Citation Nr: 1828601 Decision Date: 05/11/18 Archive Date: 05/18/18 DOCKET NO. 14-32 388 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Buffalo, New York THE ISSUE Entitlement to waiver of recovery of Chapter 33 (Post-9/11 GI Bill) education benefits, to include validity of the debt. ATTORNEY FOR THE BOARD John Kitlas, Counsel INTRODUCTION The appellant in this case is the son of the Veteran, who the record reflects served on active duty in the United States Navy from April 1992 to July 2013. This matter is before the Board of Veterans' Appeals (Board) on appeal from a determination by the Education located at the Department of Veterans Affairs (VA) Regional Office (RO) in Buffalo, New York. The Board acknowledges that the issue adjudicated below was eligibility for the transfer of entitlement of Post-9/11 GI Bill benefits. However, the practical effect of this matter is whether the debt resulting from overpayment of such benefits due to lack of eligibility was valid. In addition, the appellant has presented arguments as part of his appeal to the effect that even if the debt is valid it should be waived. Accordingly, the Board has construed the appellate claim to reflect these matters. For the reasons stated below, the Board finds the debt was validly created, but as addressed in the REMAND portion of the decision below further development is required regarding the issue of wavier of overpayment. Accordingly, this issue is REMANDED to the Agency of Original Jurisdiction (AOJ). FINDINGS OF FACT The Veteran did not satisfy the service requirements for eligibility to transfer Chapter 33 education benefits to the appellant. CONCLUSION OF LAW The overpayment and resultant debt based on Chapter 33 payments was validly created. 38 U.S.C. §§ 3311, 3319, 5112 (2012); 38 C.F.R. §§ § 1.962, 21.9520, 21.9570, 21.9635, 21.9695 (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSION The appellant in this case challenges a debt based on an overpayment of educational assistance benefits under the Chapter 33 Post-9/11 GI Bill that were transferred to him by his father. An individual who is entitled to educational assistance under 38 U.S.C. Chapter 33 based on his or her own active duty service, and who is approved by a service department to transfer entitlement, may transfer up to a total of 36 months of his or her entitlement to a dependent (or among dependents). 38 C.F.R. § 21.9570; 38 U.S.C. § 3319. The Department of Defense (DOD) is charged with making determinations of eligibility for transfer of chapter 33 entitlement to dependents; VA has no authority to determine such eligibility. 74 Fed. Reg. 14,654 (2009); Garza v. McDonald, 28 Vet. App. 222, 230 (2016) (upholding VA's interpretation of 38 U.S.C.A 3319 that DOD is responsible for making determinations of eligibility and effective dates); see also 38 U.S.C. § 3319; 38 C.F.R. § 21.9570. Dependents are not eligible for transferred entitlement if the transferor fails to complete the amount of service he or she agreed to serve in the Armed Forces in order to participate in the transferability program, unless one of the following circumstances exists: (1) The transferor did not complete the service due to (a) his or her death; (b) a medical condition that preexisted such service on active duty and that the Secretary of the military department concerned determines is not service-connected; (c) a hardship, as determined by the Secretary of the military department concerned; (d) a physical or mental condition that was not characterized as a disability and did not result from the individual's own willful misconduct but interfered with the individual's performance of duty, as determined by the Secretary of the military department concerned; or (2) The transferor is considered to have completed his or her service as a result of being discharged for (a) a disability); or (b) a reduction in force. 38 C.F.R. § 21.9570 (l). VA will discontinue each award of educational assistance given to a dependent effective the first date of each such award when: (1) The transferor fails to complete the active duty service requirement that afforded him or her the opportunity to transfer entitlement of educational assistance; and (2) The military department discharges the transferor for a reason other than one of the reasons stated in 38 C.F.R. § 21.9570. 38 C.F.R. § 21.9635(aa). If an individual transferring Chapter 33 entitlement fails to complete the service agreed to by the individual, the amount of any transferred entitlement that is used by a dependent of the individual as of the date of such failure shall be treated as an overpayment of educational assistance. 38 U.S.C. § 3319(i)(2). In the event of an overpayment of chapter 33 educational assistance benefits with respect to a dependent to whom entitlement is transferred, the dependent and the individual making the transfer shall be jointly and severally liable for the amount of the overpayment. 38 U.S.C. § 3319(i)(1). An overpayment of educational assistance paid to an eligible individual constitutes a liability of that individual, unless: (1) The overpayment was waived as provided in 38 C.F.R. §§ 1.957 and 1.962; or (2) The overpayment results from an administrative error or an error in judgment. 