Citation Nr: 19157167 Decision Date: 07/23/19 Archive Date: 07/23/19 DOCKET NO. 12-05 018A DATE: July 23, 2019 ORDER The overpayment of Department of Veterans Affairs (VA) pension benefits in the (recalculated) amount of $39,686.00 was properly created; the appeal is denied. The request for a waiver of the recovery of the overpayment of VA pension benefits in the (recalculated) amount of $39,686.00 was not timely filed; the appeal is denied. FINDINGS OF FACT 1. The Veteran was paid the applicable full pension benefits from March 1, 2008 through October 31, 2010. 2. The Veteran received benefits from the Social Security Administration (SSA) benefits for the period of March 1, 2008 through October 31, 2010. 3. The Veteran notified VA in March 2008 that he had been awarded SSA benefits. 4. The Regional Office (RO) did not take prompt action to adjust the Veteran’s pension benefits in light of his receipt of SSA benefits. 5. The RO retroactively adjusted the Veteran’s pension benefits; this action created an overpayment debt of $39,686.00. 6. The Veteran had knowledge of or should have been aware of the erroneous award of full pension benefits for the period of March 1, 2008 through October 31, 2010. 7. In November 2010, the Veteran was notified of the debt at issue. 8. In September 2011, the Debt Management Center received the Veteran’s request for waiver of the debt at issue. 9. There was no delay in the Veteran’s receipt of the notification of indebtedness as a result of VA or postal authority error, or due to other circumstances beyond the debtor’s control. CONCLUSIONS OF LAW 1. The overpayment of VA pension benefits in the (recalculated) amount of $39,686.00 was validly created. 38 U.S.C. §§ 101, 501, 1503, 1541; 38 C.F.R. §§ 3.2, 3.3, 3.23, 3.24, 3.271, 3.272, 3.274, 3.275, 3.350. 2. The Veteran’s request for a waiver of the recovery of the overpayment of VA pension benefits in the (recalculated) amount of $39,686.00 was not timely filed. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.963(b)(2). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty from April 1971 to April 1973. This matter comes before the Board of Veterans Appeals (Board) on appeal from a September 2011 decision issued by the VA Debt Management Center’s Committee on Waivers and Compromises. In February 2016, the Veteran testified at a Board hearing before the undersigned Veterans Law Judge. A transcript of the hearing is of record. In June 2016 and February 2018, the Board remanded the case for additional development and it now returns for further appellate review. Entitlement to a waiver of the recovery of an overpayment of VA pension benefits in the (recalculated) amount of $39,686.00, to include whether the debt was validly created. By way of background, in June 2005, the Veteran applied for VA pension benefits. In his application, he reported having no income. An August 2005 rating decision granted nonservice-connected pension benefits as of July 1, 2005. In a September 2005 letter notifying him of such decision, the Veteran was informed that the award of such benefits was based on the lack of family income. He was also provided with copy of VA Form 21-8768, which advised him that he was obligated to provide prompt notice of his income or net worth, and a failure to provide such would result in the creation of an overpayment which would be subject to recovery. It further stated that, when reporting income, the total amount and source of all income received should be reported. A March 2007 rating decision granted special monthly pension based on the need for aid and attendance effective September 13, 2006. Special monthly pension benefits are paid at a higher rate, so the Veteran’s rate of pension increased. In a letter sent the same month, the Veteran was notified of this decision and was again provided with a copy of VA Form 21-8768. The record contains documentation of a March 24, 2008, telephone call from the Veteran in which he timely reported that he had been awarded benefits from SSA that began in January 2008. Unfortunately, VA apparently did not promptly adjust his rate of pension based on his new income level. The Board notes that there was previously a discrepancy over whether the Veteran timely notified VA of his receipt of SSA benefits, but this correspondence shows that he did in fact make such report. In a letter dated in April 2010, the Milwaukee VA Pension Center notified the Veteran that it had received information from SSA that he had been receiving disability payments since December 2005 and advised him that VA was proposing to terminate his VA benefit payments effective February 1, 2006. In July 2010, the Veteran submitted a copy of his December 18, 2007, SSA award documents, which confirmed that he had been receiving SSA payments since December 2005. In a letter dated November 12, 2010, VA’s Debt Management Center notified the Veteran that he had been paid $54,829.00 more than he was entitled to receive. Consequently, he was informed that VA was going to withhold his VA benefit payments beginning February 2011 until the $54,829.00 overpayment was recouped. He was further advised that he could request a waiver by following the instructions on the enclosed Notice of Rights and Obligations document, which . On September 2, 2011, the Debt Management Center received the Veteran’s request