Citation Nr: 20002548 Decision Date: 01/14/20 Archive Date: 01/10/20 DOCKET NO. 15-17 301 DATE: January 14, 2020 REMANDED The issue of entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $9,263.34 due to concurrent payment of Dependents’ Educational Assistance (DEA) Chapter 35 education benefits is remanded. REASONS FOR REMAND The Veteran served on active duty from March 1969 to July 1971. He received a Purple Heart Medal, among other awards and decorations. This claim is before the Board of Veterans’ Appeals (Board) on appeal from a May 2014 decision on waiver of indebtedness by the VA Committee on Waivers and Compromises (COWC). Initially, the Board notes that the Veteran was scheduled for a hearing before the Board in March 2016; a few days prior, a Report of General Information indicated the Veteran requested the hearing be rescheduled due to a conflicting medical procedure. The record reflects that the Veteran was noted as a no show for his hearing and his representative submitted an informal hearing presentation in July 2019. In December 2019, the Board sent the Veteran a letter to clarify whether he still desired a hearing before the Board. The Veteran did not respond. Accordingly, the Board deems the Veteran’s hearing request withdrawn. See 38 C.F.R. § 20.704(d). The Veteran has disagreed with a March 2014 first demand letter assessing the debt underlying his claim for waiver. See 38 C.F.R. § 1.911(c)(3) (A debtor has the right to informally dispute the existence or amount of the debt and to appeal the VA decision underlying the debt; these rights may be exercised separately or simultaneously). As additional action must be undertaken to adjudicate the threshold determination on the propriety of the creation of the debt, further appellate review by the Board on the Veteran’s waiver claim must be deferred. Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991) (“when a Veteran raises the validity of the debt as part of a waiver application... it is arbitrary and capricious and an abuse of discretion to adjudicate the waiver application without first deciding a veteran’s challenge to the lawfulness of the debt asserted against him or her”); VAOPGCPREC 6-98 (July 24, 1998) (holding that when a veteran challenges the validity of the debt and seeks waiver of the debt, the [Regional Office] must first fully review the debt’s validity and, if the office believes the debt to be valid, prepare a written decision fully justifying the validity of the debt before referring the waiver request to the COWC). Historically, a February 2013 notification letter reported that the Veteran’s compensation award was adjusted to include an additional amount for a school child, B.L., from November 2012 until July 2013. The letter advised the Veteran that he was also in receipt of an additional amount for two other dependent children, D.L. and T.L. See 38 C.F.R. § 3.4(b)(2). Thereafter, B.L. elected Chapter 35 DEA benefits, effective August 2013. Additionally, a December 2013 Chapter 35 notification reported that T.L. elected Chapter 35 DEA education benefits effective January 2011. A December 2013 notification letter informed the Veteran of a proposal to retroactively reduce his compensation benefits due to T.L.’s election of Chapter 35 DEA education benefits. See 38 C.F.R. § 21.3023(a)(1) (an election of educational assistance is a bar to increased rates of compensation on account of the child based on school attendance). A March 2014 notification letter advised the Veteran that T.L. was removed as a dependent from his compensation benefits award, effective January 2011, and that such action generated an overpayment. A March 2014 first demand letter from the Debt Management Center (DMC) assessed an overpayment in the amount of $9,263.34. The Veteran requested waiver of the overpayment debt. He contended that repayment of the debt would cause severe hardship but also reported in May 2014 that he was unaware that he was precluded from the additional amount of compensation benefits due to award of education benefit payments to his children and requested a hearing on the validity of the debt. See 38 C.F.R. § 1.911(c) (listing the debtor’s rights and remedies). In his July 2014 notice of disagreement with the May 2014 decision on waiver of indebtedness on appeal, he also indicated that he already had explained why the debt should not have been incurred and requested an accounting of the amount of debt owed. Id. The COWC acknowledged that the Veteran was disputing the creation of the debt, to include the amount of debt owed, in an October 2014 memorandum. A December 2014 audit report validated the amount of debt owed due to concurrent payment of Chapter 35 education benefits to T.L. A May 2015 VA Form 9 continued the Veteran’s assertions that the amount of debt owed was incorrect; he also continued to request explanation for the overpayment at a July 2015 informal hearing conference. Based on the above, the Board finds the Veteran clearly expressed disagreement with the propriety of the overpayment debt and construes the Veteran’s statements as a timely notice of disagreement (NOD) with whether the underlying debt was validly created in the March 2014 first demand letter. 38 C.F.R. § 19.26(a) (2013) (when a timely NOD is filed, the agency of original jurisdiction (AOJ) must reexamine the claim and determine whether additional review or development is warranted. If no further review or development is required, or after further review or development is completed, the AOJ will prepare a statement of the case (SOC) unless the disagreement is resolved by a grant of the benefits sought on appeal or the NOD is withdrawn by the claimant); 38 C.F.R. § 1.911(c); see also VAOPGCPREC 2-90 (July 17, 1989). The matter is REMANDED for the following action: Issue an SOC with respect to the claim of whether the overpayment in the amount of $9,263.34 due to concurrent payment of DEA Chapter 35 education benefits was properly created. The Veteran is to be advised that a substantive appeal must be filed in order to perfect an appeal on the issue of whether the overpayment debt was properly created. 38 C.F.R. § 20.302(a)-(b). Only if the appeal is timely perfected is the issue to be returned to the Board. KEITH W. ALLEN Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board A. Odya-Weis 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.