Citation Nr: 1814036 Decision Date: 03/06/18 Archive Date: 03/14/18 DOCKET NO. 14-27 831A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Winston-Salem, North Carolina THE ISSUE Whether withholding of benefits based on overpayment in the amount of $11,671 was correct. REPRESENTATION Appellant represented by: North Carolina Division of Veterans Affairs WITNESSES AT HEARING ON APPEAL Appellant, son ATTORNEY FOR THE BOARD A.P. Armstrong, Associate Counsel INTRODUCTION The Veteran served on active duty from August 1956 to August 1958 and from September 1958 to December 1976. The appellant is the Veteran's surviving spouse. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a November 2013 rating decision issued by the Department of Veterans Affairs (VA) Regional Office (RO), which granted DIC and found that an overpayment had been made. The appellant and her son testified before the undersigned in a February 2015 hearing. FINDINGS OF FACT 1. Dependency and Indemnity Compensation (DIC) benefits and annuity payments under the Survivor Benefits Plan (SBP) are duplicate awards, which are legally impermissible. 2. Appellant was provided with sufficient notice such that she suffered no prejudice. CONCLUSION OF LAW The withholding of DIC benefits to offset overpayment and creation of debt was proper. 38 U.S.C. §§ 5304, 5314 (2012); 38 C.F.R. §§ 1.911, 1.912a. REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Procedural Duties VA has statutory and regulatory obligations to provide claimants with notice and assistance in substantiating their claims. See 38 U.S.C.A. §§ 5102, 5103, 5103A, 5107; 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a). In the instant case, the relevant facts are not in dispute, and the application of the pertinent statutes and regulations is dispositive of the issue on appeal. As such, the duties to notify and assist are not implicated. See Dela Cruz v. Principi, 15 Vet. App. 143, 149 (2001); Smith v. Gober, 14 Vet. App. 227, 231-32 (2000); VAOPGCPREC 5-04 (June 23, 2004). II. Analysis Appellant contends that she should be entitled to both Dependency and Indemnity Compensation (DIC) from VA and her Survivor Benefit Plan (SBP) from the Department of Defense because her husband made payments toward the SBP, which she would have received if his death was not the result of service-connected disability. See Board hearing. She asserts that she should be compensated for his retirement from service and for his disability-related death. See id. She further notes that she was not aware of the duplicate benefits and had no part in causing the overpayment of $11,671. Shortly after the Veteran's death in 1999, appellant began to receive payments as the annuitant of a SBP. See March 1999 letter from Defense Finance and Accounting Service. The Directorate of Annuity Pay advised the RO that appellant was receiving SBP payments, to notify the Defense Department if she became entitled to DIC, and that she had signed a statement authorizing the withholding of DIC for paying SBP overpayment. See id. The Board has no reason to doubt the accuracy of the March 1999 letter, specifically in regard to Appellant's understanding and authorization of the withholding of VA benefits. Appellant received SBP payments from 1999 through November 21, 2013, when the RO issued the decision to grant DIC benefits. Those DIC benefits retroactively took effect on December 18, 2011; meaning appellant was eligible to receive DIC benefits accrued from January 1, 2012 forward. From January 1, 2012 to the date the Defense Department ceased SBP payments, appellant stood to receive duplicate benefits. To avoid this overpayment, the RO withheld $11,671 from the award. Statutes applicable to VA and the Department of Defense prohibit a surviving spouse from receiving duplicate benefits under a SBP and DIC. See 10 U.S.C. § 1450(c); 38 U.S.C. § 5304(a). Section 5304(a) states that not more than one award of pension, compensation, emergency officers', regular, or reserve retirement pay, or initial award of naval pension shall be made concurrently to any person based on such person's own service or concurrently to any person based on the service of any other person. The Board understands appellant's assertion that the Veteran paid for the SBP benefits, however, the law does not allow duplicate payment. In Roberts v. McDonald, the Court of Appeals for Veterans Claims held that in situations such as this, VA must provide an appellant with notice of the statutes and regulations regarding recoupment of overpayment