Citation Nr: 18152789 Decision Date: 11/27/18 Archive Date: 11/26/18 DOCKET NO. 15-12 543 DATE: November 27, 2018 REMANDED Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits, to include whether the overpayment was properly created, in the reduced amount of $6,968 is remanded. REASONS FOR REMAND The Veteran served in the U.S. Marine Corps from July 1975 to October 1981 and from July 1982 to October 1984. The Veteran received additional compensation benefits for his son, K., who received duplicate educational benefits under the Chapter 35 (Dependents’ Educational Assistance (DEA)) program. The Agency of Original Jurisdiction (AOJ) reduced the additional disability compensation benefit payments because the Veteran’s son K. was removed as his dependent. In this case, the Veteran has challenged the proper creation of the debt. As such further appellate review by the Board of Veterans’ Appeals (Board) on the Veteran’s waiver claim must be deferred pending formal adjudication of his challenge to the validity of the debt. Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991) (“when a Veteran raises the validity of the debt as part of a waiver application... it is arbitrary and capricious and an abuse of discretion to adjudicate the waiver application without first deciding a veteran’s challenge to the lawfulness of the debt asserted against him or her”); VAOPGCPREC 6-98 (July 24, 1998) (holding that when a veteran challenges the validity of the debt and seeks waiver of the debt, the [Regional Office] must first fully review the debt’s validity and, if the office believes the debt to be valid, prepare a written decision fully justifying the validity of the debt before referring the waiver request to the Committee on Waivers and Compromises). A debtor may dispute the amount or existence of a debt, which is a right that may be exercised separately from a request for waiver or at the same time. 38 C.F.R. § 1.911 (c)(1). Resolution of the creation issue must precede consideration of the waiver issue. In that consideration of the propriety of the creation, for a determination that the overpayment was not properly created such that the debt was not valid, it must be established that the Veteran was either legally entitled to the benefits in question or, if the Veteran was not legally entitled, then it must be shown that VA was solely responsible for the Veteran being erroneously paid benefits. Administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law. VAOPGCPREC 2-90 (July 17, 1989); 55 Fed. Reg. 27757 (1990). Sole administrative error connotes that the Veteran neither had knowledge of nor should have been aware of the erroneous award. Further, neither the Veteran’s actions nor his or her failure to act must have contributed to payment pursuant to the erroneous award. 38 U.S.C. § 5112 (b)(9), (10); 38 C.F.R. § 3.500 (b)(2); 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). Thus, a finding of sole administrative error requires not only error on the part of VA, but that the beneficiary is unaware that the payments are erroneous. The United States Court of Appeals for Veterans Claims (“the Court”) noted that, “[s]tated 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.” Erickson v. West, 13 Vet. App. 495, 499 (2000). The matter is REMANDED for the following action: Adjudicate the issue of whether the overpayment was properly created, to include the raised matter of sole administrative error. If the claim continues to be denied, including on this basis, issue the Veteran an appropriate supplemental statement of the case (SSOC) which addresses both the creation and waiver issues and afford him the opportunity to respond. S. L. Kennedy Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD J. Connolly, Counsel