Citation Nr: 18153384 Decision Date: 11/27/18 Archive Date: 11/27/18 DOCKET NO. 14-43 038 DATE: November 27, 2018 REMANDED Whether an overpayment of pension benefits was validly created in the amount of $49,804.00, is remanded. Entitlement to waiver of overpayment of pension benefits in the amount of $49,804.00, to include the validity of the debt, is remanded. REASONS FOR REMAND The Veteran served on active duty from June 1970 to February 1971. This matter comes before the Board of Veterans’ Appeals (Board) from an August 2014 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 he was at fault for creation of the debt and his failure to report receipt of Social Security Administration (SSA) income in 2010 resulted in an unjust enrichment at the government’s expense. The Committee indicated there was no evidence that the Veteran reported SSA income as he alleged. The Committee determined that financial hardship was outweighed by the findings of fault and unjust enrichment. In his notice of disagreement, the Veteran not only disagreed with the waiver denial, but also challenged the validity of the debt. Specifically, he indicated that he provided information in early 2011 that showed his SSA income. The Board notes that an SSA Disability Determination and Transmittal was associated with the electronic record in July 2010. This document reveals he was adjudged disabled by SSA as of February 2010. A January 2012 report of contact shows that VA requested SSA records from the Veteran. The record also contains a request for SSA records by VA in January 2012. 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 review the record and ensure compliance with all notice and assistance requirements regarding the creation issue. 2. Prepare an audit of the Veteran’s VA 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 Veteran must be provided a written copy of the detailed audit. 3. Once the development above has been completed, the issue of validity of the creation of the overpayment of benefits in the amount of $49,804.00, should be adjudicated by the RO. The Committee must address statements of the Veteran that he mailed information in early 2011 that showed his SSA income. The Committee must also address: an SSA Disability Determination and Transmittal associated with the electronic record in July 2010; a January 2012 report of contact showing VA requested SSA records from the Veteran; and a request for SSA records by VA in January 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