Citation Nr: 21066566 Decision Date: 11/01/21 Archive Date: 11/01/21 DOCKET NO. 18-33 879A DATE: November 1, 2021 ORDER A waiver of recovery of the overpayment of Department of Veterans Affairs (VA) disability compensation benefits in the amount of $21,821.43 is denied. FINDINGS OF FACT 1. The $21,821.43 overpayment was not due to the Veteran's fraud, misrepresentation, or bad faith. 2. The fault in the creation of the debt at issue was balanced between the Veteran and VA; recovery of the debt would not create an undue hardship for the Veteran or defeat the purpose of the benefit; a waiver of recovery of the overpayment of the debt at issue would result in unfair gain to the Veteran; and there is no indication that the Veteran relinquished a valuable right or incurred a legal obligation in reliance on this benefit. CONCLUSION OF LAW Recovery of the overpayment of VA compensation benefits in the amount of $21,821.43 would not be contrary to the principles of equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. § 1.965. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran had several periods of active service in the United States Army, with additional service in the Reserves. The matter on appeal comes before the Board of Veteran's Appeals (Board) from a September 2016 Decision on Waiver of Indebtedness by the VA Committee on Waivers and Compromises (COWC). The Veteran provided testimony before the undersigned in June 2021. A transcript of that hearing is within the Veteran's claims file. In May 2015, the Regional Office (RO) notified the Veteran that it had received information from the Defense Finance and Accounting Service (DFAS) related to drill days in Fiscal Year (FY) 2008, 2009, 2010, 2011, and 2012. The RO indicated that adjustments would be made related to the drill pay received during these drill days, but that the adjustments would not create an overpayment. This letter also informed the Veteran that the RO received information related to the Veteran's return to active duty on March 1, 2004. The RO proposed to terminate the Veteran's VA benefits effective March 1, 2004, and resume them on May 18, 2005, the day after his release from active duty. The RO also proposed to reduce the Veteran's benefits effective July 8, 2009, the date he returned to another period of active duty, and resume them December 1, 2009, the date he was released from active duty for this period. The RO further proposed to terminate the Veteran's benefits effective October 2, 2012, the date he again returned to active duty, and resume the benefits October 1, 2013, the day after he was released from this period of active service. The RO informed the Veteran at this time that the retroactive adjustments made related to these periods of active duty would result in an overpayment. Finally, the RO informed the Veteran that a drill pay adjustment made for FY 2002 would now overlap with one of the active duty periods. The RO indicated it would move the FY 2002 drill pay adjustment to a different period of time such that it would not create an overpayment. The Veteran did provide a response indicate any disagreement with this assessment. Subsequently, in March 2016, the RO received information from the Defense Manpower Data Center (DMDC) showing the actual number of days drill pay was received by the Veteran in FY 2009, 2010, 2011, and 2013, which was different than originally reported. The RO informed the Veteran of the adjustment to those years by way of an April 2016 letter. The RO also indicated adjustment was made for FY 2002 and 2003. The adjustment to drill days was indicated to not have created an overpayment. The April 2016 letter also notified the Veteran that the proposed action was being taken to terminate the Veteran's benefits retroactively during his periods of active duty. Another letter sent in April 2016 indicates DMDC notified the RO of drill pay received during FY 2012 and indicated the retroactive adjustment to account for this drill pay would result in an overpayment. A $21,821.43 debt was then created as a result of this retroactive adjustment of benefits for the various periods of time at issue. The DMC then notified the Veteran of this debt later in April 2016. The Veteran, in June 2016, filed a VA Form 5655, Financial Status Report (FSR), and requested a waiver of recovery of this overpayment debt. The September 2016 COWC decision was then issued, and the Veteran has appealed the denial of a waiver. The Veteran is not challenging the validity of the debt at issue. Rather, he has appealed VA's denial of his request for waiver. See June 2017 VA Form 21-0958, Notice of Disagreement. The law provides that there shall be no recovery of overpayments of any benefits under any of the laws administered by the Secretary of VA, whenever it is determined that recovery would be against equity and good conscience, if application for relief is made within 180 days of notification. 