Citation Nr: 18158610 Decision Date: 12/18/18 Archive Date: 12/17/18 DOCKET NO. 15-25 121 DATE: December 18, 2018 ORDER The overpayment of Chapter 33 education assistance benefits, in the form of a housing allowance in the amount of $3,763.04, is valid. Entitlement to waiver of recovery of the overpayment of Chapter 33 education assistance benefits in the amount of $3,763.04 is granted. FINDINGS OF FACT 1. The Veteran was serving on active duty for the period from June 30, 2013 to February 23, 2014. 2. While serving on active duty, the Veteran was paid Chapter 33 housing allowance benefits in the total amount of $3,763.04. 3. Recovery of the overpayment of Chapter 33 housing allowance benefits in the amount of $3,763.04 would be against equity and good conscience. CONCLUSIONS OF LAW 1. The debt created by the payment of Chapter 33 housing assistance benefits in the amount of $3,763.04 is valid. 38 U.S.C. §§ 3313, 5302 (2012); 38 C.F.R. §§ 1.962, 21.9505, 21.9630, 21.9640 (2017). 2. The recovery of the overpayment of Chapter 33 housing assistance benefits in the amount of $3,763.04 would be against equity and good conscience and is, therefore, waived. 38 U.S.C. § 5107, 5302 (2012); 38 C.F.R. §§ 1.962, 1.963, 1.965, 3.102 (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty in the United States Air Force from June 2006 to August 2010. She returned to active duty in June 2013. She challenges the validity of a housing allowance overpayment made to her under the Post-9/11 GI Bill, Chapter 33, in the amount of $3,763.04. The Post-9/11 GI Bill was enacted by Congress in June 2008. See Pub. L. No. 110-252, Title V, §§ 5001-5003, 122 Stat. 2357 (2008). The statutory provisions are codified at Title 38 U.S.C. Chapter 33. For the purposes of the payment of Chapter 33 benefits, active duty is defined as full-time duty in the regular components of the Armed Forces or under a call or order to active duty under 10 U.S.C. 688, 12301(a), 12301(d), 12301(g), 12302, or 12304. 38 C.F.R. § 21.9505. In order to qualify for education assistance under the Post-9/11 GI Bill, a veteran must serve a minimum of 90 aggregate days after September 11, 2001, excluding entry level and skill training, and, after completion of such service, be discharged from service with an honorable discharge. 38 C.F.R. § 21.9520 (a) (2017). 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 virtually any benefits program administered pursuant to VA law, including pension, compensation, dependency and indemnity compensation, educational assistance benefits and subsistence allowance, insurance benefits, burial and plot allowances, clothing allowance, and automobile or other conveyance and adaptive equipment allowances. 38 C.F.R. § 1.956 (a). VA generally is required to recover erroneous VA payments or overpayment of benefits. See Edwards v. Peake, 22 Vet. App. 57, 59 (2008); 38 U.S.C. § 5314 (a) (generally requiring VA to deduct from future benefit payments a debt arising from a person’s participation in a VA benefits program); 38 C.F.R. § 1.912a (a) (same); 38 U.S.C. § 5316 (authorizing VA to recover a benefits-related debt by bringing a suit if the person fails to appropriately respond to reasonable administrative efforts to collect the debt). The Veteran was enrolled in college classes, as relevant here, from September 2, 2013 to February 23, 2014. Based on this enrollment, she was paid $714.50 per each full month of training for the period from September 2, 2013 to November 17, 2014 and December 2, 2013 to February 23, 2014. These payments totaled $3,763.04. Subsequently, in December 2014, VA was informed that the Veteran was, in fact, on active duty service during this period. Thus, the Veteran was paid education benefits without having been discharged—that is, while serving on active duty, contrary to the requirements set forth in 38 C.F.R. § 21.9520 (a). The Veteran does not contend that she was not, in fact, on active duty during the period at issue. Instead, she has consistently asserted that she was unaware that she was ineligible for housing assistance while serving on active duty and that VA did not inform her of such a requirement. However, VA law provides that persons dealing with the government are charged with knowledge of federal statutes and lawfully promulgated agency regulations “regardless of actual knowledge of what is in the [r]ebullitions or of the hardship resulting from innocent ignorance.” See Morris v Derwinski, 1 Vet. App. 260, 265 (1991) (citing Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380 (1947); see also Dent v. McDonald, 27 Vet. App. 362, 382 (2015) (a beneficiary is charged with knowing the rules governing compensation). Therefore, this argument has no merit. Further, a review of the file shows that the Veteran has utilized Chapter 33 education benefits in pursuit of advanced education for many years, and has on occasion been overpaid due to changes made to her class schedule. It is clear from the evidence of record that the Veteran is aware of the obligations required for the receipt of Chapter 33 education benefits or, at the very least, that such obligations and requirements require her strict adherence. Thus, the Board must find that, because the Veteran was paid benefits to which she was not