including 10 U.S.C. § 1450 and those allowing VA to collect the overpayment, 27 Vet. App. 108, 110 (2014). The applicable sections that allow VA to collect overpayment by offset are 38 U.S.C. 5314 and 38 C.F.R. §§ 1.911, 1.912a. Most relevant here, section 1.911 secures for the debtor the right to informally dispute the existence or amount of the debt, to request waiver of collection of the debt, to a hearing on the waiver request, and to appeal the Department of Veterans Affairs decision underlying the debt. That section also requires notice from VA to the debtor of the exact amount of debt, specific reasons for debt, rights and remedies including the requirements for waiver of the debt, that collection may be offset from current or future VA benefits, that interest and administrative costs may be assessed as appropriate, that the debtor shall have the opportunity to inspect and copy records, and that the debtor shall have the opportunity to enter into a repayment agreement. Additionally, section 1.912a(c) provides that if the debtor, within thirty days of the date of the notification, disputes, in writing, the existence or amount of the debt, offset shall not commence until the dispute is reviewed. At the time of the original award of DIC benefits, the RO notified appellant of the withholding. The December 2013 letter explained: You aren't allowed to receive full SBP from the military and full DIC from VA.... If your DIC is greater than your SBP annuity, we'll withhold an amount of money equal to the SBP payment received since you became entitled to DIC. Please be advised that you have been overpaid benefits and we must withhold $11,671.00 to satisfy the amount of benefits that you have been overpaid. The notice letter also informed appellant that she could disagree with the decision by submitting a written statement within one year of the date of the letter. Appellant did so and appealed the decision to withhold benefits. Following the Board's July 2016 remand directives, the RO provided appellant with a letter in November 2016 that included the language of 38 USC §§ 5304, 5314 and 38 CFR §§ 1.911, 1.912a in compliance with Roberts, 27 Vet. App. at 112. This notice explained the ways in which appellant could dispute or request waiver of overpayment debt. Appellant did not respond to the November 2016 letter. The undersigned also explained to appellant in the Board hearing that she could avoid repaying a debt by showing that such repayment would cause her financial hardship. Appellant testified that because she was never awarded the $11,671 in the first place, there is no need to recoup the money and no hardship to her. Considering the totality of the circumstances, the Board finds appellant was provided sufficient notice and she suffered no prejudice. While the December 2013 notice did not provide all of the information required by 38 C.F.R. §§ 1.911 and 1.912a, appellant was informed the amount of the offset, reason for the offset, that collection of the offset would be drawn from her DIC benefit award, and that she could dispute the decision with a written disagreement, which she did. She was afforded a hearing to dispute the debt collection. Additionally, the March 1999 letter from the Defense Department put appellant on notice that such action would be taken in the future if she was awarded DIC benefits. Furthermore, the November 2016 notice letter provided her with notice of the rights and remedies available to her, including how to seek a waiver of the offset. Although VA failed to defer the offset when appellant disputed it, in compliance with 38 C.F.R. § 1.912a(c), such failure was not prejudicial. Appellant has not to date provided any information that would prohibit the offset or justify a waiver. Moreover, the Board finds the evidence weighs against a finding that the offset created any kind of hardship for appellant. Indeed, the appellant received SBP annuity payments until she began receiving DIC benefits; at no time did she go without this source of income. Instead, the offset amount of $11,671 was only withheld for the period of time in which she would have received legally impermissible duplicate benefits. Based on the foregoing, the Board finds that the withholding of benefits to offset a duplicate award was proper. See 38 U.S.C. 5304; 38 C.F.R. §§ 1.911, 1.912a. (CONTINUED ON NEXT PAGE) ORDER Collection of debt by offset was proper and waiver is denied. ____________________________________________ Paul Sorisio Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs