Citation Nr: 1727216 Decision Date: 07/13/17 Archive Date: 07/25/17 DOCKET NO. 15-11 095 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Philadelphia, Pennsylvania THE ISSUE Entitlement to waiver of recovery of overpayment of Concurrent Receipt of Retired and Disability Pay (CRDP) in the amount of $1890.00, to include whether the overpayment was properly created. (The issue of entitlement to an initial rating greater than 10 percent for scars, residual, status-post vasectomy, is the subject of a separate Board decision.) ATTORNEY FOR THE BOARD Michael T. Osborne, Counsel INTRODUCTION The Veteran had active service from July 1982 to September 2002. This matter comes before the Board of Veterans' Appeals (Board) on appeal from an August 2014 administrative decision issued by the Department of Veterans Affairs (VA) Regional Office (RO) in Philadelphia, Pennsylvania, in which the Committee on Waivers and Compromises (COWC) at this RO concluded that waiver of overpayment of CRDP in the amount of $1890.00 could not be granted. The Veteran disagreed with this decision in December 2014. He perfected a timely appeal in March 2015. Although he initially requested a hearing when he perfected a timely appeal, because the Veteran subsequently waived his right to a hearing in March 2016 correspondence, his hearing request is deemed withdrawn. See 38 C.F.R. § 20.704 (2016). In September 2014, the Board remanded this matter to the Agency of Original Jurisdiction (AOJ) for additional development. A review of the claims file shows that there has been substantial compliance with the Board's remand directives. The Board directed that the AOJ schedule the Veteran for a Board hearing in its September 2014 remand. As noted above, the Veteran subsequently withdrew his Board hearing request in March 2016. See Stegall v. West, 11 Vet. App. 268 (1998); see also Dyment v. West, 13 Vet. App. 141 (1999) (holding that another remand is not required under Stegall where the Board's remand instructions were substantially complied with), aff'd, Dyment v. Principi, 287 F.3d 1377 (2002). Although the Veteran lives within the jurisdiction of the RO in Togus, Maine, because this appeal involves a request for waiver of recovery of overpayment, the RO in Philadelphia, Pennsylvania, has jurisdiction. This appeal was processed using the Virtual VA (VVA) and Virtual Benefits Management System (VBMS) paperless claims processing systems. Accordingly, any future consideration of this appellant's case should take into consideration the existence of these electronic records. FINDINGS OF FACT 1. In a letter dated on December 1, 2011, the Veteran was notified by the RO that he had been issued a duplicate payment of CRDP by VA in the amount of $1890.00 and it was proposed to recoup the duplicate payment by reducing his monthly VA disability compensation benefits. 2. In a letter dated on December 18, 2013, the Veteran was notified by the RO that VA had taken action to recoup the overpayment of CRDP in the amount of $1890.00 by reducing his monthly VA disability compensation benefits. 3. In a letter dated on February 7, 2014, and date-stamped as received by VA on February 12, 2014, the Veteran requested a waiver of overpayment of CRDP in the amount of $1890.00 and asserted that recouping this overpayment would create a significant financial hardship for him. 4. On a VA Form 5655 dated on February 7, 2014, and date-stamped as received by VA on February 18, 2014, the Veteran reported that his expenses exceeded his income and he had declared and been discharged from bankruptcy in 2012. 5. VA demonstrated significant fault in the creation of the indebtedness. 6. Denial of the Veteran's waiver request violates the principles of equity and good conscience and likely would cause him to experience financial hardship as his expenses exceed his income. CONCLUSION OF LAW The overpayment of Concurrent Receipt of Retired and Disability Pay (CRDP) in the amount of $1890.00 was not validly created. 38 U.S.C.A. § 5302 (West 2014); 38 C.F.R. §§ 1.962, 1.963, 1.965 (2016). REASONS AND BASES FOR FINDINGS AND CONCLUSION Before assessing the merits of the appeal, VA's duties under the Veterans Claims Assistance Act (VCAA) must be examined. The VCAA provides that VA shall apprise a claimant of the evidence necessary to substantiate his or her claim for benefits and that VA shall make reasonable efforts to assist a claimant in obtaining evidence unless no reasonable possibility exists that such assistance will aid in substantiating the claim. The Board notes that the VCAA and its implementing regulations do not apply in waiver cases because the statutory right to request waiver of recovery of indebtedness within Chapter 53 of Title 38 of the United States Code contains its own notice provisions. See Lueras v. Principi, 18 Vet. App. 435 (2004) citing Barger v. Principi, 16 Vet. App. 132 (2002); see also 38 U.S.C.A. § 5302 (West 2014). The Veteran contends that he is entitled to a waiver of overpayment of CRDP in the amount of $1890.00 because he should not be penalized for VA's error in paying him CRDP twice for the same period of time. Laws and Regulations Recovery of overpayment of any benefits made under 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 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. § 1.963(a). If there is a finding of fraud, misrepresentation, or bad faith by the debtor in the creation of the overpayment, then waiver of the overpayment is precluded automatically and further analysis is not warranted. See 38 C.F.R. §§ 1.962, 1.963, 1.965(b) (2016). Where there is no indication of fraud, misrepresentation, or bad faith in the record, the indebtedness shall be waived if recovery of the overpayment would be against equity and good conscience. 