Citation Nr: 20059999 Decision Date: 09/11/20 Archive Date: 09/11/20 DOCKET NO. 18-08 443 DATE: September 11, 2020 ORDER An overpayment of compensation benefits in the amount of $25,224.66 was properly created and the appeal is denied. FINDINGS OF FACT 1. The Veteran and L.J. divorced in September 2008; he was not legally entitled to additional benefits based on L.J. being a dependent spouse from that time forward. 2. The Veteran did not timely notify VA of his September 2008 divorce from L.J. 3. VA's overpayment to the Veteran was not a result of sole VA administrative error. CONCLUSION OF LAW An overpayment of VA benefits in the amount of $25,224.66 due to the removal of the Veteran’s spouse as a dependent was validly created. 38 U.S.C. § 5112; 38 C.F.R. §§ 1.911, 3.401, 3.500, 3.501. REASONS AND BASES FOR FINDINGS AND CONCLUSION As an initial matter, the Board acknowledges that the Veteran has requested a waiver of the overpayment debt in correspondence submitted with his January 2017 Notice of Disagreement and his December 2017 substantive appeal. VA contacted the Veteran by phone in October 2017, and the Veteran confirmed that the sole issue on appeal was whether the creation of the debt was proper. In the January 2017 and December 2017 correspondence, the Veteran agreed to repay the debt for the period from October 2008 to June 2011 and requested a waiver from July 2011 to 2015 as he had remarried in June 2011. In a January 2018 decision, the Committee on Waivers and Compromises (COWC) of the Department of Veterans (VA) Regional Office (RO) granted a waiver in the amount of $14,271.85 for the period of June 14, 2011 to February 2, 2016. As such, the Board finds that there currently is no case or controversy regarding the issue of waiver of overpayment. The Board also notes that the Veteran requested a Board hearing, but in August 2020 withdrew the request. He has not since requested another hearing before the Board. 38 C.F.R. § 20.704(e). 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. Regarding the issue of the validity of the debt, 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). An effective date of the award of any benefit or any increase therein by reason of marriage shall be effective from the latest of the following dates: (1) Date of claim, meaning the following, listed in their order of applicability: (i) date of veteran’s marriage, or birth of his or her child, or, adoption of a child, if the evidence of the event is received within 1 year of the event; otherwise; (ii) date notice is received of the dependent’s existence, if evidence is received within 1 year of VA’s request; (2) Date dependency arises; (3) effective date of the qualifying disability rating provided evidence of dependency is received within 1 year of notification of such rating action; or (4) date of commencement of veteran’s award. 38 C.F.R. § 3.401 (b). 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). 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 he was 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 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); VAOGC Prec. 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. VA’s policy that running awards consisting of recurring monthly payments made as a result of VA administrative error do not create overpayments or valid debts and that VA administrative error must be considered even where the initial award or entitlement to benefits itself was not the result of administrative error. A valid debt is created if a veteran had knowledge that his or her compensation benefits would change with changes in their status, and they continued to accept the amount of compensation benefits direct deposited into their bank account. See Dent, 27 Vet. App. at 384. The Veteran essentially contends that an overpayment of VA disability compensation in the amount of $25,224.66, based on the removal of his former spouse L.J., as a dependent, was not properly created (and thus is invalid) because he provided timely notice to VA regarding his September 2008 divorce when he submitted documentation to remove his former spouse and his stepchildren A.G. and D.G. from the Defense Enrollment Eligibility Reporting System (DEERS) and updated his VA record. See January 2017 Correspondence; December 2017 Form 9. Thus, the Veteran asserts that VA did not take timely action to adjust his benefits accordingly. As an initial matter, it is undisputed that the Veteran and L.J. divorced in September 2008; therefore, he was not legally entitled to additional benefits based on L.J. being a dependent spouse from that time forward. Additionally, on review, the evidence shows that VA’s overpayment to the Veteran was not the result of sole VA administrative error. In this regard, 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 2008, and that he was aware (or should have been aware) that the payments he continued to receive for years following his September 2008 divorce were erroneous because they were based on a finding that he was still married to L.J. This is evidenced by notification letters of record issued to the Veteran. Specifically, the Veteran was notified in July 2007 that he was receiving additional benefits on account of his dependent spouse L.J., that it was his responsibility to promptly report any change in the status of his dependents to VA, and that failure to do so would create an overpayment. Notwithstanding this, VA ultimately received notice that L.J. was no longer the Veteran’s spouse in September 2015 when the Veteran submitted a Status of Dependents Questionnaire listing I.J. as his spouse. Although the Veteran asserts that he promptly notified VA of the divorce, there is no documentation of any such communication(s) in the claims file. The Veteran also asserts that he submitted documentation to remove his spouse in DEERS. The Board notes that DEERS is part of the Department of Defense, and that such notification is separate and distinct from notifying VA. Therefore, updating beneficiaries in DEERS is not a notification to VA. The Board emphasizes that regulations are binding on all who seek to come within their sphere, “regardless of actual knowledge of what is in the regulations or of the hardship resulting from innocent ignorance.” See Morris v. Derwinski, 1 Vet. App. 260 (1990), (citing Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380, 385 (1947)). Likewise, there is a “presumption of regularity” under which it is presumed that government officials have properly discharged their official duties. Clear evidence to the contrary is required to rebut the presumption of regularity. Ashley v. Derwinski, 2 Vet. App. 307 (1992); see also United States v. Chemical Foundation, Inc., 272 U.S. 1, 14-15 (1926). This presumption applies to RO mailing procedures. Mindenhall v. Brown, 7 Vet. App. 271 (1994). The Veteran asserts that he “updated my VA record” at the time of his divorce from L.J. but has provided no details as to how he notified VA of his dependency change. However, as explained above, the Board presumes that any method by which the Veteran reported his divorce would have been associated with the record. There is no record of receipt of communication from the Veteran regarding his divorce from L.J. during the period in question, and the Veteran has not provided evidence which clearly rebuts this presumption. A valid debt is created if a Veteran had knowledge that his or her compensation benefits would change with changes in their status, and they continued to accept the amount of compensation benefits direct deposited into their bank account. See Dent, 27 Vet. App. at 384. The Veteran had knowledge that he was not entitled to the award that he continued to receive for many years after his divorce from L.J. The Veteran has acknowledged that he received additional compensation from October 2008 to June 2011 when he should only have been receiving compensation for himself. See January 2017 Correspondence; December 2017 Form 9. In short, because the Veteran had knowledge of the erroneous award and his failure to promptly notify VA as to his September 2008 divorce contributed to VA’s payment of the erroneous award, 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 appeal is denied. TANYA SMITH Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board T. Bynum, 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.