for waiver of the $54,829.00 overpayment. In a decision dated September 20, 2011, the Committee on Waivers and Compromises denied the Veteran’s request for waiver because it was received more than 180 days after the November 12, 2010, notice to him of the overpayment and his right to request a waiver. The Veteran appealed that determination. He testified at a Board hearing before the undersigned Veterans Law Judge and, at such time, disputed the creation of the debt based on the fact that he had notified VA of the SSA award in a timely manner. The Veteran also stated that, while he was awarded SSA benefits as of December 2005, he did not begin accepting payment until January 2008. In addition, there was a retroactive payment to the Veteran made at such time. Thereafter, VA contacted the SSA, performed audits, and has recalculated the amount of overpayment at issue, which was reduced to $39,686.00. Improved pension provides for maximum income levels under which eligibility is based and this amount is offset by annual income of the recipient minus any excepted unreimbursed medical expenses. For the purpose of determining initial entitlement, or for resuming payments on an award which was previously discontinued, the monthly rate of pension payable to a beneficiary shall be computed by reducing the beneficiary’s applicable maximum pension rate by the beneficiary’s annual rate of countable income on the effective date of entitlement and dividing the remainder by 12; whenever there is a change in a beneficiary’s annual rate of countable income, the monthly rate of pension payable shall be computed by reducing the beneficiary’s applicable maximum annual pension rate by the beneficiary’s new annual rate of countable income on the effective date of the change in the annual rate of income, and dividing the remainder by 12. 38 C.F.R. § 3.273. For the purpose of computing income for improved pension, payments of any kind from any source shall be counted as income during the 12-month annualization period in which received unless specifically excluded under 38 C.F.R. § 3.272. 38 C.F.R. § 3.271(a). Income from the SSA is not specifically excludable under 38 C.F.R. § 3.272, and, therefore, is properly considered as income for computing a veteran’s improved pension benefits for the annualization period in which it was received. In addition, 38 C.F.R. § 3.272 provides that a portion of unreimbursed medical expenses may be deducted. The pertinent regulation provides that there will be excluded from the amount of an individual’s annual income any unreimbursed amounts which have been paid within the 12-month annualization period for medical expenses regardless of when the indebtedness was incurred. The Maximum Annual Pension Rate (MAPR) Maximum Annual Pension Rate (MAPR) for 2005 for a veteran with no dependents was $10,162 or $846 (rounded amount) monthly. On December 1st, VA awards a cost of living adjustment, which increases the MAPR, so the annual year runs from December 1st through November 30th of the following year. The Veteran was paid $846 monthly from July 1, 2005, when he was initially entitled to pension. The MAPR applicable for the Veteran in 2006 was $10,579 or $881 (rounded) monthly, so from December 1, 2005, the Veteran was paid $881. The Veteran, as noted, was then granted entitlement to special monthly pension which became effective October 1, 2006. The MAPR in 2006 for that benefit was $17,651 or $1470 (rounded) monthly. Therefore, from October 1, 2006, the payment was $1490 monthly. The applicable MAPR from December 1, 2006 for 2007 was $18,234 or $1519 (rounded) monthly. So, for the 12-month period, he was paid that amount. The applicable MAPR from December 1, 2007 for 2008 was $18,654 or $1554 (rounded) monthly. So, for the first months of that period, he was paid that amount. However, in 2008, the Veteran was also initially paid SSA benefits of $990.40 effective from March 1, 2008, and he received a larger retroactive payment of $18,549.00 in June 2008, so that amount considered from the 1st of the next month of July toward annual income. He also began having a recurrent annual medical expense of $1156.00 as a continuing deduction beginning March 1, 2008. Thus, for the initial four months beginning March 1, 2008, with consideration of the addition of his SSA income and the medical expense, his monthly benefit has been reduced to $613. Since he was previously paid the full amount of pension or $1554 each month, this action created an overpayment derived from those months when he was due less money. Moreover, the retroactive SSA payment ($18,549) amount plus the monthly SSA payments equaled a total of $29,836.00 for the 12-month annual year beginning July 1, 2008, which well exceeded the maximum income limit of $18,654.00 for a veteran with dependents, even considering his medical expenses. Therefore, for that 12-month period (July 2008 to July 2009), the Veteran was not entitled to any pension benefits, even though he had been paid the full amount of his pension. When his benefits were terminated for that 12-month annual year, such amount was added to the overpayment. After that annual year ended, the applicable MAPR for 2009 was $19,736 or $1644 (rounded monthly). As noted, the Veteran was paid full pension for the first half of the year when he was not due any monies due to