Citation Nr: 1828512 Decision Date: 05/10/18 Archive Date: 05/18/18 DOCKET NO. 14-42 954 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Chicago, Illinois THE ISSUE Whether the removal of the Veteran's child from his Department of Veterans Affairs (VA) compensation award due to his concurrent receipt of Dependents' Educational Assistance benefits (DEA) under Chapter 35, United States Code, resulting in an overpayment in the calculated amount of $4,578.17, was proper. REPRESENTATION Appellant represented by: Illinois Department of Veterans Affairs ATTORNEY FOR THE BOARD J. Connolly, Counsel INTRODUCTION The Veteran served on active duty from July 1968 to July 1970. This matter comes to the Board of Veterans' Appeals (Board) on appeal from a January 2011 determination by the Department of Veterans Affairs (VA) Regional Office (RO) in Chicago, Illinois. FINDINGS OF FACT 1. In a November 2007 rating decision, service connection was established at a combined rating of 50 percent from September 2, 2004, and 80 percent from April 26, 2007, which entitled the Veteran to an additional allowance for each of his eligible dependents. 2. In an April 2009 rating decision, the RO determined that the Veteran had basic eligibility for Chapter 35 DEA benefits effective January 2009. 3. In a May 2009 letter, VA notified the Veteran that his dependents may be eligible for Chapter 35 DEA benefits and provided him with VA pamphlet 22-73-3, Summary of Education Benefits, which explained that both a dependency allowance and Chapter 35 DEA benefits could not be paid. 4. In June 2009, the Veteran indicated that his child, A., was enrolled in college from January 2009 and there had not been an application for DEA benefits or receipt of DEA benefits. 5. In a December 2010 letter, the RO advised the Veteran that since A. had elected to receive Chapter 35 DEA benefits, the RO proposed to retroactively remove A. from his compensation award. 6. For the period that the Veteran was paid additional VA disability compensation benefits for A. based on school attendance and A. was paid Chapter 35 DEA benefits, the RO retroactively terminated the dependency allowance paid to the Veteran which resulted in the $4,578.17 overpayment. CONCLUSION OF LAW The removal of the Veteran's child, A., from his VA compensation award due to the concurrent receipt of Chapter 35 DEA benefits was proper, and the resulting overpayment of VA compensation benefits in the calculated amount of $4,578.17 was properly created and is a valid indebtedness. 38 U.S.C. §§ 3562, 5112 (2012); 38 C.F.R. §§ 3.500, 3.667(f), 3.707, 21.3023 (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSION As a preliminary matter, the Board notes that the Veterans Claims Assistance Act of 2000 (VCAA) does not apply in this case, given the nature of the issues on appeal. See e.g. Reyes v. Nicholson, 21 Vet. App. 370 (2007) (holding that the provisions of 38 U.S.C. § 5103 (a) do not apply to claims for relief under Chapter 53 of Title 38 of the United States Code, pertaining to waiver of recovery of overpayments, which includes the validity of the debt); see also Schaper v. Derwinski, 1 Vet. App. 430 (1991) (challenging validity of debt). In a November 2007 rating decision, service connection was established for various disabilities. The combined rating was 50 percent from September 2, 2004, and 80 percent from April 26, 2007, thereby entitling him to an additional allowance for each of his eligible dependents. See 38 U.S.C. § 1115. In a November 2007 letter, the Veteran was advised of the RO's determination and notified that him that his compensation award included an additional amount for each of his three dependents. In an April 2009 rating decision, the RO determined that the Veteran had basic eligibility for Chapter 35 DEA benefits effective January 2009. In a May 2009 letter, the RO notified the Veteran of the decision and indicated that he continued to be paid an additional amount for his dependents, including a child, A. The RO further notified the Veteran that his dependents may be eligible for Chapter 35 DEA benefits. He was advised that VA pamphlet 22-73-3, Summary of Education Benefits, had been enclosed for his review which explained the program. The Board notes that VA pamphlet 22-73-3 includes an explanation that both a dependency allowance and Chapter 35 DEA benefits could not be paid and that any dependency allowance would be terminated when DEA benefits were elected. The Veteran was also provided a VA Form 22-5490 Dependents' Application for VA Education Benefits. This form also notified the Veteran that he could not claim a dependent for the sake of additional compensation benefits when that individual was receiving DEA benefits. Thereafter, in June 2009, the Veteran sent in a form updating the status of dependents as well as a VA Form 21-8960 which reflected that his child (aged 18 to 23 years), A., was enrolled in college from January 2009. The Veteran indicated that there had not been an application for DEA benefits or receipt of DEA benefits. In a November 2009 letter, the RO acknowledged that the Veteran had indicated that A. was attending college. The RO requested that the Veteran complete a VA Form 21-674, Request for Approval of School Attendance. The Veteran then completed that form. In January 2010, VA financial data shows that as of May 1, 2009, the Veteran was paid $2,932 for his dependents. As of June 1, 2009, the benefits were increased to $3,063. The benefits were projected to be reduced to $2,823 as of February 1, 2013. The changes were due to A.'s school status as a dependent. In December 2010, the RO informed the Veteran that information had been received showing that A. was in receipt DEA benefits. The RO indicated that the law does not allow for the Veteran to receive an additional allowance for A. on the Veteran's award concurrent to his dependent's receipt of Chapter 35 education benefits. Therefore, the RO proposed to remove A. from the Veteran's award, and reduce his monthly benefit from $2,932 to $2,823 effective May 26, 2009, which was the date A. was in receipt of Chapter 35 benefits. Thereafter, a January 2011 determination letter retroactively removed A. from the award which the RO indicated resulted in the creation of an overpayment in the amount of $4,120. However, that amount was incorrect and was later corrected to $4,578.17. The overpayment was derived from benefits paid to the Veteran from May 26, 2009, to May 31, 2009, of $18.17 for a schoolchild; then from June 1, 2009, to December 31, 2010, of $240 per month for a schoolchild which equaled $4,560. When the two amounts of $18.17 and $4,560 were combined the total amount was $4,578.17. The Veteran was later provided a copy of the January 2010 financial data. In general, any veteran whose disability is rated not less than 30 percent shall be entitled to additional compensation for his or her eligible dependents, including a child under the age of 18 years. 38 U.S.C. § 1115. That additional compensation may be extended beyond the child's eighteenth birthday based upon school attendance if the child was at that time pursuing a course of instruction at an approved educational institution and a claim for such benefits is filed within one year from the child's eighteenth birthday. 38 C.F.R. § 3.667 (a)(1). In general, Chapter 35 educational assistance is payable to a child of a veteran who has a total disability permanent in nature resulting from a service-connected disability. 38 C.F.R. § 21.3021. However, payment of both a dependency allowance as part of a veteran's disability compensation benefits and educational assistance under Chapter 35 constitutes a duplication of benefits that is strictly prohibited after the child has elected to receive the latter benefit. See 38 U.S.C. § 3562; 38 C.F.R. §§ 3.667 (f), 3.707, 21.302. A child who is eligible for educational assistance and who is also eligible for a dependency allowance as part of a veteran's disability compensation based on school attendance must elect whether he or she will receive educational assistance or compensation. An election of educational assistance is a bar to subsequent payment of compensation on account of the child based on school attendance on or after the age of 18 years. 38 38 C.F.R. § 21.3023. The overpayment of VA compensation benefits at issue in this case was properly created. The Veteran's child, A., sought and received Chapter 35 DEA benefits, from May 2009. As noted, payment of both a dependency allowance as part of a Veteran's disability compensation benefits and educational assistance under Chapter 35 constitutes a duplication of benefits that is strictly prohibited by law. 38 U.S.C. § 3562; 38 C.F.R. §§ 3.667 (f)(1), 3.707, 21.3023(a). Since A. elected to receive the Chapter 35 educational benefits, the RO appropriately removed the dependency allowance for A. from that time, which resulted in an overpayment. It is clear from the law that the Veteran is not legally entitled to additional disability compensation for A. from the time that A. began receiving Chapter 35 DEA benefits. The Board has considered whether there was sole administrative error in the concurrent payment of the two benefits. Under 38 U.S.C. § 5112 (b)(10), the effective date of a reduction or discontinuance of compensation by reason of an erroneous award based solely on administrative error or error in judgment shall be the date of last payment. See also 38 C.F.R. § 3.500 (b)(2). "Stated another way, when an overpayment has been made by reason of an erroneous award based solely on administrative error, the reduction of that award cannot be made retroactive to form an overpayment debt owed to VA from the recipient of the erroneous award." Erickson v. West, 13 Vet. App. 495, 499 (2000). The Board notes, however, that sole administrative error may be found to occur only in cases where the Appellant neither had knowledge of nor should have been aware of the erroneous award. Further, such error contemplates that neither the Appellant's actions nor her failure to act contributed to the erroneous award. 38 U.S.C. § 5112 (b)(10); 38 C.F.R. § 3.500 (b)(2). In this case, the record shows that, as part of his award of a permanent and total disability rating, the Veteran was notified that his dependents were eligible for Chapter 35 DEA benefits. He was provided with a pamphlet that explained such benefits in detail, to include how the benefits may affect his entitlement to an additional allowance for children who elect to receive Chapter 35 benefits. Moreover, the Veteran completed a VA Form 21-8960 which reflected that his child (aged 18 to 23 years), A., was enrolled in college. The Veteran indicated that there had not been an application for DEA benefits or receipt of DEA benefits. Based on the foregoing, the Board finds that the Veteran knew or should have known that he would not be entitled to the dependency allowance for A. for the same period that A. elected to receive Chapter 35 benefits. Morris v. Derwinski, 1 Vet. App. 261 (1991), citing Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384-85 (1947) (holding that all persons dealing with the federal government are charged with knowledge of federal statutes and lawfully promulgated agency regulations). Moreover, although it is clear that VA erroneously paid the Veteran a dependency allowance during the same period it paid A. Chapter 35 benefits, the record shows that the Veteran thereafter continued to accept the payments when he was under an obligation to correct the error. The Veteran's failure to be attentive to the nature, basis, and amount of money he was receiving from VA, particularly when he knew A. had begun to receive Chapter 35 benefits, contributed to the overpayment. Under these circumstances, the Board must find that the overpayment at issue in this case was not due to sole administrative error. 38 U.S.C. § 5112 (b)(10); 38 C.F.R. § 3.500(b)(2) (2015); see also Dent v. McDonald, 27 Vet. App. 362, 380 (noting that "[a]n error resulting in an overpayment will not be classified as a VA administrative error or error in judgment if the error is 'based on an act of commission or omission by the beneficiary, or with the beneficiary's knowledge.'"). For the reasons set forth above, the Board finds that the overpayment at issue in this case was properly created and is a valid debt. Narron v. West, 13 Vet. App. 223 (1999). ORDER The removal of the Veteran's child, A., from the VA compensation award due to his concurrent receipt of DEA benefits under Chapter 35, United States Code resulting in an overpayment in the calculated amount of $4,578.17 was proper; the appeal is denied. S. L. Kennedy Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs