Citation Nr: 21002244 Decision Date: 01/13/21 Archive Date: 01/13/21 DOCKET NO. 15-17 823 DATE: January 13, 2021 ORDER Entitlement to waiver of recovery of overpayment of Department of Veterans Affairs (VA) nonservice-connected pension benefits in the amount of $7,704.00 is denied. FINDINGS OF FACT 1. In July 2014, the Committee on Waivers and Compromises (COWC) denied the Veteran’s request for a waiver on the basis of it being untimely. 2. Notice letters from the Debt Management Center (DMC) informing the Veteran of his indebtedness and his right to request a waiver are not of record and have been deemed unavailable. 3. The timeliness of the Veteran’s request for a waiver of recovery of overpayment is conceded. 4. It is not shown the Veteran committed fraud, misrepresentation, or evidenced bad faith in the creation of this overpayment. 5. Recovery of the debt in this case in the amount of $7,704.00 is not against the principles of equity and good conscience. CONCLUSIONS OF LAW 1. The Veteran’s request for waiver of recovery of overpayment of VA nonservice-connected pension benefits in the amount of $7,704.00 was timely filed. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.963(b). 2. The criteria for waiver of the recovery of the overpayment of VA nonservice-connected pension benefits in the amount of $7,704.00 are not met. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.963(a), 1.965(a). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty in the United States Army from March 1966 to March 1968. During his period of service, he earned the National Defense Service Medal. Entitlement to waiver of recovery of overpayment The Veteran has been found liable for an overpayment of VA disability benefits in the amount of $7,704.00. He applied for a waiver of overpayment which was denied by a July 2014 Committee on Waivers and Compromises (COWC) decision based on the determination that his request was untimely. This threshold question must be addressed prior to addressing the underlying merits of the Veteran’s claim. A request for waiver of a debt, other than for loan guaranty, shall only be considered if made within 180 days following the date of a notice of the indebtedness to the debtor. The 180-day period may be extended if the individual requesting waiver demonstrated to the Chairperson of the Committee that, because of an error by either VA or the postal authorities, or due to other circumstances beyond the debtor’s control, there was a delay in such individual’s receipt of the notification of indebtedness beyond the time customarily required for mailing, including forwarding. If the requester does substantiate that there was such a delay in the receipt of the notice of indebtedness, the Chairperson shall direct that the 180-day period be computed from the date of the requester’s actual receipt of the notice of indebtedness. See 38 C.F.R. § 1.963(b); see also 38 U.S.C. § 5302(a). To determine whether any waiver request by the Veteran was timely, the Board must determine when the Veteran was properly provided notice of the indebtedness. In this case, the Agency of Original Jurisdiction (AOJ) sent to the Veteran a letter dated in June 2011 notifying him that VA had received information from the Social Security Administration (SSA), as well as a phone call from the Veteran, indicating that he became entitled to SSA benefits in September 2010. The letter notified him that VA proposed to reduce his VA pension benefits and that such adjustment would result in an overpayment of benefits which had been paid to him. VA provided the Veteran 60 days from the date of the letter to show that the proposed action should not be taken. A September 2011 letter notified the Veteran that VA had received his VA Form 21-8416 and adjusted his benefits accordingly. Based on the Veteran’s annual income and reported medical expenses, VA determined the Veteran had been overpaid. The letter further explained that he would be notified in a separate letter of the overpayment amount and how he could repay this debt. In June 2012 the AOJ requested additional information regarding the Veteran’s marital status, specifically to determine if he had been paid the correct benefit rate and would continue to be entitled to pension benefits. VA provided the Veteran 60 days from the date of the letter to return the VA Form 21-686c (Declaration of Status of Dependents) detailing his and his spouse’s complete marital history, a copy of his marriage certificate, and completed VA Form 21-0516 (Eligibility Verification Report) and VA Form 21-8416 (Medical Expense Report) for the years 1997 through 2012. If the requested evidence was not received within 60 days, the Veteran was informed that VA would be required to stop or reduce his benefits, effective January 1, 1997, resulting in an overpayment of benefits which had been paid to him. An August 2012 letter notified the Veteran that VA had received the information he submitted in response to the June 2012 letter. Accordingly, the Veteran’s spouse was added to his award and VA began counting her SSA income, effective October 1, 2011. As the Veteran’s annual family income exceeded income limits for a veteran with one dependent for 2011, VA terminated the Veteran’s VA pension benefits, effective October 1, 2011. Based on the change, VA determined the Veteran had been overpaid. The letter further explained that he would be notified in a separate letter of the overpayment amount and how he could repay this debt. He was also informed that he had the right to appeal the decision within one year of the date of the letter. The Veteran’s request for waiver of overpayment was received on June 24, 2014. Review of the claims file shows no documents which could be construed as a request for waiver prior to that time. As such, the COWC denied his request for a waiver based on an untimely request by a July 2014 decision. A January 2019 Board decision remanded the claim for all relevant documents to be associated with the record, as neither the first demand letters advising the Veteran of the overpayments created and his rights nor the Veteran’s waiver request are associated with his claims file frustrating the Board’s ability to conduct a de novo review of his appeal. A supplemental statement of the case (SSOC) issued in August 2020 continued to the deny the Veteran’s claim on the basis that his initial original request for waiver was not timely filed with VA. In so finding, the AOJ noted that the Veteran’s original waiver request was retrieved from the Debt Management Center (DMC) archives and added to the claims folder for review. However, as debt increase letters are generated by a third-party vendor, a copy was unable to be retrieved and, therefore, deemed unavailable to associate with the claims file. The AOJ further noted that there was no evidence that the debt increase letters in question were returned to VA as undeliverable. However, affording the Veteran the full benefit of the doubt, the Board will find that the Veteran’s request was timely. This determination is based upon the fact that debt increase letters informing him of the debt amount and his right to request a waiver, which DMC records indicate were generated and mailed out on September 12, 2011 and August 22, 2012, respectively, are not associated with the claims file; therefore, it is not known whether the Veteran actually received proper notice. The Board notes the AOJ’s contention that the September 2011 and August 2012 demand letters were not returned to the AOJ as undeliverable; however, a review of the record reveals no indication that the demand letters were sent to the Veteran, and indeed, there are no such letters associated with the electronic file. Accordingly, on the basis of the facts shown by the record, the timeliness of the Veteran’s waiver request must be conceded. To that extent, alone, the appeal is allowed. Turning to whether the Veteran should be granted a waiver of overpayment, recovery of an overpayment may be waived if there is no indication of fraud, misrepresentation, or bad faith, on the part of the person or the persons having an interest in obtaining the waiver, and recovery of such indebtedness would be against equity and good conscience. 38 U.S.C. § 5302(c); 38 C.F.R. § 1.963(a). (1) Fault of the debtor. Where actions of the debtor contribute to the creation of the debt. (2) Balancing of faults. Weighing fault of the debtor against VA fault. (3) Undue hardship. Whether collection would deprive debtor or family of basic necessities. (4) Defeat the purpose. Whether withholding of benefits or recovery would nullify the objective for which benefits were intended. (5) Unjust enrichment. Failure to make restitution would result in unfair gain to the debtor. (6) Changing position to one’s detriment. Reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation. 38 C.F.R. § 1.965(a)(1)-(6). The first and second elements pertain to the fault of the debtor versus the fault of VA. After consideration of the record, the Board finds that the Veteran was at fault for not timely notifying VA of changes in marital status and family income. The Board notes that it is the responsibility of the pension recipient to notify VA of all circumstances that will affect entitlement to receive the rate of the benefit being paid, and such notice must be provided when the recipient acquires knowledge that his income has changed. See 38 C.F.R. §§ 3.277, 3.660(a)(1). Under the provisions of 38 C.F.R. § 3.271, payments of any kind from any source shall be counted as income during the 12-month annualization period in which received unless specifically excluded under 38 C.F.R. § 3.272. Income from the SSA and interest income are not excluded under 38 C.F.R. § 3.272. The rate at which a veteran may be paid pension is reduced by the amount of a veteran’s countable annual income. 38 C.F.R. § 3.23. Here, the Board finds that the debt was properly created, as the Veteran had income from SSA, as well as a change in his marital status, that affected his right to pension benefits, an income-based benefit. The AOJ took proper actions to retroactively reduce the Veteran’s pension benefits to reflect the changes in his income and dependency. As such, the Veteran is solely at fault for the debt and VA bears no fault in this overpayment. With respect to the third element, whether the Veteran would be subjected to undue hardship if the debt were recovered, the August 2020 SSOC reflects that VA has already recouped the debt in full, and there is no evidence that the completed recovery of the assessed overpayment deprived the Veteran of basic necessities. Moreover, a current waiver of the debt would not alleviate any past hardship that was imposed. In regard to whether failure to collect would cause unjust enrichment to the debtor, the Board notes that the Veteran received benefits to which he was not entitled and as such, would cause unjust enrichment to the debtor. As to whether recoupment of those benefits would defeat the purpose of the benefit, the Board notes that the Veteran was only entitled to receive pension benefits that were due in conjunction with his receipt of SSA income. Moreover, the Veteran failed to completely report his marital and family financial statuses. Thus, he would be unjustly enriched if he did not repay those benefits. Likewise, there is no indication that the Veteran’s reliance on VA benefits resulted in relinquishment of another valuable right. The Veteran has not claimed that he relinquished any right or incurred any legal obligation or that he relied upon VA to his detriment. Thus, this element does not support the Veteran’s request for a waiver of overpayment. The record does not demonstrate any additional factors which should be considered in adjudicating the Veteran’s claim for a waiver of the indebtedness, nor has the Veteran identified any such factors. After weighing all of the enumerated factors, the Board finds that total recovery of the overpayment does not violate the principles of equity and good conscience. 38 U.S.C. § 5107(b). Thus, waiver of the recovery of the overpayment of the debt of $7,704.00 is not warranted. The evidence is not so evenly balanced as to create a reasonable doubt, and, hence, the benefit-of-the-doubt doctrine is inapplicable. 38 U.S.C. § 5107(b); Gilbert v. Derwinski, 1 Vet. App. 49 (1990). A. S. CARACCIOLO Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board T. Joseph, 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.