Citation Nr: 18147715 Decision Date: 11/06/18 Archive Date: 11/05/18 DOCKET NO. 18-01 377 DATE: November 6, 2018 ORDER A waiver of indebtedness for the recovery of the overpayment of $12,060.43 is granted. FINDING OF FACT Recovery of the overpayment would be against equity and good conscience because it would defeat the purpose of the benefit, cause undue financial hardship, and because there was no unjust enrichment. CONCLUSION OF LAW The criteria for entitlement to a waiver of indebtedness for the recovery of the overpayment of $12,060.43 have been met. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.963, 1.965. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty in the U.S. Army from September 1982 to April 2005. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from an October 2016 decision issued by the Department of Veterans Affairs (VA) Committee on Waivers and Compromises (COWC). 1. Entitlement to a waiver of indebtedness for the recovery of the overpayment of $12,060.43 The Veteran seeks a waiver of indebtedness for the recovery of the overpayment of $12,060.43. For the reasons that follow, the Board finds that a waiver of indebtedness for the entire overpayment is warranted. Preliminarily, the Board notes that an application for a waiver must be made within 180 days from the date of notification of an indebtedness. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.963(b). The Veteran’s application was untimely; however, he later informed VA that he did not receive the initial notice letter because he had moved after buying a new home. He then updated his address information and was otherwise responsive in handling this matter. In a November 2017 statement of the case (SOC), the agency of original jurisdiction (AOJ) accepted the Veteran’s explanation and waived the requirement of a timely waiver application. The Board will do so as well. The recovery of overpayment of any benefits shall be waived if collection of such indebtedness would be against equity and good conscience and 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; 38 C.F.R. § 1.963(a). In determining whether collection of the indebtedness is against equity and good conscience, 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. 38 C.F.R. § 1.965(a)(1)-(6). The facts of this case are not in dispute. The Veteran received additional VA compensation for two dependents: his spouse and his daughter. He was required to periodically update VA on their status. When he failed to timely file the requested VA Form 21-686c, Declaration of Status of Dependents, VA retroactively adjusted his benefits by removing the two dependents effective June 1, 2005. Thus, the removal of additional dependent compensation from approximately 2005 to 2015 created an overpayment of $12,060.43. The Veteran has since filed the VA Form 21-686c. It shows there was no change in the status of his dependents during the relevant period. There is no indication of fraud, misrepresentation, or bad faith on the part of the Veteran; therefore, the waiver application will be analyzed under the standard of equity and good conscience. The fault in the creation of this debt lies with the Veteran. It was his untimely response that resulted in the retroactive adjustment. VA has no fault in this regard. A July 2016 VA Form 5655, Financial Status Report, shows that his monthly expenses are greater than his monthly income; thus, recovery of the debt would cause undue hardship. Recovery of the debt would also defeat the purpose for which the benefits were intended because the additional compensation was for his two dependents, which recent paperwork shows continued to be his dependents for the entirety of the relevant period. Coincidentally, there would be no unjust enrichment if the debt were not recovered. The evidence weighs in favor of the debtor. That the Veteran is at fault for creation of the debt is attributed minimal weight because it is based on the untimely filing of a status update form. That fault is greatly overwhelmed by a lack of unjust enrichment and the fact that recovery of the debt would cause undue financial hardship and defeat the purpose for which the benefits were granted. Accordingly, recovery of the overpayment would be against equity and good conscience. A waiver of indebtedness for the overpayment of $12,060.43 is warranted. 38 C.F.R. § 1.965. D. JOHNSON Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD Mike A. Sobiecki, Associate Counsel