Citation Nr: 18143323 Decision Date: 10/18/18 Archive Date: 10/18/18 DOCKET NO. 16-17 200 DATE: October 18, 2018 ORDER The amount of debt (as determined by the agency of original jurisdiction) based on an overpayment by VA of educational assistance benefits under the Chapter 33 Post-9/11 GI Bill on behalf of the Veteran’s dependent daughter is valid; to that extent the appeal is denied. REMANDED Entitlement to a waiver of indebtedness for overpayment of educational assistance is remanded. FINDINGS OF FACT 1. The Department of Defense (DOD) notified VA in December 2015 that, per their determination, the Veteran retired from active service prior to completing the active duty service requirement that would have afforded him the opportunity to transfer his entitlement to educational assistance to his dependents. 2. Prior to DOD notifying VA that the Veteran had not completed the active duty service requirement needed to transfer his Chapter 33 benefits to his dependents, educational benefits on behalf of the Veteran’s dependent daughter had been paid by VA. CONCLUSION OF LAW Any amount of debt based on Chapter 33 payments issued on behalf of the Veteran’s dependent daughter is valid. 38 U.S.C. §§ 3311, 3319, 5112; 38 C.F.R. §§ 1.962, 21.9520, 21.9570, 21.9635, 21.9695. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran had active military service from March 1994 to August 2015. In October 2016, the Veteran appeared and provided testimony at a hearing before the undersigned Veterans Law Judge (VLJ). A transcript of the hearing is of record. Here, the Veteran has credibly testified and repeatedly stated that he initially attempted to begin the transfer process of his educational benefits to his dependents in 2010. The Board believes him. Unfortunately, DOD, has not officially recognized that the transfer process began until 2013, and, therefore, DOD has determined that the service requirement to transfer benefits were met when the Veteran separated from service in September 2015. The Veteran asserts that the educational benefits VA paid on behalf of his dependent daughter were proper, as he made reasonable attempts to complete the active duty service requirement before separating from service. As detailed below, the Board finds that the debt for overpayment of educational assistance was properly created. However, entitlement to educational benefits and eligibility to transfer such benefits are determinations that rest with DOD. Here, DOD determined that the Veteran’s dependent was not eligible for the benefits paid, as the benefits had not been properly transferred. The Veteran has a three-year window to appeal that term of service determination with DOD. In the event the Veteran has not yet filed an appeal with DOD regarding its decision, but wishes to do so, the Board encourages him to move expeditiously on that front, in light of the end of the three-year appeal period rapidly approaching. Basic Eligibility Requirements for Chapter 33 Benefits The post-9/11 GI Bill, 38 U.S.C. Chapter 33, provides for VA educational assistance for members of the Armed Forces based on active duty service after September 10, 2001. 38 U.S.C. § 3311; 38 C.F.R. § 21.9520. A veteran may establish eligibility for educational assistance under 38 U.S.C. Chapter 33 based on active duty service after September 10, 2001, if he or she serves a minimum of 90 aggregate days excluding entry level and skill training (such training may be included in the total creditable length of service for longer periods, as set forth in 38 C.F.R. § 21.9640 (a)), and, after completion of such service, he or she: (1) continues on active duty; (2) is discharged from service with an honorable discharge; (3) is released from service characterized as honorable and placed on the retired list, temporary disability retired list, or transferred to the Fleet Reserve or the Fleet Marine Corps Reserve; (4) is released from service characterized as honorable for further service in a reserve component; or (5) is discharged or released from service characterized as honorable for: (i) a medical condition that preexisted such service and is not determined to be service-connected; (ii) hardship, as determined by the Secretary of the military department concerned; or (iii) a physical or mental condition that interfered with the individual’s performance of duty but was not characterized as a disability and did not result from the individual’s own misconduct. 38 U.S.C. § 3311; 38 C.F.R. § 21.9520(a). Here, the Veteran’s eligibility for Chapter 33 benefits are not in dispute, based on his decades of honorable military service. Authority to Transfer Chapter 33 Benefits to Dependents An individual who is entitled to educational assistance under 38 U.S.C. Chapter 33 based on his or her own active duty service, and who is approved by a service department to transfer entitlement, may transfer up to a total of 36 months of his or her entitlement to a dependent (or among dependents). 38 U.S.C. § 3319; 38 C.F.R. § 21.9570. DOD is charged with making determinations of eligibility for transfer of Chapter 33 entitlement to dependents; VA has no authority to determine such eligibility. 