Citation Nr: 1805180 Decision Date: 01/25/18 Archive Date: 02/05/18 DOCKET NO. 12-22 187 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Montgomery, Alabama THE ISSUE Entitlement to waiver of recovery of an adjusted overpayment of Department of Veterans Affairs (VA) improved pension benefits in the amount of $14,775.00, to include whether the adjusted overpayment was properly created. REPRESENTATION Veteran represented by: Alabama Department of Veterans Affairs WITNESS AT HEARING ON APPEAL Veteran ATTORNEY FOR THE BOARD Carole Kammel, Counsel INTRODUCTION The Veteran served on active duty from March 1974 to September 1977. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a May 2012 decision of the Committee on Waivers and Compromise (CWOC) of the Milwaukee, Wisconsin (RO). The Veteran appealed this determination to the Board. Jurisdiction of the appeal currently resides with the Montgomery, Alabama RO. In August 2015, the Veteran testified before the undersigned at a Travel Board hearing. A transcript of the hearing is of record. In July 2016, the Board remanded the appeal to the RO for additional development. The appeal has been returned to the Board for further appellate consideration. In March 2017, the Pension Management Center (PMC) reviewed the Veteran's counting income after verification from the Social Security Administration and adjusted the Veteran's benefits which resulted in a decreased in the amount of overpayment by $10,835.00. Thus, the resulting adjusted amount of overpayment of (VA) improved pension benefits due from the Veteran is $14,775.00. The Board has recharacterized the amount of overpayment due from the Veteran to reflect the PMC's action. FINDINGS OF FACT 1. The Veteran was granted pension benefits effective May 8, 2007. 2. On August 29, 2011, VA received VA Form 21-8416, Improved Pension Eligibility Verification Report, showing that the Veteran had been receiving income from the Social Security Administration (SSA). 3. As a result of VA being unaware of the Veteran's additional SSA income, the RO determined he was overpaid pension benefits in the amount of $25,610.00. 4. In March 2017, the PMC reviewed the Veteran's countable income after verification from the SSA and adjusted his benefits which resulted in a decrease in the amount of overpayment by $10,835.00; thus, resulting in an adjusted overpayment of $14,775.00. 5. The adjusted overpayment of $14,775.00 was not due to the Veteran's fraud, misrepresentation, or bad faith, but was due to fault on the part of the Veteran. 6. The Veteran will be unjustly enriched if the benefits are not recovered and withholding of benefits or recovery generally does not nullify the objective for which benefits were intended. 7. Recovery of the adjusted overpayment will not cause the Veteran significant undue hardship. CONCLUSIONS OF LAW 1. An adjusted overpayment of VA pension benefits in the amount of $14, 775.00 was validly created. 38 U.S.C. §§ 1506, 1521 (2012); 38 C.F.R. §§ 1.962, 3.271, 3.272, 3.277, 3.660 (2017). 2. The adjusted overpayment of VA pension benefits was not due to fraud, misrepresentation or bad faith of the Veteran and recovery of it is not against equity and good conscience; therefore, the adjusted overpayment is not waived. 38 U.S.C. §§ 5107, 5302(a) (2012); 38 C.F.R. §§ 1.963(a), 1.965(a) (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS I. Duties to Notify and Assist The Veterans Claims Assistance Act (VCAA) describes VA's duties to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C. §§ 5100, 5102, 5103, 5103A, 5106, 5107, 5126; 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a). However, the VCAA does not apply to cases involving recovery of overpayment based on indebtedness or the validity or waiver of the underlying debt, which are not claims for benefits. See Reyes v. Nicholson, 21 Vet. App. 370, 379-80 (2007); Lueras v. Principi, 18 Vet. App. 435, 438 (2004); Barger v. Principi, 15 Vet. App. 132 (2002). The Veteran offered testimony before the undersigned Veterans Law Judge at a Board hearing in August 2015. The Board finds that all requirements for hearing officers have been met. 38 C.F.R. § 3.103 (c)(2) (2017); Bryant v. Shinseki, 23 Vet. App. 488 (2010). To the extent that any evidentiary deficiency was noted, the Board finds that it has been cured on remand. The Board also finds that there has been compliance with the July 2016 remand directives. See Stegall v. West, 11 Vet. App. 268 (1998). II. Merits Analysis The Veteran seeks entitlement to waiver of recovery of an adjusted overpayment of VA improved pension benefits in the amount of $14,775.00, to include whether the overpayment was properly created. In the analysis below, the Board will first discuss whether the debt was properly created and then whether entitlement to a waiver of recovery of the adjusted overpayment is warranted. A. Creation of the debt In a February 2008 rating decision, the Veteran was granted pension benefits effective from May 8, 2007--the date VA received his informal claim for this benefit. At that time, the Veteran reported that he was 53 years old, was high-school educated; and had last worked on January 3, 2007 at an Army Surplus Store. The Veteran also indicated that he was not in receipt, nor did he expect to receive SSA disability benefits. In January 2012, VA retroactively terminated the Veteran's pension benefits, effective October 1, 2009 based on information showing that he had been concurrently receiving SSA disability benefits. In a February 2012 letter, the Veteran was informed by the Debt Management Center (DMC) that as a result of having received VA pension benefits concurrently with SSA disability benefits, an overpayment of $25,610.00 had been created and needed to be repaid. The Veteran requested a waiver of the recovery of the overpayment of $25,610.00. In a May 2014 decision, the COWC denied the waiver on the basis that a waiver of the overpayment would be against equity and good conscience. In his May 2012 notice of disagreement and at the August 2015 hearing, the Veteran did not dispute the receipt of the receipt of Social Security Income, but has maintained that he had informed VA on three separate occasions, beginning via telephone in August 2010, about his receipt of SSA benefits before VA took any action. In addition, the Veteran maintained that he did not receive SSA benefits until August 2010. (This is in contrast to VA's initial determination that it had "assumed" that the Veteran had concurrently received SSA benefits in an amount that excessed his pension benefits beginning