Citation Nr: 18142654 Decision Date: 10/16/18 Archive Date: 10/16/18 DOCKET NO. 15-36 393 DATE: October 16, 2018 REMANDED The issue of entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $600.00 based on change in dependency status is remanded. REASONS FOR REMAND The Veteran served on active duty from October 1977 to September 2010. As explained below, the Board of Veterans’ Appeals (Board) finds the Veteran has raised the issue of the proper creation of the debt, to include the matter of sole administrative error. See Edwards v. Peake, 22 Vet. App. 57, 60-61 (2008). (pleadings from a pro se claimant are to be read sympathetically in cases involving waivers of overpayments). Resolution of the creation issue must precede consideration of the waiver issue and must include consideration as to whether the Veteran was either legally entitled to the benefits in question or, if the Veteran was not legally entitled, whether VA was solely responsible for the Veteran being erroneously paid benefits. See VAOPGCPREC 2-90 (July 17, 1989); 55 Fed. Reg. 27757 (1990) (administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law); 38 C.F.R. § 3.350(b)(2). The Veteran retired from the Coast Guard in October 2010 and is also in receipt of VA compensation benefits at a 40 percent disability rate since October 1, 2010. See 38 C.F.R. § 3.4(b)(2) (a veteran in receipt of compensation at the rate of 30 percent or more is entitled to additional compensation for a spouse, children and/or dependent parents); see also 38 C.F.R. §§ 3.700, 3.750 (a veteran may not concurrently receive military retirement and VA compensation; if there is a failure to report concurrent receipt of compensation benefits and military retirement pay, and the veteran did not waive that portion of his retirement pay as was equal in amount to the compensation to which he is entitled, an overpayment may be created). In a January 2011 notification letter, the Veteran was informed that he was being paid VA compensation benefits as a veteran with one dependent, his spouse, and was directed to inform VA right away if there was any change in his marital status. The first evidence of record of a report in the change in dependency status was a VA Form 21-868c, Declaration of Status of Dependents, dated April 2013 that reported his marriage was terminated in divorce in October 2012. In an April 2015 letter, VA informed the Veteran that his compensation benefits were retroactively reduced to a rate for a veteran with no dependents, effective November 1, 2012, and notified the Veteran that an overpayment was created. A May 2015 Debt Management Center first demand letter indicated withholding for an overpayment of $1,882.74 would begin in August 2015. The Veteran disagreed with the demand letter and essentially contended in a June 2015 statement that VA and the Coast Guard Pay and Personnel Center were responsible for the overpayment. He further argued in a June 2015 letter that the debt owed VA should be recouped from the Coast Guard because he did not receive more money than he was entitled; rather, his military retirement benefits were offset by VA disability compensation and any adjustments to the proportion paid out by each agency should be resolved by a reimbursement by the Coast Guard to VA. This is construed as a disagreement with whether such overpayment debt was validly created in the May 2015 demand letter. Correspondence between VA and the Veteran via e-mail stated that VA did not collect a debt from other agencies and that a waiver request was started for him; he was notified that same month that the waiver of the overpayment debt was denied. Thereafter, a September 2015 statement of the case (SOC) by the Committee on Waivers and Compromises granted a partial waiver of the overpayment debt in the amount of $1,282.74, and denied the remaining debt of $600.00 due to partial fault, lack of a VA Form 5655, and partial unjust enrichment. Further, in his VA Form 9, the Veteran repeated that the $1,882.74 was a part of his military retired pay such that it could not constitute an overpayment. As such further appellate review by the Board on the Veteran’s waiver claim must be deferred pending formal adjudication of a threshold determination on the propriety of the creation of the debt prior to a decision on the waiver of indebtedness. Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991) (“when a Veteran raises the validity of the debt as part of a waiver application... it is arbitrary and capricious and an abuse of discretion to adjudicate the waiver application without first deciding a veteran’s challenge to the lawfulness of the debt asserted against him or her”); VAOPGCPREC 6-98 (July 24, 1998) (holding that when a veteran challenges the validity of the debt and seeks waiver of the debt, the [Regional Office] must first fully review the debt’s validity and, if the office believes the debt to be valid, prepare a written decision fully justifying the validity of the debt before referring the waiver request to the Committee on Waivers and Compromises). A debtor may dispute the amount or existence of a debt, which is a right that may be exercised separately from a request for waiver or at the same time. 38 C.F.R. § 1.911(c)(1). In addition, the Veteran stated in his VA Form 9, that he submitted a VA Form 5655, Financial Status Report in July 2015. He also indicated in a July 2015 e-mail that the form was completed and mailed. He inquired in a July 2015 letter whether VA received the form, and has generally reported that his budget was restricted. The Board finds the Veteran should be afforded an additional opportunity to submit a VA Form 5655 on remand. The matter is REMANDED for the following actions: 1. Contact the Veteran and afford him the opportunity to submit an additional VA Form 5655. 2. Adjudicate the issue of whether the overpayment was properly created, to include the raised matter of sole administrative error. 3. After the issue regarding whether the overpayment was properly created is resolved to the Veteran’s satisfaction, perfected on appeal, or finally denied, issue a supplemental statement of the case (SSOC) that addresses the waiver issue and afford him the opportunity to respond. Nathan Kroes Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD A. Odya-Weis, Counsel