Citation Nr: 18143678 Decision Date: 10/19/18 Archive Date: 10/19/18 DOCKET NO. 13-25 279 DATE: October 19, 2018 ORDER An overpayment of Department of Veterans Affairs (VA) compensation benefits in the calculated amount of $6,206.70 was properly created, and the appeal for a waiver of recovery of the overpayment is denied. FINDINGS OF FACT 1. In a September 1994 letter, the Regional Office (RO) informed the Veteran that additional information was needed in order for him to be paid additional benefits for his spouse; he was provided a VA Form 21-8764 indicated that failure to notify the RO in a prompt fashion of a dependency change (assuming he was receiving such benefits) would result in an overpayment. 2. After the RO received the Veteran’s marriage certificate, in an October 1994 letter, the RO informed the Veteran that he had been awarded additional benefits for his spouse, C., and he was informed that he should promptly inform that office of VA of any change in the status of his dependent; he was provided a VA Form 21-8764 which reiterated that additional benefits were included for his spouse and that failure to notify the RO in a prompt fashion of a dependency change would result in an overpayment. 3. In December 2011, the RO attempted to verify whether the Veteran was still married to C., but the Veteran did not respond. 4. In a December 2011 letter, the RO indicated that it was proposed to reduce the Veteran’s benefits because he had not verified his dependency status. 5. Thereafter, it was shown that the Veteran and C. divorced in October 2001. 6. In an April 2012 letter, the RO informed the Veteran that a retroactive reduction had been undertaken. 7. In April 2012, the Veteran was notified that a retroactive adjustment had been made resulting in an overpayment debt of $13,890.37. 8. In October 2012, the Veteran contested the amount of the overpayment, submitting a Form VA 21-0538 Status of Dependents Questionnaire and a copy of his divorce decree, and asked that the overpayment be recalculated. 9. In a February 2013 letter, the RO informed the Veteran that the overpayment amount had been adjusted; the Veteran was later informed that the recalculated amount of the overpayment was $6,206.70. 10. The creation of the overpayment of VA compensation benefits was not due to the Veteran’s fraud, misrepresentation, or bad faith. 11. The Veteran was at fault in the creation of the overpayment of the compensation benefits for a spouse for failing to report his divorce from C. 12. Recovery of the overpayment would defeat the purpose of the benefit because the Veteran was not married to C, but received benefits for her as a spouse. 13. There is no evidence of the Veteran changed position to his detriment due to his reliance upon receipt of VA benefits. 14. The Veteran was unjustly enriched in receiving additional compensation benefits, and while there was some financial hardship, that factor is outweighed by the other elements of equity and good conscience. CONCLUSIONS OF LAW 1. The overpayment of VA compensation benefits in the amount of $6,206.70 was properly created. 38 U.S.C. §§5110, 5111, 5112; 38 C.F.R. §§ 3.401, 3.501. 2. Recovery of the overpayment of the additional VA disability compensation in the amount of $6,206.70 would not be contrary to the principles of equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. § 1.965. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty from January 1988 to September 1993. In July 2017, the Board of Veterans’ Appeals (Board) determined that the request for a waiver of the recovery of the debt was timely, but remanded the case for consideration of whether the debt at issue was properly created and then to consider whether a waiver was warranted. Currently, the only matter certified to the Board is entitlement to waiver of recovery of an overpayment of VA compensation benefits in the calculated amount of $6,206.70, to include whether the overpayment was validly created. Historically, in a September 1994 letter, the RO informed the Veteran that he had been awarded VA compensation benefits. He was advised that additional information was needed in order for him to be paid additional benefits for his spouse. Thus, he was provided a VA Form 21-8764 which indicated that failure to notify the RO in a prompt fashion of a dependency change (assuming he was receiving such benefits) would result in an overpayment. After the RO received the Veteran’s marriage certificate from him, in an October 1994 letter, the RO informed the Veteran that he had been awarded additional benefits for his spouse, C., and he was informed that he should promptly inform that office of VA of any change in the status of his dependent. He was provided a VA Form 21-8764 which reiterated that additional benefits were included for his spouse and that failure to notify the RO in a prompt fashion of a dependency change would result in an overpayment. In December 2011, the RO attempted to verify whether the Veteran was still married to C., but the Veteran did not respond. Therefore, in a December 2011 letter, the RO indicated that it was proposed to reduce the Veteran’s benefits because he had not verified his dependency status. Thereafter, it was shown that the Veteran and C. divorced in October 2001 which was about 10 years prior to when VA was informed of the divorce. In an April 2012 letter, the RO informed the Veteran that a retroactive reduction had been undertaken and in April 2012, the Veteran was notified that a retroactive adjustment had been made resulting in an overpayment debt of $13,890.37. In October 2012, the Veteran contested the amount of the overpayment, submitting a Form VA 21-0538 Status of Dependents Questionnaire and a copy of his divorce decree, and asked that the overpayment be recalculated. In a February 2013 letter, the RO informed the Veteran that the overpayment amount had been adjusted; the Veteran was later informed that the recalculated amount of the overpayment was $6,206.70. The law provides for the rates of disability compensation, and for payment of additional compensation for dependents of veterans who are at least 30 percent disabled. 38 U.S.C. §§ 1114 (c), 1115, 1134, 1135. There is no documentary evidence in the record of any notification of a change in dependency status prior to October 2012, after the RO sought this information. The Board notes that there is a presumption of regularity that applies to official acts, and “in the absence of clear evidence to the contrary, courts presume that they have properly discharged their official duties.” Ashley v. Derwinski, 2 Vet. App. 62, 64 (1992) (citing United States v. Chemical Foundation, Inc., 272 U.S. 1, 14-15 (1926)); see also Thompson v. Brown, 8 Vet. App. 169, 177-178 (1995) (applying the presumption of regularity to notice of a Board decision). Therefore, the presumption of regularity applies, and the Board can only conclude that the RO did not receive any information regarding changes in the Veteran’s marital status prior to October 2012. In this case, the Veteran continued to be paid benefits for a spouse, C., long after his divorce. The Veteran had been duly notified to report dependency changes; thus, the Veteran should have been aware that he was erroneously receiving benefits for a spouse because there was no decrease in his benefits when he was no longer married and the retention of those benefits contributed to the erroneous award. From his divorce onward, the Veteran was not married and was not entitled to any benefits for a spouse. The RO terminated the Veteran’s additional benefits for a spouse following his divorce. This action was proper. The law is clear that the Veteran’s right to receive additional disability compensation with respect to C. ceased after their divorce. Thus, the Board finds that the overpayment in this case was properly created. It was determined that there was no fraud, misrepresentation, or bad faith on the Veteran’s part with respect to the creation of the overpayment at issue, but that recovery of the overpayment of VA compensation benefits would not be against equity and good conscience. The Veteran contends that a waiver is warranted. VA law provides that recovery of overpayment of any benefits shall be waived if there is no indication of fraud, misrepresentation, or bad faith on the part of the person or persons having an interest in obtaining the waiver and recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. § 1.963 (a). The standard “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 rights. In making this 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 the 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. See 38 U.S.C. § 5302; 38 C.F.R. § 1.965 (a). In this case, the Board finds that there is no evidence demonstrating that the indebtedness resulted from fraud, misrepresentation, or bad faith on the Veteran’s part. Therefore, waiver of indebtedness is not precluded if shown that it would be against the principles of equity and good conscience to require the Veteran to repay the debt to the government. 38 C.F.R. §§ 1.963, 1.965. With regard to fault, a claimant who is receiving compensation is required to report to the VA any material change or expected change in income or other circumstance that affects the payment of benefits. 38 C.F.R. § 3.660. An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. 38 C.F.R. § 1.962. VA law provides for additional monthly compensation for dependents when a veteran is entitled to disability compensation evaluated as thirty percent or greater. 38 C.F.R. § 3.4 (b)(2). The law states that the Veteran has an obligation to timely notify VA of all marriages and divorces. The RO advised the Veteran of his obligation to provide notification regarding any changes in dependency, as noted above, also furnishing him VA Forms 21-8764. The Veteran divorced from C. in October 2001, but did not promptly notify VA of the divorce. Thus, on review, the Veteran was not legally entitled to additional benefits for C. as his spouse, following their divorce at the end of that month. See 38 U.S.C. § 5112 (b). The law and regulation are clear; that is, the Veteran is obligated to promptly notify VA of dependency changes. Thus, the Veteran is at fault in the creation of the overpayment. Although the Veteran was notified of his responsibility to do so, the Veteran did not properly advise VA of changes in his marital status and he was not entitled to additional compensation for C. as a dependent spouse following their divorce. Further, recovery of the overpayment would defeat the purpose of the benefit because the Veteran was not married to C., but received benefits for her as a spouse. Also, as such, the Veteran was unjustly enriched in receiving additional compensation benefits. There is also no evidence of the Veteran changed position to his detriment due to his reliance upon receipt of VA benefits. The Board also finds that while there is some financial hardship because debts slightly exceed income, that factor is outweighed by the other elements of equity and good conscience, particularly since the overpayment has been recouped in full. (Continued on the next page)   When all the evidence is assembled VA is then responsible for determining whether the evidence supports the claim or is in relative equipoise, with the claimant prevailing in either event, or whether a preponderance of the evidence is against the claim in which case the claim is denied. Gilbert v. Derwinski, 1 Vet. App. 49, 55 (1990); Ortiz v. Principi, 274 F. 3d 1361 (Fed. Cir. 2001). In this case, the Board finds that the preponderance of the evidence in this case is against the Veteran’s claim for a waiver and therefore the benefit doctrine does not apply. S. L. Kennedy Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD J. Connolly, Counsel