in September 2009 based on information from the SSA that he had initially became entitled to disability benefits from that agency in August 2009. In any case, as a result of the Veteran receiving the additional SSA income, along with the ongoing pension payments, he was overpaid and a debt to VA in the amount of $25,610.00 was initially created. Pursuant to the Board's July 2016 remand directives, VA obtained additional information from the SSA regarding the date that the Veteran had begun receiving disability benefits from that agency. In March 2017 calculations and a letter to the Veteran, VA noted that the SSA had verified that the Veteran had not received benefits until August 17, 2010. On that date, the Veteran received a check in the amount $1,782.00. This amount was comprised of a base benefit of $1,188.00 monthly plus a retroactive benefit of $594.00. As recurring income is counted on an annualized basis beginning the first of the month after receipt, VA began considering annualized Social Security benefits of $14,256.00 ($1,188.00 x 12 months) effective September 1, 2010. VA also considered the one-time income of $594.00 from September 1, 2010 for a period of 12 months. As VA had previously started counting the Veteran's Social Security benefits in October 2009, it adjusted the Veteran's award to count for no income effective October 1, 2009 until the income described above was considered on September 1, 2010. The Board notes the Veteran's assertions regarding notifying VA of his receipt of SSA benefits. Nothing in the claims file, however, to include a Report of Contact or Report of General Information filled out by VA personnel substantiates those assertions. The Board thus concludes that this assertion does not rebut the presumption of administrative regularity. See e.g., Kyhn v. Shinseki, 716 F.3d 572, 577 (Fed. Cir. 2013) (noting that application of the presumption of administrative regularity is proper "where the presumption of regularity [is] premised upon independent legal authority"). This presumption of regularity in the administrative process may be rebutted by clear evidence to the contrary. Schoolman v. West, 12 Vet. App. 307, 310 (1999). An allegation of non-receipt, by itself, is insufficient to rebut the presumption of regularity. Schoolman, 12 Vet. App. at 310. Thus, based on this adjustment, the Board finds the adjusted overpayment of $14,775.00 was validly created. B. Waiver of Adjusted Overpayment The Veteran maintains that recovery of the adjusted overpayment will cause him significant undue hardship. (See Notice of Disagreement, received by VA in May 2012). In cases such as this where there is no fraud, misrepresentation, or bad faith on the Veteran's part with respect to the creation of the overpayment at issue, waiver of the debt is not precluded pursuant to 38 U.S.C § 5302 (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 right of debt recovery. 38 C.F.R. § 1.965(a) (2017). The elements for consideration are as follows: (1) fault of debtor, where actions of the debtor contribute to creation of the debt; (2) balancing of faults, weighing fault of debtor against VA fault; (3) undue hardship, whether collection would deprive debtor or family of basic necessities; (4) defeat the purpose, whether withholding of benefits or recovery would nullify the objective for which benefits were intended; (5) unjust enrichment, failure to make restitution would result in unfair gain to the debtor; (6) changing position to one's detriment, reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation. Id. In the instant case, the Veteran was clearly at fault for creation of the adjusted overpayment by not ensuring that VA was informed of the additional SSA income that he was receiving. There is also no indication of VA fault, as the RO proceeded to take action on adjusting the appellant's pension payments after learning of the additional SSA income. Additionally, at least in general terms, recovery of the debt does not defeat the purpose of the pension program as this program is simply designed to provide for maintenance of basic needs. Consequently, as the Veteran was actually receiving additional unreported income at the same time that he was receiving pension benefits, this additional income presumably could have been used to help provide for these needs in lieu of the pension payments. Further, the appellant was unjustly enriched as he did receive pension payments to which he was not actually entitled given his income level. Moreover, there is no indication that he changed his position to his detriment as a result of receipt of the VA pension benefits. The Board notes that despite all of these factors, the current collection of the debt could cause the Veteran undue hardship. In this regard, on VA Form 5655, Financial Status Report, received by VA in April 2012, the Veteran provided a reasonable accounting of his income and expenditures, which indicated that his monthly income only exceeded his monthly expenses by $61.00. In a March 2017 letter to the Veteran, and pursuant to the Board's July 2016 remand directives, VA requested that the Veteran provide an Improved Pension Eligibility Verification Report (Veteran with No Children) and VA Form 21P-8416, Medical Expense Report to outweigh the other waiver determination elements. The Veteran did not submit the requested documents, or provide any written documentation to support his contention that to repay the adjusted overpayment would cause him undue hardship. This evidence is critical to deciding this claim, particularly regarding whether overpayment of the adjusted debt is warranted or would cause undue harm to the Veteran. As the current information indicates that his current income exceeds his current expenses, and as the Veteran did not provide current information, the Board finds that undue hardship has not been shown. The duty to assist a claimant is not a one-way street, and in the instant case, the Veteran has failed to cooperate to the full extent in the development of his claim. Wood v. Derwinski, 1 Vet. App. 406 (1991). Thus, the Board finds that recovery of the debt is not against equity and good conscience and waiver of the $14,775.00 overpayment is not warranted. ORDER An adjusted overpayment of pension benefits in the amount of $14,775.00 was properly created; the debt is valid and the appeal is denied. Waiver of recovery of an adjusted overpayment of pension benefits in the amount of $14,775.00 is denied. ____________________________________________ K. MILLKAN Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs