Citation Nr: 1824704 Decision Date: 04/24/18 Archive Date: 05/03/18 DOCKET NO. 14-33 896 ) 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 nonservice-connected pension benefits in the amount of $9,793 for the period from July 1, 2012, to December 31, 2013, to include the preliminary issue of the validity of the debt. REPRESENTATION Appellant represented by: Shannon L. Brewer, Attorney ATTORNEY FOR THE BOARD J. Meyer, Associate Counsel INTRODUCTION The Veteran served on active duty from October 1972 to October 1974. This matter is before the Board of Veterans' Appeals (Board) on appeal from December 2013 and April 2014 administrative decisions by the Department of Veterans Affairs (VA) Regional Office (RO) in Milwaukee, Wisconsin. The Board notes that in April 2015 and December 2017 correspondences, the Veteran withdrew his request for a hearing. Additionally, the Board notes that while the July 2014 statement of the case reflects that the Veteran's balance on the $9,793 overpayment debt at the time of that decision was $8,705, the Board does not have any jurisdiction, and therefore makes no finding, with respect to the current amount owed on the $9,793 debt. Instead, as reflected in the title page, the only issue before the Board is whether the Veteran is entitled to a waiver of recovery of overpayment of nonservice-connected pension benefits, to include the preliminary issue of the validity of the asserted debt. Finally, the Veteran's claims file indicates that he submitted a FOIA request in October 2017 for VA medical records, and that he was provided these records in April 2018. As the issue pertaining to this appeal does not relate to this evidence, there is no prejudice in proceeding with adjudication of this appeal. FINDINGS OF FACT 1. The overpayment of $9,793 was caused because the Veteran did not report his social security income from July 1, 2012, to December 31, 2013. 2. The overpayment of VA disability compensation benefits was an unjust enrichment to the Veteran (money he was never entitled), and continued collection of the indebtedness would not defeat the purpose VA pension benefits or be otherwise inequitable. CONCLUSION OF LAW The overpayment of nonservice-connected pension benefits in the amount of $9,793 for the period from July 1, 2012, to December 31, 2013, was an unjust enrichment, and recovery of the overpayment of VA benefits for this period of time is not against equity and good conscience. 38 U.S.C. §§ 5107, 5302(a) (2012); 38 C.F.R. §§ 1.963 (a), 1.965(a) (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran asserts that VA's finding that he received $9,793 in overpayment of VA benefits during the period on appeal was not proper because he "worked" for his social security benefits and "served" for his pension. As a result, he should be able to keep both. In any event, he contends that his overpayment should be waived based upon equity in order to provide him with "a fresh start." Validity of Debt The Board must first consider whether a valid debt has been created before considering whether the Veteran may be entitled to waiver of the indebtedness. See Schaper v. Derwinski, 1 Vet. App. 430 (1991). In general, an overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled, and may arise from virtually any benefits program administered pursuant to VA law, including pension, compensation, dependency and indemnity compensation, or any other form of benefits. See 38 U.S.C. § 5302 (2012); 38 C.F.R. §§ 1.956(a), 1.962 (2017). Because nonservice-connected pension and special monthly pension are need-based programs, the maximum allowable pension rate (MAPR) as prescribed by law is offset by the Veteran's countable income, which includes income from most sources, including any eligible dependents. Such sources typically include regular earnings, disability and retirement payments, interest and dividend payments from annuities, and net income from farming or a business. Some expenses, such as unreimbursed medical expenses that are in excess of five percent of the Veteran's MAPR, may also be reduced from the Veteran's countable income. 38 U.S.C. § 1503 (a); 38 C.F.R. §§ 3.260, 3.261, 3.262. Nonrecurring income or expenses (i.e., a transaction on a one-time basis) will be annualized over a 12-month period receipt of the income or the expense. 38 C.F.R. §§ 3.271(c), 3.272(h) (2017). As an initial matter, the Veteran has not disputed that he received the asserted income from the Social Security Administration (SSA) during the period on appeal. Further, the Veteran has not disputed receiving an additional $9,793 in VA pension benefits based upon his SSA income. Therefore, as the Veteran does not dispute receiving this income, the Board agrees with the Pension Management Center's calculation that an overpayment in the amount of $9,793 has been validly created. Waiver of Overpayment As the debt has been validly created, the Board must next consider whether repayment of the incurred debt should be waived. Recovery of overpayments of any benefits made under the laws administered by VA shall 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 and if the recovery of the indebtedness from the payee who received the benefits would be against equity and good conscience. 38 U.S.C. § 5302 (2012); 38 C.F.R. §§ 1.962, 1.963(a), 1.965 (2017). The standard of 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 VA's right of debt recovery. The elements for consideration are: (1) fault of debtor, where actions of the debtor contribute to creation of the debt; (2) balancing of faults, weighing fault of debtor against VA fault; (3) undue hardship, whether collection would deprive debtor or family of basic necessities; (4) defeat the purpose, whether withholding of benefits or recovery would nullify the objective for which benefits were intended; (5) unjust enrichment, failure to make restitution would result in unfair gain to the debtor; (6) changing position to one's detriment, reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation. 38 C.F.R. § 1.965(a) (2017). When there is an approximate balance of positive and negative evidence regarding the merits of an issue material to the determination of the matter, reasonable doubt will be resolved in favor of the claimant in each such issue. 38 U.S.C. § 5107(b) (2017). In this case, the Board concludes that repayment of the $9,793 debt does not violate any sort of equity and good conscience. Here, the Veteran did not report his SSA income for the period on appeal, despite the fact that VA previously notified him that SSA benefits must be reported. Further, while there are no other reports of income of record that were submitted by the Veteran during the period on appeal, there has also not been any indication that VA was aware that the Veteran received SSA benefits during this time. Moreover, it appears that the Veteran would have been aware that VA did not know about this income as the Veteran was notified by VA in December 2012 that his pension benefits would increase slightly due to cost of living adjustments. Indeed, the last financial statement submitted by the Veteran was in June 2011, which did not report any SSA income. Therefore, the Board finds that not only was the Veteran at fault for the creation of the overpayment, but the balance of faults also weighs against him. In arriving at its conclusion, the Board has strongly considered whether recouping these benefits would defeat the purpose for which the benefits were intended and whether this would cause undue hardship. Special consideration has been given to the Veteran's age in conjunction with the fact that the he reports experiencing financial difficulties in 2014. However, the Board notes that the Veteran's assertions were not supported by any documentation such as receipts, bills, collection letters, etc. Further, the Veteran was recently awarded VA disability compensation benefits for his service-connected diabetes. Moreover, he has not provided sufficient evidence since 2014/2015 to indicate that repayment of the debt would cause undue hardship. The Board has also considered the Veteran's statements that he has "worked" for his SSA benefits and therefore his pension benefits should not be reduced based upon equity. Nevertheless, while the Board is quite sympathetic to his argument, it is bound by the law and is without authority to grant benefits on an equitable basis. See 38 U.S.C. §§ 7104; see also Harvey v. Brown, 6 Vet. App. 416, 425 (1994). Additionally, the Board notes that VA has already previously waived repayment of almost $3,000 in VA benefits to which the Veteran was not legally entitled. Importantly, the Veteran was not, at any point, entitled to the almost $3,000 waived - as this was simply a decision by VA to waive the debt out of good conscience. As such, the Board finds that recouping the $9,793 in benefits on appeal would not defeat the purpose for which the benefits were intended, nor would this cause undue hardship. Therefore, as the Veteran was unjustly enriched by receiving benefits in the amount of $9,793, the Board determines that it is not fundamentally unjust to require that the remaining debt be repaid. The appeal is denied. Veterans Claims Assistance Act Pursuant to the Veterans Claims Assistance Act of 2000 (VCAA), VA has duties to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (2012); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2017). See also Pelegrini v. Principi, 18 Vet. App. 112 (2004); Quartuccio v. Principi, 16 Vet. App. 183 (2002); Mayfield v. Nicholson, 444 F.3d 1328 (Fed. Cir. 2006); Dingess/Hartman v. Nicholson, 19 Vet. App. 473 (2006). However, the Court has held that the notice and duty-to-assist provisions of the VCAA do not apply to claims for waiver of recovery of overpayment. See Barger v. Principi, 16 Vet. App. 132 (2002); see also Lueras v. Principi, 18 Vet. App. 435 (2004). Nevertheless, the legal provisions pertaining to the collection of debts owed by reason of participation in a VA benefits program are contained in 38 C.F.R. § 1.911. Under section 1.911, when VA has determined that a debt exists by reason of an administrative decision or by operation of law, VA shall promptly demand, in writing, payment of the debt. VA shall notify the debtor of his or her rights and remedies and the consequences of failure to cooperate with collection efforts. In this case, this notification was performed in an October 2013 letter. ORDER A waiver of recovery of an overpayment of VA nonservice-connected disability pension benefits in the amount of $9,793 for the period from July 1, 2012, to December 31, 2013, is denied. ____________________________________________ B.T. KNOPE Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs