Citation Nr: 20031808 Decision Date: 05/06/20 Archive Date: 05/06/20 DOCKET NO. 17-34 145 DATE: May 6, 2020 ORDER The overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $5,467.72 was not properly created, and the appeal is granted. FINDINGS OF FACT 1. In a February 1999 letter, the RO informed the Veteran that he had been awarded additional benefits for dependents and he was informed that he should promptly inform that office of VA of any change in the status of his dependents. 2. In September 2013, the Veteran and his spouse, S., divorced. 3. A September 2013 VA Form 27-0820, Report of General Information, noted that that the Veteran called to report his divorce and asked that S. be removed from his award. 5. In September 2016, the RO removed S. from the Veteran’s award of VA disability compensation benefits effective October 1, 2013; this action of the RO resulted in the creation of an overpayment in the amount of $5,467.72. 6. The Veteran neither had knowledge of nor should have been aware of the erroneous award of benefits for his spouse after their divorce and the error in the spouse not being removed was not due to the Veteran’s actions or failure to act. CONCLUSION OF LAW The overpayment of VA compensation benefits in the amount of $5,467.72 was not properly created. 38 U.S.C. §§ 5110, 5111, 5112; 38 C.F.R. §§ 3.401, 3.501. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran had active service from December 1980 to March 1981. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from a September 2016 decision by the Department of Veterans Affairs (VA) Regional Office (RO), which removed his former spouse, S., from his award. The Veteran testified before the undersigned at a February 2020 Travel Board hearing. Whether the overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $5,467.72 was properly created The law provides for the rates of disability compensation, and for payment of additional compensation for dependents of veterans who are at least 30 percent disabled. 38 U.S.C. §§ 1114 (c), 1115, 1134, 1135. The Veteran was, at all times relevant to this issue and the period of time in question, rated appropriately to receive additional compensation for a spouse. In a February 1999 letter, the RO informed the Veteran that he had been awarded additional benefits for dependents and he was informed that he should promptly inform that office of VA of any change in the status of his dependents. In September 2013, the Veteran and his spouse, S., divorced. A September 2013 VA Form 27-0820, Report of General Information, from the same date as their final divorce decree noted that that the Veteran called to report his divorce and asked that S. be removed from his award. However, thereafter no action was taken to remove her from his award. In July 2016, the RO removed S. from his award of VA disability compensation benefits effective “the first of the month following the month for which VA last paid [him]” — so effective August 1, 2016 — because he did not give the date or location of his divorce. In August 2016, the Veteran submitted a new Declaration of Status of Dependents form with the date and place of his divorce, as well as a copy of his divorce decree. The RO then sent a new September 2016 notification letter informing the Veteran that S. had been removed from his award effective October 1, 2013, the first day of the month following their divorce, based on the information the Veteran submitted. This action of the RO resulted in the creation of an overpayment in the amount of $5,467.72, as indicated by a November 2016 letter from the Debt Management Center. The Veteran maintains that the error in this case was on VA’s part, as he promptly notified VA of his divorce and was never informed that he needed to provide additional information, including the date and location of his divorce. The Board has considered whether there was sole administrative error in the payment of the additional benefits for a spouse due to the delay. Under 38 U.S.C. § 5112 (b)(10), 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. See also 38 C.F.R. § 3.500 (b)(2). “Stated another way, when an overpayment has been made by reason of an erroneous award based solely on administrative error, the reduction of that award cannot be made retroactive to form an overpayment debt owed to VA from the recipient of the erroneous award.” Erickson v. West, 13 Vet. App. 495, 499 (2000). The Board notes, however, that sole administrative error may be found to occur only in cases where the Appellant neither had knowledge of, nor should have been aware of, the erroneous award. Further, such error contemplates that neither the Appellant’s actions nor his failure to act contributed to the erroneous award. 38 U.S.C. § 5112 (b)(10); 38 C.F.R. § 3.500 (b)(2). In this case, the Veteran notified VA promptly of his divorce – in fact, he contacted VA the date of the final divorce decree. The RO failed to act, to include notifying the Veteran that they needed additional information from him regarding his divorce. The record is devoid of any further notifications of his rate of payment or that he was being paid for a spouse. It is reasonable that he thought VA was aware of his current dependency status after notifying them and was paying him accordingly. With the paucity in the record of notices to the Veteran, the Board finds that the Veteran neither had knowledge of nor should have been aware of the erroneous award of benefits for his spouse after their divorce and the error in the spouse not being removed was not due to the Veteran’s actions or failure to act. Rather, it was solely due to the RO’s failure to act, which in this case constitutes sole VA administrative error. The Board has considered the holding in Dent v. McDonald, 27 Vet. App. 362, 374 (2015), that it is not generally considered administrative error for VA to continue sending monthly payments after the Veteran notified VA of his changed status, and VA’s delay in administratively processing the adjustment to the rate of compensation is also not considered administrative error. In this case, however, there was not merely a delay on the part of VA in adjusting the rate of compensation. Instead, VA failed to acknowledge the Veteran’s report and failed to act for nearly three years. Accordingly, the Board finds that under the circumstances of this case, the appeal must be granted. In addition, to the extent that the Veteran requested a waiver of the recovery of the overpayment, that matter is moot. DAVID L. WIGHT Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board A. Dean, 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.