Citation Nr: 19108807 Decision Date: 02/06/19 Archive Date: 02/05/19 DOCKET NO. 16-43 801 DATE: February 6, 2019 ORDER Waiver of an overpayment of death pension benefits in the adjusted amount of $74,362.00 is denied. FINDING OF FACT 1. An overpayment of VA pension benefits in the amount of $74,362.00 was validly created. 2. The creation of the overpayment was not the result of fraud, misrepresentation, or bad faith. 3. Collection of the overpayment of death pension benefits in the adjusted amount of $74,362.00 would not be against equity and good conscience. CONCLUSION OF LAW The criteria for waiver of an overpayment of death pension benefits in the amount of $74,362.00 have not been satisfied. 38 U.S.C. § 5302 (2012); 38 C.F.R. §§ 1.963, 1.965 (2018). REASONS AND BASES FOR FINDING AND CONCLUSION Entitlement to waiver of an overpayment of death pension benefits in the amount of $74,362.00, to include the validity of the debt. An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. See 38 U.S.C. § 5302; 38 C.F.R. § 1.962. The Board finds that the overpayment of VA pension benefits in the amount of $74,362.00 was validly created. The appellant was awarded VA pension benefits in August 2007. A copy of the August 2007 award letter shows that VA informed the appellant that “[w]e’re paying you as a surviving spouse with three dependents. Please let us know right away if there is any change in your marital status or the status of your dependents.” Annual notification letters dated in December 2007 and December 2008 informed the appellant that she was to notify VA immediately if her marital status changed. The appellant submitted a September 2015 Marital Status Questionnaire showing that she had remarried on August 11, 2008. In September 2015 the appellant was notified that pension benefits were terminated effective August 1, 2008 based on the marriage. The termination of pension benefits based on the appellant’s marriage in August 2008 was proper and created an overpayment in the initial amount of $177,655.05. The appellant contends that she believed that the benefits received had been issued directly to her children as dependents, and not to herself. She reported in August 2016 correspondence that, after the Veteran’s death, she was escorted to the VA office and was asked if she wanted DIC benefits for herself, in which case she needed to remain unmarried, or for her children, which they would be eligible for until they turned 18. She reported that she chose the children, and signed the paperwork and moved to the next office. According to the doctrine of sole administrative error, if a debt was the result solely of administrative error, no overpayment may be charged to the Veteran for the portion of the overpayment attributable to administrative error. Jordan v. Brown, 10 Vet. App. 171 (1997). However, where an erroneous award is based on an act of commission or omission by a payee or with the payee's knowledge, sole administrative error is not present. Id. In Jordan, the Court of Appeals for Veterans Claims also found that sole administrative error was not present if the payee knew, or should have known, that the payments were erroneous. The Board finds that the weight of the evidence shows that there was no administrative error on the part of VA in the creation of the overpayment debt. The record does not include paperwork showing that the appellant elected benefits for her dependents, but not for herself. While the appellant appears credible in her report that she believed that DIC benefits were awarded directly to her children, the Board finds that she should have known that the benefits were awarded to her. The August 2007 initial award letter informed her that she was being paid “as a surviving spouse,” informed her that she was receiving DIC benefits which included an additional two-year benefit “for surviving spouses” entitled to DIC who have children under the age of 18, and showed that she would continue to be in receipt of benefits in the amount of $1,067.00 a month after all of her children attained the age of 18. Thus, she should have known that she had been designated as a beneficiary. Based on the receipt of multiple notice letters, she should have known that it was her duty to report her marriage. August 2007, December 2007, and December 2008 letters all informed the appellant of her duty to report any change in marital status. The appellant contends in a July 2016 notice of disagreement and additional lay statements that she called VA to inform them of her marriage in 2008 and that she submitted a copy of her marriage license so that the education benefits she had been receiving could stop without further complications. It is presumed that government officials “have properly discharged their official duties.” United States v. Chemical Foundation, Inc., 272 U.S. 1, 14-15 (1926). The Board finds that had the appellant reported her marriage to VA, or submitted a marriage license, this would have been recorded. As the record does not show that the appellant submitted evidence of her marriage prior to September 2015, and the appellant has not submitted evidence to support her lay assertions, the Board finds that the weight of the evidence is against finding that the overpayment debt was due to sole administrative error. The appellant’s statements do raise the question of whether notice of marriage was sent by her to the wrong governmental department. In that regard, in November 2015, she reported that she notified the Army of her marriage in 2009 and was told she would have to pay back any medical expenses incurred. She stated that since “DIC was under the kids’ name, that part was not a concern.” In August 2016 correspondence, the appellant reported that after she called VA, she mailed in a copy of her marriage certificate. She stated that was told she could no longer use e-benefits or medical benefits. The appellant made reference to issues with the “DFAS” never receiving the forms but argues that it was obvious by how quickly she was removed from the other systems that the paperwork was received. In her August 2016 substantive appeal, the appellant contends that she can only prove that she cooperated with the “Army” over the past eight years. She stated, “If VA did not input my marriage certificate back in 2008, how can I prove more than I was taken out of the system? This implies knowledge on the Army’s part.” In her statements, the appellant refers to VA, the Department of the Army, and the Defense Finance Accounting System interchangeably, and in her initial November 2015 statement, she indicated that notice of marriage was sent to the Army. It is not clear whether she is aware that, for VA death pension benefits, notice of marriage needed to be sent to VA and not to another government agency. In any case, the Board finds that the appellant has not submitted evidence, outside of her lay assertions, which tends to show that she mailed or otherwise notified VA of her marriage in 2008. For these reasons, the Board finds that the debt was not due to sole administrative error. Finally, the appellant contends that while she understood that benefits were not due to her because of her remarriage, benefits made in support of her children should not have been stopped. In June 2016, adjustments were made to the appellant’s award, and DIC benefits had been granted to her three dependent children directly, effective August 1, 2008. The June 2016 decision by the Debt Management Center shows that these dependency adjustments effectively reduced the appellant’s overpayment debt to $74,362.00. The adjusted amount represents the amount overpaid to the appellant based on her remarriage. The Board finds that the adjusted overpayment in the amount of $74,362.00 was validly created based on the termination of the appellant’s award due to remarriage. The Board will next address the appellant’s request for a waiver. Any indebtedness can be waived only when the following factors are determined to exist: 1) 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, 2) collection of such indebtedness would be against equity and good conscience. 