the SSA retroactive award. As of August 1, 2009, the first date when the retroactive award was no longer in effect as the 12-month period had ended, the Veteran’s annual SSA income was $12,568.00 and he had the aforementioned recurrent medical expenses. Because the Veteran had SSA income, again he was no longer entitled to full pension benefits (even though he had been so paid) because his annual income was deducted. The new monthly amount was calculated was $644. So, when his benefits were again adjusted, this action added to the overpayment. In sum, the recalculated debt period is March 1, 2008 through October 31, 2010. The Veteran did not receive SSA before that time. Although he was due SSA benefits prior to that date, those benefits were paid via the SSA retroactive payment. The Veteran was entitled to reduced pension benefits from March 1, 2008 through June 30, 2008 as indicated; was not due pension benefits from July 1, 2009 for 12 months as indicated; and was entitled to reduced pension benefits from August 1, 2009 forward as indicated. The actions to adjust the pension benefits created an overpayment. The total recalculated debt is in the amount of $39,686.00 because the Veteran was overpaid this amount. He has been provided a detailed audit by the Agency of Original Jurisdiction (AOJ). The Veteran feels that the AOJ is at fault for the creation of the debt because the AOJ delayed in adjusting his pension benefits. Therefore, the Board has considered whether there was sole administrative error in the overpayment of the pension to the delay. 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). There was error on VA’s part in this case because action was not promptly taken when the Veteran reported his SSA income. However, sole administrative error may be found to occur only in cases where the Veteran neither had knowledge of, nor should have been aware of, the erroneous award. Further, such error contemplates that neither the Veteran’s actions nor his 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 Veteran knew he needed to report the SSA income and the record shows that he did so. He also should have therefore known that he was being overpaid when an adjustment was not made to his VA benefits. The Board recognizes that the Veteran was challenged in being legally blind and homelessness, but cannot find that he neither had knowledge of, nor should have been aware of, the erroneous award. In this regard, the Veteran has regularly pursued VA claims and corresponded with VA. The Board also recognizes that the Veteran properly told VA of the award of SSA benefits, but thereafter, he retained the full pension award, which was improper. In conclusion, while VA erred in overpaying the Veteran, the creation of the overpayment debt of $39,686.00 was proper because VA is obligated to remedy the erroneous action absent sole VA error, which, as noted previously, is not present in this case. With regard to the waiver request, under applicable criteria, a request for waiver of an indebtedness shall only be considered if made within 180 days following the date of a notice of indebtedness to the debtor. The 180-day period may be extended if the individual requesting waiver demonstrates, as a result of error by either the VA or the postal authorities, or due to other circumstances beyond the debtor’s control, there was a delay in such individual’s receipt of the notification of indebtedness beyond the time customarily required for mailing. If the debtor does substantiate there was such a delay in the receipt of the notice of indebtedness, the 180-day period shall be computed from the date of the debtor’s actual receipt of the notice of indebtedness. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.963(b)(2). As noted, in November 2010, the Veteran was notified of the debt at issue. In September 2011, the Debt Management Center received his request for waiver of the debt at issue. The record does not show that there was an error in the VA notice or that the Veteran did not receive it. The Veteran has visual problems, but he has shown that he is able to correspond with VA. During the time period dated after the November 2010 notice of the debt, the record does not show that the Veteran was unable to request a waiver due to circumstances beyond his control. At no time during this time period was he determined to be incompetent nor was a custodian or fiduciary assigned. Moreover, over the years, the Veteran pursued other VA claims and apparently understood the time limits of those claims. Thus, the Board finds that he had adequate knowledge and awareness of his responsibilities. See generally Reyes v. Nicholson, No. 03-1929 (U.S. Vet. App. July 20, 2007). Consequently, as VA did not receive the Veteran’s request for a waiver of recovery of the overpayment within 180 days from the date of notification, and no exception applies, such must be denied. Therefore, based on the foregoing, the Board finds that the overpayment of VA pension benefits in the (recalculated) amount of $39,686.00 was validly created and the Veteran’s request for a waiver of the recovery of such overpayment was not timely filed. Consequently, the appeal as to both issues must be denied. A. JAEGER Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD J. Connolly, 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.