Citation Nr: 18140211 Decision Date: 10/02/18 Archive Date: 10/02/18 DOCKET NO. 13-26 747 DATE: October 2, 2018 ORDER The adjustments to the Veteran’s non-service-connected disability pension benefits, to include the validity of the overpayment created thereby, were proper, and the Veteran’s appeal is denied. FINDINGS OF FACT 1. The Veteran was awarded VA nonservice-connected pension effective June 26, 2006. 2. The Veteran had outstanding warrants issued for his arrest on November 28, 2007 and April 1, 2009, which the RO was notified of in April 2008 and November 2009, respectively. 3. In January 2012, the RO received evidence from the California Department of Corrections (CDC) (hereafter referred to as the “CDC chronological history”) showing that, from June 2006 to July 2011, the Veteran was incarcerated multiple times during that period for parole violations, to include for periods in excess of 60 days from October 8, 2008 to March 19, 2009; from June 16, 2009 to October 5, 2009; from October 15, 2009 to October 20, 2009; from March 4, 2010 to July 17, 2010; from July 29, 2010 to November 27, 2010; and from December6, 2010 to May 18, 2011. 4. The initial decisions to terminate the Veteran’s non-service-connected disability pension made in the September 2010 and January 2011 notification letters were revised in a September 2012 administrative decision and the Veteran’s non-service-connected disability pension benefits were properly adjusted for his specific periods of ineligibility due the Veteran’s specific periods of incarceration as set forth in the CDC chronological history, which resulted in a reduction of the initial overpayment. CONCLUSION OF LAW The revised adjustments to the Veteran’s non-service-connected disability pension benefits, and therefore the overpayment, was properly calculated. 38 U.S.C. §§ 501, 1505, 5313, 5313B; 38 C.F.R. §§ 3.6, 3.271, 3.272, 3.666. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran had honorable active military service from July 1971 to November 1971. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from a September 2012 administrative decision of a Department of Veterans Affairs (VA) Regional Office (RO). In August 2017, the Board remanded the Veteran’s appeal to afford him a hearing on his appeal. It also picked up the issue of the validity of an overpayment as having a Notice of Disagreement pending and remanded it for issuance of a Statement of the Case. The Veteran appeared and testified at a Board video-conference hearing held before the undersigned Veterans Law Judge in January 2018. A transcript of this hearing is associated with the claims file. Subsequently, in February 2018, the Board again remanded the Veteran’s claim after recharacterizing the issue on appeal finding the issue of the validity of the overpayment is as aspect of the Veteran’s appeal to determine whether the adjustments made to his non-service-connected disability pension is proper. The Board’s remand was for the narrow purposes of having the RO conduct development to ascertain the propriety of the reduction of the Veteran’s nonservice-connected pension for the period of November 28, 2007 to September 30, 2008. After attempting additional development without success, the RO issued a Supplemental Statement of the Case (SSOC) in June 2018 in which it only addressed the narrow issue of the period of November 28, 2007 to September 30, 2008 rather than the broader issue on appeal. Given that no new evidence had been received that needed to be addressed on the broader issue on appeal, the Board finds that there was no prejudicial error to the Veteran in its failure to issue an SSOC on only the narrow issue submitted on remand. See 38 C.F.R. § 19.31. Whether the adjustments to the Veteran’s non-service-connected disability pension benefits, to include the validity of the overpayment created thereby, were proper The Veteran contends that VA is adjudicating the wrong issue. He contends he has not appealed VA’s right to collect the overpayment, but the amount that VA took from him as incorrect. He also contends that the audit he was provided is patently incorrect and the total debt is not valid in that it shows he was overpaid for the periods of September 2012 through June 2013 by $9,829.00. He contends that the evidence he submitted from the California Department of Corrections as to his periods of incarceration were ignored because the basis of his appeal was ignored. He did not appeal VA’s right to recover the overpayment but the amount VA took from him, which he contends is wholly in error by at least $22,000.00 and is now owed to him. See correspondence received August 7, 2014. He further contends that VA assessed him overpayments after he was discharged from parole in July 2011 and no longer in custody, which amount is in the $20,000.00 range. He claimed that VA took more from him than he owed and is still deducting from his pension. See correspondence received February 24, 2015. However, in contrast, at the Board hearing held in January 2018, the Veteran acknowledged that his overpayment had been reduced to $1,959.00 and that he finished paying that off in September 2013. See Board hearing transcript, p. 9. Background To assist in understanding the outcome of this case, it is necessary to review the actions taken by the RO and the Veteran from the beginning. In June 2006, the Veteran filed claims seeking both service-connected compensation and nonservice-connected pension benefits for an “affective personality disorder.” In September 2006, he added claims for service-connected compensation for spine and neck disorders and for total disability due to individual unemployability (TDIU). In a September 2007 rating decision, the RO denied the Veteran’s service connection and TDIU claims, but granted entitlement to non-service-connected pension effective June 26, 2006. In April 2008, the RO received an FFP-3 VA Investigative Summary Form from VA’s Office of Inspector General (OIG), Fugitive Felon Program, showing that a warrant for the Veteran was issued on November 28, 2007. In November 2009, the RO received another FFP-3 VA Investigative Summary Form from VA’s OIG that a second warrant had been issued for the Veteran on April 1, 2009. In December 2009, the RO notified the Veteran by letter (with copy to his representative at the time) that it had received information from VA’s OIG that he is a fugitive felon and a warrant for his arrest was issued on April 1, 2009; that the law (Section 505 of Public Law 107-103) prohibits benefit payments to VA beneficiaries while they are fugitive felons (i.e., a person who is fleeing to avoid prosecution, custody or confinement for a felony; or a person who is a fugitive by reason of violating a condition of probation or parole); and the law (38 U.S.C. § 1505) requires termination of pension payments effective the first day of the warrant date. Thus, the RO proposed to stop his benefit payments effective April 1, 2009. The Veteran was advised of what evidence was used to make this decision, what steps to take to clear the warrant, and his rights and privileges regarding the proposed action by the RO. The Veteran submitted a statement saying the warrant was cleared approximately 60 days after it was issued and requesting a hearing. However, he did not submit any supporting documentation to show when the warrant was cleared and he failed to report for the hearing scheduled in May 2010. Thereafter, based on information from the California Parole and Community Services Division that the April 1, 2009 warrant was cleared by the Veteran’s arrest on July 29, 2010 and that he remained incarcerated at a division of the CDC, in September 2010, the RO notified the Veteran that it was effectuating the proposed action in the December 2009 letter. The Veteran was also advised that this action created an overpayment. In October 2010, the Debt Management Center (DMC) sent him a first demand letter advising him that an overpayment in the amount of $15,792.83 was created. Also in October 2010, the RO notified the Veteran by letter about the November 28, 2007 warrant and proposed to terminate his non-service-connected pension benefits starting November 28, 2007 due to being a fugitive felon. In a January 2011 notice letter, the RO effectuated the October 2010 proposed action. Essentially this decision only assigned an earlier date of November 28, 2007 from April 1, 2009 for the initial termination of the Veteran’s pension benefits as an October 2010 contact with the Parole Board of Sacramento, California, State Warrants Unit, indicated that this warrant was also cleared by the July 2010 arrest. The reinstatement and then re-termination on the 61st day of incarceration were essentially unchanged. This letter also advised the Veteran that an additional overpayment was created on his account because of this action and he would receive separate notice of how much he overpaid. The claims file does not contain a copy of any correspondence from the DMC to the Veteran regarding this debt. However, the Compensation and Pension Award statement for this decision shows an overpayment in the amount of $17,564.83 was created. In October 2011, the Veteran filed a Notice of Disagreement disputing the amount of the overpayment claiming that the amount of the overpayment exceeds the total amount of payments he had received since he was awarded his claim. However, in September 2012, the Veteran withdrew this appeal. In December 2011, the Veteran’s representative submitted a statement requesting that the Veteran’s benefits be restarted immediately along with documents from the CDC showing that a warrant (but not specifying which one) was cancelled on December 7, 2010 and that he was discharged from the CDC in July 2011. In January 2012, the RO received documentation from the CDC (the CDC chronological history) demonstrating the actual dates from November 2001 to July 2011 when the Veteran was incarcerated and paroled. Based upon this evidence, the RO proposed to modify the adjustments previously made to the Veteran’s pension payments in a May 2012 letter, which adjustments were made final in a September 2012 decision letter after no comment was received from the Veteran or his representative. Such adjustments resulted in a significant reduction in the overpayment due from the Veteran, as shown by the September 2013 audit prepared for the Veteran that shows a reduction from $33,357.66 to $1,959.09. (The Board acknowledges that the initial total amount of the overpayment does not come from records from the DMC but from Compensation and Pension Award statements in the Veteran’s claims file and, therefore, may not be wholly accurate. However, the Board finds that any difference is irrelevant given the RO’s September 2012 adjustments to the Veteran’s non-service-connected disability pension benefits, which the RO and the Veteran have both acknowledged resulted in a reduction in the overpayment to $1,959.00. See September 2013 VA audit and January 2018 Board hearing testimony.) In December 2012, the Veteran filed his Notice of Disagreement as to the RO’s September 2012 decision. He stated he was appealing because the decision is based on inaccurate and incomplete information. He set forth two arguments. In his first argument, he referenced the second paragraph of VA’s letter and said he had sent official state of California archival information that verifies all periods during which he was incarcerated for any period exceeding 61 consecutive days and all periods during which there was a felony warrant for his arrest. He related that all custody/warrant conditions stemmed from “CDCR PAROLE” and no other reason, and that he was discharged from parole in July 2011, which he has provided verification of as well. In his second argument, he stated that the letter does not indicate the amount of the overpayment. But then he states that he sent VA official information from the CDC, State of California, that shows the amount of his overpayment was approximately $26,500.00, when VA claims the overpayment totals $31,000.00, which is incorrect. He stated he is enclosing again official archival information that shows, beyond a doubt and with full explanation, that he was overpaid $26,500.00. Therefore, he stated VA owed him a refund and a stop to it currently taking $50.00 out of his pension monthly. He felt VA owed him approximately six months of full pension payments because it took more money from him than he was overpaid and $50.00 for each month taken from his pension check. He claims he was re-eligible for his pension since two months prior to his discharge from parole in July 2011 because he was not in custody for more than 61 days since April 2011, a period of 20 months counting December 2012. On his VA Form 9 filed in September 2013, the Veteran stated that his appeal is based on the “amount” of the overpayment, not the validity or legality of it. He argues that the CDC archival records prove VA has withheld more than his total overpayment amount and is continuing to withhold $50.00 per month from his pension. He further stated that his total overpayment amount was repaid prior to the restarting of his pension in October 2012 and that VA has withheld approximately $5,000.00 more than was overpaid and was still reducing his pension. Analysis Initially, in light of the Veteran’s consistent arguments that the RO has adjudicated the wrong issue, the Board finds that the Veteran’s Notice of Disagreement plainly disagrees with the RO’s calculation of his non-service-connected disability pension. The Veteran stated that he was appealing the RO’s decision because “the decision is based on inaccurate and incomplete information” and his first argument was that the RO failed to consider the evidence from the CDC as to his periods of his incarceration and warrants. Such argument can only be construed as disagreement with the adjustments made to the non-service-connected disability pension benefits themselves rather than having anything to do with payments or overpayments. Notably, he raised the argument at the January 2018 Board hearing as well that the RO had to withhold his pension for when he was actually incarcerated, not for “when they think” he was in jail, which also goes to the adjustments made and not the issue of overpayment and payment. Consequently, despite the Veteran’s consistent argument that the only issue on appeal is the payment issue, the Board finds that the issue of the validity of the adjustments to his non-service-connected disability pension benefits was raised by the Veteran and is properly on appeal. Thus, the Board will consider both issues in adjudicating the Veteran’s appeal. After reviewing of the adjustments made to the Veteran’s non-service-connected disability pension benefits by the RO in the September 2012 administrative decision, the Board finds that they were proper and the resulting reduction to the overpayment was correct. Moreover, the Board does not find any evidence to suggest that the Veteran was overpaid more than $1,959.00, which debt he admitted at the January 2018 Board hearing he has paid back to VA, or that VA has somehow taken more money from the Veteran than necessary to recoup the $1,959.00. Generally, disability pension is paid 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. 38 U.S.C. §§ 1502, 1503, 1521. The Veteran here has been found to be permanently and totally disabled due to non-service-connected disabilities. 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. Pension benefits are based upon total family income and the amount of pension benefits is adjusted based upon the number of dependents the veteran supports. 38 U.S.C. §§ 1521, 1522. The rate of pension payable to an entitled payee is based on the amount of countable income received. The maximum annual rate of pension (MAPR) is established by statute every year and is reduced by the veteran’s countable annual income. In the present case, the Veteran’s pension entitlement has been based upon his report of no income in any given year under consideration. The Board also notes that from June 1, 2008 until March 18, 2009, the Veteran’s MAPR was higher as he was receiving additional benefits due to a dependent child. However, no pension shall be paid to (or for) a veteran who has been imprisoned in a Federal, State, or local penal institution as a result of conviction of a felony or misdemeanor for any part of the period beginning sixty-one days after such individual’s imprisonment begins and ending when such individual’s imprisonment ends. 38 U.S.C. § 1505; 38 C.F.R. § 3.666; see also Latham v. Brown, 4 Vet. App. 265 (1993). Pension will be resumed as of the day of release if notice is received within one year following release; otherwise, resumption with be effective the date of receipt of such notice. 38 C.F.R. § 3.666(c). Furthermore, a pension is not payable on behalf of a veteran for any period during which he or she is a fugitive felon. 38 U.S.C. § 5313B; 38 C.F.R. § 3.666(e)(1). The term “fugitive felon” means a person who is a fugitive by reason of: (i) [f]leeing to avoid prosecution, or custody or confinement after conviction, for an offense, or an attempt to commit an offense, which is a felony under the laws of the place from which the person flees; or (ii) [v]iolating a condition of probation or parole imposed for commission of a felony under Federal or State law. 38 C.F.R. § 3.666(e)(2). The term “felony” includes a high misdemeanor under the laws of a state that characterizes as high misdemeanors offenses that would be felony offenses under Federal law. 38 C.F.R. § 3.666(e)(3). The statute barring a veteran from receiving VA benefits while a “fugitive felon” does not require an adjudication of guilt or knowledge of the outstanding arrest warrant. Mountford v. Shinseki, 24 Vet. App. 443 (2011). The evidence of record clearly demonstrates that warrants for the Veteran’s arrest were issued on November 28, 2007 and April 1, 2009. See FFP-3 VA Investigative Summary Forms received on April 8, 2008 and November 2, 2009. In addition, contact with various California parole offices resulted in the RO being told that the Veteran’s arrest at the end of July 2010 resulted in both warrants being cleared. They both also reported that the Veteran remained incarcerated at that time. This evidence was the basis of the original decisions issued in September 2010 and January 2011 terminating the Veteran’s non-service-connected disability pension benefits. Unfortunately, it was not until January 2012 that the RO first received the detailed CDC chronological history of the Veteran’s incarcerations and parole record. Unlike the Veteran contends, the CDC’s chronological history was the main piece of evidence relied upon by the RO in revising and reinstating the Veteran’s non-service-connected disability pension benefits in the September 2012 administrative decision and in every adjudication thereafter. The Board is unclear as to why the Veteran believes that this evidence has not been considered since it is clear it is the only evidence the RO has as to when the Veteran was incarceration and it has listed it in every adjudication it has made. The Board agrees with the RO that the CDC chronological history shows that an October 8, 2008 arrest cleared the November 28, 2007 warrant and a June 16, 2009 arrest cleared the