Citation Nr: 18154379 Decision Date: 11/29/18 Archive Date: 11/29/18 DOCKET NO. 15-28 390 DATE: November 29, 2018 ORDER The declaration of an overpayment debt, in the amount of $3,764, was invalid. FINDINGS OF FACT 1. The Veteran moved multiple times and failed to keep VA apprised of his current address for many years between 2001 and 2011. 2. The VA failed to provide notice to the Veteran’s last-known address. CONCLUSION OF LAW The debt declared in the amount of $3,764 is invalid. 38 U.S.C. §§ 501, 5107, 5302; 38 C.F.R. §§ 1.962, 1.956, 3.652. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from June 1998 to May 1999. This matter comes before the Board of Veterans’ Appeals (Board) from a November 2012 RO decision. The preliminary issue of the validity of a debt is a threshold determination that must be made prior to a decision on a request for waiver of the indebtedness. Schaper v. Derwinski, 1 Vet. App. 430, 434 (1991). An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. See 38 U.S.C. § 5302; 38 C.F.R. § 1.962. An overpayment may arise from most benefits programs administered pursuant to VA law including, most pertinent to this case, compensation benefits. 38 C.F.R. § 1.956(a). Regarding the issue of the validity of the debt, an additional amount of compensation may be payable for a spouse, child, and/or dependent parent where a veteran is entitled to compensation based on disability evaluated as 30 percent or more disabling. 38 C.F.R. § 3.4(b)(2). In this case, the Veteran was awarded a 40 percent combined disability rating immediately following his discharge from service. His oldest, and first son, was born in November 1999. He informed the VA of the birth in February 2000 and VA implemented a child dependency allowance in March 2000, effective in December 1999. The Veteran had little contact with the VA for several years after this. His only interaction with VA occurred when he reported for a single VA examination in August 2001 to confirm the stability of his service-connected disabilities. He continued to receive monthly payments of the 40 percent combined disability rating and the single child dependency allowance. In February 2006, the VA mailed the Veteran correspondence which was then returned by the Postal Service as undeliverable and unable to be forwarded. Two years later in April 2008, the RO mailed the Veteran a standard letter requesting that he verify the status of his current dependents to establish his continued entitlement to a dependency allowance. This request was mailed to the same address which had failed in February 2006. It was also returned by the Postal Service as unable to be forwarded. In July 2008, the RO requested the Veteran’s current address from the credit union where his monthly benefits were deposited. The credit union provided an address in Manchester. The RO did not re-mail the dependency form to the Veteran at the newly-provided address. Rather, in December 2008, the RO mailed the Veteran notice that they proposed to reduce his dependency allowance, since he had not provided an updated form. This notice was mailed to his former address and was returned by the Postal Service. The RO re-mailed the same notice to the updated address in January 2009. The January 2009 notice was not returned. However, the Veteran did not respond to the letter in any way. In April 2009, the RO attempted to contact the Veteran using phone numbers obtained from the VA Healthcare system. According to the memorandum for the file reflecting these attempts, the Veteran’s home phone number belonged to someone else; his workplace informed the RO the Veteran had not worked there in years; and a third number had been disconnected. In April 2009, the RO mailed the Veteran a letter to his updated address, informing him that because he had not confirmed the status of his dependents, that his dependency allowance would be retroactively discontinued effective in April 2000. Later the same month, the RO mailed another letter to the same address, informing him that an overpayment would be created, in the amount of the dependency allowance paid since April 2000. This letter explained that the Veteran was invited to furnish the dependency form to add the dependency allowance back into his compensation award, but that evidence must be provided by December 2009, to retroactively pay the benefits and clear the overpayment. Why April 2000 was selected as the date to cut off the dependency allowance was not explained in either letter. Neither of these letters was returned by the Postal Service. The VA’s Debt Management Center mailed the Veteran an official notice that his overpayment debt had been calculated in the amount of $3,764, in May 2009, to the same updated address in Manchester. This notice provided the information that in order to recoup the debt, VA would begin withholding his VA compensation benefits in August 2009 until the debt had been repaid. He was also informed that he had the right to dispute the debt and to request a waiver, along with information as to how to do these things. This letter was not returned by the Postal Service either. There is no indication in the claims file that the RO actually began withholding benefits in August 2009; rather it appears that no such action was implemented. In August 2009, however, the RO again contacted the Veteran’s credit union to request the Veteran’s current address. There is no indication in the file as to what prompted this request. According to the request, the VA’s “records do not contain the current address for the above-named Veteran/payee whose benefits are sent to your institution.” It seems reasonable to conclude, however, that the RO had suspicions that the Veteran was not receiving his mail from VA at that time. The credit union responded with a new address in Hillsborough. In March 2011 the Veteran wrote the RO and provided a new address in Florida. In this letter, he indicated that “until further notice, all written correspondence,” should be sent to this address. In April 2011, the Veteran phoned the RO to report he had married in September 2010. He provided information as to his wife’s identity, his older son (for whom he had previously been receiving the single child dependency allowance), and informed the RO of the birth of his second son in 2009. He then submitted a completed dependents form in May 2011, showing his wife and two sons. Also in May 2011, the Veteran wrote to inform he had moved back to New Hampshire and provided a new address in Hillsborough. Three months later, in July 2011, the Veteran provided another New Hampshire address in Berlin. In July 2011, the RO implemented new child dependency allowances, for both sons, effective in May 2011, when the Veteran had provided the dependency form to VA. The Veteran provided another dependency form in November 2011, reflecting the birth of a third son in June 2011. According to this form, the Veteran was still living in Berlin. A statement in support of the Veteran claims appears to have been created by an RO employee in January 2012. It reads as follows: Veteran visited customer service to discuss an overpayment situation with Debt Management. Veteran states a debt was created due to his dependent [older son] being removed from his award. [Older son was added to the award on April 1, 2000. He was taken off April 2009. The dependent was added back on 5-1-2011. IRS withheld monies from Veterans tax return. Debt Management told Veteran that the debt ($3,764) with the VA had been satisfied. Veteran is requesting for reimbursement because [older son] has always been the Veteran’s dependent. On the same day, the Veteran submitted a copy of a letter from the Department of the Treasury’s Financial Management Service. This letter was dated in February 2011 and mailed to the Veteran’s prior address in Florida. It shows that the Treasury had withheld $3,781 of the Veteran’s federal tax return toward repayment of his debt to VA. The Veteran had hand-written across the top of the letter that the February 2011 letter represented the first notice he had received relating to this issue. The RO formally denied the Veteran’s request for reimbursement in November 2012. The notice letter reflecting this decision provides the following explanation: In response to your request to add [older son] to your award back to the date he was previously removed, a review of your claims file shows that we proposed to remove [older son] from your award based on your failure to return a dependency questionnaire by correspondence dated December 12, 2008, and took final action and notified you by correspondence dated April 6, 2009. In that April 6, 2009 letter, we informed you that you must provide the required dependency information by December 12, 2009 in order to have [older son] reinstated on your award effective the date he was removed. However, you did not provide that information until April 25, 2011, when you called the VA office. Therefore, we cannot add [older son] from the date he was previously removed. The Veteran submitted a formal notice of disagreement with the RO’s denial in January 2013. He stated that he had not received the request for him to complete the dependents form or the notice of the debt. He again noted that he had not known about the debt until he received the notice that the money was being recouped from his tax return, and that at that point he was told it was “too late to respond.” He argued the situation was unfair as it was out of his control. He also noted that he had promptly responded to every request from VA that he had in fact received. Lastly, he asserted he had attempted to update his addresses with VA, but VA had failed to make the changes in VA’s system. The Veteran’s subsequent substantive appeal, filed in July 2015, contains similar arguments about what he perceives as VA’s inefficiency in maintaining his current address, and VA’s delays in addressing his issues. An effective date of the award of any benefit or any increase therein by reason of marriage shall be effective from the latest of the following dates: (1) date of claim, meaning the following, listed in their order of applicability: (i) date of veteran’s marriage, or birth of his or her child, or, adoption of a child, if the evidence of the event is received within 1 year of the event; otherwise; (ii) date notice is received of the dependent’s existence, if evidence is received within 1 year of VA’s request; (2) date dependency arises; (3) effective date of the qualifying disability rating provided evidence of dependency is received within 1 year of notification of such rating action; or (4) date of commencement of veteran’s award. 38 C.F.R. § 3.401(b). Individuals to whom benefits are being paid are required to certify, when requested, that any or all of the eligibility factors which established entitlement to the benefit being paid continue to exist. The beneficiary will be advised at the time of the request that the certification must be furnished within 60 days from the date of the request therefor and that failure to do so will result in the reduction or termination of benefits. (1) If the certification is not received within 60 days from the date of the request, the eligibility factor(s) for which certification was requested will be considered to have ceased to exist as of the end of the month in which it was last shown by the evidence of record to have existed. The effective date of reduction or termination of benefits will be in accordance with 3.500 through 3.504 as in effect on the date the eligibility factor(s) is considered to have ceased to exist. The claimant will be advised of the proposed reduction or termination of benefits and the date the proposed action will be effective. An additional 60 days from the date of notice of the proposed action will be provided for the claimant to respond. (2) If the certification is not received within the additional 60-day period, the proposed reduction or termination of benefits will be put into effect. When the required certification is received, benefits will be adjusted, if necessary, in accordance with the facts found. 38 C.F.R. §3.652. Upon careful review, the Board finds that the entirety of the debt was not properly created. We therefore hold that a reduction in the amount of the declared debt is warranted. In this case, none of the notifications provided to the Veteran in connection with the original grant of compensation benefits and the original grant of dependency benefits for his older son indicate that he might be required to re-certify his continued entitlement to dependency benefits. Rather, the original notifications in 2000 indicated that he would continue to receive dependency benefits for his older son until the son turned 18, unless he continued attending school at that point. Multiple letters to the Veteran throughout the years have informed him he is responsible for reporting changes in the status of his dependents, but did not inform him he might be required, upon request, to confirm current, unchanged status. Therefore, following the original award, the Veteran had a reasonable expectation that dependency benefits would continue for at least 18 years, absent a tragic event. It is the responsibility of Veterans to cooperate with VA, to include informing VA of any change in address. See Olson v. Principi, 3 Vet. App. 480, 483 (1992). It is clear in this case that the Veteran moved multiple times during the relevant time period between 2008 and 2011, and did not inform the VA each time. Although the Veteran has attempted to make the argument that VA was at fault, and in support of this he points to an unrelated mistake in his benefit payments, the evidence shows that he did not keep in contact with VA for several years, and also did not keep the VA medical system apprised of his whereabouts. Furthermore, the record shows that beginning in 2011, he promptly notified VA of multiple moves and VA promptly updated their records systems each time. It is significant that the Veteran does not actually assert that he in fact notified the VA of his new address in 2008; rather he points to other mistakes the VA has made over the years and asserts the fault therefore must be on the part of VA. This argument is fallacious. The occurrence of one mistake does not in any way prove the occurrence of a different mistake. Rather, in 2008, when the RO was attempting to reach the Veteran to confirm his dependency information, a clear VA mistake was made. Because mail sent to the Veteran in 2006 had been returned by the Postal Service, VA was on notice that the address was no longer valid. Nevertheless, in April 2008, the RO mailed the request for the Veteran to complete an updated dependency form to the address on file, without attempting to ascertain his current address. Because this letter was also returned, the RO knew or should have known that the Veteran did not receive it. The RO then contacted the Veteran’s credit union and received a new address. However, the RO did not re-mail the dependency form to the Veteran at the newly-provided address. The subsequent decision to reduce the Veteran’s dependency allowance was therefore based upon a flawed premise; that the Veteran had failed to return a requested form to VA; when VA had actual knowledge that the Veteran had not received the form or the request. Although only some of the subsequent letters regarding the debt were returned to VA, the Veteran has stated he did not receive any notification of the debt until he received the notification from the United States Treasury in February 2011. The Board finds the Veteran’s statement that he was unaware the dependency allowance had been reduced and of the debt created from that retroactive reduction to be credible. Although the Veteran was negligent in failing to notify the VA of multiple moves, he has otherwise shown responsibility in his dealings with VA, as shown by his responsiveness when he did learn of the declared debt, and by his responsiveness between 1999 and 2000, when VA was regularly contacting him about his compensation claim. In short, the Board holds that both the Veteran and the VA share in the fault for the creation of this debt. The Veteran is at fault for failing to keep VA apprised of his current address. The VA is at fault firstly for not mailing the original request to the most current address available, and secondly for declaring a debt based upon the Veteran’s failure to return a form with which he had never been provided. Therefore, the Veteran became aware of the declared debt when the Treasury withheld a portion of his tax return and provided notice of this withholding in February 2011. It was after this that the Veteran resumed a responsible relationship with VA, notifying VA of three address changes in March 2011, May 2011, and July 2011. He also timely notified VA of his marriage and the birth of his second and third sons. As set forth above, the RO then implemented new child dependency allowances effective in May 2011, representing the month the new dependency form had been received by VA. Under the provisions of 38 C.F.R. §3.652, when the required certification is received, benefits will be adjusted in accordance with the facts found. In this case, the RO properly re-implemented the child allowance for the Veteran’s older son effective in May 2011. However, in reviewing the declared debt, the Board holds that no debt can be charged until the time when the Veteran was aware of the situation. In this case, that point is established to have been in February 2011. Therefore, the debt relating to the child dependency allowance accrued between April 2000 and May 2009, when the Debt Management Center declared the amount of the debt, is invalid. This money should therefore be returned to the Veteran. T. MAINELLI Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD Heather J. Harter