38 U.S.C. § 5302(a). The standard "equity and good conscience" will be applied when the facts and circumstances in a case indicate a need for reasonableness and moderation in the exercise of the Government's rights. The decision reached should not be unduly favorable or adverse to either side. The phrase "equity and good conscience" means arriving at a fair decision between the obligor and the Government. In making this determination, consideration will be given to the following elements: fault of the debtor, balancing of faults, undue hardship, defeat of the purpose of the benefit, unjust enrichment, and changing position to one's detriment in reliance upon the benefit. If there is any indication of fraud, misrepresentation, or bad faith, waiver of a debt is precluded. 38 C.F.R. § 1.965. The COWC concluded in the September 2016 decision on appeal that the facts in this case do not show that the mandatory bars to waiver apply in the present case, and the Board agrees. There is no indication that the Veteran attempted to defraud VA by misrepresenting any relevant facts with respect to his benefits. There is no evidence that he notified VA of the receipt of active duty or military drill pay and VA compensation benefits, but there is also no evidence that he was aware of these duplicate payments and intentionally withheld the information in order to commit fraud or misrepresentation or otherwise act in bad faith. Thus, the Board agrees that the mandatory bars to waiver are not present in this case. However, after reviewing the record, the Board finds it would not offend the principles of equity and good conscience to require the Veteran to repay the VA disability compensation debt owed. In assessing whether collection of the debt would be against equity and good conscience, the Board finds that the Veteran is at least partially at fault in the creation of this debt. The record does not show that he notified VA each time he went on active duty so that his benefits could be stopped. The claims file includes a December 2008 letter showing the RO indicated the Veteran should advise immediately if he returned to active military service. He did not do so. Conversely, the record shows the RO knew of the Veteran's March 2004 to May 2005, and July 2009 to November 2009, periods of active service at the time it issued an April 2013 rating decision. The RO, however, took no action in relation to these periods of active service until 2015. Thus, VA was aware of at least a portion of the Veteran's active duty dates, even though the Veteran was not proactive in informing the RO at the time he went on active duty. The Board, therefore, finds the Veteran was partially at fault in the creation of this debt and VA did delay in processing the adjustment in at least some of the benefits. Fault in this case was relatively balanced. As to the element of undue hardship, the pertinent regulation provides that consideration should be given to whether collection of the indebtedness would deprive the debtor or her family of basic necessities. 38 C.F.R. § 1.965(a)(3). While the Veteran has suggested that repaying the debt would cause a hardship, he has not suggested it would deprive him or his family of basic necessities. Moreover, he submitted a FSR in June 2016, which showed that at this time, his monthly income was less than his expenses by approximately twenty-five dollars ($25.00). However, this included an $800 monthly expense listed for gas, "M sc" and monthly supplies for his mother in a nursing home. The Board is unclear as to what "M sc" represents, and the Board also notes that the Veteran has since reported, to include at the time of his Board hearing, that his mother has unfortunately passed away. Thus, it appears that the Veteran's income at this time would be in excess of his expenses. The Veteran confirmed at the time of his Board hearing that he is receiving compensation at the 100 percent rate due to his unemployability, as well as receiving benefits from the Social Security Administration (SSA). The record does not suggest that collection of the debt at issue would deprive him or his family of basic necessities. Undue hardship, therefore, is not shown. The Board has also considered whether recovery of the overpayment of the debt at issue would defeat the purpose for which the benefit was intended. In this case, the purpose would not be defeated. The debt represents prohibited duplicate payments of military pay and VA disability compensation. As these duplicate benefits were prohibited, there can be no finding that recovery of the overpayment would defeat the purpose for which the benefit was intended. Additionally, the Board finds that failure to make restitution for the full amount of the debt would result in unfair gain to the Veteran. Money to which he was not entitled was paid on his behalf. Finally, the Veteran has not contended with any specificity, nor does the evidence show, that he relinquished a valuable right or incurred a legal obligation in reliance on the benefits received. Based upon the forgoing, and after weighing the elements pertaining to the principles of equity and good conscience as set forth by 38 C.F.R. § 1.965(a), the Board finds that recovery of the overpayment does not violate the principles of equity and good conscience. Accordingly, the Board finds that waiver of recovery of the overpayment of VA disability compensation benefits in the amount of $21,821.43 is not warranted. The Veteran's appeal is denied. J. B. FREEMAN Veterans Law Judge Board of Veterans' Appeals Attorney for the Board A. Adamson, 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.