Citation Nr: 18148857 Decision Date: 11/08/18 Archive Date: 11/08/18 DOCKET NO. 15-10 372A DATE: November 8, 2018 ORDER Waiver of recovery of an overpayment of Dependents Educational Assistance (DEA) benefits under 38 U.S.C. Chapter 35 in the amount of $3,998.87 is granted. FINDINGS OF FACT 1. VA and the appellant’s school were at fault for creation of the debt as a result of miscommunication regarding the appellant’s enrollment status. 2. VA was at fault in failing to contact the appellant’s school regarding conflicting enrollment information provided by the school; this fault outweighs any unjust enrichment. CONCLUSION OF LAW Recovery of the overpayment of DEA benefits under 38 U.S.C. Chapter 35 in the amount of $3,998.87 would be against equity and good conscience. 38 U.S.C. § 5302 (2012); 38 C.F.R. §§ 1.911, 1.962, 1.963, 1.965 (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from December 1979 to June 1982. The appellant in this case is the Veteran’s spouse. This appeal to the Board of Veterans’ Appeals (Board) arose from an October 2014 decision of the Department of Veterans Affairs (VA) Regional Office (RO) in St. Louis, Missouri, which denied the appellant’s request for a waiver of an overpayment of DEA benefits under 38 U.S.C. Chapter 35. In May 2015, the appellant withdrew her request for a Board hearing. 1. Entitlement to waiver of an overpayment of DEA benefits under 38 U.S.C. Chapter 35 in the amount of $3,998.87, to include whether the overpayment of education benefits was properly created. Generally, a beneficiary is charged with knowing the rules governing compensation. Dent v. McDonald, 27 Vet. App. 362, 382 (2015) (summarizing Jordan v. Brown, 10 Vet. App. 171, 174-75 (1997)). A person may have actual or constructive knowledge of a fact, the latter of which is defined as “[k]nowledge that one using reasonable care or diligence should have, and therefore that is attributed by law to a given person.” Id. at 380. An administrative error resulting in an overpayment will not be classified as a VA administrative error or error in judgment if the error is “based on an act of commission or omission by the beneficiary, or with the beneficiary’s knowledge.” Id. (citing 38 U.S.C. § 5112(b)(9); see 38 C.F.R. § 3.500(b)(1); VA Gen. Coun. Prec. 2-90 (Mar. 20, 1990)). Additionally, the law provides that recovery of an overpayment may be waived if there is no indication of fraud, misrepresentation, or bad faith, on the part of the person or the persons having an interest in obtaining the waiver, and recovery of such and recovery of such indebtedness would be against equity and good conscience. See 38 U.S.C. § 5302(c) (2012); 38 C.F.R. §§ 1.962, 1.963 (2017). The standard of “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, and requires a fair decision between the obligor and the Government that is not unduly favorable or adverse to either side. 38 C.F.R. § 1.965(a) (2017); Ridings v. Brown, 6 Vet. App. 544, 546 (1994). In making this determination, consideration will be given to the following elements, which are not intended to be all-inclusive: fault of the debtor; balancing of faults between the debtor and VA; undue hardship of collection on the debtor; defeat of the purpose of an existing benefit to the appellant; unjust enrichment of the appellant; and whether the appellant changed positions to his or her detriment in reliance upon a granted VA benefit. 38 U.S.C. § 5302; 38 C.F.R. § 1.965(a). The Board finds that the appellant was not at fault for the creation of the debt and a waiver of the overpayment at issue is warranted. By way of background, VA paid the appellant for multiple school terms for a GED program from February 26, 2013, through May 30, 2014. See October 2014 Decision on Waiver of Indebtedness. It was found during a July 2014 VA compliance audit that the appellant did not attend sufficient hours during the noted period to be considered at least half-time, which is a requirement for her program, and thus, VA ceased distribution of education benefits for the period and an overpayment of $13,409.49 was created. Id. In a March 2015 substantive appeal, the appellant asserted that VA and her school were at fault for creating the overpayment because there was miscommunication as to whether the appellant was attending school under a “semester hour” system or a “clock hour” system. See also May 2015 Representative Brief. In light of this miscommunication, the RO determined that part of the debt ($9,410.62) was not the appellant’s fault because VA’s Education Division failed to contact the school regarding conflicting information that was on the enrollment form submitted by the school. See July 2015 Statement of the Case. The RO concluded therefore that the appellant was still responsible for $3,998.87 of the debt, as indicated above. In light of the foregoing, the Board finds that fault for creation of the remaining debt does not rest with the appellant, but also finds that the appellant was unjustly enriched by VA’s and her school’s error. The Board notes, however, that an August 2014 Financial Status Report (VA Form 5655) indicates that the appellant and Veteran have a net monthly income of $189.60 after accounting for their expenses. Thus, based on the evidence of record and after weighing all the equities involved, the Board finds that recovery of the overpayment from the appellant would be against equity and good conscience. The request for waiver of recovery of the overpayment is granted. STEVEN D. REISS Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD M. C. Wilson, Counsel