Citation Nr: 18152860 Decision Date: 11/27/18 Archive Date: 11/26/18 DOCKET NO. 14-11 507 DATE: November 27, 2018 REMANDED Whether an overpayment of VA nonservice-connected pension benefits was validly created in the amount of $6,228.00, is remanded. Entitlement to waiver of recovery of overpayment of VA nonservice-connected pension benefits in the amount of $6,228.00, to include the validity of the debt, is remanded. REASONS FOR REMAND The Veteran served on active duty from December 1977 to September 1984, from September 1985 to September 1988, and from December 1990 to September 1991. This matter comes before the Board of Veterans’ Appeals (Board) from an October 2013 Decision on Waiver of Indebtedness. For the reasons set forth below, the Board has recharacterized and bifurcated the issues on appeal to afford the Veteran the broadest scope of review. The Committee denied the waiver request having determined that the Veteran was at fault for creation of the debt having delayed reporting his Social Security Administration (SSA) income to VA, which resulted in an unjust enrichment at the government’s expense. The Committee indicated the Veteran’s monthly income was sufficient to meet his monthly expenses and repay his debt. The Committee determined there was no financial hardship and a changed position standard did not apply. In his notice of disagreement (NOD) and substantive appeal, the Veteran not only disagreed with the waiver denial, but also challenged the validity of the debt. Specifically, he indicated that he notified VA in September 2012 that had been awarded SSA disability income and was told he did not have to worry about submitting documentation as they had already received information from SSA. In his NOD, he also indicated that he was in the Vocational Retraining Assistance Program (VRAP) and had been receiving $1,564.00, every month from January 2013 to December 2013, excluding the summer months of May through August. However, he indicated that he used those benefits to pay his tuition. The Board notes that prior to the award of nonservice-connected pension, the record contains a VETSNET award dated in September 2012 showing SSA had adjudged the Vet disabled as of July 2012. An SSA inquiry shows that the Veteran received his first payment in August 2012. In February 2018, the Board remanded the waiver issue to obtain updated financial information, to include information regarding his VRAP benefits, monthly income and expenses, assets and debts, and repayment of overdue taxes. An attempt to obtain this information from the Veteran was returned as undeliverable in June 2018. The Veteran has a history of homelessness and thus, it is not clear from the record that he received this request for information. The Veteran is disputing the debt and clearly has asked that the repayment of the debt be waived. Because the Veteran has challenged the proper creation of the debt, further appellate review by the Board regarding 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 the 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 [RO] 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). Finally, there is no actual audit that explains the creation of the debt that was attributed to the Veteran during the applicable time-period. Resolution of the creation issue, to include obtaining a proper audit detailing the actual amount of the overpayment and how the overpayment was calculated, should precede consideration of the waiver issue. As a final matter, proper notice should be issued to the Veteran as to the creation issue. The matter is REMANDED for the following action: 1. The RO should ascertain the current address of the Veteran, to include from his representative, and update the record accordingly. 2. The RO should review the record and ensure compliance with all notice and assistance requirements regarding the creation issue. 3. Request that the Veteran complete an updated Financial Status Report listing all monthly income and expenses, assets and debts, repayment of overdue taxes, and tuition for the applicable period. 4. Prepare an audit of the Veteran’s VA nonservice-connected pension benefits. (a) The audit must explain the creation of the debt, to include amount paid for the applicable period. (b) The audit must contain the amount of net worth and income that was attributed to the Veteran during the applicable period, including the amount of countable income considered after any exclusions from income were deducted. (c) The audit must consider VRAP benefits paid to the Veteran and the amount of tuition supplemented by the Veteran. (d) The audit must consider the amount of repayment for overdue taxes. (e) The Veteran must be provided a written copy of the detailed audit. 5. Once the development above has been completed, the issue of validity of the creation of the overpayment of benefits in the amount of $6,228.00, should be adjudicated by the RO. The Committee must address statements of the Veteran that he informed VA in September 2012 of his award of SSA disability income. The Committee must also address the following documents associated with the record prior to the award of nonservice-connected pension: a VETSNET award dated in September 2012 showing SSA had adjudged the Vet disabled as of July 2012 and an SSA inquiry showing that the Veteran received his first payment in August 2012. The Veteran must be provided the proper notice of any such determination and afforded the necessary time to respond. Thereafter, if necessary, the issue of waiver of recovery of the overpayment should be readjudicated. E. I. VELEZ Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD K. L. Wallin, Counsel