Citation Nr: 18147590 Decision Date: 11/06/18 Archive Date: 11/05/18 DOCKET NO. 13-20 468 DATE: November 6, 2018 ORDER The overpayment of Department of Veterans Affairs (VA) improved death pension benefits in the amount of $4,765 was properly created and a waiver of the recovery of that overpayment is denied. FINDINGS OF FACT 1. The Appellant was granted improved death pension benefits. 2. In October 2011, the Appellant reported that she had been awarded monthly monetary benefits of $1,173 from the Social Security Administration (SSA), but she did not report that she received a retroactive payment and she reported having no assets. 3. In June 2012, based on the monthly SSA income, the Regional Office (RO) terminated her improved death pension benefits effective November 1, 2011. 4. In September 2012, the Appellant was notified that the retroactive termination of her VA improved death pension benefits resulted in an overpayment of $4,765. 5. A Financial Status Report reflected that the Appellant’s income did not exceed expenses, but the Appellant’s retroactive SSA payment was not reported. 6. The Appellant is not demonstrated to have committed fraud, misrepresentation, or bad faith in the creation of the overpayment. 7. The Appellant was at fault in not fully reporting her SSA income (the retroactive payment) and VA was at fault in delaying the termination of the improved death pension benefits. 8. Waiver of the assessed overpayment would result in unfair enrichment to the Appellant. 9. Recovery of the assessed overpayment does not result in financial hardship depriving the Appellant of basic necessities. 10. Denial of waiver would not defeat the purpose of the award of VA pension benefits. 11. There is no indication that the Appellant relinquished a valuable right or incurred a legal obligation in reliance upon the benefits received. CONCLUSIONS OF LAW 1. An overpayment of $4,765 in VA improved death pension benefits was properly created. 38 U.S.C. §§ 1503, 1541, 5313; 38 C.F.R. §§ 3.3, 3.23, 3.24, 3.271, 3.272, 3.274. 2. Recovery of the overpayment of the VA improved death pension benefits in the amount of $4,765 would not be contrary to the principles of equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.963, 1.965. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS After the Veteran died in November 2007, the Appellant applied for VA death pension benefits. Thereafter, the Appellant was granted entitlement to non-service connected death pension benefits. In order to be eligible for nonservice-connected pension benefits, the claim must meet the net worth requirements of 38 C.F.R. § 3.274 and have an annual income not in excess of the maximum annual pension rate (MAPR) specified in 38 C.F.R. §§ 3.23 and 3.24. See 38 C.F.R. § 3.3 (b)(4). The Appellant must meet the specific income and net worth requirements for each annual pension year. See 38 U.S.C. § 1541; 38 C.F.R. § 3.3 (b)(4). As of December 1, 2010, (for 2011), the MAPR was $7933. A surviving spouse who meets these requirements will be paid the maximum rate of death pension, reduced by the amount of countable income. See 38 U.S.C. § 1541; 38 C.F.R. § 3.23. In determining income for this purpose, payments of any kind from any source are counted as income during the 12-month annualization period in which received unless specifically excluded. See 38 U.S.C. § 1503; C.F.R. § 3.271. The MAPR for a surviving spouse is specified by statute and is increased periodically under 38 U.S.C. § 5312. See 38 C.F.R. § 3.23. In determining annual income, all payments of any kind or from any source shall be included except for listed exclusions which do not include SSA income. See 38 U.S.C. § 1503 (a); see also 38 C.F.R. § 3.271 (a). In October 2011, the Appellant reported in an Improved Pension Eligibility Report (EVR) that she had been awarded monthly monetary benefits of $1,173 from the SSA; however, she did not report that she received a large retroactive payment and she reported having no assets. In June 2012, the RO notified the Appellant that her EVR indicated that she might not be entitled to VA pension benefits because her annual SSA benefits of $14,080.00 exceeded the maximum income limit of $7,933.00 for a surviving spouse with no dependents for the year 2011. The RO then terminated her improved pension benefits effective November 1, 2011, the first day of the month following her award of SSA benefits. In September 2012, the Appellant was notified that the retroactive termination of her VA benefits resulted in an overpayment of $4,765. Thereafter, the Appellant disputed the creation of the debt and requested a waiver of recovery of the overpayment. She submitted a Financial Status Report which reflected that her monthly expenses exceeded her monthly income by approximately $200. However, she did not report in her assets the SSA retroactive payment which exceeded $57,000, as indicated by the SSA. 1. Creation of the Debt The debt, as indicated above, was created during the period from November 1, 2011, through May 31, 2012. The annual income of the Appellant beginning November 1, 2011, the initial date of the annualization year, was comprised of SSA income of $14,080.00 as well as an SSA retroactive payment of $57,941.00; and the Appellant also had unreimbursed medical expenses of $461. Since the MAPR was $7,933 for 2011, even applying the applicable formula to reduce income by a portion of the medical expenses, her income well exceeded the MAPR for her to receive improved death pension benefits. See 38 C.F.R. § 3.272. As such, the action to retroactively terminate the Appellant’s benefits was proper since her income for improved death pension benefits was excessive. The the debt of $4,765.00 is valid and was properly created. 2. Waiver of the Debt The Committee did not find fraud, misrepresentation, or bad faith in this case; however, the Committee determined that it would be against the principles of equity and good conscience if the debt was not collected. Thus, the request for a waiver of the recovery of the overpayment at issue was denied. In cases where fraud, misrepresentation, or bad faith on the Veteran’s part with respect to the creation of the overpayment at issue has not been demonstrated, and, therefore, waiver is not precluded pursuant to 38 U.S.C. § 5302(a), 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). In making this determination, consideration is given to the following elements, which are not intended to be all-inclusive: (1) fault of debtor (where actions of the debtors contribute to the creation of the debt); (2) balancing of faults (weighing fault of the debtor vs. the fault of VA); (3) undue hardship (whether collection would deprive the 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); and (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 C.F.R. § 1.965(a). The first and second elements pertain to the fault of the debtor versus the fault of VA. After consideration of the record, the Board finds that the Appellant was at fault for not notifying VA of her retroactive payment from SSA. However, VA was also at fault for the delay in terminating the pension benefits that the Appellant was no longer entitled to receive, even based on the monthly SSA income alone without regard to the retroactive payment. Also, the Board finds credible the Appellant’s statements that she seemed unaware of the income limitations. In regard to whether failure to collect would cause unjust enrichment to the debtor, the Board notes that the Appellant received benefits to which she was not entitled and as such, would cause unjust enrichment to the debtor. Likewise, there is no indication that the Appellant’s reliance on VA benefits resulted in relinquishment of another valuable right. As to whether recoupment of those benefits would defeat the purpose of the benefit, pension benefits are income-based and for those below a certain income level. The Appellant was not qualified to be in the group because her income was excessive. Thus, recoupment of those benefits would not defeat the purpose of the benefit. The Board has also considered whether the Appellant would suffer undue financial hardship if forced to repay the debt at issue. There is no current Financial Status Report as the Appellant failed to provide one and the older report of record is incomplete, as noted above. Significantly, the Appellant was awarded the retroactive SSA payment of over $57,000; as such, the Board does not that repayment of the overpayment would result in depriving the Appellant of basic necessities and does not otherwise find financial hardship. After weighing all the enumerated factors, the Board finds that the total recovery of the overpayment does not violate the principles of equity and good conscience as the elements not in the Veteran’s favor outweigh VA’s fault in tis case. Thus, waiver of the recovery of the overpayment of the debt of $4,765 is not warranted. 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 Appellant’s claim for a waiver and therefore the benefit doctrine does not apply. C. TRUEBA Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD J. Connolly, Counsel