April 1, 2009 warrant. Although the Veteran initially reported that the April 1, 2009 warrant was released about 60 days after issuance, he did not submit any documentation to support that statement. Subsequently, in a statement he submitted with his Notice of Disagreement, he acknowledged that the June 16, 2009 arrest cleared the April 1, 2009 warrant. In the same statement, he also admitted that the October 8, 2008 arrest cleared the November 28, 2007 warrant. Furthermore, the Veteran admitted that all warrants and arrests were related to violations of his parole. Consequently, there is no issue as to the Veteran’s fugitive felon status from November 28, 2007 to September 30, 2008 and April 1, 2009 to June 15, 2009 and the termination of the Veteran’s non-service-connected disability pension for those periods is proper. (The Board notes that the RO has chosen to reinstate the Veteran’s pension benefits effective October 1, 2008 even though the warrant for his arrest was not cleared until October 8th; hence, it has the first period of fugitive felon status ending on September 30th instead of October 7th. The Board sees no reason to make any adjustment to the date to reflect the actual clearing of the warrant as to do so would result in an unfavorable outcome to the Veteran.) Furthermore, the CDC chronological history also establishes that the Veteran had multiple periods of incarceration while he was on parole from June 2006 until his final discharge in July 2011, many of them (but not all) in excess of 61 days. The claims file contains a list of the dates the Veteran was arrested and released compiled from the CDC’s chronological history prepared by the RO. The Board has reviewed the CDC’s chronological history, the RO’s list of dates, and the Veteran’s own list he submitted with his Notice of Disagreement. The Board concludes this evidence demonstrates the Veteran was incarcerated in excess of 60 days as follows: Arrested Released Number of Days 10/8/2008 3/19/2009 162 6/16/2009 10/5/2009 111 10/15/2009 12/20/2009 66 3/4/2010 7/17/2010 135 7/29/2010 11/27/2010 121 12/6/2010 5/18/2011 163 The Board comments that the RO did not adjust the Veteran’s non-service-connected disability pension for the following periods of incarceration because they were 60 days or less: May 24, 2007 to June 14, 2007 (21 days); December 30, 2009 to January 20, 2009 (21 days); and May 18, 2001 to July 15, 2011 (58 days). In addition, for two other periods of incarceration from March 19, 2007 to May 20, 2007 and August 31, 2007 to November 1, 2007 (which were 62 days each), the RO did not adjust the Veteran’s non-service-connected disability pension because it appears additional information was needed as on the RO’s list it was noted “needs DP.” Furthermore, there appears to be a question as to whether the Veteran was in custody for the full 62 days from March to May of 2007 as it is not clear on the chronology. Hence, the Board agrees that adjustments to the Veteran’s non-service-connected disability pension are not warranted for either of these two periods of incarceration. However, for those periods listed in the table above that exceeded 60 days, the RO adjusted the Veteran’s non-service-connected disability pension on the 61st day and the Board agrees that such adjustments were appropriate. See 38 U.S.C. § 1505; 38 C.F.R. § 3.666(a)-(c). Consequently, after carefully considering both adjustments made for the periods when the Veteran was considered a fugitive felon and when he was incarcerated for a period in excess of 60 days, the Board finds that the RO properly adjusted the Veteran’s non-service-connected disability pension in the September 2012 decision on appeal. Hence, the Board finds that the Veteran’s appeal seeking to revise the adjustments made to his non-service-connected disability pension must be denied. As to his contentions regarding the overpayment and the payments on the overpayment, after carefully considering the Veteran’s arguments, the Board can only reach the conclusion that the Veteran is confused as to what constitutes an overpayment due from him and one due to him. This conclusion arises from the Veteran’s argument in his Notice of Disagreement and subsequent arguments he has made, especially regarding what the audit shows. In his Notice of Disagreement, he begins arguing that he believes the overpayment is less than what VA says it is but then suddenly argues that, because he was overpaid, he is owed a refund, which statement is perplexing. How can one receive extra money that they were not supposed to get and must pay back and yet think they are due more? The Veteran’s statements and testimony given after the September 2013 audit are even more illustrative of his confusion. In an April 2014 letter, the Veteran stated that the audit is patently erroneous because, for the period