38 C.F.R. § 21.9695(b) (cross-referencing 38 C.F.R. § 21.9635(r)). Here, the record reflects the Veteran had transferred Chapter 33 benefits to the appellant over a period from 2011 to 2013. However, in October 2013 VA received notification from the Navy Point of Contact that the Veteran did not complete his obligated projected end date in May 2014. The Board notes that the appellant does not dispute the Veteran did not complete his obligated projected end date of May 2014. He contends that the Veteran had to retire early to help care for his father (the appellant's grandfather) due to the latter's dementia. The appellant also contends that the Veteran was not informed this action would result in the Chapter 33 benefits becoming non-transferable, and that he was not informed about this during any of his pre-retirement meetings. Supporting lay evidence is of record regarding these contentions. The Board is sympathetic to the appellant in this case, and does not doubt the circumstances he reports as the reason for the Veteran's retirement from service in July 2013. However, the Board is required to follow the legal criteria governing the transfer of such education benefits. Here, nothing in the record reflects the Veteran received a hardship discharge as determined by the Secretary of the Navy. Rather, the record available for review reflects the reason for separation was qualifying active duty period. In other words, he had sufficient service to retire prior to his obligated projected end date. None of the other exceptions listed in 38 C.F.R. § 21.9570(l) appears applicable in this case either. Regarding the exception to an individual's liability when there is administrative error or error in judgment, VA regulation provides that when an administrative error or error in judgment by VA, DOD, or the Department of Homeland Security with respect to the Coast Guard when it is not operating as a service in the Navy, is the sole cause of an erroneous award, the award will be reduced or terminated effective the date of last payment. 38 C.F.R. § 21.9635 (r)(1). When a payee receives an erroneous award of educational assistance as the result of providing false information or withholding information necessary to determine eligibility for the award, the effective date of the reduction or discontinuance will be the effective date of the award, or the day before the act, whichever is later. 38 C.F.R. § 21.9635(r)(2). The date of the reduction or discontinuance will not be before the last date on which the individual was entitled to payment of educational assistance. Id.; see also 38 U.S.C. §§ 3323 (c), 5112(b), 5113. The term "erroneous award" includes erroneous payments made subsequent to the initial award of benefits. Dent v. McDonald, 27 Vet. App. 362, 374 (2015). In this case, the record reflects the overpayment was created when VA received notification in October 2013 that the Veteran did not meet his obligated projected end date. The record does not indicate there was any basis for VA to be aware of this fact prior to the October 2013 notification. Moreover, the fact that the notification was provided within a few short months after the Veteran's retirement from service indicates sufficient diligence on the part of the Navy to inform VA of this fact. As such, it does not appear the overpayment was created due to administrative error or error in judgment on the part of VA or the Navy. In view of the foregoing, the Board must find that the overpayment and resulting debt as properly created. To this extent only, the benefit sought on appeal is denied. ORDER To the extent the overpayment and resulting debt of Chapter 33 (Post-9/11 GI Bill) education benefits was properly created, the benefit sought on appeal is denied. REMAND The Board notes that while it has determined the debt was properly created in this case, the exact amount of the overpayment is not clear from the record. For example, there is evidence the appellant was sent three demand letter in November 2013, all of which listed a different amount for the overpayment that must be paid. In addition, the Board notes that while the appellant's contentions provided evidence in support of waiver of the overpayment, it does not appear this issue was formally adjudicated below. For example, he indicated on his September 2014 Substantive Appeal he could not afford to repay the overpayment, but no financial status information appears to have been requested. Therefore, the Board finds that a remand is required in order to conduct the necessary development and consider the merits of the Veteran's request for a waiver of the overpayment in this case. Accordingly, the case is REMANDED for the following action: 1. Clarify the exact amount of the overpayment in this case. 2. Provide the appellant with notification as to the elements necessary to satisfy a waiver of overpayment claim. 3. Request the appellant to submit a current financial status report, VA Form 5655. 4. After conducting any additional development deemed necessary, adjudicate the appellant's claim of entitlement to waiver of the overpayment in this case. The case should then be returned to the Board for further appellate consideration, if in order. By this remand, the Board intimates no opinion as to any final outcome warranted. The appellant 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 claim must be afforded expeditious treatment. The law requires that all claims 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.A. §§ 5109B, 7112 (West 2014). ______________________________________________ STEVEN D. REISS Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs