Citation Nr: 1818883	
Decision Date: 03/28/18    Archive Date: 04/05/18

DOCKET NO.  14-38 117A	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in Milwaukee, Wisconsin


THE ISSUE

Entitlement to a waiver of recovery of overpayment of pension benefits in the amount of $51,047.


REPRESENTATION

Appellant represented by:	Veterans of Foreign Wars of the United States


WITNESS AT HEARING ON APPEAL

The Veteran


ATTORNEY FOR THE BOARD

A. Creegan, Associate Counsel


INTRODUCTION

This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2017).  38 U.S.C. § 7107(a)(2) (2012).

The Veteran served on active duty from January 1969 to October 1971.

This matter is before the Board of Veterans' Appeals (Board) on appeal from a June 2014 decision of the Committee on Waivers and Compromises of the Department of Veterans Affairs (VA) Regional Office (RO) in Milwaukee, Wisconsin.

A videoconference hearing in this matter was held before the undersigned Veteran's law judge in October 2017. The transcript is of record. 

At his hearing the Veteran requested that his monthly withholding be lowered if the debt was not waived.  This issue is not before the Board, and is referred to the VA Debt Management Center for resolution.


FINDINGS OF FACT

1. There is no indication of fraud, misrepresentation, or bad faith on the part of the Veteran in matters involving creation of the debt at issue in this matter.

2. Recovery of the overpayment in the amount of $51,047 would not be against equity and good conscience.


CONCLUSION OF LAW

Recovery of the overpayment of pension benefits in the amount of $51,047 would not be against equity and good conscience. 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 CONCLUSION

Neither the Veteran nor his representative has raised any issues with the duty to notify or duty to assist. See Scott v McDonald, 789 F.3d 1375, 1381 (Fed. Cir. 2015) (holding that "the Board's obligation to read filings in a liberal manner does not require the Board . . . to search the record and address procedural arguments when the veteran fails to raise them before the Board."); Dickens v. McDonald, 814 F.3d 1359, 1361 (Fed. Cir. 2016) (applying Scott to duty to assist argument).

I. Legal Criteria

Recovery of overpayment of any benefits made under laws administered by VA may be waived if there is no indication of fraud, misrepresentation, or bad faith on the part of the person or persons having an interest in obtaining the waiver. 38 U.S.C. § 5302 (c); 38 C.F.R. § 1.963(a). "Bad faith" is defined in VA regulations as "unfair or deceptive dealing by one who seeks to gain thereby at another's expense. Thus, a debtor's conduct in connection with a debt arising from participation in a VA benefits/services program exhibits bad faith if such conduct, although not undertaken with actual fraudulent intent, is undertaken with intent to seek an unfair advantage, with knowledge of the likely consequences, and results in a loss to the government." 38 C.F.R. § 1.965(b).

If there is no indication of fraud, misrepresentation, or bad faith in the record, the indebtedness shall be waived if the recovery of the overpayment would be against equity and good conscience. 38 U.S.C. § 5301(a); 38 C.F.R. §§ 1.962, 1.965.

Consideration of equity and good conscience is intended to reach a result that is not unduly favorable or adverse to either the claimant or the Government. It is intended to achieve a result that is fair. 38 C.F.R. § 1.965(a). Six non-exclusive elements are set forth in the regulations that must be addressed to determine whether the facts and circumstances in a particular case dictate that collection of an overpayment would be against equity and good conscience. The following six elements, which are not intended to be all-inclusive, consist of: (1) the fault of the debtor; (2) balancing of faults between the debtor and VA; (3) undue hardship of collection on the debtor; (4) a defeat of the purpose of an existing benefit to the veteran; (5) the unjust enrichment of the veteran; and (6) whether the veteran changed positions to his/her detriment in reliance upon a granted VA benefit. 38 U.S.C. § 5302; 38 C.F.R. § 1.965(a). Each of the six elements must be addressed. See Ridings v. Brown, 6 Vet. App. 544, 546 (1994).

The standard of proof to be applied in decisions on claims for veterans' benefits is set forth in 38 U.S.C. § 5107. A veteran is entitled to the benefit of the doubt when there is an approximate balance of positive and negative evidence. See 38 C.F.R. § 3.102. When a veteran seeks benefits and the evidence is in relative equipoise, the veteran prevails. See Gilbert v. Derwinski, 1 Vet. App. 49 (1990). The preponderance of the evidence must be against the claim for benefits to be denied. See Alemany v. Brown, 9 Vet. App. 518 (1996).

