Citation Nr: 21070686 Decision Date: 11/24/21 Archive Date: 11/24/21 DOCKET NO. 18-11 072A DATE: November 24, 2021 ORDER The overpayment in the amount of $54,400.18 for educational assistance benefits under the Transfer of Entitlement (TOE) provisions of 38 U.S.C. Chapter 33 (Post-9/11 GI Bill) was properly created; to that extent, the appeal is denied. REMANDED Entitlement to a waiver of the overpayment in the amount of $54,400.18 for educational assistance benefits under the Transfer of Entitlement (TOE) provisions of 38 U.S.C. Chapter 33 (Post-9/11 GI Bill) is remanded. FINDINGS OF FACT 1. VA awarded to the appellant transferred education benefits under the Post-9/11 GI Bill from the Veteran for the academic terms from August 2015 to August 2016 in the calculated amount of $54,400.18. 2. The Veteran was obligated to serve on active duty until June 19, 2018, to be eligible to transfer education benefits to his dependents; however, he separated from active duty on July 1, 2016. 3. In February 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 benefits. CONCLUSION OF LAW The overpayment in the amount of $54,400.18 for educational assistance benefits under the Post-9/11 GI Bill for the academic terms from August 2015 to August 2016 was legally created, thus, the debt is valid. 38 U.S.C. §§ 3311, 3319; 38 C.F.R. §§ 1.911, 21.9570, 21.9695. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from February 1983 to September 1992 and December 1995 to February 2016, with additional service in the Air Force National Guard and Air Force Reserve. The appellant is his daughter. This matter comes to the Board of Veterans' Appeals (Board) on appeal from a February 2017 determination of the Department of Veterans Affairs (VA) Regional Office. This matter was previously before the Board in January 2020 at which time the matter was remanded for additional development; namely, to request the Veteran's service personnel records and Department of Defense (DoD) records. There has been substantial compliance with the Board's January 2020 remand directives. See Stegall v. West, 11 Vet. App. 268 (1998). The Board explained in January 2020 that the issue had been adjudicated initially as eligibility for the transfer of entitlement of Post-9/11 GI Bill benefits. However, as the practical effect of the matter was whether the debt resulting from the payment of such benefits due to lack of eligibility was valid, and in consideration of the appellant's request for waiver of the overpayment, the Board recharacterized the issue as noted above. Validity of the Overpayment Law and Regulations An overpayment is created when VA determines that a beneficiary or payee has received benefit payments greater than the amount due or to which such beneficiary or payee is entitled. 38 C.F.R. § 1.962. The debtor may challenge the validity or amount of the debt owed. See 38 C.F.R. § 1.911(c)(1); see also VAOPGCPREC 6-98; Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991). The debtor may also apply for a waiver of any debt found to be valid. See 38 U.S.C. § 5302; 38 C.F.R. §§ 1.911(c)(2), 1.963. In this case, the Veteran has challenged the validity of the debt. For a determination that the overpayment was not properly created, such that the debt was not valid, it must be established that the claimant was either legally entitled to the benefits in question or, if the claimant was not legally entitled, then it must be shown that VA was solely responsible for the claimant being erroneously paid 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. 27757 (1990). For the overpayment to be considered the result of sole administrative error, and for the appellant to consequently not be liable for the debt, the appellant must not have known, or should not have known, that the VA educational benefits were erroneous. In other words, 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. 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). 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 service after September 10, 2001. 38 U.S.C. § 3311; 38 C.F.R. §§ 21.9500 - 21.9770. An individual who is entitled to educational assistance under Chapter 33 based on his or her own active 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 or TOE benefit 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. 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). 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 one of the following circumstances exists: (1) The transferor did not complete the service due to (a) his or her death; (b) a medical condition that preexisted such service on active duty and that the Secretary of the military department concerned determines is not service-connected; (c) a hardship, as determined by the Secretary of the military department concerned; (d) 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; or (2) The transferor is considered to have completed his or her service as a result of being discharged for (a) a disability); or (b) a reduction in force. 38 C.F.R. § 21.9570(l); 38 U.S.C. §§ 3311(c)(4), 3319(i). The 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). If an individual transferring Chapter 33 entitlement fails to complete the service agreed to by the individual, the amount of any transferred entitlement that is used by a dependent of the individual as of the date of such failure shall be treated as an overpayment of educational assistance. 38 U.S.C. § 3319(i)(2). In the event of an overpayment of Chapter 33 educational assistance benefits with respect to a dependent to whom entitlement is transferred, the dependent and the individual making the transfer shall be jointly and severally liable for the overpayment. 