legally entitled, the overpayment at issue was properly created and is a valid debt. Turning to the question of waiver of the debt, recovery of an overpayment may be waived if there is no indication of fraud, misrepresentation, or bad faith on the part of the person or the persons having an interest in obtaining the waiver, and recovery of such indebtedness would be against equity and good conscience. See 38 U.S.C. § 5302 (c) (2012); 38 C.F.R. §§ 1.962, 1.963 (2017). The standard “equity and good conscience” will be applied when the facts and circumstances in a particular case indicate a need for reasonableness and moderation in the exercise of the Government’s rights. The decision reached should not be unduly favorable or adverse to either side. The phrase “equity and good conscience” means arriving at a fair decision between the obligor and the Government. In making this determination, consideration will be given to the following elements, which are not intended to be all-inclusive: (1) the fault of the debtor, (2) balancing of faults between the debtor and the VA, (3) undue hardship of collection on the debtor, (4) whether collection would defeat the purpose of an existing benefit, (5) whether failure to collect a debt would result in the unjust enrichment of the debtor, and (6) whether the debtor changed positions to her detriment in reliance upon a granted VA benefit. 38 U.S.C. § 5302 (2012); 38 C.F.R. § 1.965 (a) (2017); see Ridings v. Brown, 6 Vet. App. 544, 546 (1994). As noted above, the Veteran insists that she was not at fault for the creation of the debt and feels that she should not be required to repay it. She has indicated in multiple statements to VA that she provided all the information required to verify her eligibility for Chapter 33 benefits, and that her eligibility was verified by VA each semester. Because of this verified eligibility, VA continued to pay her benefits. As such, she reasonably believed that she was eligible for education benefits, to include housing benefits. The Veteran has also provided information concerning the financial hardship that repayment would cause. In April 2015, she submitted a VA Form 5655, Financial Status Report, which showed that she earned approximately $3,131.00 per month, out of which $2,702.00 went to her monthly bills, not including a $300 monthly student loan payment. It appears from the Form 5655 that her financial obligations leave her with around $100 per month to provide basic necessities for her and her dependent child. As for the fault of the debtor and the balancing of faults in this case, the Board finds VA and the Veteran to have equal fault. As noted above, the Veteran is familiar with the education benefits system and is tasked with knowing its requirements. However, despite this, she did apply for educational benefits and was subsequently paid benefits for each semester. She has repeatedly stated that her expectation, which the Board finds to be reasonable, was that the VA would deny the benefit if she was not eligible for it. The Board also finds that VA failed to perform a timely verification, to ensure that the Veteran was in fact eligible for the benefits being paid. The Veteran returned to active duty in June 2013 and enrolled in classes in September 2013. However, VA did not verify her status until December 2014. In applying for benefits, the Veteran provided all information asked of her, and the VA approved and paid her education benefits without verifying her eligibility for the program until 18 months after her enrollment. Therefore, although the Veteran should have reported her military status at the time of the application, or refrained from applying for education benefits while serving on active duty, the Board finds equal fault in the creation of the overpayment lies with VA for its significant delay in verifying her service. With regard to undue hardship, the Board finds that the Veteran would be unable to repay the $3,763.04. As noted above, her monthly expenditures consume almost all of her monthly income, leaving her with very little money to provide for her needs and those of her child. The record also reflects that the Veteran has no significant assets that could be used to collect the overpayment debt. This demonstrates that she does not have the financial means to pay the debt owed to VA while providing for basic necessities of life. For these reasons, the Board finds that repayment of the overpayment debt would result in undue hardship to the Veteran. Finally, the evidence is clear that the benefits received by the Veteran were in fact used to fund her education, as the program intended. Although she was unjustly enriched by the erroneous grant of housing benefits in that she received $3,7563.04 in benefits for which she was not entitled, the Board finds that the undue hardship of repayment outweighs any unjust enrichment that may have resulted from the overpayment of benefits. Therefore, the Board finds it would be against equity and good conscience for VA to recover the assessed overpayment from the Veteran and she is entitled to a waiver in the amount of $3,7563.04. See 38 U.S.C. § 5302; 38 C.F.R. § 1.965 (a). R. FEINBERG Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD Jeremy J. Olsen, Counsel