Citation Nr: 18149749 Decision Date: 11/13/18 Archive Date: 11/13/18 DOCKET NO. 16-38 405 DATE: November 13, 2018 ORDER The overpayment of Department of Veterans Affairs (VA) disability compensation benefits in the amount of $4,705.74 resulting from a change in dependency status due to the Veteran’s school-aged daughter’s election of Dependents’ Education Assistance (DEA) Chapter 35 benefits was proper and the appeal is denied. FINDINGS OF FACT 1. The Veteran’s daughter, S.R., was added as a dependent school child to the Veteran’s compensation benefits effective September 2012. 2. In March 2014, VA was notified that S.R. elected to receive Chapter 35 benefits beginning in November 2013; the Veteran was notified that month that he was unable to receive additional compensation benefits for a school-aged child dependent that elected DEA benefits. 3. The retroactive reduction in compensation benefits is due, at least in part, to the Veteran’s failure to timely notify VA of the change in dependency status that generated an overpayment debt in the amount of $4,705.74 for the period from November 2013 to September 2015. 4. The Veteran should have known that he continued to receive erroneous compensation benefits payments. 5. The overpayment debt is not a result of sole administrative error. CONCLUSION OF LAW The overpayment of DEA Chapter 35 benefits in the amount of $4,705.74 was properly created. 38 U.S.C. §§ 3512, 3562; 38 C.F.R. §§ 3.707, 21.3023. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from October 1990 to July 2012, to include service in Southwest Asia. Initially, the Board notes that a waiver of this debt was granted in September 2017. However, the Board will still address if the waived debt was validly created. The Veteran’s overpayment debt is due to a change in his dependency status that retroactively reduced his compensation benefits award after his school-aged dependent child, S.R., elected to receive DEA under Chapter 35. 38 U.S.C. § 3562; 38 C.F.R. § 21.3023(a)(1) (the commencement of a Chapter 35 program of education for an eligible child is a bar to subsequent payment, increased rates, or additional amounts of compensation on account of the child based on school attendance on or after the age of 18 years). The Veteran disagreed with a November 2015 Debt Management Center (DMC) first demand letter assessing an overpayment debt in the amount of $4,705.74 based on the retroactive reduction of his compensation benefits due to removal of S.R. as a dependent on his award. However, the Board finds the evidence of record supports a finding that the creation of the overpayment debt was proper. The Veteran does not dispute that his disability compensation benefits were properly reduced due to S.R.’s election of Chapter 35 benefits. However, he disputes the amount of the overpayment debt and alleges that the error in this case was on VA’s part since May 2014 because VA did not reduce his compensation award within 60 days of a notification letter that S.R.’s concurrent receipt of Chapter 35 benefits precluded payment of additional compensation benefits due to her dependency status. See 38 U.S.C. § 5112(b)(10); 38 C.F.R. § 3.500(b)(2) (finding the effective date of a reduction or discontinuance of compensation by reason of an erroneous award based solely on administrative error or error in judgment shall be the date of last payment); see also Erickson v. West, 13 Vet. App. 495, 499 (2000) (“stated another way, when an overpayment has been made by reason of an erroneous award based solely on administrative error, the reduction of that award cannot be made retroactive to form an overpayment debt owed to VA from the recipient of the erroneous award.”). Specifically, the Veteran contends in an October 2015 notice of disagreement that he did not respond to the March 2014 correspondence from VA notifying him of the potential overpayment debt because the letter indicated that the additional compensation due to S.R.’s dependent status would be removed after 60 days. He asserts that it was solely VA’s fault that his award was not adjusted beginning in May 2014, 60 days after notification letter. Initially, the Board notes that VA was notified of S.R.’s election of DEA Chapter 35 benefits from the RO and the Veteran did not notify VA of his change in dependency status as advised in notification letters dated September 2012 and July 2013. The Veteran was informed in a March 2014 VA notification letter that S.R. elected DEA Chapter 35 benefits and proposed to reduce his compensation award; the letter advised that he could request a reduction in benefits to minimize an overpayment debt and that he had 60 days from the date of the notice to submit evidence that the proposed action should not be taken. The Veteran also received a June 2015 notification letter indicating that S.R. was removed from the award in June 2015 because she stopped attending school. Thereafter, the Veteran was notified in September 2015 that an overpayment debt was assessed due to the retroactive adjustment of compensation benefits due to change in dependency status beginning in November 2013. The Board notes that sole administrative error may only but found when neither the Veteran’s actions nor his failure to act contributed to the erroneous award. 38 U.S.C. § 5112(b)(10); 38 C.F.R. § 3.500(b)(2). Based on the above, the Board finds the Veteran had knowledge, or should have known, that his compensation benefit payments were not reduced in a timely manner and resulted in an erroneous award. Jordan v. Brown, 10 Vet. App. 171 (1997) (sole administrative error is not present if the payee knew, or should have known, that the payments were erroneous). Moreover, the Veteran did not notify VA of his change in dependency status when it initially occurred. As a result, the Board finds his failure to act contributed to the creation of the overpayment debt. Therefore, even though the Veteran’s compensation benefits were not reduced until September 2015, any delay in the adjustment was not the only cause of the overpayment debt and does not constitute sole administrative error. As the Veteran should have been aware of the erroneous award of higher compensation benefits payments to which he was not entitled due, in part, to his failure to notify VA of his change in dependency status, the Board concludes the overpayment was properly created. The appeal is denied. Nathan Kroes Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD A. Odya-Weis, Counsel