of September 2012 through June 2013, VA has him overpaid by $9,829.00 and was still taking money from his checks even though he was released from parole in July 2011 and he was not in jail during this time period. He further stated that he did not appeal VA’s right to overpayment refund, but the amount VA took, which is wholly in error by at least $22,000.00, which VA now owes him, plus the $50.00 it had been taking from his check each month since 2013. Again, in a February 2015 statement, the Veteran argued that audit clearly shows that the VA continues to assess him overpayments after he was discharged from parole in July 2011 and no longer in custody in the amount of $20,000.00 or so, and VA continues to wrongfully take money out of his pension. He contended that VA took more from him than he owed and is still deducting from his pension. At the January 2018 Board hearing, he claimed the audit showed that money was withheld from him or that he owed money to be repaid beginning May 2011 to November 2011 in the amount of $6,000; and from December 2011 to November 2012 another $12,000; and from December 2012 to June 2013, another $7,000. In recent correspondence submitted in August 2018, the Veteran stated that the audit “lists the amount paid to me and the amount over-paid to me.” This last statement clearly explains where the Veteran’s confusion is coming from. Consequently, the Board will explain for the Veteran’s benefit how to read the VA’s audit of the overpayment calculation. The audit was conducted and provided with the September 2013 Supplemental Statement of the Case. The audit is made up of two sections. The top section is labeled “Amount Paid” and the bottom section is labeled “Amount Due.” The Veteran is correct when he said that the audit “lists the amount paid to me.” This would be the “Amounts Paid” section. However, the Veteran is unfortunately confused about what the bottom section, the “Amount Due” section, is supposed to represent. Instead of listing “the amount over-paid” to the Veteran, this section in fact lists the amount that should have been paid to the Veteran. In other words, wiping the slate clean and recalculating the Veteran’s pension entitlement, this is the amount now due to the Veteran during the relevant period based upon the new evidence of record. The “Amount Paid” section reflects the actual amount of money that has been previously paid to the Veteran during the relevant period. The “Amount Due” section reflects the amount of money now owed or payable to the Veteran given the adjustments made to his benefits because of the new evidence during the relevant period. At the bottom of each section is a “Total Paid” and “Total Due.” The “Total Due” is subtracted from the “Total Paid” to arrive at the “Overpayment” due. The “Overpayment” is the “amount over-paid” to the Veteran, not the “Amount Due” or “Total Due.” It is the difference between what was actually paid to the Veteran and what should have been paid to the Veteran that is the amount that was overpaid to him. In the Veteran’s case, the RO performed the audit from October 1, 2007 through June 30, 2013. This audit shows the “Total Paid” the Veteran from November 1, 2007 through June 30, 2013 was $45,910.00. This means that is the amount of money VA paid the Veteran. In addition, the audit shows that the “Total Due” to the Veteran was $43,950.91. By subtracting the “Total Due” from the “Total Paid” results in an “Overpayment” in the amount of $1,959.00. Thus, if the Veteran looks at the audit, he will see under the “Amount Due” that his pension benefits were terminated only for the two periods when he was a fugitive felon (from November 28, 2007 to September 30, 2008, and from April 1, 2009 to June 15, 2009) and for each period of incarceration in excess of 60 days (starting on the 61st day) as listed above. These periods are easily identified by the $0.00 in the Rate column. It is also clear that no adjustments were made to the Veteran’s pension benefits after May 18, 2011, when he was released from the last period of incarceration that exceeded 60 days, unlike he contends there were. The Board has considered the Veteran’s other arguments as well, but does not find them prevailing or relevant to the appeal. The evidence clearly demonstrates that the Veteran’s overpayment due in September 2013 based upon the proper adjustments to his non-service-connected disability pension benefits was only $1,9595.09. He admitted at the January 2018 Board hearing that this amount had been paid back by VA withholding $50.00 from his pension check. Consequently,   based on the foregoing, the Board find that the calculation of the overpayment was proper and VA does not owe any money to the Veteran. Thus, the Veteran’s appeal is denied. M. C. GRAHAM Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD S.M. Kreitlow