Citation Nr: 18146829 Decision Date: 11/01/18 Archive Date: 11/01/18 DOCKET NO. 15-11 091 DATE: November 1, 2018 ORDER Entitlement to a waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $10,243.50 is denied. FINDINGS OF FACT 1. This overpayment at issue was not due to the Veteran’s fraud, misrepresentation or bad faith. 2. The Veteran received additional compensation benefits for his child, B., who received duplicate educational benefits under the Chapter 35 program; he bore no fault in the debt created. 3. Since the Veteran’s child, B., was paid Chapter 35 benefits, the recovery of the overpayment would not defeat the purpose of paying benefits by nullifying the objective for which the benefits were intended, namely, payment of additional compensation on the basis of the Veteran’s child’s educational pursuits. 4. Waiver of recovery of the overpayment would constitute an unjust enrichment to the Veteran by essentially paying the same benefit twice. 5. The evidence does not show that the Veteran incurred a legal obligation or changed his position to his detriment in reliance upon the receipt of VA benefits. 6. There is no financial hardship in this case. CONCLUSION OF LAW The overpayment was not due to fraud, misrepresentation or bad faith of the Veteran, but recovery of the overpayment of VA compensation benefits in the amount of $10,243.50 would be against equity and good conscience and, therefore, is not waived. 38 U.S.C. §§ 5107, 5302(a); 38 C.F.R. §§ 1.963(a), 1.965(a). REASONS AND BASES FOR FINDINGS AND CONCLUSION A June 2008 rating decision granted service connection for various disabilities. Enclosed with the notification letter of the rating decisions addressing his service-connected disabilities was a VA Forms 21-8764 that notified him that he was receiving additional compensation benefits for a spouse and children, and further informed him that his payments could be affected by a change in the status of his dependents, of which he was directed to promptly advise VA in the event this occurred. The Veteran was subsequently provided additional VA Forms 21-8764. In August 2010, the Veteran was notified that VA had added B. as a school child from May [redacted], 2010 his 18th birthday until his expected date of graduation of May 16, 2014. In the interim, B. applied for Dependents’ Educational Assistance (DEA) benefits under Chapter 35, Title 38, of the United States Code. In 2013, he was granted these benefits (Chapter 35) on a retroactive basis effective November 7, 2007 and was provided a payment in the amount of over $10,000. In a January 2014 letter, the Veteran was advised that VA proposed to remove B. from the Veteran’s award effective August 27, 2010 due to the award of Chapter 35 benefits. In April 2014, the proposed action was taken which resulted in the debt at issue. The concurrent receipt of Chapter 35 benefits by the student and additional compensation payments based on that student’s school attendance is considered a duplication of benefits and is prohibited. The Veteran requested a waiver of the recovery of that overpayment. A Financial Status Report (FSR) was then received from the Veteran showing that his monthly income exceeded his monthly debts. In a September 2014 decision, the Committee considered the Veteran’s claim for waiver. The Committee did not find fraud, misrepresentation, or bad faith on the Veteran’s part with respect to the creation of the overpayment at issue. The Board agrees with this determination. The Committee further found that the overpayment was created because the Veteran’s dependent, B. received Chapter 35 educational benefits while the Veteran received an additional allowance in his compensation for this dependent. However, the Veteran may not receive both benefits concurrently. The Committee found no fault in the creation of the debt on the Veteran’s part as he could not have anticipated the award of Chapter 35 benefits. However, none of the other elements were resolved in the Veteran’s favor. The Veteran appealed that determination, maintaining that the funds should have been withheld from the payment to B. of Chapter 35 benefits and that his VA benefits should not be affected by the choice of another. In cases where there is no fraud, misrepresentation, or bad faith on the Veteran’s part with respect to the creation of the overpayment at issue, waiver is not precluded pursuant to 38 U.S.C. § 5302(a). In order to dispose of the matter on appeal, the Board must determine whether recovery of the indebtedness would be against equity and good conscience, thereby permitting waiver under 38 U.S.C. § 5302(a) and 38 C.F.R. §§ 1.963(a), 1.965(a). The pertinent regulation provides that the standard of “equity and good conscience” will be applied when the facts and circumstances indicate a need for reasonableness and moderation in the exercise of the Government’s rights. 38 C.F.R. § 1.965(a). The elements of equity and good conscience are as follows: (1) fault of debtor, where actions of the debtor contribute to creation of the debt; (2) balancing of faults, weighing fault of 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. The first and second elements pertain to the fault of the debtor versus the fault of VA. The Veteran has essentially argued that VA was at fault with regard to the duplicate payments. VA certainly bears more responsibility for the creation of the overpayment. There was an application for Chapter 35 benefits which took time to process. In the meantime, the Veteran received additional benefits for B. as a dependent school child. These actions were proper. However, once Chapter 35 benefits were awarded, the award was retroactive to when B. submitted an application. Thus, a large measure of the “fault” lies in how the claim for Chapter 35 was processed; however, VA bears more relative fault in the creation of the overpayment at issue as there was a delay in stopping the Veteran’s additional benefits for B. in light of the Chapter 35 award. However, with regard to the other elements of equity and good conscience, none of these elements is in the Veteran’s favor. Given that his child is or was being paid Chapter 35 benefits, the recovery of the overpayment would not defeat the purpose of paying benefits by nullifying the objective for which the benefits were intended, namely, payment of additional compensation on the basis of his child’s educational pursuits. Waiver of recovery of the overpayment would constitute an unjust enrichment to him by essentially paying the same benefit twice. The evidence does not show that he incurred a legal obligation or changed his position to his detriment in reliance upon the receipt of VA benefits. The last element of equity and good conscience is whether the Veteran would suffer undue financial hardship if forced to repay the debt at issue. However, there is no financial hardship in this case as the Veteran’s monthly income exceeds expenses by over $1,000 and he is able to pay his installment debts. The Board notes that the Veteran has referred to another Board decision which granted benefits; however, there were differences in the fact pattern including with regard to financial hardship. Therefore, overall the Board finds that, in weighing all of the elements of equity and good conscience, the elements not in the Veteran’s favor outweigh the element in the Veteran’s favor. Accordingly, waiver of recovery of the overpayment is not warranted. S. L. Kennedy Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD J. Connolly, Counsel