Citation Nr: 1807256 Decision Date: 02/05/18 Archive Date: 02/14/18 DOCKET NO. 14-18 313 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Philadelphia, Pennsylvania THE ISSUES 1. Whether an overpayment of nonservice-connected pension benefits was validly created in the amount of $55,048.00. 2. Entitlement to waiver of overpayment in the amount of $55, 048.00, to include the validity of the debt. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD K. L. Wallin, Counsel INTRODUCTION The Veteran served on active duty from June 1967 to March 1969. This matter comes before the Board of Veterans' Appeals (BVA or Board) on appeal from an April 2013 decision of the Committee on Waivers and Compromises. For the reasons set forth below, the Board has recharacterized and bifurcated the issues on appeal in order to afford the Veteran the broadest scope of review. The appeal is REMANDED to the Agency of Original Jurisdiction (AOJ). VA will notify the Veteran if further action is required. REMAND Appellate consideration is being deferred and this case remanded for action as described below. The Veteran was notified in January 2013 that was he over paid nonservice-connected pension benefits in the amount of $55,048.00. The Veteran requested a waiver of such overpayment in March 2013 on the basis of financial hardship. The Committee denied the waiver request having determined his net worth was a bar to benefits and received an unjust enrichment at government expense and was at fault in the creation of the debt because he failed to submit evidence relating to income, expenses, and net worth when asked in April 2012. In his substantive appeal, the Veteran not only disagreed with the waiver denial, but also challenged the validity of the debt. Specifically, he indicated that in his original application for benefits dated in February 2010 he disclosed that his assets totaled $89,237.00. He further indicated that he complied with all the requests from the VA for financial information and never tried to defraud VA. The Board notes that the Veteran's original claim for benefits in received in March 2010 showed $89,237.00, in bonds and $500 in bank accounts. A Corpus of Estate Determination dated in August 2010 shows total amount of the Veteran's estate was $94, 237.00 (including $89, 237 in bonds). An Eligibility Verification Report dated in February 2011 shows assets in the amount of $89,500.00. An April 2012 Corpus of Estate Determination showed assets totaling $114, 111.82. Thereafter, in December 2012 the Veteran was notified that he was going to receive $1,732.00 per month as his countable income was zero after considering continuing medical expenses. 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 with regard to 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). Resolution of the creation issue, to include obtaining a proper audit detailing the actual amount of the overpayment and how the overpayment was calculated (detailing how medical expenses were deducted from countable income), should precede consideration of the waiver issue. As a final matter, the Board notes that the United States Court of Appeals for Veterans Claims (Court) held in Barger v. Principi, 16 Vet. App. 132 (2002), that the Veterans Claims Assistance Act (VCAA), with its expanded duties, was not applicable to waiver issues, pointing out that the statute at issue in such cases (Chapter 53) was not found in Title 38, United States Code, Chapter 51 (i.e. the laws changed by VCAA). See 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5106, 5107, 5126 (West 2014); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326. However, the Court has not indicated if VCAA applies to creation issues. Thus, a VCAA letter should be issued as to the creation issue. Accordingly, the case is REMANDED for the following action: 1. The RO should review the record and ensure compliance with all notice and assistance requirements set forth in the VCAA with regard to the creation issue only. Dingess/Hartman v. Nicholson, 19 Vet. App. 473 (2006); 38 U.S.C.A. § 5103(a); 38 C.F.R. § 3.159(b)(1). 2. Prepare an audit of the Veteran's VA nonservice-connected pension benefits. (a) The audit must explain the creation of the debt, to include amount paid for the applicable time period. (b) The audit must contain the amount of net worth and income that was attributed to the Veteran during the applicable time period, including the amount of countable income considered after medical expenses 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 $55,048.00, should be adjudicated by the RO. 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. If upon completion of the above action the claim remains denied, the case should be returned to the Board after compliance with appellate procedures. The Veteran has the right to submit additional evidence and argument on the matter or matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). This appeal must be afforded expeditious treatment. The law requires that all issues that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C. §§ 5109B, 7112 (2012). _________________________________________________ E. I. VELEZ Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C. § 7252 (2012), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2017).