38 U.S.C.A. § 5301(a); 38 C.F.R. §§ 1.962, 1.965. The phrase "equity and good conscience" means arriving 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) where actions of the debtor contribute to the creation of the debt; (2) weighing fault of the debtor against VA fault; (3) whether collection would deprive debtor or family of basic necessities; (4) whether withholding of benefits or recovery would nullify the objective for which benefits were intended; (5) failure to make restitution would result in unfair gain to the debtor; (6) reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation. See 38 C.F.R. § 1.965(a). Factual Background and Analysis The Board finds that the evidence supports granting the Veteran's request for waiver of recovery of the overpayment of Concurrent Receipt of Retired and Disability Pay (CRDP) in the amount of $1890.00 because this overpayment was not properly created. The Veteran essentially disputes the validity of the debt that was created and asserts that he was not at fault in creating this overpayment. The record evidence supports the Veteran's assertion that the overpayment of CRDP in the amount of $1890.00 was not properly created and he is entitled to waiver of recovery of overpayment. The Board notes initially that there is no indication of fraud, misrepresentation, or bad faith on the part of the Veteran. On the contrary, the AOJ acknowledged the Veteran's lack of fraud, misrepresentation, or bad faith in its initial decision denying his waiver request in August 2014. The AOJ also conceded in its August 2014 decision that VA demonstrated significant fault in the creation of the indebtedness by paying the Veteran the same CRDP benefits twice for the same period of time. The Veteran has asserted throughout the appeal period that recouping the overpayment would create a significant financial hardship for him as his monthly expenses exceed his monthly income. Nevertheless, it appears that VA has recouped all of the money which it erroneously paid the Veteran when this overpayment was created initially by reducing his VA disability compensation. It is not clear to the Board what, if anything, the Veteran still owes VA in terms of any remaining overpayment as he already may have satisfied this debt. It also appears that collection of the Veteran's overpayment of VA disability compensation benefits in the amount of $1890.00 would deprive him of the basic necessities of life. A review of the Veteran's February 2014 VA Form 5655, "Financial Status Report," shows that his monthly income exceeds his monthly expenses. Although the Veteran reported that his monthly gross salary was $1782.16 and $350.00 was deducted from this salary for Federal, state, and local income taxes, he also reported that he had been unemployed for the past 31/2 years. Therefore, it is unclear what sources of income constitute his reported monthly gross salary. He next reported on his February 2014 VA Form 5655 that he received $1653.04 in monthly VA benefits, Social Security, or other income so his total calculated monthly income (including the after-tax monthly gross salary of $1432.16) is $3085.20. He calculated his monthly expenses as totaling $4470.08. He reported having no assets other than 2 vehicles and was "upside down" on the loans for each of these vehicles. He had filed for and been discharged from personal bankruptcy in October 2012. Thus, it is clear from a review of the record evidence that a financial hardship would be created by collecting on the Veteran's debt to VA because his monthly income exceeds his monthly expenses. The Board next notes that withholding of benefits or recovery would not nullify the objective for which benefits were intended. The duplicate CRDP in the amount of $1890.00 that the Veteran received in January 2010 apparently represented CRDP to which he was entitled for the period from August 2005 through February 2006 and from June 2006 through December 2006. According to information provided to the Veteran by the AOJ in December 2011 correspondence, he already had been paid CRDP for this time period in October 2007. Although the Veteran received additional CRDP benefits to which he was not entitled in January 2010, the Board again notes that significant fault in the payment of this additional compensation (and in the creation of this overpayment) lies with VA's apparent failure to reconcile its own records which showed that the Veteran already had been paid CRDP for this time period in October 2007. The Board acknowledges here that failure to make restitution would result in unfair gain to the debtor. Again, the Veteran was not entitled to the additional CRDP that he received (through no fault of his own) in January 2010. Again, the fault for this unfair gain lies with VA's unexplained inability to notice in January 2010 that it already had paid the Veteran CRDP for this time period in October 2007. The Board notes in this regard that there is a handwritten note at the bottom of an Audit Error Worksheet (AEW) included in the Veteran's claims file which notes that he was paid in error in January 2010 and a prior AEW dated in October 2009 apparently had generated this duplicate payment. Finally, the Board notes that reliance on VA benefits did not result in relinquishment of a valuable right or incurrence of a legal obligation. There is no evidence that the Veteran relinquished any right or incurred any legal obligation or that he relied upon VA to his detriment when he received additional VA disability compensation benefits to which he was not entitled in January 2010. In summary, the Veteran contends that he is entitled to waiver of overpayment in the amount of $1890.00 because this debt was not validly created. He specifically contends that, because this overpayment was generated by VA error in compensating him a second time for CRDP in January 2010 after he already had been paid for CRDP in October 2007, he should not be penalized for VA's error. The Board agrees, finding that it would be against equity and good conscience to permit recovery of the overpayment of CRDP in the amount of $1890.00 against the Veteran in this case. The Board again notes, however, that it appears that VA already has recovered the overpayment by reducing the Veteran's VA disability compensation an equivalent amount to satisfy this overpayment debt. The Veteran cannot now be held responsible for VA's failure to follow its own procedures or check its own records prior to issuing him a duplicate payment. Thus, the Veteran's request for waiver of recovery of the overpayment of CRDP in the amount of $1890.00 is granted. The Board finally notes that, because it has found that this alleged overpayment of additional CRDP was not validly created, any collection actions by VA should cease. See generally 38 C.F.R. §§ 1.911, 1.916, 1.917, 1.920, 1.942(e) (2016). ORDER An overpayment of Concurrent Receipt of Retired and Disability Pay (CRDP) in the amount of $1890.00 was not validly created. ____________________________________________ L. M. BARNARD Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs