Citation Nr: 18155270 Decision Date: 12/03/18 Archive Date: 12/03/18 DOCKET NO. 15-41 123A DATE: December 3, 2018 ORDER The creation of debt against the Veteran's account in the amount of $5,895.00 is valid. FINDING OF FACT 1. A March 2006 notice letter, and its accompanying enclosures, informed the Veteran he was awarded additional VA compensation benefits for his dependent spouse, that he was required to promptly report any change in marital status, and that a change in marital status could impair his right to receipt of that additional compensation. 2. On August 1, 2006, the Veteran divorced his dependent spouse. 3. In April 2013, the Veteran reported the divorce to VA. CONCLUSION OF LAW The creation of debt against the Veteran's account in the amount of $5,895.00 is valid. 38 U.S.C. §§ 1114 (c), 1115, 5112, 5302; 38 C.F.R. §§ 1.962, 3.500, 3.660. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty in the U.S. Navy from June 1990 to September 2005. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from a January 2014 decision issued by the Department of Veterans Affairs (VA). The intertwined issue of entitlement to an effective date prior to April 24, 2013 for the addition of T. H. as a dependent spouse is discussed in a separate decision. The Board has limited the discussion below to the relevant evidence required to support its finding of fact and conclusion of law, as well as to the specific contentions regarding the case as raised directly by the Veteran and those reasonably raised by the record. See Scott v. McDonald, 789 F.3d 1375, 1381 (Fed. Cir. 2015); Robinson v. Peake, 21 Vet. App. 545, 552 (2008). 1. Whether the creation of debt against the Veteran's account in the amount of $5,895.00 was proper The Veteran contends that the debt created against his account is invalid. For the reasons that follow, the Board finds that creation of the debt in the amount of $5,895.00 is valid. The law provides for payment of additional VA compensation benefits for dependents of veterans who are at least 30 percent disabled, which the Veteran was for the entire period at issue. 38 U.S.C. §§ 1114(c), 1115. An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. 38 U.S.C. § 5302; 38 C.F.R. § 1.962. Overpayments created by retroactive discontinuance of benefits will be subject to recovery if not waived. 38 C.F.R. § 3.660(a)(3). The relevant authority for determining the effective dates of reductions and discontinuances of VA compensation is 38 U.S.C. § 5112 and 38 C.F.R. § 3.500. In pertinent part, the effective date of reduction or discontinuance of compensation by divorce of a dependent spouse shall be the last day of the month in which such divorce occurs. 38 U.S.C. § 5112(b)(2). Where the overpayment occurred by reason of an erroneous award based solely on administrative error, the reduction of that award cannot be made retroactive to form an overpayment of debt owed to VA. 38 U.S.C. § 5112(b)(10); 38 C.F.R. § 3.500(b)(2); Erickson v. West, 13 Vet. App. 495, 499 (2000). Administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law. VAOPGPREC 2-90 (Mar. 20, 1990). An error resulting in overpayment will not be classified as VA administrative error if it is based on an act of commission or omission by the beneficiary, or with the beneficiary’s knowledge. Id.; 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); see Dent v. McDonald, 27 Vet. App. 362, 380 (2015) (knowledge can be actual or constructive). In 2006, the Veteran was awarded service connection for certain disabilities. A March 2006 notice letter accompany the award of service connection informed him of his entitlement amount and payment start dates. The notice letter also informed him that he was being paid as a veteran with one dependent, his spouse P.H. It was explained that this resulted additional compensation, and the Veteran was instructed to inform VA immediately if there was a change in marital status. The enclosures included with the notice letters, e.g., VA Form 21-8764, reiterated that a change in status of dependents should be promptly relayed to VA because it could affect his right to payments. In an April 2013 VA Form 21-686c, Declaration of Status of Dependents, the Veteran reported that he had divorced P.H. on August 1, 2006. He also reported that he married a new spouse on May 16, 2008. VA accepted the Veteran’s report of marital change as accurate. Parenthetically, the Board notes that the Veteran has since criticized VA of accepting the occurrence of such a legal action based simply on his lay statements; however, he has not disputed that the divorce occurred on the date that he said it did. The Veteran’s statements do not raise doubt as to the actual date of divorce. He is competent to report such an occurrence and there is nothing of record to diminish his credibility in this regard. Thus, they are accepted as accurate for the purpose of this adjudication. In a January 2014 decision, VA retroactively decreased the Veteran’s VA compensation payments based on removal his dependent spouse. This action created an overpayment from September 1, 2006 through April 2013; the reduction ceased on May 1, 2013 based on the addition of his new dependent spouse. The reduction in VA compensation payments created an overpayment in the amount of $5,895.00 over the period identified above, which was based on the difference in being paid as a veteran with one dependent versus a single veteran. Based on a review of all evidence of record, the Board finds that the creation of the $5,895.00 debt is valid. The Veteran had at least constructive knowledge that the presence of his dependent spouse on his account provided for additional compensation, and that a change in marital status could affect his level of VA disability compensation moving forward. He was informed of this fact by a March 2006 notice letter and its enclosures. In the October 2014 notice of disagreement, the Veteran admitted error in failing to inform VA of divorce in August 2006. While he reported that he was unaware that he was receiving additional compensation for his spouse and a change in marital status could affect his right to those payments, he should have understood this fact based on the above cited notice that accompanied his award of compensation. Thus, his failure to return the additional compensation to which he had no legal right during the period of September 2006 through April 2013 constituted an act of omission and there can be no finding of sole administrative error. 38 U.S.C. § 5112(b)(10); 38 C.F.R. § 3.500(b)(2); Dent, 27 Vet. App. at 380. The Board also notes that mere administrative delay in effectuating the reduction, in this case approximately nine months subsequent to his April 2013 report of divorce, does not constitute sole administrative error. The Veteran argued that VA should have known of the divorce at an earlier time because the Defense Enrollment Eligibility Reporting System (DEERS) and Defense Finance and Accounting Services (DFAS) were aware of the change after it occurred. VA does not automatically communicate with those functions of the Department of Defense (DOD). Moreover, the Veteran was specifically informed of the requirement to inform VA of a change in marital status. Thus, while the Board is sympathetic to the circumstances of the Veteran’s case, it is bound by law and without authority to grant benefits on an equitable basis. See 38 U.S.C. §§ 503, 7104. In sum, the creation of the $5,895.00 debt was not the result of sole administrative error. He should have known the continued payment of additional compensation was erroneous, and his continued acceptance of compensation at the unchanged rate constituted an omission. Thus, there was not sole administrative error, and the creation of the debt against his account in the amount of $5,895.00 is valid. D. JOHNSON Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD Mike A. Sobiecki, Associate Counsel