Citation Nr: 18153954 Decision Date: 11/29/18 Archive Date: 11/28/18 DOCKET NO. 15-34 266 DATE: November 29, 2018 REMANDED The issue of whether the debt created by the removal of the Veteran’s son, E., from his award of Department of Veterans Affairs (VA) disability compensation was validly created is remanded. Entitlement to waiver of recovery of overpayment created by removal of the Veteran’s son, E., from his award of VA disability compensation is remanded. REASONS FOR REMAND The Veteran, who is the appellant in this case, served on active duty from November 1990 to May 1991. He also had unverified service in the United States Army Reserves. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from a July 2014 decision of the VA Regional Office (RO) in Philadelphia, Pennsylvania. 1. Whether the debt created by the removal of the Veteran’s son, E., from his award of VA disability compensation was validly created is remanded. In a July 2014 decision, the RO removed E. from the Veteran’s award of VA disability compensation, effective August 27, 2012, the date E. began receiving Chapter 35, Dependents’ Educational Assistance, and found that an overpayment had been created. In August 2014, the VA Debt Management Center in St. Paul, Minnesota sent the Veteran a letter informing him that he was paid $5,847.31 more than he was entitled to receive; such was based on the removal of E. as his dependent for VA compensation purposes, effective August 27, 2012. In his November 2014 notice of disagreement (NOD), the Veteran the Veteran disagreed with both the validity and amount of the debt. He stated that VA “failed to remove [E.] from the entitlement benefit, as it repeatedly stated it would do so. I do not feel I should be held responsible for this oversight.” He asked that the overpayment be waived. In a May 2015 decision, VA’s Committee on Waivers and Compromises (COWAC) found that the Veteran was not at fault in the creation of the debt, since he reasonably relied on VA to take the appropriate action when E. was awarded Chapter 35 benefits. Significant VA fault was found to exist in the debt creation due to the excessive delay in processing the award adjustment. The COWAC found that collection of this debt may pose some degree of hardship on the Veteran, but that it is not seriously impairing his ability to provide for basic necessities, and undue financial hardship was not shown to exist. Therefore, the COWAC denied the Veteran’s request for a waiver of the debt. In July 2015, the RO issued a statement of the case (SOC). The RO characterized the issue on appeal as “whether to remove [E.] from the award effective August 27, 2012, which resulted in an overpayment of benefits, was proper.” In the August 2015 substantive appeal, the Veteran stated that the SOC mischaracterized the issue on appeal. He again expressed his disagreement with the validity of the debt and requested a waiver of recovery of overpayment, stating that “the issue is the length of time it took the BVA [sic] to remove [E.] from my award as a school age child, while he was receiving Chapter 35 benefits causing the overpayment of $5847.31.” The Board finds that the issue addressed in the July 2015 SOC is a mischaracterization of the issue on appeal. The Veteran did not contest in the November 2014 whether the removal of E. from the Veteran’s award was proper; instead, the Veteran disagreed with the validity of the debt and asked for a waiver of the debt. This was reiterated by the Veteran in the August 2015 substantive appeal. There is no question that the Veteran was not entitled to receive dependency compensation for his son at the same time that he (E.) was receiving Chapter 35 DEA benefits. See 38 U.S.C. § 3562; 38 C.F.R. §§ 3.667(f), 3.707, 21.3023 (2017). As the Veteran clearly states in his November 2014 NOD, the issue on appeal is whether the creation of the overpayment and resultant debt was valid based on the proper effective date of the discontinuance of dependency compensation benefits with respect to E. Therefore, the Board has recharacterized the issues on appeal as reflected herein. As the July 2015 SOC did not address the proper issues on appeal and did not inform the Veteran of both the laws relevant to determining the validity of the debt and the laws relevant to the request for waiver of overpayment, the Board is required to remand the claims for issuance of a supplemental statement of the case. 2. Entitlement to waiver of recovery of overpayment created by removal of the Veteran’s son, E., from his award of VA disability compensation is remanded. Before adjudication of a waiver application, the lawfulness of a debt must first be determined. See Schaper v. Derwinski, 1 Vet. App. 430, 434-35 (1991) (noting that the propriety and amount of the overpayment at issue are matters that are integral to a waiver determination). Thus, the issue of entitlement to a waiver of overpayment is also remanded as inextricably intertwined with the validity of the debt issue. Harris v. Derwinski, 1 Vet. App. 180, 183 (1991). The matter is REMANDED for the following action: After performing all appropriate development, readjudicate the issues on appeal as they have been recharacterized herein by the Board. If any benefit sought remains denied, the Veteran and his representative should be furnished a supplemental statement of the case and given the opportunity to respond thereto before the case is returned to the Board. J. GALLAGHER Acting Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD M. Thomas, Associate Counsel