Citation Nr: 20004027 Decision Date: 01/16/20 Archive Date: 01/16/20 DOCKET NO. 16-33 191 DATE: January 16, 2020 REMANDED The issue of entitlement to waiver of recovery of an overpayment of disability compensation benefits due to retroactive reduction of benefits pursuant to a May 2013 rating decision (June 2013 notification date), including discontinuance of special monthly compensation for loss of use of the lower extremities, discontinuance of a 100 percent evaluation for loss of the lower extremities, discontinuance of specially adapted housing and automobile and adaptive equipment, is remanded. The issue of timeliness of a request for waiver of recovery of an overpayment of disability compensation benefits due to removal of a spouse from an award is remanded. REASONS FOR REMAND The Veteran honorably served on active duty from November 1966 to August 1969. This matter is before the Board of Veterans’ Appeals (Board) on appeal from a January 2016 administrative decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Milwaukee, Wisconsin. The Board notes that the following issues are presently before the Board but NOT addressed in this decision: (1) whether reduction from a 100 percent evaluation for loss of use of the lower extremities to a 40 percent rating for peripheral neuropathy of each lower extremities, effective August 3, 2008, was proper; (2) whether discontinuance of special monthly compensation based on loss of use of the lower extremities was proper; and (3) whether the discontinuance of entitlement to specially adapted housing and assistance with the purchase of an automobile and adaptive equipment was proper. However, these issues cannot be addressed at this time in this decision and will be addressed in a Board decision under separate cover. As explained below, the Board finds the Veteran has raised the issue of the proper creation of the debt, to include a dispute on the amount of debt owed. Resolution of the creation issue must precede consideration of the waiver issue and must include consideration as to whether the Veteran was either legally entitled to the benefits in question. 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 Committee on Waivers and Compromises). A debtor may dispute the amount or existence of a debt, which is a right that may be exercised separately from a request for waiver or at the same time. 38 C.F.R. § 1.911(c)(1). The Veteran has been in receipt of VA compensation benefits since June 1999 and continues to receive them. The Veteran was found to be entitled to loss of use of the bilateral lower extremities from January 2008 to August 2008, with special monthly compensation for loss of use of both feet, specially adapted housing, and automobile and adaptive equipment, which were all retroactively discontinued in a May 2013 rating decision. See May 2013 Rating Decision; see also June 2013 Notification Letter (notifying the Veteran of overpayment and telling him that VA will inform the Veteran of how much and how to repay in future correspondence). The record does not reflect that the Veteran has ever been sent a demand letter with respect to these debts. See January 2016 Decision on Waiver of Indebtedness (VA Form 4-1837). However, the Veteran has submitted a letter from the Department of the Treasury indicating that they are collecting benefits on behalf of VA and has reported that the Debt Management Center (DMC) has found that he is not receiving benefits, which is presumed to be related to Treasury’s involvement. See November 2015 Veteran’s Statement in Support of Claim (VA Form 21-4138) and Attachments. Notably, the Veteran has repeatedly disputed the debt origins (the reduction and discontinuances) and decision on this has not been finally adjudicated. See, e.g., January 2017 Board Remand; June 2017 Supplemental Statement of the Case. In response to receiving the Department of the Treasury notice, the Veteran specifically stated to VA that he fully disputes the origin and that he “contend[s] that [he] did nothing wrong and that any debt is in fact invalid.” See November 2015 Veteran’s Statement in Support of Claim (VA Form 21-4138). As such, further appellate review by the Board on the Veteran’s waiver claim must be deferred pending formal adjudication of a threshold determination on the propriety of the creation of the debt prior to a decision on the waiver of indebtedness. Lastly, regarding the issue of timeliness of a waiver of overpayment of disability compensation benefits due to removal of a spouse from an award, the Veteran submitted a timely notice of disagreement (NOD) with the January 2016 administrative decision finding his waiver untimely. See January 2016 NOD; see also January 2016 Veteran’s Statement in Support of Claim (VA Form 21-4138) (sent with the NOD and disputing the matter of timeliness). A statement of the case has not yet been issued on this specific issue. A remand is required for the AOJ to issue a statement of the case. 38 C.F.R. § 20.200. The matter is REMANDED for the following action: 1. Obtain and associate with the file all relevant records from the Debt Management Center (DMC), to include all demand letters sent to the Veteran and any records relating to Department of Treasury referral. 2. After completion of directive one, adjudicate the issue of whether the overpayment was properly created, to include the amount of debt owed. This may require that the adjudication be deferred until a final decision is reached on the matter of the propriety of the reductions and discontinuances involved. The Veteran is to be advised that a timely notice of disagreement and 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. 3. After the issue regarding whether the overpayment was properly created is resolved to the Veteran’s satisfaction, perfected on appeal, or finally denied, issue a supplemental statement of the case (SSOC) that addresses the waiver issue, if appropriate (i.e., if creation of the overpayment debt was valid). [CONTINUED ON THE NEXT PAGE]   4. Send the Veteran and his representative a statement of the case that addresses the issue of timeliness of a request for waiver involving an overpayment for a reduction due to removal of a spouse from an award. If the Veteran perfects an appeal by submitting a timely VA Form 9, the issue should be returned to the Board for further appellate consideration. VICTORIA MOSHIASHWILI Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board S. Lambert, 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.