Citation Nr: 18151995 Decision Date: 11/20/18 Archive Date: 11/20/18 DOCKET NO. 15-33 376 DATE: November 20, 2018 ORDER The creation of debt against the Veteran's account in the amount of $10,461.00 is valid. FINDING OF FACT 1. The Veteran was incarcerated on September [redacted], 2011 in a state correctional facility following conviction and was released from incarceration on March [redacted], 2012. 2. The Veteran was paid the full amount of his VA compensation benefits throughout his period of incarceration; however, under VA law and regulations he was only entitled to a reduced amount for the subperiod from November 8, 2011 to February 29, 2012. VA’s retroactive reduction of his benefits in April 2013 to correct this error created the debt and was proper. CONCLUSION OF LAW The creation of debt against the Veteran's account in the amount of $10,461.00 is valid. 38 U.S.C. §§ 5107, 5302, 5313; 38 C.F.R. §§ 1.911, 1.962, 3.102, 3.660, 3.665. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty in the U.S. Army from February 1972 to February 1974. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from an April 2013 decision issued by the Department of Veterans Affairs (VA). In the June 2013 notice of disagreement (NOD), the Veteran’s representative requested a hearing before a decision review officer (DRO). The hearing was scheduled for May 22, 2014, and the Veteran and his representative were provided notice of its time, date, and location in an April 2014 notice letter. The Veteran and his representative failed to appear for the hearing. They have not provided good cause for the failure to appear or requested another hearing. To the contrary, in argument attached to the September 2015 substantive appeal, the representative wrote that the Veteran did not request a personal hearing or opportunity to provide testimony before the Board. Accordingly, the Board will proceed with adjudication of the appeal. The Board has limited the discussion below to the relevant evidence required to support its finding of fact and conclusion of law, as well as to the specific contentions regarding the case as raised directly by the Veteran and those reasonably raised by the record. See Scott v. McDonald, 789 F.3d 1375, 1381 (Fed. Cir. 2015); Robinson v. Peake, 21 Vet. App. 545, 552 (2008). The Veteran’s representative has raised two arguments in support of the appeal as discussed in the September 2015 VA Form 9. First, the August 2013 statement of the case (SOC) was inadequate for failing to provide a summary of pertinent evidence, lack of citation to pertinent laws, and lack of a summary of the reason for the decision. Second, based on statute, regulation, and pertinent case law, VA was without authority to retroactively reduce the Veteran’s VA compensation benefits after his period of incarceration had ended. Id. Regarding the adequacy of a SOC, 38 U.S.C. § 7105(d)(1)(A)-(C) requires that a SOC address the issues which the representative has raised above. The proper recourse for an inadequate SOC is the subsequent issuance of an adequate supplemental statement of the case (SSOC). 38 C.F.R. § 19.31(b)(3). Here, the Board finds that the August 2013 SOC was adequate and remand for the issuance of a new SSOC is not needed. The representative’s argument relies on the premise that the issue on appeal is VA’s authority to retroactively reduce the Veteran’s VA compensation benefits after his period of incarceration has ended. This is incorrect. The issue on appeal is the validity of the Veteran’s debt. The representative’s assertion is merely an argument related to that issue. Put another way, the representative’s argument is an “issue” in a colloquial sense; however, it is not the “issue” on appeal within the meaning of the statute. While the SOC did not address the representative’s argument, it did otherwise summarize the pertinent evidence, cite to pertinent laws, and provide a summary of the reason for upholding the validity of the debt. Accordingly, the Board finds that it was adequate and remand for the issuance of an SSOC is not required. Regarding the second argument, the representative argues that the 38 U.S.C. § 5313 and 38 C.F.R. § 3.665, to include as interpreted by relevant caselaw, e.g., Shephard v. Shinseki, 26 Vet. App. 159 (2013) and Snyder v. Nicholson, 389 F.3d 1213 (Fed. Cir. 2007); only provide affirmative authority for VA to reduce compensation during the period of incarceration and VA is without authority to retroactively reduce compensation after incarceration has ended. The Board disagrees with the representative’s conclusion. It is a fundamental cannon of statutory and regulatory interpretation that words should be read in their context with a view to their place in the overall statutory and regulatory scheme. See King v. Shinseki, 26 Vet. App. 484,488-89 (2014) (citing Davis v. Mich. Dep’t of Treasury, 489 U.S. 803, 809, 109 S. Ct. 1500, 103 L. Ed. 2d 891 (1989)). 38 U.S.C. § 5313 and its implementing regulation 38 C.F.R. § 3.665 essentially set forth the effective dates for reduction and reinstatement of VA compensation benefits for an incarcerated veteran and explain when a veteran is without legal entitlement to payment. See Shephard, 26 Vet. App. at 164 (discussing 38 U.S.C. § 5313(a)(1)). As the representative asserted, they do not provide VA authority for retroactive reduction of benefits; however, that authority is found elsewhere in the regulatory construct. Per 38 C.F.R. § 1.962, an overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. Under 38 C.F.R. § 3.660(a)(3), overpayments created by retroactive discontinuance of benefits will be subject to recovery if not waived. Read in conjunction, the legal framework clearly envisions that an overpayment, to include as related to incarceration, may be created based on a retroactive discontinuance of benefits due to lack of legal entitlement during the relevant time period and that VA may collect that overpayment. Accordingly, the Board will continue with adjudication of the appeal. 1. Whether the creation of debt against the Veteran's account in the amount of $10,461.00 was proper The Veteran challenges the validity of the debt against his account in the amount of $10,461.00. For the reasons that follow, the Board finds the debt is valid. Preliminarily, the Board notes that a veteran has two forms of recourse when faced with an overpayment. He or she may challenge the validity of the debt and/or request a waiver of indebtedness. 38 C.F.R. § 1.911(c). These are distinct issues that may be exercised separately or simultaneously. Id. Moreover, when raised by the debtor or reasonably raised by the evidence of record, the issue of the validity of the debt may include consideration of how the actual dollar amount of the overpayment was calculated. Here, the appeal considers only the validity of the debt. The Veteran did request a waiver of indebtedness, which was denied in an April 2013 decision by the Committee on Waivers and Compromises (COWC); however, that decision was not appealed and is final. With regard to the validity of the debt, neither the Veteran nor his representative nor the record have reasonably raised concern with how the amount of the debt was calculated. Thus, the Board will not discuss that matter. Turning to the issue at hand, an overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. 38 U.S.C. § 5302; 38 C.F.R. § 1.962. Overpayments created by retroactive discontinuance of benefits will be subject to recovery if not waived. 38 C.F.R. § 3.660(a)(3). As pertinent in this appeal, a veteran who is incarcerated in excess of 60 days following conviction of a felony or misdemeanor shall be entitled only to a reduced amount of compensation for the period beginning on the sixty-first day following incarceration and ending on the day incarceration ends. 38 U.S.C. § 5313; 38 C.F.R. § 3.665. The evidence shows the Veteran was incarcerated on September [redacted], 2011 in a state correctional facility following conviction and that he was released from incarceration on March [redacted], 2012. The sixty-first day following his incarceration was November 8, 2011. Based on consideration of all evidence, the Board finds the creation of the debt was valid. The Veteran did not dispute that he was incarcerated following conviction from September [redacted], 2011 to March [redacted], 2009. During this period, he received the full amount of his VA compensation benefits; however, under VA law and regulations he was only entitled to a reduced amount of those benefits for the subperiod from November 8, 2011 to February 29, 2012. The retroactive reduction in VA compensation benefits, effectuated by an April 2013 decision, created the overpayment and debt. As discussed above, VA had legal authority to take such action. (Continued on the next page)   The Board is without authority to grant benefits on the basis of equity. 38 U.S.C. §§ 503, 7104; Harvey v. Brown, 6 Vet. App. 416 (1994). The actions taken by VA were in accordance with the facts and law relevant to the appeal. There is no reasonable doubt to be resolved. 38 U.S.C. § 5107(b); 38 C.F.R. § 3.102. The creation of the debt against the Veteran’s account in the amount of $10,461.00 was valid. D. JOHNSON Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD Mike A. Sobiecki, Associate Counsel