II. Analysis

The Veteran applied for pension benefits in August 2008, which were granted in October 2008. At the time of filing, the Veteran had an application pending with the Social Security Administration for disability benefits. That application was later granted and benefits were paid backdated to July 2007. From July 2007 to February 2014 the Veteran received pension benefits that were too high due to nonreporting of his Social Security income.  In September 2014, the RO granted entitlement to special monthly pension based on the need for aid and attendance, effective July 24, 2014.  Payment of the benefit remained subject to higher income limitation. 

During the October 2017 Board hearing, the Veteran testified that he was experiencing a severe financial hardship and was considering moving from his home to a homeless shelter.   He did not dispute the cause of the debt but requested that the amount of monthly withholding to recover the debt be reduced.  In December 2017, the Veteran submitted excerpts of a May 2016 Chapter 7 Bankruptcy Order of Discharge.  It is not clear which debts including that to VA were discharged by the Court.  
The Debt Management Center (DMC) issued a demand letter for the debt in February 2014, and the Veteran timely responded with a request for waiver. In June 2014, the Committee on Waivers and Compromises denied the Veteran's request for waiver due to a finding of bad faith, as the Committee noted that the Veteran did not note Social Security income on his 2008 application for pension. However, as the Veteran's application for Social Security benefits was not granted until December 2009 and he therefore did not have any Social Security income at the time of his August 2008 pension application, the Committee reversed the bad faith finding in the Statement of the Case.  The Board concurs with this finding. 

As there is no bad faith on the part of the Veteran, the Board must determine whether recovery of the overpayment would be against equity and good conscience. 38 C.F.R. § 1.962, 1.965. As to the first element, the Board finds that the Veteran was at fault, as he did not report his Social Security income when he began receiving Social Security benefits or at any point thereafter, despite having been notified several times that any changes to income must be reported to avoid an overpayment. The Veteran stated in a June 2014 statement that he did not report his Social Security income because he had received a letter from VA stating that reporting of income from other agencies was not necessary due to a data matching program. However, the letter in question was sent in January 2013, four years after the Veteran began receiving Social Security income, at which point the vast majority of the Veteran's debt had already been incurred. 

The second element is the balancing of faults between the debtor and the VA. The VA sent several notification letters explaining that all income and changes to income must be reported. These notification letters specifically mentioned Social Security benefits. Therefore, the Board finds that the VA was not at fault in the Veteran's incurring of the debt.

The third element is undue hardship of collection on the debtor. The Veteran has stated that payment of the debt would cause him financial hardship. Currently the Veteran's debt is being repaid via withholding of VA benefits. At his hearing in October 2017, his representative stated that the Veteran's income each month is $1,263, and that his expenses total just over $1200. In a financial statement submitted shortly after the hearing the Veteran indicated that he has monthly expenses of $1,991. However, the Veteran listed a total $508 in monthly debts in Section III but only detailed $110 of monthly debts in Section VI. Furthermore, the Veteran's stated amounts of $183 per month for cable and $150 per month for rides from friends and family are not necessities. The Board emphasizes that after taking care of basic necessities such as shelter and food, the Veteran is expected to accord a debt to the VA. Furthermore, the Board notes that the Veteran has in fact offered to make partial payments to take care of his debt in monthly installments. His statement indicates that while the payments may be difficult for the Veteran, that they remain feasible and do not constitute an undue hardship.

As to the fourth element, collection of the overpayment would not defeat the purpose of an existing benefit to the Veteran. Pension benefits are intended to provide the Veteran with a minimum amount of income, which he is currently receiving between his Social Security benefits and the VA benefits that are not being withheld. 

The Board does not find any evidence that waiver of the funds would constitute unjust enrichment.  The Veteran did received financial benefits in excess of entitlement for many years.  However, his current financial status is not robust but has been relieved to some extent by discharge of some debts by the Bankruptcy Court.  There is no evidence that the Veteran changed positions to his detriment in reliance upon a granted VA benefit, as the Veteran's financial situation has been similar for several years. 

The facts of this case do not demonstrate that recovery of the overpayment would be against the principles of equity and good conscience. 38 C.F.R. §§ 1.963, 1.965. For these reasons, the Board finds that a preponderance of the evidence is against the Veteran's claim for a waiver of recovery of the overpayment of VA pension benefits in the amount of $51,047. Because the preponderance of the evidence is against the claim, the benefit of the doubt doctrine is not for application. See 38 U.S.C. § 5107; 38 C.F.R. § 3.102.


ORDER

Waiver of recovery of an overpayment of VA benefits in the amount of $51,047 is denied.



____________________________________________
J.W. FRANCIS
Veterans Law Judge, Board of Veterans' Appeals



Department of Veterans Affairs