Citation Nr: 1805950 Decision Date: 01/30/18 Archive Date: 02/07/18 DOCKET NO. 11-11 010 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Milwaukee, Wisconsin THE ISSUE Entitlement to waiver of recovery of an overpayment of VA death pension benefits, in the amount of $19,008.00. ATTORNEY FOR THE BOARD Donna D. Ebaugh, Counsel INTRODUCTION The Veteran had active service from March 1952 to March 1955. The Veteran died in January 1985. The appellant is the Veteran's surviving spouse. This matter comes before the Board of Veterans' Appeals (Board) on appeal from an August 2010 decision issued by the Committee on Waivers and Compromises (COWC) of the Department of Veterans Affairs (VA) Regional Office in Milwaukee, Wisconsin. In that decision, COWC denied a waiver of recovery of overpayment of death pension benefits in the amount of $19,008.00 on the basis that a timely request for a waiver of overpayment was not submitted. The Board acknowledges that the appellant requested a hearing before a Veterans Law Judge at a local regional office (Travel Board hearing). Such a hearing was scheduled to take place in April 2012; however, the appellant did not appear for the hearing or request to reschedule the hearing. Thus, her hearing request is deemed withdrawn. See 38 C.F.R. § 20.704 (2017). The Board remanded the appeal in June 2014 to obtain outstanding documents. The appeal is once again before the Board. FINDINGS OF FACT 1. In a January 2009 letter, the VA Debt Management Center informed the appellant that she had been paid $19,008.00 more than she had been entitled to in VA benefits. 2. The appellant requested a waiver for the debt but the precise date of receipt is not verifiable. 3. In August 2009, the COWC denied the appellant's request for a waiver, finding that she had not timely filed her request for the same. 4. There is no evidence of fraud, misrepresentation, or bad faith on the part of the appellant. 5. Recovery of the assessed overpayment would nullify the objective for which the benefits were intended. 6. The appellant's assets and income, with consideration of the cost of life's basic necessities, would not be sufficient to permit collection of the debt and would result in undue financial hardship. CONCLUSION OF LAW Recovery of the overpayment of VA death pension benefits in the amount of $19,008.00 is against equity and good conscience. 38 U.S.C. § 5302 (a) (2012); 38 C.F.R. §§ 1.962, 1.963, 1.965 (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSION As an initial matter, the basis for the debt is unclear. Both the January 2009 letter notice of the overpayment, and the appellant's request for waiver of the debt, are not available for review. In June 2014, the Board remanded the claim in order to obtain these missing documents; however, the documents were not located. The Board notes that appellant does not dispute the validity of the debt, but asserts that repayment would be an undue hardship. For the reasons explained below, the Board agrees. The Board notes that even if a debt is deemed valid and properly created, the debtor still has the right to request waiver of collection of the debt. Pertinent law and regulations provide that there shall be no recovery of payments or overpayments (or any interest thereon) of VA benefits, where it is determined that recovery would be against equity and good conscience. 38 U.S.C. § 5302 (a); 38 C.F.R. § 1.962. However, the recovery of any payment or the collection of any indebtedness (or any interest thereon) may not be waived, if there exists in connection with the claim for such waiver an indication of fraud, misrepresentation or bad faith on the part of the person or persons having an interest in obtaining the waiver. 38 U.S.C. § 5302 (a)-(c); 38 C.F.R. §§ 1.962 (b), 1.965(b). The issue of whether there exists a preliminary bar to waiver of recovery of indebtedness is a determination that must be reviewed by the Board on a de novo basis. See Ridings v. Brown, 6 Vet. App. 544, 546 (1994). If it is determined that there is no indication of fraud, misrepresentation or bad faith, the applicable standard for the Board to apply is whether recovery of the indebtedness at issue would be against the principles of equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.963, 1.965. In this case, the AOJ has not indicated a finding of fraud, misrepresentation or bad faith with respect to the debt created or the request for a waiver of the same. Rather, the COWC denied the appellant's request for a waiver on the basis that she filed her request for a waiver more than 180 days following notification of the debt. In her March 2011 substantive appeal Form 9, the appellant denied that her request was untimely and reported that her she filed forms and statements over and over again and followed up with multiple calls to VA. The Board finds no indication of fraud or misrepresentation on the part of the appellant, associated with the debt created or the waiver request. As there is no statutory bar to waiver of recovery, the critical inquiry in this case is whether the evidence establishes that recovery of the indebtedness would be against equity and good conscience. If so, recovery of the overpayment may be waived. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.963 (a), 1.965. If warranted, the Board may waive only a portion of the debt. Jordan v. Brown, 10 Vet. App. 171 (1997). The phrase equity and good conscience means arriving at a fair decision between the obligor and the government. 38 C.F.R. § 1.965. In making the determination, consideration will be given to the following elements, which are not intended to be all inclusive: (1) Fault of the debtor. Where actions of the debtor contribute to the creation of the debt. (2) Balancing of faults. Weighing fault of debtor against any VA fault. (3) Undue hardship. Whether collection would deprive debtor or family of basic necessities. (4) Defeat the purpose. Whether the withholding of benefits or recovery would nullify the objective for which the benefits were intended. (5) Unjust enrichment. Whether failure to make restitution would result in unfair gain to the debtor. (6) Changing position to one's detriment. Whether reliance on Department of Veterans Affairs benefits has resulted in relinquishment of a valuable right or incurrence of a legal obligation. 38 C.F.R. § 1.965. In addressing the question of whether waiver of the overpayment would be against equity and good conscience, the first consideration is whether the appellant was predominantly at fault in the creation of the debt. Again, in this case, the cause of the debt is unclear as the letter explaining the debt is not available for review. The August 2010 decision on waiver of indebtedness indicates that VA discovered the overpayment in January 2009 and that they notified the appellant of the same, that same month. The request for waiver was denied solely because the committee determined that the request had not been received within 180 days of notification. Because the evidence is unclear as to the creation of the debt, the Board is unable to determine whether the appellant was at fault in creating the debt. Even if the evidence demonstrated that the appellant was at fault for creating the debt, the analysis does not end there. The Board must also consider whether collection of the debt would cause the appellant undue financial hardship. In an August 2010 financial statement, the appellant listed her income (net $1720 monthly) and expenses ($2158), which demonstrated a negative net income. In a statement received in June 2011, the appellant reported that she had no way of paying the debt due. There is no indication that her financial situation has changed since this time. Given that the appellant's expenses exceed her income, the Board finds that it would be an undue hardship to collect the $19,008.00 overpayment from the appellant. Moreover, the purpose of death pension benefits is to provide supplemental income, and if these benefits are a principal means of support, collection of the debt by withholding benefits would defeat the purpose of the benefits. In view of the record, and giving the appellant the benefit of the doubt, the Board finds that recovery of the overpayment constitutes a violation of the principles of equity and good conscience. The Board thus finds that waiver of recovery of the $19,008.00 overpayment of VA compensation benefits is warranted. ORDER Waiver of recovery of an overpayment of $19,008.00 for VA death pension benefits, is granted. ____________________________________________ L. M. BARNARD Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs