Citation Nr: 20005299 Decision Date: 01/22/20 Archive Date: 01/22/20 DOCKET NO. 17-44 128 DATE: January 22, 2020 ORDER The overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $3,419.80 due to concurrent payment of Dependents’ Educational Assistance (DEA) Chapter 35 education benefits for T.C. from August 2014 to September 2015 was not properly created; to that extent, the appeal is granted. The overpayment debt of VA compensation benefits in the amount of $3,077.74 due to concurrent payment of DEA Chapter 35 education benefits for T.C. from August 2013 to July 2014, was proper; to that extent, the appeal is denied. FINDINGS OF FACT 1. In May 2014, the Veteran was notified that he was entitled to a total disability rating based on individual unemployability (TDIU), effective August 2013, and was advised that he was being paid compensation benefits for three dependents, to include T.C., who may be eligible for DEA. 2. In an August 2014 statement, the Veteran requested T.C. be removed from his compensation benefits award due to her election of Chapter 35 education benefits. A November 2014 Chapter 35 notification was associated with the record reflecting T.C.’s award was effective August 2014; a second Chapter 35 notification was added in February 2015 that amended the effective date to August 2013. 3. The retroactive reduction in compensation benefits generated an overpayment debt in the amount of $3,419.80 for the period from August 2014 to September 2015. The amended effective date for T.C.’s award of Chapter 35 education benefits resulted in an additional adjustment of the Veteran’s compensation benefits that generated an overpayment debt in the amount of $3,077.74 for the period from August 2013 to July 2014. 4. The creation of the overpayment of compensation benefits in the amount of $3,419.80 from August 2014 to September 2015 was due to sole administrative error on the part of VA; the Veteran neither had knowledge, nor reasonably should have been aware, of the erroneous award of benefits and the error was not due to the Veteran’s actions or failure to act. 5. The Veteran knew, or should have known, that the amended effective date of T.C.’s election of Chapter 35 education benefits from August 2013 to July 2014 resulted in an erroneous award of compensation benefits in the amount of $3,077.74. The overpayment debt is not a result of sole administrative error. CONCLUSIONS OF LAW 1. The overpayment of VA compensation benefits in the amount of $3,419.80 was not properly created. 38 U.S.C. §§ 1115, 5112; 38 C.F.R. §§ 3.4, 3.500, 3.650, 38 C.F.R. § 21.3023. 2. The overpayment of VA compensation benefits in the amount of $3,077.74 was properly created. 38 U.S.C. §§ 1115, 5112; 38 C.F.R. §§ 3.4, 3.500, 3.650, 38 C.F.R. § 21.3023, 21.3041(a)(2)(ii). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty from August 1984 to January 1993. In November 2019, the Veteran testified at a Board of Veterans’ Appeals (Board) hearing before the undersigned. A transcript of the hearing is associated with the record. Initially, the Board notes that this appeal addresses the retroactive removal of the Veteran’s dependent, T.C., from his VA compensation benefits award due to her election of Chapter 35 education benefits and the issue of whether the two resulting overpayment debts were properly created. Here, the Veteran perfected an appeal from a July 2017 Statement of the Case that characterized the issue as whether T.C. was properly removed as an award dependent, thereby properly creating the overpayment. Having reviewed the evidence of record, to include the Veteran’s hearing testimony, the Board finds that the issues on appeal should be characterized as stated on the title page. The overpayment debts extend from a retroactive removal of T.C. from the Veteran’s VA disability compensation benefits due to her election of DEA Chapter 35 education benefits. See 38 C.F.R. § 3.4(b)(2) (a veteran in receipt of compensation at the rate of 30 percent or more is entitled to additional compensation for a spouse, children and/or dependent parents); 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). Historically, the Veteran was advised in a May 2009 notification letter that his compensation award was adjusted to include an additional amount for a dependent child, T.C.; a February 2012 letter notified him that T.C. remained on his compensation benefits award as a school child, effective December 2011. See 38 C.F.R. § 3.4(b)(2). Thereafter, eligibility for DEA benefits was established effective August 2013 in a May 2014 rating decision. See 38 C.F.R. § 3.807(a)(2). In August 2014, the Veteran requested VA remove T.C. from his compensation benefits award because she elected Chapter 35 education benefits. Of record are two notifications of a Chapter 35 award; a November 2014 notification report that T.C. elected DEA education benefits effective August 2014 and a February 2015 notification indicated that the election was amended to be effective August 2013. See 38 C.F.R. § 21.3041(a)(2)(ii) (the period of eligibility for a child of a permanent and totally disabled veteran that is more than 18 years old but less than 26 years old at the effective date of the rating can be elected by the child as follows: the effective date of the permanent and total rating; the date VA notified the veteran of the rating; or, any date in between.). A September 2015 VA notification letter informed the Veteran that T.C. was removed as a dependent from his compensation benefits effective August 2014 and that such action generated an overpayment debt. 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 November 2015 notification letter acknowledged that T.C. was previously removed from the compensation benefits award effective August 2014, but proposed to retroactively remove T.C. from the award effective August 2013 due to the amended notice that T.C. elected Chapter 35 education benefits effective August 2013. A December 2015 first demand letter from the Debt Management Center (DMC) assessed an overpayment in the amount of $3,419.80 for the period from August 2014 to September 2015. A March 2017 notification letter informed the Veteran that T.C. was removed as a dependent from his compensation benefits effective August 2013 and that such action also generated an overpayment; the record reflects that the debt in the amount of $3,077.74 was calculated for the period from August 2013 to July 2014. The Veteran testified that the creation of the overpayment debt in the amount of $3,419.80 was solely due to VA administrative error because he timely notified VA of T.C.’s Chapter 35 election and was unaware that he continued to receive an additional amount of compensation benefits for T.C. as a dependent after he notified VA in August 2014. See 38 U.S.C. § 5112(b)(10); 38 C.F.R. § 3.500(b)(2) (finding 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). The Board finds the evidence of record supports a finding that the overpayment of VA compensation benefits in the amount of $3,419.80 assessed for the retroactive removal of T.C. as a dependent from August 2014 to September 2015 was not properly created. The Board agrees that the creation of the debt was solely due to VA administrative error. The record supports the Veteran’s assertions that neither his actions nor failure to act contributed to the erroneous award. Rather, the evidence of record indicates that the Veteran timely notified VA of T.C.’s election of Chapter 35 benefits shortly after she became eligible for DEA and the delay in adjusting the award was solely the fault of VA. Further, the record is at least in equipoise that the Veteran did not know, nor should he have known, that he was receiving an erroneous award to which he was no longer entitled. Rather, the Veteran testified that he was unaware the compensation award was not adjusted after he reported the Chapter 35 election in August 2014 because his TDIU rate was being implemented around that time and another child was being removed from his compensation benefits award. The Board finds the other evidence of record generally supports those contentions as a VETSNET award print indicated his adjusted monthly rate based on a TDIU went into effect around June 2014 and his other child was removed as a dependent effective April 2015. Moreover, the record is also devoid of any further notifications of his rate of payment or whether such included an additional amount for dependents. It is reasonable that he thought VA was aware of his current dependency status and was paying him accordingly. As such, the Board finds that the Veteran neither had knowledge of nor should have been aware of the erroneous award of benefits for T.C. after her election of Chapter 35 education benefits and the error in T.C. not being removed from August 2014 to September 2015 was not due to the Veteran’s actions or failure to act. Rather, VA failed to act. As the Board concludes that the creation of the overpayment debt of VA compensation benefits in the amount of $3,419.80 due to concurrent payment of DEA Chapter 35 education benefits for T.C. from August 2014 to September 2015 was not proper, the claim is granted. With regard to the second debt in the amount of $3,077.29, the Veteran does not contend, nor does the evidence of record indicate, that he was entitled to additional compensation benefits for a T.C. at any point from August 2013 to July 2014. Moreover, the Veteran reported at the hearing that he agreed he owed that overpayment debt. The Board concludes that the overpayment debt was validly created due to T.C.’s amended election of Chapter 35 benefits effective the date of the Veteran’s permanent and total rating that provided her eligibility for DEA. See 38 C.F.R. § 21.3041(a)(2)(ii). The Board is bound by the laws and regulations prohibiting any person from receiving additional VA compensation for a child based on school attendance that elects education assistance. See 38 C.F.R. § 21.3023(a)(1). As the Veteran knew the amended election by T.C. resulted in his receipt of compensation benefits payments to which he was not entitled for T.C. from August 2013 to July 2014, there simply is no provision of law under which the Board may grant this portion of the appeal. 38 U.S.C. § 5112(b)(10); 38 C.F.R. § 3.500(b)(2). The Board concludes that the overpayment of VA compensation benefits in the amount of $3,077.74 due to concurrent payment of DEA Chapter 35 education benefits for T.C. from August 2013 to July 2014, was properly created; to that extent, the appeal is denied. L. M. BARNARD 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.