Citation Nr: 1803920	
Decision Date: 01/22/18    Archive Date: 01/31/18

DOCKET NO.  14-42 782	)	DATE
	)
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On appeal from the
Department of Veterans Affairs Regional Office in Montgomery, Alabama


THE ISSUES

1.  Whether the termination of additional VA compensation benefits for a spouse as of February 1, 1998, was proper, to include whether creation of debt in the amount of $8,257.00 was proper.

2.  Entitlement to a waiver of the recovery of an overpayment of compensation benefits in the amount of $8,257.00.


REPRESENTATION

Veteran represented by:	Military Order of the Purple Heart of the U.S.A.


WITNESS AT HEARING ON APPEAL

The Veteran


ATTORNEY FOR THE BOARD

S. Mishalanie, Counsel

INTRODUCTION

The Veteran served on active duty from January 1965 to August 1992 in the United States Air Force. 

This matter comes before the Board of Veterans' Appeals (Board) on appeal from June 2011 and April 2012 decisions issued by the Department of Veterans Affairs (VA) Regional Offices (ROs) in Montgomery, Alabama, and Milwaukee, Wisconsin.  

In October 2017, the Veteran testified before the undersigned Veterans Law Judge.  A transcript of the hearing is of record.

This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2017).  38 U.S.C. § 7107(a)(2) (2012).

The issue of entitlement to a waiver of the recovery of an overpayment in compensation benefits is addressed in the REMAND portion of the decision below and is REMANDED to the Agency of Original Jurisdiction (AOJ).


FINDINGS OF FACT

1.  In September 1993, the RO notified the Veteran that he was being paid an additional amount in disability compensation for his spouse, that he should inform VA immediately of any change in the status of his dependents, and that failure to notify VA in a prompt fashion of a dependency change would result in an overpayment which must be repaid. 

2.  The Veteran divorced S. on January 14, 1998.  The Veteran was not entitled to the additional benefits provided for S. beginning on February 1, 1998; therefore, he was overpaid in the amount of $8,257.00.

3.  In October 2001, the RO requested that the Veteran complete and return a Dependent Status Questionnaire; on that form, he indicated that he was not married and had no dependents.

4.  The RO did not take any action after it was informed that the Veteran was no longer married and continued to pay him at the same rate of compensation.  

5.  The Veteran continued to receive and accept payment at the same rate of compensation, which included additional compensation for a dependent spouse.  In August 2007, the RO informed him that it was paying him an additional amount for his spouse and that he should inform VA if there was any change in his marital status.  He did not take any action.  

6.  VA's monthly payments of disability compensation at the additional rate provided for a dependent spouse was not a result of sole VA administrative error.  


CONCLUSION OF LAW

An overpayment of VA disability compensation in the amount of $8,257.00, based on removal of former spouse S. as a dependent, is valid.  38 U.S.C. §§ 1115, 1135, 5112 (2012); 38 C.F.R. §§ 3.204, 3.213, 3.217, 3.500(b), 3.660 (2017). 


REASONS AND BASES FOR FINDINGS AND CONCLUSION

For a determination that an overpayment was not properly created, and is therefore invalid, it must be established that the claimant was either legally entitled to the benefits in question or, if the claimant was not legally entitled, then it must be shown that VA was solely responsible for the claimant being erroneously paid benefits.  Administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law.  VAOPGPREC 2-90 (July 17, 1989), 55 Fed. Reg. 27757 (1990).  Sole administrative error connotes that the claimant neither had knowledge of nor should have been aware of the erroneous award.  Further, neither the claimant's actions nor his or her failure to act must have contributed to payment pursuant to the erroneous award.  38 U.S.C. § 5112(b)(9), (10) (2012); 38 C.F.R. § 3.500(b)(2) (2017); Jordan v. Brown, 10 Vet. App. 171 (1997) (sole administrative error is not present if the payee knew, or should have known, that the payments were erroneous).  Thus, a finding of sole administrative error requires not only error on the part of VA, but that the beneficiary is unaware that the payments are erroneous.

Applicable regulations pertaining to compensation benefits provide that it is the responsibility of the recipient of VA compensation benefits to notify VA of all circumstances which will affect entitlement to receive the rate of the benefit being paid.  Thus, the recipient of VA benefits must notify VA when he acquires knowledge that income, marital status, or dependency status will change or other circumstances which would affect her entitlement to receive, or the rate of, the benefit being paid.  38 C.F.R. § 3.660(a)(1).  Where the dependency of another person ceased on or after October 1, 1982, due to marriage annulment, divorce or death, the reduction or discontinuance shall be effective the last day of the month in which dependency ceased (i.e., the date of the divorce).  38 U.S.C. § 5112(b)(2); 38 C.F.R. § 3.660(a)(2).  Overpayments created by retroactive discontinuance of benefits will be subject to recovery if not waived.  38 C.F.R. § 3.660(a)(3).  

Regarding the submission of information affecting entitlement to benefits, generally, VA may take action affecting entitlement to benefits based on oral or written information or statements provided to VA by a beneficiary or his or her fiduciary. 38 C.F.R. § 3.213 (2017).  Regarding a change of status affecting entitlement, for the purposes of establishing entitlement to a higher rate of compensation based on the existence of a dependent, VA will require evidence which satisfies the requirements of § 3.204.  Such requirements include proof of dissolution of marriage along with the date (month and year) and place of the event.  38 C.F.R. § 3.204. 

