Citation Nr: 20046677 Decision Date: 07/13/20 Archive Date: 07/13/20 DOCKET NO. 19-11 052 DATE: July 13, 2020 ORDER The overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $8,646.34 was properly created; the appeal is denied. REMANDED Entitlement to a waiver of recovery of an overpayment of VA compensation benefits in the amount of $8,646.34 is remanded. FINDINGS OF FACT 1. The Veteran and S.F. married in December 1995. 2. In December 2011, the Veteran and S.F. divorced; the Veteran was not legally entitled to additional benefits based on S.F. being a dependent spouse from that time forward. 3. The Veteran and V.T. married in February 2012. 4. The Veteran did not timely notify VA of his December 2011 divorce from S.F. or of his February 2012 marriage to V.T. 5. The Veteran notified VA of his December 2011 divorce from S.F. and his February 2012 marriage to V.T., in February 2017. 6. The overpayment in the amount of $8,646.34 was not solely the result of VA administrative error. CONCLUSION OF LAW The overpayment of VA compensation benefits in the amount of $8,646.34 was validly 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 served on active duty from August 1984 to September 2006. This appeal to the Board of Veterans’ Appeals (Board) arose from a March 2017 notification letter based on mandated review for dependent verification received on September 1, 2016. The letter reflects the removal of the Veteran’s former spouse, S.F., as a dependent, effective January 1, 2012 due to divorce on December [REDACTED], 2011, and the addition of the Veteran’s current spouse, V.T., as a dependent, effective March 1, 2017 based on receipt of VA Form 21-686c – Declaration of Status of Dependents. In March 2017, the Veteran filed a notice of disagreement (NOD) with the assigned effective date. In January 2019, the RO issued a statement of the case (SOC), and the Veteran filed a VA Form 9, substantive appeal, in March 2019. 1. Whether the overpayment debt of VA compensation benefits in the amount of $8,646.34 was valid The issue of the validity of a debt is a threshold determination that must be made in a benefits overpayment debt collection matter. Schaper v. Derwinski, 1 Vet. App. 430 (1991). An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. 38 U.S.C. § 5302; 38 C.F.R. § 1.962. An additional amount of compensation may be payable for a spouse, child, and/or dependent parent where a Veteran is entitled to compensation based on disability evaluated as 30 percent or more disabling. 38 C.F.R. § 3.4(b)(2). If a veteran and his or her dependent spouse divorce, the veteran’s VA compensation award is reduced by the amount that was being paid on behalf of the dependent spouse. The effective date of discontinuance of the spouse’s compensation award, for divorce or annulment on or after October 1, 1982, is the last day of the month in which the divorce or annulment occurred. 38 U.S.C. § 5112(b)(2); 38 C.F.R. § 3.501(d)(2). Individuals to whom benefits are being paid are required to certify, when requested, that any or all of the eligibility factors which established entitlement to the benefit being paid continue to exist. 38 C.F.R. § 3.652(a). When the required certification is received, benefits will be adjusted, if necessary, in accordance with the facts found. 38 C.F.R. § 3.652(b). In order for the Board to determine that an overpayment was not properly created, thereby invalidating the debt, the record must establish the Veteran was legally entitled to the benefits in question or if not legally entitled, then it must be shown that VA was solely responsible for the Veteran being erroneously paid compensation benefits. Administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law. VAOPGPREC 2-90 (July 17, 1989), 55 Fed. Reg. 27,757 (1990). Sole administrative error connotes the Veteran neither had knowledge of nor should have been aware of the erroneous award. Further, neither the Veteran’s actions nor his or her failure to act must have contributed to payment pursuant to the erroneous award. 38 U.S.C. § 5112(b)(9), (10); 38 C.F.R. § 3.500(b)(2); 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). An administrative error resulting in an overpayment will not be classified as a VA administrative error or error in judgment if the error is “based on an act of commission or omission by the beneficiary, or with the beneficiary’s knowledge.” Dent v. McDonald, 27 Vet. App. 362, 380 (2015) (citing 38 U.S.C. § 5112(b)(9); see 38 C.F.R. § 3.500(b)(1); VAOGCPREC 2-90 (Mar. 20, 1990)). Thus, a finding of sole administrative error requires not only error on the part of VA, but that the beneficiary is unaware that the payments are erroneous. The Veteran asserts that an overpayment of VA disability compensation in the amount of $8,646.34 based on the removal of his dependent spouse, was not properly created. On his August 2006 Application for Compensation or Pension, the Veteran listed his spouse as S.F., and in his August 2007 Application Request to Add and/or Remove Dependents he stated that he married S.F. in December 1995. In the June 2008 notification letter, the Veteran was informed that his payments included an additional amount for his spouse, S.F., and his son, and that the Veteran should advise right away if there is any change in the status of his dependents. In subsequent notification letters in February 2013, October 2013, and November 2014, the Veteran was notified that he was being paid as a Veteran with two dependents, his spouse, S.F., and his son. The notification letters specified that the Veteran should advise right away of any change in the status of his dependents. In an October 2016 rating decision, the Veteran was determined to be not competent. In the October 2016 notification letter, the Veteran was advised that he would continue to receive his monthly benefit check until the VA appoints a fiduciary for him. In a January 11, 2017, VA 21-555 Certificate of Legal Capacity, V.T. was appointed as the Veteran’s legal custodian. Correspondence regarding the appointment of V.T. as the Veteran’s fiduciary does not indicate that V.T. is the Veteran’s spouse. In a January 2017 letter, the RO advised the Veteran that the compensation he receives for his service-connected disability includes an additional amount for his spouse and child and that he is responsible for reporting any change in the number of dependents. The RO advised that to show continued entitlement to this amount, a VA Form 21-0538, Status of Dependents Questionnaire must be completed and returned, and that if the number of dependents has changed due to either the loss or addition of a dependent, payments will be adjusted accordingly but if there are no changes, benefits would continue at the present rate. In February 2017, in response to the January 2017 notification, the Veteran filed an Application Request to Add and/or Remove Dependents, indicating that he and S.F. divorced in December 2011, and that he and V.T. married in February 2012. At this time, the Veteran provided a copy of the divorce decree for his marriage with S.F. on December [REDACTED], 2011, as well as a copy of the marriage license between he and V.T. indicating that they were married on February [REDACTED], 2012. In a March 2017 letter, VA advised the Veteran that based on a mandated review for dependent verification received on September 1, 2016, the Veteran’s records revealed that a change occurred in his marital status. The letter indicates that VA removed S.F. from the Veteran’s award, effective January 1, 2012, and added his current spouse, V.T., as of March 1, 2017. The removal resulted in an overpayment debt. The Debt Management Center (DMC) assessed a debt of $8,646.34, noting the Veteran was incompetent and had a fiduciary. In his March 2017 notice of disagreement (NOD) and an April 2017 statement, the Veteran stated that it came to his attention that he had incurred a debt with the VA for $8,646.34. He believed the amount to be in error because his new marriage license and divorce decree were submitted in February 2012. He stated that he was solely under the impression that VA had received this documentation at that time because he had continued receiving his current benefits. He stated that his current wife has been listed as his fiduciary and caregiver, and thus believed that VA was in receipt of documentation conferring her as his legal spouse. He stated that he and his spouse realized that there may be a problem with his dependent status after receiving notification in March 2017 from VA, and then resubmitted the divorce decree and marriage license. He indicated that he was completely unaware that his divorce decree and current marriage certificate had not been received by VA, and that it was not due to any fault, negligence, or ill intent to defraud or deceive the VA on his behalf. He stated that he had no reason to believe that this was a lingering and outstanding issue because he had not noticed any interruption in his benefits and was legally remarried with the only exception of 45 days between his divorce and remarriage. He stated that he has always complied in a timely manner with required administrative documentation and should not be unjustly burdened or penalized with the astronomical debt due to no fault of his own. In April 2017, the Veteran stated that his basis for the dispute is that the period in question does not appear to warrant an overpayment of his VA benefits, as the change in his marital status did not change the outcome in the amount of compensation that he was and has been receiving. Based on the evidence of record, the Board finds that the creation of the debt is valid. First, the Veteran was not legally entitled to the benefits he received based on his marriage to S.F. after their divorce. As discussed above, the record indicates that the Veteran and S.F. divorced in December 2011. Therefore, the Veteran was not legally entitled to additional benefits based on S.F. being a dependent spouse upon their divorce. The Veteran has asserted that the debt amount was incorrectly calculated because he has been married to V.T. since February 2012, and that overpayment should be reduced beginning upon the date of his second (and current) marriage. The Board notes that the effective date of the award of any benefits or increase of benefits by reason