Citation Nr: 1801033	
Decision Date: 01/09/18    Archive Date: 01/19/18

DOCKET NO.  14-12 640	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in St. Paul, Minnesota


THE ISSUES

Whether a debt based on an overpayment of nonservice-connected pension benefits from October 1, 2008, to September 30, 2010, in the amount of $8,629.00 was properly created.


REPRESENTATION

Appellant represented by:	Veterans of Foreign Wars of the United States


WITNESSES AT HEARING ON APPEAL

The Veteran and his Spouse



ATTORNEY FOR THE BOARD

K. Marenna, Counsel


INTRODUCTION

The Veteran had active service from January 1963 to July 1965.

This matter is before the Board of Veterans' Appeals (Board) on appeal from a September 2010 decision issued by the Department of Veterans Affairs (VA) Debt Management Center in St. Paul, Minnesota. 

The Veteran and his wife testified at an August 2017 Board videoconference hearing before the undersigned Veterans Law Judge.  A transcript is of record.

The Board notes that the Veteran testified on the issue of entitlement to a waiver of debt based upon the overpayment of nonservice-connected pension benefits in the amount of $8,629.00 at the August 2017 hearing.  As the Veteran expressed disagreement with the debt decision and he has stated that he would like a waiver of the debt, the Board finds that a November 2010 notice of disagreement regarding the validity of the debt can also be construed as a request for a waiver of the debt.  

The issue of entitlement to a waiver of debt based upon the overpayment of nonservice-connected pension benefits in the amount of $8,629.00 has been raised by the record in a November 2010 statement, but has not been adjudicated by the Agency of Original Jurisdiction (AOJ).  Therefore, the Board does not have jurisdiction over it, and it is referred to the AOJ for appropriate action.  38 C.F.R. § 19.9(b) (2017).



FINDING OF FACT

An overpayment of nonservice-connected pension benefits from October 1, 2008, to September 30, 2010, in the amount of $8,629.00 was validly created as a result of the Veteran's failure to report an increase in his wife's income from October 1, 2008, to February 1, 2010.


CONCLUSION OF LAW

The overpayment of nonservice-connected pension benefits from October 1, 2008, to February 1, 2010, in the amount of $8,629.00 was validly created.  38 U.S.C. §§ 5107, 5302, 5317 (2002); 38 C.F.R. §§ 3.23, 3.271, 3.272, 3.277 (2017).


REASONS AND BASES FOR FINDING AND CONCLUSION
VA's duties to notify and assist are inapplicable to debt validity claims.  See Barger v. Principi, 16 Vet. App. 132 (2002).  In addition, neither the Veteran nor his representative has raised any issues with the duty to notify or duty to assist.  See Scott v. McDonald, 789 F.3d 1375, 1381 (Fed. Cir. 2015) (holding that "the Board's obligation to read filings in a liberal manner does not require the Board . . . to search the record and address procedural arguments when the veteran fails to raise them before the Board"); Dickens v. McDonald, 814 F.3d 1359, 1361 (Fed. Cir. 2016) (applying Scott to a duty to assist argument).
The debt at issue was created as a result of the Veteran's failure to report to VA his wife's increased income, resulting in an overpayment of nonservice-connected pension benefits.  The Veteran has disputed the validity of the debt.  

An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled.  38 C.F.R. § 1.962.  The issue of the validity of the debt is a threshold determination that must be made prior to a decision on a request for waiver of the overpayment.  See Schaper v. Derwinski, 1 Vet. App. 430 (1991).

In order for the Board to determine whether the 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 solely responsible for the Veteran being paid benefits erroneously.  When an overpayment has been made by reason of an erroneous award based solely upon administrative error, the reduction of that award cannot be made retroactive to create an overpayment of debt owed to VA from the recipient of the erroneous award.  38 U.S.C. § 5112(b)(10); 38 C.F.R. § 3.500(b); 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. § 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).

Nonservice-connected improved pension is available to a Veteran of a period of war who meets statutorily-defined service, net worth, and annual income requirements; and who is permanently and totally disabled from nonservice-connected disability not the result of willful misconduct, or who is 65 years of age or older.  38 U.S.C. §§ 1501-1503, 1513, 1521, 1522; 38 C.F.R. §§ 3.3(a)(3), 3.23.  The purpose of VA pension benefits is to provide a subsistence income for Veterans of a period of war who are totally disabled and who are otherwise unable to maintain a basic, minimal income level.  Recipients are required to report any changes in income and number or status of their dependents in a timely fashion.  38 U.S.C. §§ 1521, 1522.
To be eligible for nonservice-connected pension, the Veteran's countable annual income must not exceed the specified maximum annual pension rate (MAPR), as increased periodically and reported in the Federal Register.  38 U.S.C. § 1521; 38 C.F.R. § 3.3.  The MAPR is published in Appendix B of VA's Adjudication Manual M21-1, and is given the same force and effect as if published in VA regulations.  38 C.F.R. § 3.21.

The MAPR varies depending on several factors, including the number of dependent children.  Countable income consists of payments of any kind from any source received during a 12-month annualization period (e.g., a year), unless specifically excluded.  Countable income expressly includes gross salary or wages of a veteran. Social Security Administration (SSA) and VA benefits also constitute countable income, as they are not specifically excluded.  See 38 C.F.R. §§ 3.271, 3.272.  In determining annual income for pension purposes, all payments of any kind or from any source (including salary, retirement or annuity payments, or similar income, which has been waived) are generally counted as income during the 12-month annualization period in which received.  Fractions of dollars will be disregarded in computing income; and only those amounts that are listed in 38 C.F.R. § 3.272 may be excluded from countable income for determining entitlement to improved pension.  38 U.S.C. § 1503; 38 C.F.R. §§ 3.271, 3.272. 

In a February 2009 decision letter, the Veteran was notified that his claim for nonservice-connected pension benefits was granted effective October 1, 2008.  The letter stated that the Veteran was being paid as a Veteran with one dependent.  The letter informed the Veteran that the award was based on total family income of $10,452.00, which included $7,152.00 to the Veteran from Social Security, and $3,300 annual earnings by the Veteran's spouse, which the Veteran had reported was her approximate gross income in a December 2008 letter.  The combined family income of $10,452.00 was below the MAPR for a Veteran with one dependent, which was $14,643.00 effective December 1, 2007, and $15,493 effective December 1, 2008.  See Veterans Pension Rate Table.  The letter notified the Veteran that "You are responsible to tell us right away if: your income or the income of your dependents changes (e.g., earnings, Social Security benefits, lottery and gambling winnings)" (emphasis added).  
In February 2010, the Veteran sent a Pension Eligibility Report to VA and noted that his wife was a freelance writer/editor who worked only sporadically throughout the year.  He stated that her income varied each month.  In 2008, her gross income was $4,400, and in 2009, it was $11,999.  

In an August 2010 clarifying statement, the Veteran stated that his only income was Social Security at $630 a month and he and his wife did not have any assets.  He stated that his wife was a freelance writer and that as her work was irregular, the reported amounts did not indicate future earning potential.  From September 3, 2008, to December 31, 2008, she made $2,212.76, from January 1, 2009 to September 30, 2009, she made $7,741.69, and from October 1, 2009, to December 31, 2009, she made $4,257.66.  

In a September 2010 letter, the Veteran was informed that based on the February 2010 Eligibility Verification Report, his disability pension benefits were terminated effective October 1, 2008 because his combined family income of a minimum of $17,106.00 exceeded the MAPR for a Veteran with one dependent, which was $14,643.00 effective December 1, 2007, and $15,493 effective December 1, 2008.  See Veterans Pension Rate Table.  The Veteran's Social Security benefit was $596 per month in 2008 and effective January 2009, $631.00 a month.  The pension award was reopened effective February 1, 2010, when their income fell to within the allowable limit, at a reduced amount.  

This change resulted in a total overpayment to the Veteran of $8,629.00.  The Veteran was paid $349 for two months (October 1, 2008, through November 30, 2008- $698) and $385 for 21 months (from December 1, 2008 through September 30, 2010- $8085).  The monthly award amount was adjusted to $22 for 7 months from (February 1, 2010 through August 31, 2010- $154), which is subtracted from the total, with a resulting debt of $8,629.00.  

The Board finds that the Veteran was not legally entitled to nonservice-connected pension benefits from October 1, 2008, to February 1, 2010.  The Veteran's wife's income, combined with the Veteran's Social Security benefit resulted in a combined family income that exceeded the MAPR for a Veteran with one dependent, which was $14,643.00 effective December 1, 2007, and $15,493 effective December 1, 2008.  Therefore, the Veteran was not legally entitled to nonservice-connected pension benefits. 

The Board further finds that VA was not solely responsible for the Veteran being paid benefits erroneously.  The Veteran was informed that he needed to notify VA of an increase in income "right away," but he did not inform VA until the February 2010 Eligibility Verification Report of his wife's increased income.  At the August 2017 hearing, the Veteran testified that he had informed VA that his wife's income fluctuated and he reported her income in the requested Eligibility Verification Report.  However, the evidence shows the Veteran was informed that he needed to inform VA of any changes in income right away in the February 2009 decision letter granting entitlement to the nonservice-connected pension benefits.  The evidence shows the Veteran's wife's income increased in 2008 and 2009 from the amount initially reported by the Veteran.  Her reported income in the February 2010  Eligibility Verification Report of $11,999 from January 1, 2009, to December 31, 2009, and $7,650 from January 1, 2010, to December 31, 2010, is significantly higher than the income of $3,300 reported in the September 2008 claim.  

Consequently, the Board finds that an overpayment of pension benefits in the amount of $8,629.00, the amount of nonservice-connected pension benefits received for the period from October 1, 2008, to September 30, 2010, was validly created.


ORDER

The debt created based on an overpayment of nonservice-connected pension benefits from October 1, 2008, to September 30, 2010, in the amount of $8,629.00, was properly created.  



______________________________________________
M. SORISIO
Veterans Law Judge, Board of Veterans' Appeals



Department of Veterans Affairs