Citation Nr: 21003653 Decision Date: 01/22/21 Archive Date: 01/22/21 DOCKET NO. 20-08 098 DATE: January 22, 2021 ORDER The appeal as to the validity of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $7,748.73 due to a retroactive removal of a dependent spouse, B.C., is denied. The appeal as to the validity of an overpayment of VA compensation benefits in the amount of $18,767.35 is granted. REFERRED The issue of waiver of overpayment of compensation benefits in the amount of $7,748.73 was raised in a May 2017 statement and is referred to the Agency of Original Jurisdiction (AOJ) for adjudication. FINDINGS OF FACT 1. An audit of the proper calculation of the debt created solely due to a retroactive removal of a dependent spouse comes to $7,748.73; $18,767.35 of the original $26,516.08 in debt was not due to a retroactive removal of a dependent spouse and is not a properly created debt. 2. November 1, 2008 was the date the Veteran first had a rating sufficient for additional compensation for dependents. 3. Either the Veteran or the Veteran’s representative submitted a May 13, 2015 claim for additional benefits for a dependent spouse and this form was improperly filled out to reflect that B.C. and the Veteran were still married. 4. B.C. died in April 2007, which was prior to the claim and the date the Veteran was first eligible for additional compensation for a dependent. 5. In a May 2015 letter, the RO informed the Veteran that he had been awarded additional benefits for his spouse, B.C., and he was informed that he should promptly inform that office of VA of any change in the status of his dependent; he was provided a VA Form 21-8764 shortly before this decision, which notified the Veteran additional benefits were included for his spouse and that failure to notify the RO in a prompt fashion of a dependency change would result in an overpayment that he would have to repay. 6. The Veteran continued to receive compensation at a rate consistent with a dependent spouse; he knew or should have known that additional benefits for B.C. were being given to him and that this was in error. 7. The Veteran and K.F. married in September 2015 and he notified the RO that they were married in October 2015. 8. The RO removed B.C. from the Veteran’s award of VA disability compensation benefits effective November 1, 2008 and added K.F. to the award effective September 2015, with commencement of payment on October 1, 2015; the actions of the RO resulted in the creation of an overpayment. CONCLUSION OF LAW The overpayment of VA compensation benefits in the amount of $7,748.73, but no more, was properly created due to a retroactive removal of a dependent spouse from the Veteran’s award. 38 U.S.C. §§ 5110, 5111, 5112 (2018); 38 C.F.R. §§ 3.401, 3.501 (2020). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran honorably served on active duty from December 1965 to December 1967. This matter is before the Board of Veterans’ Appeals (Board) on appeal from a February 2017 administrative decision of the Department of Veterans Affairs (VA) Regional Office (RO). The Veteran testified before the undersigned at a virtual Board hearing in November 2020. A transcript of the hearing is of record. Validity of Debt in the Amount of $26,516.08 I. Calculation of the Debt The initial debt amount was calculated in the amount of $26,516.08. See February 2017 Debt Management Center (DMC) First Demand Letter. However, this debt amount stems from not just a retroactive removal of a dependent spouse, but also from a reduction of the Veteran’s benefits from the 50 percent rate to the 40 percent rate, for which VA had found years prior that no overpayment should be created due to sole VA administrative error. See February 2017 Notification Letter; September 2015 Rating Decision (assigning a later effective date due to clear and unmistakable error (CUE), resulting in a reduced combined rating from 50 percent to 40 percent spanning November 2008 through March 2015); September 2015 Rating Decision – Codesheet (finding that “the Veteran should not be charged with an overpayment as it is the result of an administrative error,”). An audit was completed concurrent with the statement of the case (SOC), which reflects a valid debt amount of $7,748.73 based on the difference in compensation of a Veteran at the 40 percent rate with and without a spouse. See January 2020 User Calculations; January 2020 SOC. However, there was no finding in the SOC or by other VA adjudication that $18,767.35 of the original $26,516.08 was improperly created. After the SOC and completion of the audit, the Veteran was generated an award in the amount of $40,006.88, but only $13,490.80 was paid to the Veteran. See November 2020 Email Correspondence. The remainder ($26,516.08) was not paid to the Veteran. See id. Because the amount not paid to the Veteran is identical to the amount contained in the first demand letter, the Board can only conclude that the entire compensation amount was collected from the Veteran’s retroactive award, not simply the Veteran’s dependency award, despite the audit reflecting only $7,748.73 in valid debt. Because an audit reflects that only $7,748.73 of the overpayment arose from the retroactive removal of a dependent spouse, the Board finds that $18,767.35 of the original $26,516.08 overpayment does not represent a valid debt. To that extent only, the appeal is granted. II. Legal Criteria In general, any veteran whose disability is rated not less than 30 percent shall be entitled to additional compensation for his or her eligible dependents, including spouses and children under the age of 18 years. 38 U.S.C. § 1115. When determining the effective date for an award of additional compensation for dependents, the effective date will be the last of the following dates: (1) the date of claim; (2) the date the dependency arises; (3) effective date of the qualifying disability rating provided evidence of dependency is received within a year of notification of such rating action; or (4) date of commencement of the service member’s award. 38 C.F.R. § 3.401 (b). The “date of claim” for additional compensation for a dependent is the date of the veteran’s marriage or the birth of the child, if evidence of the event is received within a year of the event; otherwise, the date notice is received of the dependent’s existence, if evidence is received within a year of notification of VA’s request. 38 U.S.C. § 5110; 38 C.F.R. § 3.401. The effective date for removal of a dependent spouse is the last day of the month in which the death of the dependent spouse occurred. See 38 U.S.C. § 5112(b)(2); 38 C.F.R. § 3.500(g)(2)(ii). 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 an appellant neither had knowledge of, nor should have been aware of, the erroneous award. Id. Further, such error contemplates that neither an 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). When there is an approximate balance of positive and negative evidence regarding the merits of an issue, the benefit of the doubt shall be given to the Veteran. 38 U.S.C. § 5107(b); 38 C.F.R. § 3.102. If the preponderance of the evidence is against the claim, the claim is to be denied. Id. II. Factual Background In April 2015, the Veteran was first awarded a combined evaluation greater than 30 percent and was informed that he was eligible for additional benefits for a dependent spouse. See April 2015 Notification Letter. The Veteran was provided a VA Form 21-8764, which notified him that he must inform VA of any change in dependent status if he receives additional benefits for a dependent and that failure to do so could result in an overpayment that he would have to repay. Shortly thereafter, a claim for additional benefits for a dependent spouse was submitted on behalf of the Veteran. See May 2015 VA Form 21-686c Declaration of Status of Dependents. The claim form reflected that the appellant was then presently married to B.C. Id. The marital status was marked as “married” and the marriage was not noted to have been terminated. Id. The form is noted as electronically signed by the Veteran’s representative and the Veteran. Id. The Veteran disputes that he submitted this form. See November 2020 Hearing Transcript. On the same day, the Veteran’s representative submitted a copy of B.C.’s death certificate and requested dependency allowance payments until B.C.’s date of death, April 24, 2007. See May 2015 Correspondence. An award for additional benefits for B.C. was granted, effective November 1, 2008, the date the Veteran was first rated appropriately to receive additional compensation for dependents. See May 2015 Notification Letter. The notification letter informed the Veteran should let VA know right away if there is any change in the status of his dependents. Id. This award generated $6,016.68 of benefits paid to the Veteran for back pay of additional benefits for a dependent spouse. See May 2015 Award Print. The death certificate was resubmitted two days later. See May 2015 Death Certificate. In December 2015 and July 2016, the Veteran submitted claims for benefits for a dependent spouse, K.F., whom he married in September 2015. See October 2015 VA Form 21-686c Declaration of Status of Dependents; July 2016 VA Form 21-686c Declaration of Status of Dependents; see also July 2016 Death Certificate; July 2016 Marriage Certificate. In February 2017, B.C. was retroactively removed from the Veteran’s award for the entire period, beginning November 1, 2008 to February 2017. See February 2017 Notification Letter. This created a debt in the amount of $7,748.73. In July 2020, K.F. was added to the Veteran’s award as a dependent spouse of benefits effective September 2015, with commencement of payment effective October 2015. See July 2020 Notification Letter. III. Legal Analysis 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. However, at no point was the Veteran entitled to additional benefits for B.C. as a dependent spouse. Prior to November 1, 2008, the Veteran was not rated appropriately to receive additional benefits for a dependent spouse. See 38 U.S.C. § 1115. Because B.C. died prior to this date, she was not legally a spouse of the Veteran and could not be on his award. See 38 C.F.R. §§ 3.1(j); 3.500(g)(2)(ii). The Board recognizes that VA was notified of the B.C.’s unfortunate death at approximately the same time as the claim for benefits. Considering this notification to VA, the Board has considered whether there was sole VA administrative error or error in judgment in the payment of the additional benefits for a B.C. Ultimately, the Board finds that there was not sole VA error because the application form for benefits reflected continuing marriage and because after the benefit was granted the Veteran continued to receive additional compensation, which he knew or should have known was in error. The form incorrectly reflected that the Veteran was married to B.C. at the time of submission because his marital status was marked as “married” and the marriage was not noted to have been terminated. Submission of the incorrect information by the Veteran or his representative contributed to the erroneous award of benefits. As such, the initial grant of additional compensation cannot be solely the result of VA error. Moreover, the form was submitted via the Stakeholder Enterprise Portal (SEP). See VA Adjudication Manual M21-1, III.i.4.B. This portal allows certain representatives to submit a limited number of claims, including dependency claims, using an interview process designed to limit omissions and misinterpretations of information requested from a claimant. VA Adjudication Manual M21-1, III.i.4.B.1.b. The Veteran’s representative completed the form incorrectly, despite the interview-based process, and omitted that the Veteran’s prior spouse had died. The form was, in all other respects, complete and triggered an automated process to pay benefits. When the letter and evidence submitted by the representative on the same day was reviewed, the error was detected, and the overpayment process was immediately begun by VA staff. The Veteran disputes that he submitted any claim for additional compensation for his spouse, B.C. However, the record ultimately reflects that such a claim was received, and it was submitted by either him or his representative because of their electronic signatures. Even assuming the Veteran had no knowledge of his representative’s submission, he is still liable for all acts of his representative that are within the scope of their representation. See Brown v. Brown, 8 Vet. App. 40, 43 (1995); see also VAOPGCPREC 11-92 (May 14, 1992), 57 Fed. Reg. 49746 (1992). There is no limitation on the scope of their representation of the Veteran. See May 2008 VA 21-22 Appointment of Veterans Service Organization (VSO) as Claimant Representative. Accordingly, the submission of the claim was within the scope of the representation and the Veteran is legally responsible for the representative’s actions. Further, if the Board were to consider the representative a third party, this still would not rise to the level of sole VA error and the debt would still be valid. When error lies with neither the beneficiary nor the VA, but instead with a third party, the law ultimately allocates responsibility for the overpayment to the beneficiary who reaped the benefit of the award. See VAOPGCPREC 2-90 (March 20, 1990). Thus, sole VA error cannot be found on the basis that the Veteran did not himself submit the claim. After the initial grant of additional compensation benefits for a dependent spouse, the Veteran knew or should have known that he was receiving benefits for B.C. when he should not have been. With the grant of benefits, the Veteran was informed that his “payment includes an additional benefit for [his] spouse [B.C.] effective November 1, 2008” and that he should let VA know right away if there is any change in the status of his dependents. See May 2015 Notification Letter. Shortly before this, the Veteran was provided a VA form 21-8764 that provided him with additional notice that failure to report a change in dependency could result in an overpayment that he would have to repay. While the Veteran informed VA promptly by submitting a death certificate in May 2015 and again in July 2016, as well as by submitting new claims reflecting that he was now married to K.F., the Veteran continued to receive payment for additional benefits for B.C. In this case, the Veteran continued to be paid at the same rate after informing VA a second time of B.C.’s death; in other words, there was no reduction in his benefits after he reported that B.C. died. Thus, the Veteran should have been aware that he was erroneously receiving benefits for B.C. because there was no decrease in his benefits. The Veteran’s failure to bring VA’s attention to this continuing error contributed to the erroneous award. Although there was delay in removing B.C. from the Veteran’s award after he notified VA, “the release of the payments and VA delay in administratively processing the adjustment… is not considered administrative error.” See Dent v. McDonald, 27 Vet. App. 362, 384 (2015). The Board acknowledges that the Veteran was entitled to additional benefits for a dependent spouse for K.F. during a period that overlaps with the debt period. However, the Veteran has already been granted compensation benefits for this K.F., with payment beginning in October 2015. See July 2020 Notification Letter. To find the debt invalid based on this would result in compensation to the Veteran for both B.C. and K.F. during an overlapping time. The Veteran is also not entitled to an earlier date of payment for K.F. as his dependent spouse. K.F. and the Veteran first married in September 2015 and the Veteran first submitted his claim in October 2015; thus, the date of first entitlement for benefits for K.F. September 2015, with payment commencing in October 2015. 38 U.S.C. §§ 5110, 5111; 38 C.F.R. §§ 3.31, 3.401. Accordingly, the Veteran has already been sufficiently compensated for a dependent spouse from October 1, 2015. In summary, the RO terminated the Veteran’s additional benefits for B.C. for the time from the initial award, which predates B.C.’s death. This action was proper. The law is clear that the Veteran’s right to receive additional disability compensation with respect to B.C. did not exist after she died. Although the Veteran disputes that he is responsible for the debt on the basis that it was his representative and not himself that submitted the claim, the errors on the claim form contributed to the erroneous award and cannot be considered sole VA error. The Veteran additionally knew or should have known of the continuing erroneous award because he continued to receive his pay at the same rate. Lastly, while the Veteran is entitled to compensation for a dependent spouse during the debt period, this benefit has already been granted in full. Considering the foregoing, the preponderance of the evidence reflects that the debt established in the amount of $7,748.73 is valid and there is no sole VA error. Because the preponderance of the evidence is against the claim, the benefit of the doubt doctrine is not applicable. 38 U.S.C. § 5107(b); 38 C.F.R. § 3.102. Accordingly, the claim is denied. Although the Board is sympathetic to the Veteran’s contentions, it is bound by applicable law and regulations. Here, the law that requires that the error committed be committed solely by VA in order to find the debt invalid and the Board is bound by the law. Unlike the Secretary, the Board has no authority to grant claims solely on an equitable basis; instead, the Board is constrained to follow specific provisions of the law. 38 U.S.C. §§ 503, 511, 512(a), 7104; Taylor v. West, 11 Vet. App. 436, 440-41 (1998); Harvey v. Brown, 6 Vet. App. 416, 425 (1994). To the extent that the Veteran feels that recovery of the debt is unfair, fairness and equity pertains to a claim for a waiver of the recovery of the debt, which is not currently before the Board and, therefore, cannot currently be adjudicated by the Board. J. B. FREEMAN Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board S. Lambert 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.