Citation Nr: 19192566 Decision Date: 12/10/19 Archive Date: 12/10/19 DOCKET NO. 17-17 416 DATE: December 10, 2019 ORDER Waiver of an overpayment of $6,984.00 due to the delayed removal of the Veteran's dependents is granted. FINDINGS OF FACT The Veteran notified VA of his divorce and the required removal of his dependents in August 2014; VA delayed processing the request for nearly two years resulting in an overpayment of $6,984.00. CONCLUSION OF LAW Recovery of the overpayment in the amount of $6,984.00 would be against equity and good conscience and recovery by the government is waived. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.963(a), 1.965(a). REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran had active duty service from July 1995 to June 1997 in the United States Marine Corps. The Veteran testified at a videoconference hearing before the Board in December 2019. A transcript of that hearing has been associated with the claims file. Waiver of an overpayment of $6,984.00 due to the delayed removal of the Veteran's dependents from his compensation award. The Veteran contends that his overpayment of $6,984.00 should be waived. Waiver of repayment of an indebtedness is precluded if there is any indication of fraud, misrepresentation of a material fact, or bad faith on the part of the person having an interest in obtaining a waiver. 38 U.S.C. § 5302(c). In order to determine whether waiver may be granted, it is first necessary to examine the question of whether the overpayment was created as a result of fraud, misrepresentation, or bad faith on the part of the claimant. Ridings v. Brown, 6 Vet. App. 544, 546 (1994), citing 38 C.F.R. § 1.965. The Board notes, that the Veteran was free of fraud, misrepresentation, or bad faith. He submitted notice of his divorce in a timely manner. His actions did not represent intentional behavior to obtain government benefits to which he was not entitled. As there was no willful intention on the part of the Veteran to commit fraud, misrepresent a material fact, or exercise bad faith in the creation of an overpayment that has been assessed against him, the Board’s review is limited to the issue of whether the evidence establishes that recovery of the indebtedness would be against equity and good conscience, in which case recovery of that overpayment may be waived. If there is no indication of fraud, misrepresentation, or bad faith, recovery of overpayments of benefits under laws administered by the Secretary of Veterans Affairs (Secretary) is prohibited if the Secretary determines that recovery would be against equity and good conscience. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.962. Recovery of the overpayment shall be waived if it is determined that recovery of the indebtedness would be against equity and good conscience. 38 C.F.R. § 1.963(a). 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) (1996). 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 the 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. Ridings, 6 Vet.App. at 546. The first element is “fault of the debtor,” defined as “[w]here actions of the debtor contribute to creation of the debt.” 38 C.F.R. § 1.965(a)(1). The second element is “balancing of faults.” 38 C.F.R. § 1.965(a)(2). This element requires weighing the fault of the debtor against the fault of the Department. In assessing the matter of fault with respect to the issue of waiver of overpayment, the Board finds that the Veteran furnished notice of change of dependents promptly, and that he cannot be held at fault. The Board notes also that although in most circumstances a veteran should have been aware that there was no change in his or her payments after asking for removal of their dependents. In this case, the Veteran has testified that after his divorce he entered into a rehabilitation facility and was not in control of his finances during that period. The Board finds the Veteran credible in his testimony. Therefore, the Board recognizes that the Veteran was not at fault in the creation of the overpayment. With respect to balancing of faults, as noted above the Veteran has been found to have been without fault in the creation of the indebtedness. To the extent that anyone may be said to have been at fault in the creation of the overpayment, it is VA. Specifically, VA was at fault in failing to promptly adjust the Veteran’s disability pension award until March 2016. The third element to be considered is “undue hardship,” described as “[w]hether collection would deprive debtor or family of basic necessities.” 38 C.F.R. § 1.965(a)(3). The Board notes that the Veteran has been permanently and totally disabled due to service-connected disabilities since August 2002. Arguably, in light of the Veteran’s total disability, were the VA to demand recovery of the debt, this could deprive the Veteran of basic necessities, and create an undue hardship. The fourth element to be addressed is whether recovery of the overpayment would defeat the purpose for which the benefits were intended. 38 C.F.R. § 1.965(a)(4). The benefits are intended to provide the Veteran with income given his inability to work. The overpayment would not defeat the purpose for which the benefits were intended. The fifth element to be considered is “unjust enrichment,” which means that failure to make restitution would result in unfair gain to the debtor. 38 C.F.R. § 1.965(a)(5). In this case, the Board notes that the sum at issue was provided to the Veteran over several years at a time when he was seeking to complete a rehabilitation program. Coupled with the fact that the Veteran was not at fault in the creation of the debt, to allow retention of that money under such circumstances would not result in an unfair gain. The sixth element to be considered is whether reliance on VA benefits resulted in the Veteran relinquishing a valuable right or incurring a legal obligation. 38 C.F.R. § 1.965(a)(6). The veteran has not claimed that he relinquished any right or incurred any legal obligation in reliance upon receipt of VA pension benefits, nor do the facts show such. After having reviewed the entire record, and for the reasons and based discussed above, the Board is of the opinion that the considerations of equity and good conscience, the use of which is intended to reach a result that is not unduly favorable or adverse to either the claimant or the Government, dictates that a waiver of the $6,984.00 overpayment should be granted. Under the circumstances, the Board believes that it would be unfair to the Veteran to insist upon recovery of the overpayment. To that extent, the benefit sought on appeal is granted. B. MULLINS Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board Patricia Veresink, Associate Counsel The Board’s decision in this case is binding only with respect to the instant matter decided. This decision is not precedential, and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.