recovery of the indebtedness would be against equity and good conscience.  38 U.S.C. § 5302(a); 38 C.F.R. §§ 1.963 (a), 1.965(a).  In this regard, 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.  38 C.F.R. § 1.965(a).  The decision reached should not be unduly favorable or adverse to either side.  Id.  The phrase equity and good conscience means arriving at a fair decision between the obligor and the government.  Id.  

In making this determination as to whether recovery would be against equity and good conscience, 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 debtor and VA; (3) undue hardship; (4) whether collection would defeat the purpose of the benefit; (5) unjust enrichment; and (6) whether the debtor changed position to her own detriment through reliance on the benefit.  Id.; see Ridings v. Brown, 6 Vet. App. 544, 546 (1994).

Here, the record reflects that the fault in the creation of the overpayment at issue lies entirely with the appellant, as the debt resulted from her withdrawal from her program of study.  See 38 C.F.R. § 1.965(a)(1).  Further, she does not assert, nor does the record reflect, that VA bears any fault in the creation of the debt.  See 38 C.F.R. § 1.965(a)(2).  Additionally, there is no evidence that the appellant changed her position to her detriment in reliance on the overpaid benefits, resulting in relinquishment of a valuable right or incurrence of a legal obligation.  See 38 C.F.R. § 1.965(a)(6).  And, at least in general terms, the receipt of VA educational benefits in excess of what is legally allowable represents some level of unjust enrichment.  See 38 C.F.R. § 1.965(a)(5).  


Nevertheless, the Board finds that it is reasonably established that VA's collection of the debt would result in an undue hardship for the appellant.  In this regard, the appellant's financial disclosure submitted in conjunction with her initial request for a waiver of the debt reflects that she is a full-time student without any income, and with monthly expenses totaling $1,086.13.  See April 2010 Financial Status Report (VA Form 5655).  Subsequent submissions reflect increasing monthly expenses, without any increased income.  See, e.g., July 2010 Notice of Disagreement; September 2011 Substantive Appeal (VA Form 9) (indicating that her monthly expenses have increased and now exceed $1,100.00).  Without any income, the appellant would incur severe financial harm from the enforcement of this significant debt, and it is reasonable to assume that the collection of the overpayment would serve to deprive her of basic necessities.  See 38 C.F.R. § 1.965(a)(3).  

Accordingly, in this case, the Board finds that the undue hardship that would result from the collection of the debt outweighs the other factors.  In this regard, the Board notes that the factors set forth in § 1.965(a) need not be viewed in a vacuum, but rather in relation to each other.  One or more factors may increase or decrease in weight depending on the findings pertaining to other factors.  And here, given the evidence indicating that the collection of the overpayment would deprive the appellant of basic necessities, factors such as fault in the creation of the debt, whether collection would defeat the purpose of the benefit, unjust enrichment, and relying on VA benefits to one's detriment, which do not generally favor the appellant, cannot alter the conclusion that collection of the debt would be against equity and good conscience in this case.


Thus, in light of the foregoing, the Board finds that the available evidence weighs in favor of a determination that VA's recovery of the debt is against equity and good conscience.  As such, waiver of the overpayment of $3,049.89 is warranted.  

ORDER

Waiver of overpayment of VA educational assistance benefits in the amount of $3,049.89 is granted, subject to controlling regulations governing the payment of monetary awards.




____________________________________________
P.M. DILORENZO
Veterans Law Judge, Board of Veterans' Appeals



Department of Veterans Affairs