74 Fed. Reg. 14,654 (2009); Garza v. McDonald, 28 Vet. App. 222, 230 (2016); see 38 U.S.C. § 3319; 38 C.F.R. § 21.9570; Dependents are not eligible for transferred entitlement if the transferor fails to complete the amount of service he or she agreed to serve in the Armed Forces in order to participate in the transferability program, unless one of the following circumstances exists: (1) The transferor did not complete the service due to (a) his or her death; (b) a medical condition that preexisted such service on active duty and that the Secretary of the military department concerned determines is not service-connected; (c) a hardship, as determined by the Secretary of the military department concerned; (d) a physical or mental condition that was not characterized as a disability and did not result from the individual’s own willful misconduct but interfered with the individual’s performance of duty, as determined by the Secretary of the military department concerned; or (2) The transferor is considered to have completed his or her service as a result of being discharged for (a) a disability; or (b) a reduction in force. 38 C.F.R. § 21.9570(l). Discontinuance Dates and Liability for Overpayments VA will discontinue each award of educational assistance given to a dependent effective the first date of each such award when: (1) The transferor fails to complete the active duty service requirement that afforded him or her the opportunity to transfer entitlement of educational assistance; and (2) The military department discharges the transferor for a reason other than one of the reasons stated in 38 C.F.R. § 21.9570. 38 C.F.R. § 21.9635(aa). If an individual transferring Chapter 33 entitlement fails to complete the service agreed to by the individual, the amount of any transferred entitlement that is used by a dependent of the individual as of the date of such failure shall be treated as an overpayment of educational assistance. 38 U.S.C. 3319(i)(2). In the event of an overpayment of Chapter 33 educational assistance benefits with respect to a dependent to whom entitlement is transferred, the dependent and the individual making the transfer shall be jointly and severally liable for the amount of the overpayment. 38 U.S.C. 3319(i)(1). An overpayment of educational assistance paid to an eligible individual constitutes a liability of that individual, unless: (1) The overpayment was waived as provided in 38 C.F.R. §§ 1.957 and 1.962; or (2) The overpayment results from an administrative error or an error in judgment. 38 C.F.R. § 21.9695 (b) (cross-referencing 38 C.F.R. § 21.9635 (r)). Regarding the exception to an individual’s liability when there is administrative error or error in judgment, VA regulation provides that when an administrative error or error in judgment by VA, DOD, or the Department of Homeland Security with respect to the Coast Guard when it is not operating as a service in the Navy, is the sole cause of an erroneous award, the award will be reduced or terminated effective the date of last payment. 38 C.F.R. § 21.9635(r)(1). When a payee receives an erroneous award of educational assistance as the result of providing false information or withholding information necessary to determine eligibility for the award, the effective date of the reduction or discontinuance will be the effective date of the award, or the day before the act, whichever is later. 38 C.F.R. § 21.9635(r)(2). The date of the reduction or discontinuance will not be before the last date on which the individual was entitled to payment of educational assistance. Id.; see 38 U.S.C. §§ 3323 (c), 5112(b), 5113. The term “erroneous award” includes erroneous payments made subsequent to the initial award of benefits. Dent v. McDonald, 27 Vet. App. 362, 374 (2015). With regard to fault for an erroneous award, if fault for an overpayment cannot “clearly be ascribed to the beneficiary,” VA’s policy is to assume that fault and not create a debt against the beneficiary. Dent, 27 Vet. App. at 380 (citing VAOPGCPREC 2-90 (March 1990)). However, when both VA and the beneficiary are partially at fault, the debt based on the effective date of reduction or discontinuance of benefits is properly created. See Jordan v. Brown, 10 Vet. App. 171, 174 (1997). Analysis An overpayment is created when VA determines that a beneficiary or payee has received benefit payments in excess of the amount due or to which such beneficiary or payee is entitled. 38 C.F.R. § 1.962. The debtor may challenge the validity or amount of the debt owed. See 38 C.F.R. § 1.911(c)(1); see also VAOPGCPREC 6-98; Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991). Here, the amount of debt is not in dispute. The December 2015 letter from the Muskogee RO to the Veteran’s dependent notifying her of the debt shows that a debt was created in the amount of $61,085.80. This amount constituted the total amount VA had paid for educational benefits for the Veteran’s dependent daughter, who had been receiving an education at Auburn University. Whether the amount of debt was properly calculated is not before the Board. The issue before the Board is whether the basis for the creation of the debt was valid. Turning to the facts, the Veteran attempted to transfer his entitlement to Chapter 33 benefits to his dependents, and believed he had appropriately done so when payments were rendered for his daughter’s education. Records from an electronic database titled Veterans Information Solution (VIS)-an application that provides authorized VA personnel access to service discharge data and other eligibility information-shows that the Veteran was approved to transfer such benefits effective March 14, 2013, the transfer request date of record. The VIS records reflect that, as a condition of eligibility for transfer of his Chapter 33 benefits, the Veteran, as sponsor, had an obligated projected end date of March 13, 2017 in terms of his service requirements. In other words, eligibility for transfer of Chapter 33 benefits was contingent upon him completing his service obligation, which required that he continue serving until March 13, 2017. Service department records show that the Veteran actually separated from service September 1, 2015, more than 18 months prior to March 13, 2017. As previously stated, DOD is charged with making determinations of eligibility for transfer of Chapter 33 entitlement to dependents. While VA is tasked with administering Chapter 33 benefits, VA does not have authority to determine eligibility for transfer of such benefits. See Garza, 28 Vet. App. at 230. Accordingly, VA cannot determine whether the Veteran satisfied the eligibility requirements for transfer of his Chapter 33 benefits to his dependent. The Veteran testified before the Board in October 2016 that he went through what he thought were the appropriate steps to begin the process to transfer his Chapter 33 benefits to his dependents in 2010, when he had more than enough anticipated active service remaining which would have met the transfer service obligation. He became aware in 2013, when he wanted his daughter to begin receiving the benefits, that the website dealing with transferring the benefits did not acknowledge his initial transfer attempts, because an extra form was needed to complete the process (per the Veteran’s testimony he was required to print out a page and sign it, while submitting the remainder of the application electronically). The Veteran also testified that when he noticed this issue on the website in 2013, he spoke with a personnel specialist (whom the Veteran identified by name), who told him that the form he had not signed in 2010 was merely a formality and the transfer service period had actually begun when he had attempted to begin the process online in 2010. Further, the Veteran wrote in his January 2016 notice of disagreement that he called the GI Bill help desk in 2014 in an additional attempt to rectify any clerical errors appearing in the system, and was told that file showed that the Veteran had submitted an online request to transfer the benefits back in 2010, but they were unable to update the system to reflect this date. As such, the Veteran clearly made attempts to transfer the benefits properly, and was reasonable in relying upon his belief that DOD would find that the transfer service obligation would have been met when the Veteran retired and separated from active service in September 2015. Although the Board is extremely sympathetic to the Veteran’s vigilant attempts to meet the transfer service obligation, as noted VA does not have the authority to alter DOD’s findings of the Veteran’s transfer request date or eligibility for transferring Chapter 33 benefits. The service department’s findings on such matters are conclusive and binding on VA. See, e.g., Duro v. Derwinski, 2 Vet. App. 530 (1992). Here, DOD has found that the Veteran was not eligible to transfer his Chapter 33 entitlement to his dependents. The Veteran’s dependent daughter enrolled in and began attending Auburn University in August 2013 and received Chapter 33 payments, via automated payments issued to her college, from August 2013 through December 2015. VA’s discontinuance of these benefits effective the date of the initial award, in 2013, was proper, based on DOD’s determination the Veteran did not complete the service requirement that was the basis of eligibility for the transfer, and had not been discharged for one of the reasons set forth in 38 C.F.R. § 21.9570. See 38 C.F.R. § 21.9635 (aa). Accordingly, all Chapter 33 payments issued prior to DOD notifying VA that the Veteran did not complete requirements to transfer his benefits constitute an overpayment for which the Veteran and his dependent daughter are liable. See 38 U.S.C. 3319(i)(1); 38 C.F.R. § 21.9695(b). Thus, the overpayment and resultant debt based on Chapter 33 payments issued for the Veteran’s dependent is valid. The exact amount of such debt is a matter for the agency of original jurisdiction to determine. Although the Board cannot disturb DOD’s findings that the Veteran did not satisfy the eligibility requirements for transferring his Chapter 33 benefits to his daughter, VA can consider whether the resultant overpayment debt should be waived in certain circumstances. As such, and as discussed below, the issue of whether a waiver of all or a portion of the overpayment debt would be proper is remanded for AOJ consideration. The Board again reiterates that should the Veteran wish to pursue an appeal with DOD of its determination regarding his eligibility to transfer his Chapter 33 benefits, the deadline to appeal that determination is approaching, and he should be expeditious in that pursuit. REASONS FOR REMAND The Board has determined that the debt described above was properly created. However, consideration must be made as to whether a waiver of all or a portion of the overpayment debt would be proper in this case. The matter is REMANDED for the following action: Adjudicate the issue of whether a waiver of the indebtedness would be appropriate here, given the Veteran’s credible lay statements about his reliance upon DOD that the benefits were appropriately transferred. In determining this issue, the AOJ should consider the Veteran’s written statements submitted in support of his appeal and his October 2016 Board testimony. MATTHEW W. BLACKWELDER Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD C. Davidoski, Associate Counsel