In this case, the record indicates the Veteran was notified several times that he should promptly inform the RO of any change in the status of his dependents.  In September 1993, the RO granted disability compensation and notified him that the award included additional benefits for his spouse.  He was notified that he should immediately inform VA if there were any changes in the number or status of his dependents and that his failure to do so would result in an overpayment which must be repaid.  He was again informed of this in March 1995.  

In October 2001, the RO sent the Veteran a letter reminding him that his disability compensation included an additional amount for his spouse and/or children and that he was responsible for reporting any changes in his dependents.  The RO requested that he complete and return a Status of Dependents Questionnaire, VA Form 21-0538.  Later that month, the Veteran completed the form and returned it to the RO.  On that form, he indicated that he was not married and had no dependents; however, the RO did not take any action to either verify his divorce or to discontinue his spousal benefits.  The Veteran continued to be paid at the same rate of disability compensation, which included an additional amount for his spouse.

In an August 2007 letter, the RO notified the Veteran that it had granted service connection for chronic lymphocytic leukemia and basic eligibility for Dependents' Educational Assistance.  In that letter, the RO notified him that his payment included an additional amount for his spouse and that he should let them know right away if there was any change in his marital status.  The Veteran did not respond.  

An April 2011 Report of General Information indicates that the Veteran had not returned his Dependency Questionnaire and had stated that he was not married to V.  It was noted that the Veteran stated that he had divorced S., which was supported by his October 2001 Dependent Status Questionnaire.  It was also noted that he could not provide the date he divorced S.  

In April 2011, the RO proposed to reduce the Veteran's compensation payments retroactively from September 1993, the last time the RO knew he had a dependent.  The Veteran submitted a copy of his divorce decree, which showed that he divorced S. on January 14, 1998.  

In June 2011, the RO retroactively reduced the Veteran's disability compensation for his former spouse, S., effective from February 1, 1998, the first of the month following his divorce.

The Veteran contends that because he notified the RO that he was no longer married in October 2001 and the RO failed to take any action, the RO should not create any overpayment by retroactively reducing his award.  The RO continued to pay the Veteran at the same rate; however, he stated that he was not aware that he was still being paid an additional amount for his spouse and thought the payments he was receiving were in the correct amount.  See April 2012 NOD.

The Board is sympathetic to the Veteran's argument that VA failed to take action to reduce his benefits after it received the Veteran's October 2001 Dependent Status Questionnaire that indicated he was not married.  However, the Veteran received and accepted a November 2001 payment that was at the same rate of compensation, which he should have known he was not entitled to receive.  Furthermore, the August 2007 letter clearly notified him that his payment included an additional amount for his spouse, yet he took no action to correct this.  Therefore, the Board finds that the creation of the debt was not the result of sole administrative error.

The law is clear that the Veteran's right to receive additional disability compensation with respect to S. ceased after their divorce.  Accordingly, the retroactive termination of the Veteran's additional disability compensation benefits for a dependent spouse, S., effective February 1, 1998, was proper, and the creation of the overpayment was valid.  

Although the Board finds the creation of the debt valid, the equitable arguments raised by the Veteran and his representative may be considered in determining whether a waiver of the recovery of overpayment is warranted in this instance.  This issue is addressed in the Remand section below.  


ORDER

The overpayment of VA disability compensation in the amount of $8,257.00, based on removal of former spouse S.P. as a dependent, is valid. 


REMAND

In December 2011, the Veteran requested a waiver of the recovery of an overpayment in the amount of $8,257.  In an April 2012 decision, the Committee on Waivers and Compromises (the Committee) at the RO in Milwaukee, Wisconsin, denied his request.  Later that month, the Veteran's representative submitted a Notice of Disagreement (NOD) stating that he disagreed with the June 2011 decision that created the debt.  However, liberally construed, the Board also interprets the Veteran's NOD as encompassing the decision that denied his request for a waiver.  However, the October 2014 Statement of the Case (SOC), only addressed the creation of the debt and did not address the decision that denied waiver of the debt.  Because the NOD with respect to this issue remains unprocessed, a remand is necessary for issuance of an SOC.  See Manlincon v. West, 12 Vet. App 238, 240-241 (1999).

Accordingly, the case is REMANDED for the following actions:

(Please note, this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c).  Expedited handling is requested.)

1.  The AOJ should issue an SOC addressing the issue of entitlement to a waiver of the recovery of an overpayment of compensation benefits in the amount of $8,257.00. 

2.  Thereafter, the Veteran should be given an opportunity to perfect an appeal by submitting a timely Substantive Appeal in response thereto.  The AOJ should advise the appellant that the claims file will not be returned to the Board for appellate consideration of this particular issue following the issuance of the SOC unless he perfects the appeal.

The Veteran has the right to submit additional evidence and argument on the matter the Board has remanded.  Kutscherousky v. West, 12 Vet. App. 369 (1999).

This claim must be afforded expeditious treatment.  The law requires that all claims remanded by the Board for additional development or other appropriate action must be handled in an expeditious manner.  See 38 U.S.C.A. §§ 5109B, 7112 (West 2014).




______________________________________________
ANTHONY C. SCIRÉ, JR.
Veterans Law Judge, Board of Veterans' Appeals


Department of Veterans Affairs