Citation Nr: 18145889 Decision Date: 10/30/18 Archive Date: 10/30/18 DOCKET NO. 14-06 555 DATE: October 30, 2018 ORDER Entitlement to waiver of overpayment of pension benefits in the amount of $31,399.00 is denied. FINDING OF FACT 1. As a result of the exclusion of his spouse’s wages in his countable income, the Veteran was overpaid $31,399 in VA pension benefits. 2. The Veteran was at fault in the creation of the indebtedness at issue, but he was not guilty of bad faith, misrepresentation or fraud. 3. The recouping of the $31,399 in overpaid benefits would not deprive the Veteran of basic necessities. 4. The recovery of the overpayment at issue would not defeat the purpose for which the benefits were awarded. 5. The failure to make restitution in this case would result in unfair gain to the Veteran. 6. The Veteran did not relinquish a valuable right or incur a legal obligation in reliance on the VA disability compensation overpayment. CONCLUSION OF LAW The criteria for entitlement to waiver of overpayment of pension benefits in the amount of $31,399.00 have not been met. 38 U.S.C. § 5302 (2012); 38 C.F.R. §§ 1.956, 1.962, 1.963, 1.965, 3.700 (2017). REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from March 1968 to March 1970, and from April 1972 to April 1975. This matter initially came before the Board of Veterans’ Appeals (Board) on appeal of a November 2013 decision of the Committee on Waivers and Compromises (COWC) of the Department of Veterans Affairs (VA) Regional Office (RO) in Milwaukee, Wisconsin. In June 2014, the Board remanded the matter to the Agency of Original Jurisdiction (AOJ) to schedule the Veteran for the requested Board hearing. However, he failed to report to hearings scheduled in August 2015 and October 2015. The Board will accordingly proceed with appellate decision in this matter. Entitlement to Waiver of Overpayment of Pension Benefits in the Amount of $31,399.00 Recovery of overpayment of any benefits made under laws administered by VA may 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. 38 U.S.C. § 5302(c); 38 C.F.R. § 1.963(a). If there is no indication of fraud, misrepresentation, or bad faith in the record, the indebtedness shall be waived if the recovery of the overpayment would be against equity and good conscience. 38 U.S.C. § 5301(a); 38 C.F.R. §§ 1.962, 1.965. Consideration of equity and good conscience is intended to reach a result that is not unduly favorable or adverse to either the claimant or the Government. It is intended to achieve a result that is fair. 38 C.F.R. § 1.965(a). Six non-exclusive elements are set forth in the regulations that must be addressed to determine whether the facts and circumstances in a particular case dictate that collection of an overpayment would be against equity and good conscience. The six non-exclusive elements, consist of: (1) the fault of the debtor; (2) balancing of faults between the debtor and VA; (3) undue hardship of collection on the debtor; (4) a defeat of the purpose of an existing benefit to the veteran; (5) the unjust enrichment of the veteran; and (6) whether the veteran changed positions to his/her detriment in reliance upon a granted VA benefit. 38 U.S.C. § 5302; 38 C.F.R. § 1.965(a). Each of the six elements must be addressed. See Ridings v. Brown, 6 Vet. App. 544, 546 (1994). The Veteran applied for nonservice-connected pension benefits in August 2003. At that time, he reported no income for him or his spouse other than Social Security benefits for each. In October 2003, the Veteran was awarded nonservice-connected pension benefits, and he was paid as a veteran with two dependents (his spouse and child). The notification letter detailed the Veteran’s family income, and specifically noted that the Veteran would report if his income or the income of his dependents changed. The Veteran was subsequently sent yearly Eligibility Verification Report letters that indicated that the Veteran must inform VA if a family member started getting other income, such as earnings. In December 2011, VA sent a letter to the Veteran indicating that he would not receive an Eligibility Verification Report form that year; however, he still had to inform VA if a family member started getting other income such as earnings. In January 2013, VA informed the Veteran that technological improvements allowed VA to verify a pension applicant’s income from sources such as the Internal Revenue Service and Social Security before awarding benefits. In 2013, VA reviewed the Veteran’s spouse’s income tax reports and discovered that the reported incomes from 2009 did not match, as his spouse had been earning income that was not reported. As a result of his family income being in excess of the maximum annual pension rate, the Veteran was paid pension benefits which he was no longer entitled to receive from 2009 through the time benefits were discontinued in 2013. As a result, he was overpaid $31,399.00 in VA pension benefits. If there is no indication of fraud, misrepresentation, or bad faith recovery of overpayment of benefits is prohibited if the Secretary determines that recovery would be against equity and good conscience. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.962. In this case, the Committee on Waivers and Compromises found the Veteran free of misrepresentation, or bad faith, and the Board agrees that there is insufficient evidence to make such a determination. In determining whether recovery would be against equity and good conscience, the record reflects that the actions of the Veteran created the debt. To that end, the Veteran failed to inform VA of the changes in his spouse’s employment status and increase in monthly household income. While he has indicated that he did not realize that his spouse’s income was included in the calculation for VA pension, this factor does not obviate the requirement to inform VA. The Veteran was sent numerous notification letters over the years indicating that he should report any change in family income. In addition, when the Veteran filed for benefits, he included his spouse’s Social Security income and thus was aware that her income was considered in the award of benefits. The Board has considered whether the Veteran would be subjected to undue hardship if the debt were recovered. On an October 2013 Financial Status Report, the Veteran reported monthly income of nearly $2,200. He noted rent/mortgage, food, and utility and phone/internet payments of $1,160 per month. He also included two car payments, gas, and car insurance totaling over $500 per month. Other monthly payments included health insurance ($250), life insurance ($57) payment on other debts ($85) and an unspecific loan payment of $350. The Board notes that "financial hardship" is primarily intended to mean that a veteran would be deprived of basic necessities such as food, clothing, and shelter, which do not appear to be factors here. Based on the reported income and expenses, the Board finds that recoupment of this debt would not cause undue financial hardship, as the Veteran included these factors in his monthly expenses. The Board acknowledges that the Veteran's financial difficulties may be significant; however, deprivation of basic necessities is not shown. In addition, the Veteran has indicated substantial amount of debt including, including over $400 per month in regular loan/debt payments. However, his debts to the government must be given the same consideration as his other debts. Moreover, the Board acknowledges the Veteran’s report that he is too disabled to work and earn money to pay off the debt; however, as indicated, the benefit is based upon household income and is not solely limited to the Veteran. As for whether a waiver would defeat of the purpose of an existing benefit to the veteran, 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. Basic entitlement to such pension exists if, among other things, the Veteran's annual income is not in excess of the maximum annual pension rate (MAPR). 38 C.F.R. §§ 3.3(a)(3), 3.23(a)-(b), (d)(4) (2017). Given that the Veteran’s household income for the period in question was greater than the applicable pension rate and he was already in receipt of a minimal income level, waiver would defeat the purpose of the benefit. Similarly, the Board finds that his receipt of the pension benefits from VA that he was not lawfully entitled to because his household income was greater than the limit set for receipt of pension results in unfair enrichment to him. Finally, it does not appear that the Veteran changed positions to his detriment in reliance upon a granted VA benefit. In viewing the elements of equity and good conscience, the Board concludes that the negative evidence outweighs any positive evidence and that the facts in this case demonstrate that waiver of recovery of the overpayment is not against equity and good conscience. Accordingly, waiver of recovery of the overpayment is denied. A. S. CARACCIOLO Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD G. E. Wilkerson, Counsel