Citation Nr: 20005128 Decision Date: 01/23/20 Archive Date: 01/22/20 DOCKET NO. 16-47 925 DATE: January 23, 2020 ORDER The reduction in Department of Veterans Affairs (VA) disability compensation for the recouping of military drill pay for Fiscal Years (FYs) 2010, 2011 and 2012 and active duty pay for FYs 2012 through 2015 was proper, and the appeal is denied. REFERRAL The issue of entitlement to waiver of recovery of an overpayment of compensation benefits in the amount of $17,737.83 is referred. The Board acknowledges that the Veteran has requested a waiver of the debt in the amount of $17,737.83. The Committee on Waivers and Compromises (COWC) has deferred adjudicating this issue pending a determination on the validity of debt, as required by law. See Schaper v. Derwinski, 1 Vet. App. 430 (1991); COWC Memorandum dated March 23, 2012. The Board does not yet have jurisdiction over this issue, as it has never been adjudicated by the Agency of Original Jurisdiction. The issue must be referred to COWC. FINDING OF FACT The Veteran received both drill pay and VA compensation benefits in violation of 10 U.S.C. 12316 and 38 U.S.C. § 5304(c) from the time period beginning on April 22, 2010 and ending on August 31, 2012. CONCLUSION OF LAW The overpayment in disability compensation in the amount of $17,737.83 was properly created. 10 U.S.C. § 12316; 38 U.S.C. §§ 5103, 5103A, 5107, 5304(c), 5110(b); 38 C.F.R. §§ 3.102. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from December 1985 to November 1996 in the Air Force and from November 2004 to January 2006, April 2008 to April 2010 and September 2012 to January 2015 in the Army. This matter comes before the Board of Veterans’ Appeals (Board) on appeal of a December 2014 determination by the VA Debt Management Center (DMC). On his Form 9 appeal, the Veteran requested a travel board hearing with a Veterans Law Judge. However, the Veteran cancelled the November 2019 hearing and the Board considers the hearing request withdrawn at this time. See 38 C.F.R. § 20.704(d). An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits in excess of the amount to which he or she was entitled. 38 C.F.R. § 1.962. Whenever the Secretary finds that an overpayment has been made to a veteran or eligible person, the amount of such overpayment shall constitute a liability of such veteran or eligible person to the United States. See Mountford v. Shinseki, 24 Vet. App. 443, 450, n.6 (2011) (citing 38 U.S.C. §§ 3685, 5314). To establish improper creation of an overpayment, i.e., an invalid debt, evidence must show that the Veteran was legally entitled to the VA compensation benefits at issue, or, if he was not legally entitled to these benefits, then it must be shown that VA was solely at fault for the erroneous payment of excess benefits. 38 U.S.C. § 5304(c) prohibits the receipt of VA disability compensation benefits for any period for which the person receives active service pay. See 38 C.F.R. § 3.654, 3.700. This includes active duty pay, drill, and active duty for training payments, and inactive duty for training payments made to Reservists and members of the National Guard. Reservists may waive their pension, compensation, or retirement pay for periods of field training, instruction, other duty, or drills. A waiver may include prospective periods and contain a right of recoupment for the days for which the reservist did not receive payment for duty by reason of failure to report for duty. 38 C.F.R. § 3.700(a)(1). The Veteran was being simultaneously paid for active duty and drill pay adjustment days while collecting disability benefits in FYs 2010, 2011 and 2012, resulting in an overpayment. After adjusting for periods of active duty service, the Veteran was paid for 50 drill days in FY 2010, 107 days in FY 2011 and 81 days in FY 2012 while collecting disability benefits. This overpayment was deducted from the Veteran’s disability compensation in FY 2015. However, the remaining disability compensation paid to the Veteran for FY 2012 through FY 2015 came while he was on active duty with the Army. The overpayment created by the Veteran’s active duty status from September 1, 2012 through January 5, 2015 totals $17,737.83. After careful calculation, the Board agrees that the overpayment in the amount of $17,737.83 has been validly created. The Veteran received monetary benefits (VA compensation) in addition to military drill and active duty pay, to which he was not legally entitled. The overpayment was not solely due to VA administrative error. Sole administrative error entails no knowledge or fault on the part of the debtor. See Jordan v. Brown, 10 Vet. App. 171 (1997) (sole administrative error is not present if the payee knew, or should have known, that the payments were erroneous). The Veteran first claims that he had been assigned to the Warrior Transition Unit for physical rehabilitation and not training and, as such, he believes he was entitled to both the military and VA payments. Second, the Veteran alleges VA was at fault as he properly informed VA of his duty status with a VA Form 21-8951 in 2011. Third, the Veteran has claimed that he was unaware that he could not receive disability compensation and drill pay or active duty pay. However, the record reflects that the Veteran received military pay for both active duty and drill pay adjustment days while collecting disability benefits in FYs 2010, 2011 and 2012. This is prohibited by statute. Second, the record reflects that VA sent the Veteran VA Form 8951 (Notice of Waiver of VA Compensation or Pension to Receive Military Pay and Allowances) in October 2011 and September 2012 after receiving information that he had received military pay, but the Veteran did not sign and return the form reflecting his election of VA or military pay. The Veteran and his superior officer both signed the Notice of Waiver forms in 2013 and the Veteran indicated he wished to suspend his disability benefit payments and instead accept his drill pay for the requisite period. The Veteran returned a Notice of Waiver for FY 2015 stating that he participated in zero drill days and received no military pay during this period, but his DD-214 reflects that he was discharged from active duty in January 2015. The Board finds that the Veteran understood he could not be compensated simultaneously for drill days and his service-connected disabilities, and that VA was not at sole fault for the creation of the debt. Regardless, the Veteran’s actual knowledge of the applicable law does not affect the validity of the debt. Morris v. Derwinski, 1 Vet. App. 260, 265 (1991) (“[R]egulations are binding on all who seek to come within their sphere, ‘regardless of actual knowledge of what is in the [r]egulations or of the hardship resulting from innocent ignorance.’“; “[t]he Supreme Court has held that everyone dealing with the Government is charged with knowledge of federal statutes and lawfully promulgated agency regulations) (quoting Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380, 385 (1947). However, his lack of knowledge regarding his active duty status and VA benefits may be considered a factor in the analysis for waiver of overpayment, which is referred to COWC for consideration. T. MAINELLI Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board K. C. Schumacher, 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.