Citation Nr: 21068418 Decision Date: 11/10/21 Archive Date: 11/10/21 DOCKET NO. 18-18 950A DATE: November 10, 2021 ORDER Entitlement to a waiver of recovery of an overpayment of transferred 38 U.S.C. Chapter 33 (Post-9/11 GI Bill or Chapter 33) educational assistance benefits in the calculated amount of $10,399.17 for tuition/fees, books/supplies, and a housing allowance, and to include whether the debt was validly created, is denied. FINDINGS OF FACT 1. In October 2013, VA awarded to the appellant transfer of entitlement (TOE) educational benefits under the Post-9/11 GI Bill from the Veteran. 2. The Veteran was obligated to serve on active duty until October 9, 2017, to be eligible to transfer education benefits to his dependents; however, the Veteran separated from active duty on February 1, 2017. 3. In August 2017, the Department of Defense (DoD) confirmed that the Veteran did not satisfy the service requirements for eligibility to transfer Post-9/11 GI Bill education benefits to the appellant. 4. The Veteran did not complete his service contract due to: death; a medical condition that preexisted such service on active duty and that the Secretary of the military department concerned determined is not service connected; a hardship, as determined by the Secretary of the military department concerned; a physical or mental condition that was not characterized as a disability and did not result from the individual's own willful misconduct but interfered with the individual's performance of duty, as determined by the Secretary of the military department concerned; a disability; or, reduction in force. 5. The appellant utilized the transferred Chapter 33 benefits in the calculated amounts of $22,897.68 for tuition and fees, $22,227.48 for a housing allowance, and $2,750.01 for books and supplies for a course of study. 6. As the DoD determined that the Veteran was ineligible to transfer Post-9/11 GI Bill education benefits to the appellant because the Veteran did not satisfy the service requirements, an overpayment of Post-9/11 GI Bill benefits was validly created. 7. In February 2018, the VA Committee on Waivers and Compromises (Committee) granted a partial waiver of indebtedness after applying the appellant's remaining entitlement to Dependents' Educational Assistance (DEA) program benefits to the debt amount, which reduced the calculated amount to $10,399.17 for tuition/fees, books/supplies, and a housing allowance. 8. Recovery of the overpayment of Post-9/11 GI Bill benefits in the calculated amount of $10,399.17 for tuition/fees, books/supplies, and a housing allowance would not be against the principles of equity and good conscience. CONCLUSION OF LAW The debt created by the overpayment of transferred Post-9/11 GI Bill educational assistance benefits in the calculated amount of $10,399.17 is valid, and the criteria for a waiver of recovery of an overpayment of such benefits have not been met. 38 U.S.C. §§ 3301, 3311, 3313, 3319; 5302; 38 C.F.R. §§ 1.962, 1.965, 21.9550, 21.9570. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran had active duty from January 1997 to January 2017. The appellant is the Veteran's dependent daughter. In the April 2018 Substantive Appeal to the Board (VA Form 9), the appellant requested a Board hearing at the local Regional Office (RO). She was scheduled to present testimony during a hearing before a Veterans Law Judge in October 2021. The appellant was notified of the time and place of the hearing by a September 2021 letter. However, she failed to appear for the hearing, and she has not requested that the hearing be rescheduled or established good cause for the failure to appear for the hearing. Accordingly, the hearing request is deemed withdrawn. See 38 C.F.R. § 20.704. The appellant contends that the creation of the debt, stemming from the overpayment of transferred Chapter 33 benefits she received from the Veteran, was improper because the Veteran was not informed that if he retired from active duty approximately nine months earlier than the date of his obligated service that the appellant's transferred Post-9/11 GI Bill benefits would be rescinded or taken away. Furthermore, she contends that the recovery of the overpayment of the Post-9/11 GI Bill benefits should be waived as the repayment of the debt would result in undue financial hardship. An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. See 38 U.S.C. § 5302; 38 C.F.R. § 1.962. An overpayment may arise from virtually any benefits program administered pursuant to VA law, including pension, compensation, dependency and indemnity compensation, educational assistance benefits and subsistence allowance, insurance benefits, burial and plot allowances, clothing allowance, and automobile or other conveyance and adaptive equipment allowances. See 38 C.F.R. § 1.956(a). The Post-9/11 GI Bill, 38 U.S.C. Chapter 33, provides for VA educational assistance for members of the Armed Forces based on active duty service after September 10, 2001. 38 U.S.C. § 3311; 38 C.F.R. § 21.9520. An individual who is entitled to educational assistance under Chapter 33 based on his or her own active duty service, and who is approved by a service department to transfer entitlement, may transfer up to a total of 36 months of his or her entitlement to a dependent (or among dependents). 38 U.S.C. § 3319; 38 C.F.R. § 21.9570. VA will pay this transfer of entitlement (or TOE) benefits to the dependent and/or the dependent's institution of higher learning if the dependent is using transferred entitlement to pursue and complete the requirements of a secondary school diploma or equivalency certificate the amounts of educational assistance payable under Chapter 33 in the same manner and at the same rate as if the transferor were enrolled in the dependent's program of education. DoD is charged with making determinations of eligibility for transfer of Chapter 33 entitlement to dependents; VA has no authority to determine such eligibility. See 38 U.S.C. § 3319; 38 C.F.R. § 21.9570; 74 Fed. Reg. 14,654 (2009); Garza v. McDonald, 28 Vet. App. 222, 230 (2016). An eligible individual is any member of the uniformed services who, at the time of the approval of the individual's request to transfer entitlement to educational assistance under this section, has completed at least (1) six years of service in the armed forces and enters into an agreement to serve at least four more years as a member of the uniformed services; or (2) the years of service as determined in regulations pursuant to subsection (j). 38 U.S.C. § 3319(b). The provisions of 38 C.F.R. § 21.9570(l) pertain to when a transferor fails to complete the required service contract that afforded participation in the transferability program. Dependents are not eligible for transferred entitlement if the transferor fails to complete the amount of service he or she agreed to serve in the Armed Forces in order to participate in the transferability program, unless the transferor did not complete the service because of his or her death, a medical condition that preexisted such service on active duty and that the Secretary of the military department concerned determines is not service connected, a hardship as determined by the Secretary of the military department concerned, or a physical or mental condition that was not characterized as a disability and did not result from the individual's own willful misconduct but interfered with the individual's performance of duty as determined by the Secretary of the military department concerned. Moreover, benefits are not payable to dependents under TOE if the transferor fails to complete the amount of service he or she agreed to serve in the Armed Forces unless the transferor is considered to have completed his or her service agreement as a result of being discharged for a disability or a reduction in force. See 38 U.S.C. §§ 3319(i), 3311(c)(4). The record shows that in October 2013, the Veteran requested to transfer all eligible Chapter 33 benefits, or 36 months of benefits, to the appellant. The record further shows that the appellant utilized such benefits for a course of study. After the appellant submitted an April 2017 Dependents Application for Education Benefits (VA Form 22-5490), in which she elected to receive benefits under 38 U.S.C. Chapter 35 (or DEA), in order to pursue a course of study at Austin Peay State University, the Agency of Original Jurisdiction (AOJ) attempted to determine the amount of benefits she was entitled to receive based on her prior use of Chapter 33 benefits. In this regard, VA contacted the DoD to verify whether the Veteran was approved to participate in the TOE program, i.e., whether he met the requirements to be able to transfer his Post-9/11 GI Bill benefits to the appellant, as there was a discrepancy between his TOE-obligated end date and his active duty separation date. In an August 2017 VA/DoD Identity Repository report (VADIR), DoD noted that the Veteran's last day on active duty was January 31, 2017, and that he was retired since February 1, 2017. However, this DoD record also showed that the Veteran's service obligation for the transfer of entitlement provision was until October 9, 2017, or four years following the request to transfer such benefits to the appellant on October 10, 2013. Because the Veteran separated from active duty prior to his service obligation date for TOE, DoD determined that his dependents were ineligible for transferred Post-9/11 GI Bill benefits. Based on DoD's determination, and after performing an administrative review of the Veteran's and appellant's records, the AOJ found that an overpayment of Post-9/11 GI Bill benefits in the calculated amounts of $22,897.68 for tuition and fees, $22,227.48 for a housing allowance, and $2,750.01 for books and supplies, was created. Moreover, after the appellant filed a notice of disagreement (NOD) and requested a waiver of this debt, in February 2018, the Committee granted a partial waiver of indebtedness after applying the appellant's remaining entitlement to DEA benefits to the TOE debt amount, which reduced the calculated amount to $10,399.17 for tuition/fees, books/supplies, and a housing allowance. The Board notes that the appellant has not asserted that the amount of these benefits was calculated incorrectly. Rather, in numerous statements throughout the appeal, including in March 2017, October 2017, and April 2018, the appellant asserted that the creation of the debt was unfair. For example, in the March 2017 request for a waiver of indebtedness and Financial Status Report (VA Form 5655), the appellant noted that although she understood why the debt was created, she thought that it was unfair that this debt was created based on someone else's decision and that she did not know that her father had to complete a term of service in order for her to receive Post-9/11 GI Bill benefits. She noted that she believed that she was receiving such education benefits because she deserved them. Likewise, she asserted in the October 2017 NOD, as well as in a November 2017 statement, that she and the Veteran were not informed that TOE eligibility would be rescinded or reversed if the Veteran retired in February 2017. She stated that her father had over 20 years of active duty and that such service entitled him to be able to transfer his Post-9/11 GI Bill benefits to his dependents. She further noted that she was unable to pay approximately $3,000.00 to $4,000.00 per month in order to repay the Chapter 33 debt. Furthermore, in the April 2018 VA Form 9, the appellant asserted that the Veteran was under the impression that his service obligation was met when he retired on February 1, 2017, and that he was not aware that he had to serve until October 9, 2017, in order to be able to transfer his VA education benefits. Although the Board is sympathetic to the appellant's contentions, it must find that the overpayment of Post-9/11 GI Bill benefits in the calculated amount of $10,399.17 for tuition/fees, books/supplies, and a housing allowance was validly created. Specifically, DoD determined that the Veteran was ineligible to transfer Post-9/11 GI Bill education benefits to the appellant because he did not satisfy the service requirements. As noted above, the determination of an individual's eligibility to transfer education benefits is made by DoD and not by VA. See 38 U.S.C. § 3319; 38 C.F.R. § 21.9570. VA does not have the authority to determine such eligibility, and it cannot alter the DoD's determination on such eligibility. Furthermore, although the Board has considered the statements by the appellant that it is unfair that the debt was created, as she and the Veteran were not aware that if he retired in February 2017 that the transferred benefits would be rescinded, the record does not show that the Veteran meets the exceptions when the transferor fails to complete the amount of service he or she agreed to serve in the Armed Forces in order to participate in the transferability program. Specifically, neither the appellant nor the Veteran have asserted, and the evidence does not show, that he did not complete his service contract due to: death; a medical condition that preexisted such service on active duty and that the Secretary of the military department concerned determined is not service connected; a hardship, as determined by the Secretary of the military department concerned; a physical or mental condition that was not characterized as a disability and did not result from the individual's own willful misconduct but interfered with the individual's performance of duty, as determined by the Secretary of the military department concerned; a disability; or, reduction in force. To the extent the appellant asserts that she relied on erroneous information provided or omitted by VA or DoD staff regarding the Veteran's eligibility to transfer benefits to his dependents or the resulting debt from such transferred benefits, VA is not liable for their reliance on said erroneous or omitted information dispensed by VA or DoD employees. See Harvey v. Brown, 6 Vet. App. 416, 424 (1994). The United States Court of Appeals for Veterans Claims (Court) has held that inaccurate advice does not create any legal right to benefits where such benefits are otherwise precluded. See Shields v. Brown, 8 Vet. App. 346, 351 (1995). Likewise, the Court has held that erroneous advice given by a government employee cannot be used to estop the government from denying benefits. See McTighe v. Brown, 7 Vet. App. 29, 30 (1994). This must be frustrating to the appellant, and the Board recognizes this frustration. While the Board is sympathetic to the appellant's contentions, it is bound by the findings of DoD in this matter. The proper course for the appellant and Veteran, if they believe there is a reason to dispute DoD's determination or the content of military records, is for the Veteran to pursue such a disagreement with the DoD. See Sarmiento v. Brown, 7 Vet. App. 80, 85 (1994). As DoD determined that the Veteran was ineligible to transfer Post-9/11 GI Bill education benefits to the appellant because he did not satisfy the service requirements, an overpayment of Post-9/11 GI Bill benefits in the calculated amount of $10,399.17 for tuition/fees, books/supplies, and a housing allowance was validly created. Nonetheless, the appellant is seeking a waiver of overpayment of these transferred Chapter 33 education benefits. For example, in the July 2017 and October 2017 VA Forms 5655, the appellant contended that she would endure a financial hardship if she was required to repay the debt in the amount of approximately $48,000.00, which was the approximate debt amount prior to the partial grant of a waiver of the indebtedness when VA applied her entitlement to DEA benefits. Specifically, she noted that she would not be able to afford to pay the $3,000.00 to $4,000.00 per month payments in order to pay back this debt. Recovery of the overpayment of any VA benefits must be waived if: (1) the application for relief is filed in a timely manner; (2) there is no indication of fraud, misrepresentation, or bad faith on the part of the person having an interest in the waiver; and (3) recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 38 U.S.C. § 5302(a), (c). As noted above, the Board determined that this debt was validly created because the overpayment of eduction benefits resulted from the appellant receiving Chapter 33 benefits from the Veteran, who was ineligible to transfer such benefits to her. The record shows that the application for waiver was timely because it was received within 180 days of the notice of the indebtedness. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.963(b)(2). The Board has reviewed the evidence of record and does not find that there was fraud, misrepresentation, or bad faith on the part of the Veteran or the appellant. Thus, the only issue to be determined is whether recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 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, which are not intended to be all-inclusive: (1) Fault of the debtor where actions of the debtors contribute to the creation of the debt; (2) Balancing of faults weighing fault of the debtor vs. the fault of VA; (3) Undue hardship whether collection would deprive the 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; and (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. Addressing the factors set forth in 38 C.F.R. § 1.965(a), the creation of the debt resulted from the appellant receiving education benefits under Chapter 33 from the Veteran even though he was ineligible to transfer such benefits to the appellant, as he did not serve on active duty until the obligated TOE end date. Moreover, as noted in the September 2017 decision by the Committee that denied the appellant's waiver request for overpayment of Chapter 33 benefits, the Veteran entered a contractual agreement with the service branch to serve the obligated period of time on active duty in order to be able to transfer education benefits to the appellant, which he did not complete. The Committee further noted that the appellant and the Veteran bear the burden of the creation of the debt, as they were responsible for knowing the terms and obligation required for the transfer of entitlement. The Board finds that recovering the overpayment will not result in undue financial hardship to the appellant. The Board acknowledges that the appellant contended throughout the appeal that she would experience a financial hardship in repaying VA for the overpayment in question. The appellant also submitted three VA Forms 5655 showing her monthly expenses and her monthly income. In the first VA Form 5655, which was signed in July 2017, but received by VA in November 2017, she noted that her monthly expenses were $20.00 and monthly income was zero. She also did not have any assets or installment contracts or other debts. The second VA Form 5655, which was received by VA in October 2017, showed that her monthly expenses exceeded her monthly income by $789.40, and that she was able to pay $50.00 per month toward the debt in question. She also noted that she had $24,916.00 in assets, which included her car and cash in the bank, and that she had various installment contracts and other debts that she was required to pay $648.40 per month. In the most recent VA Form 5655, which was signed by the appellant in March 2018 but received by VA in August 2018, the appellant noted that her monthly expenses exceeded her monthly income by $1,139.26, and that she would be able to pay $100.00 per month toward this debt. She noted that she had $24,800.00 in assets, which included her car, and that she had a negative cash bank account of $449.50. She had various installment contracts and other debts that she was required to pay $775.08 per month. However, the Board notes that even though these VA Forms 5655 show that the appellant's monthly expenses exceeded her monthly income, the evidence is against a finding that repayment of this debt would cause undue financial hardship. The Board has considered the appellant's statements that she would not be able to afford to pay the $3,000.00 to $4,000.00 per month payments in order to pay back this debt. The total debt amount has been reduced from $47,875.17 to $10,399.17 after applying the appellant's DEA benefits, which is a substantial reduction in the overall debt and the monthly outlay she would be required to contribute toward reducing the debt. In fact, the appellant indicated that she would be able to pay approximately $100.00 per month in the most recent VA Form 5655. Moreover, as noted in the Committee's September 2017 decision, although the evidence showed current repayment challenges based only on her submission of the July 2017 VA Form 5655, the Committee looked at the potential for repayment within the next three to five years. Furthermore, the evidence showed that the appellant shared her residence with the Veteran, and that this debt, which is a shared burden between the appellant and the Veteran, could be offset with help from the Veteran. Likewise, the repayment of the debt owed would not deprive the appellant of the basic necessities if repaid in structured installments based on her age and future earning potential. Accordingly, although the appellant has asserted that repayment of the debt would cause her undue financial hardship, the preponderance of the evidence is against such a finding. Thus, the Board finds that repayment of this debt would not cause undue financial hardship. The preponderance of the evidence is against a finding that collection of the overpayment would defeat the purpose of an existing benefit. The appellant does not claim that she changed her position to her detriment in reliance on the overpaid amount. Nor does the record indicate that she did so. Thus, this factor does not provide a basis for waiving the recovery of the overpayment. The appellant would be unjustly enriched if the recovery of the overpayment was waived. The debt is valid, and her financial position is such that repayment of the overpayment would not result in undue hardship. To reiterate, the Committee already waived a substantial portion of the debt, which amount is more than $35,000.00. Given the fault on the part of the appellant and the Veteran, that the appellant has the ability to repay the debt without resulting undue hardship, and that to permit the appellant to keep the overpayment would result in her unjust enrichment because there are no equitable circumstances appearing in the record that would make retention of the overpayment anything other than unfair gain, the Board finds that recovery of the overpayment of transferred Post-9/11 GI Bill educational assistance benefits in the calculated amount of $10,399.17 for tuition/fees, books/supplies, and a housing allowance would not be against the principles of equity and good conscience for all the reasons laid out above. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.965(a). Accordingly, the request for a waiver of the overpayment is denied. A. P. SIMPSON Veterans Law Judge Board of Veterans' Appeals Attorney for the Board A. Hodzic, 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.