of marriage shall be the date of the marriage, if proof of marriage is received by VA within a year from the date. 38 U.S.C. § 5110 (n). While the Board acknowledges that the Veteran was validly re-married to V.T. as of February 2012, VA did not receive notice of the Veteran’s marriage to V.T. until March 2017, five years after the date of the marriage, and over five years after the December 2011 divorce from S.F. As such, dependency benefits for S.F. were terminated, and the dependency benefits for V.T. were awarded in March 2017, upon receipt of the marriage certificate indicating the date of their marriage in February 2012. The Board acknowledges the Veteran’s assertion that he believed VA was aware of the change in dependent status because his current spouse was listed as his fiduciary. However, as noted above, the Veteran was not declared incompetent for VA purposes until the October 2016 rating decision, and the Veteran’s spouse, V.T. was not listed as his fiduciary until January 2017. While the January 2017 correspondence indicates that V.T. was granted legal capacity, it does not indicate that V.T. was the Veteran’s spouse. As noted above, VA did not receive any indication of the marriage between the Veteran and V.T. until March 2017. Additionally, the evidence shows that VA’s overpayment to the Veteran was not the result of sole VA administrative error. Sole administrative error entails no knowledge or fault on the part of the debtor. See Jordan, 10 Vet. App. 171. The Veteran has stated that he and his current spouse did not realize that there was a problem with the status of his dependents until receiving notification in March 2017. However, as the Veteran began receiving notices in 2008 instructing him of his responsibility to promptly report any change in the status of his dependents to VA, the Board finds the Veteran’s argument unpersuasive. As such, the Board finds that the Veteran knew or should have known that his compensation award should have been adjusted based on a change in his marital status in 2011, and that he was aware or should have been aware that the payments he continued to receive for years following his divorce were erroneous because they were based on a finding that he was still married to S.F. Based on the foregoing, the Board finds VA was not solely responsible for the erroneously paid benefits. The Veteran’s failure to promptly notify VA of his December 2011 divorce contributed to VA’s payment of the erroneous award, and the creation of the overpayment was not a result of sole VA administrative error. 38 U.S.C. § 5112(b)(9), (10); 38 C.F.R. § 3.500(b)(2); Jordan, supra. Accordingly, the Board finds the creation of the overpayment was valid. The Board is bound by the law and is without authority to grant benefits on an equitable basis. See 38 U.S.C. §§ 503, 7104; Harvey v. Brown, 6 Vet. App. 416, 425 (1994). The application of the law to the facts in this case is dispositive. Where there is no entitlement under the law to the benefit sought, the appeal must be denied. See Sabonis v. Brown, 6 Vet. App. 426 (1994). REASONS FOR REMAND In his March 2017 NOD, the Veteran stated that he should not be unjustly burdened or penalized with the “astronomical debt due to no fault of his own.” He stated that notification of the lingering debt has become increasingly taxing and is causing undue emotional distress and psychological trauma. He noted that if the debt is imposed, it would inflict extreme financial hardship on his entire household, as he is unable to work due to his service-connected disabilities. He asserted that the entirety of the debt should be forgiven minus a period not to exceed 45 days, the time period between his two marriages. The Board construes the Veteran’s statements as containing a timely request for a waiver following the March 2017 notification of the debt. The Board notes that the matter has not yet been referred to the Committee on Waivers and Compromises (COWC) which has jurisdiction over the question of waiver of indebtedness. Upon remand, the debt must be referred to the COWC for review of whether a waiver is appropriate in this case. As such, a remand is warranted to determine whether collection of the debt would result in undue hardship to the Veteran. The matters are REMANDED for the following action: 1. Request that the Veteran submit a VA Form 5655, listing all monthly income, monthly expenses, assets and debts, for the Veteran and any dependents. Supporting documentation should be requested from the Veteran as deemed appropriate. 2. The Veteran’s claims file should be sent to the COWC for adjudication of his request for a waiver of recovery of an overpayment in the amount of $8,646.34 on the merits. 3. After completion of the above and any additional development deemed necessary, readjudicate the issue on appeal. If the benefit sought on appeal remains denied, furnish the Veteran and his representative a Supplemental Statement of the Case and allow them an opportunity to respond. (CONTINUED ON NEXT PAGE) REBECCA J. KIPPER Acting Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board A. Labi, 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.