38 U.S.C. § 5302 (c); 38 C.F.R. §§ 1.963, 1.965. Thus, a finding of fraud, misrepresentation, or bad faith precludes a grant of a waiver of recovery of the overpayment. The controlling legal criteria provide that the standard of “equity and good conscience” will be applied when the facts and circumstances in a particular case indicate the need for reasonableness and moderation in the exercise of the Government’s rights. 38 C.F.R. § 1.965(a). The decision reached should not be unduly favorable or adverse to either side. The phrase equity and good conscience means arriving at a fair decision between the obligor and the U.S. Government. In this determination, the Board must consider the following elements, which are not intended to be all inclusive: (1) Fault of debtor. Where actions of the debtor contribute to the creation of the debt. (2) Balancing of faults. Weighing the fault of the debtor against the VA’s fault. (3) Undue hardship. Whether collection would deprive the debtor or his or her 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 an 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 U.S.C. § 5302(c); 38 C.F.R. § 1.965(a). The Board finds that the overpayment was not the result of fraud, misrepresentation, or bad faith on the part of the appellant. 38 U.S.C. § 5302 (c); 38 C.F.R. §§ 1.963(a), 1.965(b). The appellant reported that she believed that the DIC benefits she was receiving were issued in her children’s names. She also contends that she notified VA of her marriage by phone in 2008, and sent a copy of her marriage license, though there is no evidence of this. The appellant did not appear to know that she was in receipt of benefits she was not entitled to. Thus, the evidence does not establish fraud, misrepresentation, or bad faith on the part of the appellant in the creation of the overpayment debt. As the evidence does not establish fraud, misrepresentation, or bad faith, the Board will next determine if a waiver of recovery of the VA indebtedness is warranted on the basis of equity and good conscience under 38 U.S.C. § 5302 (a); 38 C.F.R. §§ 1.963 (a), 1.965(a) (2018). The first two elements for consideration under 38 C.F.R. § 1.965(a) are the fault of the debtor, and balancing the fault of the debtor and VA. The record shows that the appellant did not inform VA of her marriage until September 2015, and while she contends that she had notified VA of the marriage in 2008, this was not evidenced by the record. Again, it is presumed that government officials “have properly discharged their official duties and the appellant has not submitted any evidence to rebut this presumption. See United States v. Chemical Foundation, Inc., 272 U.S. 1, 14-15 (1926). It was the appellant’s responsibility to provide notice of her marriage to VA in a timely fashion so that her entitlement to benefits could be properly determined. VA was not at fault in the creation of the overpayment of benefits because they were not shown to be aware of the marriage. As to the element of undue financial hardship, the regulation provides that consideration should be given to whether collection of the indebtedness would deprive the debtor or family of the basic necessities. A March 2016 Financial Status Report shows that the appellant and her spouse had a monthly income of $5,874.00. She identified monthly expenses in the amount of $1,600.00 for rent or mortgage payments, $1,200.00 for food, $280.00 for utilities and heat, $190.00 for car insurance, $200.00 for cell phones, and $234.00 for health insurance. Monthly expenses totaled $3,704.00. The Board notes that while the appellant also listed amounts paid toward college funds, internet, violin lessons, and monthly debts for credit card bills and home repair expenses, after taking care of basic necessities such as shelter and food, the appellant is expected to accord a debt to VA the same regard given to any other debt. The Board finds that the appellant’s family income of $5,874.00 exceeded total monthly expenses represented by rent or mortgage, food, utilities, and other necessities. While the appellant reported in her September 2016 substantive appeal that expenses she listed did not include clothing, activity costs, dental and medical bills, and that her remaining balance after bills was barely enough to cover her expenses with seven children in the household, the Board finds that the appellant, nonetheless met basic necessities. Additional assets, to include $1,200.00 cash in the bank, $200,000.00 in a retirement fund, and $120,000.00 in mutual funds were also identified. Given the income and expense information and the appellant’s assets, the Board finds that the collection of the debt would not deprive her or her family of the basic necessities of life. With regard to the other elements pertaining to the principles of equity and good conscience as set forth by 38 C.F.R. § 1.965 (a), the Board finds that recovery of the overpayment debt would not defeat the purpose for which benefits were intended. VA death pension benefits designed to be an income-based benefit, however survivor benefits are limited by law to a surviving spouse who has not remarried. See 38 U.S.C. § 101 (3) (2012); 38 C.F.R. §§ 3.50, 3.55 (b) (2018). As such, repayment based on marriage would not defeat the purpose for which benefits are intended. The Board finds that the failure of the Government to insist upon its right to repayment of the assessed overpayment would result in unjust enrichment of the appellant and there is no evidence showing that she relinquished a valuable right or incurred any legal obligations resulting from reliance on VA benefits. Balancing the factors discussed above, to include the creation of the debt, the lack of undue financial hardship, and unjust enrichment by the appellant, the Board finds that the recovery of the overpayment in the amount of $74,362.00 would not be against the principles of equity and good conscience. See 38 C.F.R. §§ 1.963, 1.965 (2018). K. PARAKKAL Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD Christine C. Kung