38 U.S.C. § 3319(i)(1). Discussion Information obtained from VADIR (Veterans Affairs and Department of Defense Identity Repository) shows that the Veteran applied to transfer his Chapter 33 benefits to his dependents in June 2014 and he was found eligible to transfer 18 months of benefits to each of his two dependents. His transfer status date was in August 2014. The information also shows that he was given an obligated projected end date of June 19, 2018. His education file contains a letter from the DoD to the Veteran informing him that he had been approved by his service to transfer his unused Post-9/11 GI Bill benefits to members of his family and that his obligation end date was June 19, 2018. In January 2015, the appellant filed an application for Chapter 33 education benefits under TOE to pursue a master's degree program in Occupational Therapy. In February 2015, the appellant received a Certificate of Eligibility awarding her 18 months of Chapter 33 TOE benefits. VA thereafter paid Chapter 33 benefits for the appellants attendance at Quinnipiac University for three semesters beginning in August 2015 and ending in December 2016. On file is an April 2016 Record of Individual Counseling from the Chief Enlisted Manager of the Air National Guard (ANG) informing the Veteran that he had failed four fitness tests over the previous 36 months and that his enlistment had been extended on three occasions to allow him ample time to pass the fitness assessment (FA). These extensions include a seven-month extension in May 2015 and an additional three-month extension in December 2015/January 2016 which brought his enlistment to May 2016. The Veteran was further informed that he was being given a final two-month extension in May 2016 which would bring his enlistment to July 2016. He was additionally informed that a FA would be arranged in late June 2016 and that he should use the following 60 days to properly prepare for the FA. The Chief Enlisted Manager acknowledged to the Veteran that he had challenges that he was dealing with but that none of them were keeping him from achieving a level of fitness that allowed for a passing score. A Special Order in September 2016 from the Department of the Air Force shows that the Veteran was honorably discharged from the New York Air National Guard effective June 30, 2016 and was transferred to the USAF (United States Air Force) Retired list on July 1, 2016. In February 2017, the Agency of Original Jurisdiction (AOJ) sought clarification from the ANG regarding the Veteran's eligibility to transfer his Chapter 33 benefits. More specifically, the AOJ asked the ANG whether the Veteran met his obligation date for TOE and, if not, the reason. The ANG informed the AOJ that the Veteran retired on July 1, 2016, and he was aware of his obligation end date of June 19, 2018 (for TOE). The AOJ informed the appellant in February 2017 that VA had received an update from the DoD that her parent (the Veteran) was not eligible for the TOE program and that there had been an overpayment in Chapter 33 education benefits for the three academic terms that she was enrolled in at Quinnipiac University beginning in August 2015, January 2016, and August 2016, respectively. Notably, the AOJ thereafter informed the appellant in July 2017 that the payments made for the Fall 2016 semester (i.e. from August 29, 2016, to December 17, 2016) were due to administrative error because VA made the payments after the Veteran had retired from military service. These payments are shown to total $34,191.66 and include $22,065.23 for tuition and fees, $11,543.10 for housing, and $583.33 for books and supplies. Accordingly, the AOJ reduced the amount of the overpayment by $34,191,66 for a total amount owed of $54,400.18. The appellant asserts that VA should not have given her the education benefits in the first place if she was not entitled to them and that had she known she was not entitled to the benefits she would not have attended such a pricey institution as Quinnipiac University. She asked that the benefits be reinstated to avoid her having to borrow tens of thousands of dollars in education loans. In support of the appeal, the Veteran submitted a statement in January 2020 asserting that he was not aware that he had to serve an additional four years for to be eligible for the TOE program until he applied for the program (in June 2014). That notwithstanding, there is no dispute that he was aware of his end obligation date in June 2018 when he applied for and was approved for the benefits in 2014. He explained in January 2020 that he had no choice but to retire early in July 2016 because of his failure to pass the fitness assessments which prevented him from reenlisting. He said that he had been given enlistment extensions and that if he did not retire prior to the end date of his enlistment extensions, he would not have been able to collect retirement benefits until he reached age 65. He said that in consideration of this and for the good of his health, he retired in July 2016. He also said that he was under the care of a physician during the times that he failed the fitness assessments for back problems and ongoing sciatica and that the military would not grant him waivers or evaluate him for possible medical retirement even though his unit knew of his medical conditions. The record contains a copy of a report that the Veteran filed with the Inspector General in August 2016 regarding the circumstances of his retirement. He noted in this report that his eligibility for TOE would not be met with his "forced retirement". As a starting point, there is no dispute that the Veteran failed to complete the required service contract for participation in the transferability program by retiring from military service in July 2016 which was prior to his service obligation date in June 2018. Next, the evidence does not show that the Veteran meets any of the circumstances under 38 C.F.R. §21.9570 pertaining to when a transferor fails to complete the required service contract for the transferability program. Rather, evidence from the service department shows that he was not discharged for a medical condition, a service-connected disability, or hardship. Rather, the information shows that he retired. Such evidence includes information from the DOD informing VA in February 2017 that at the time that the Veteran retired on July 1, 2016, he was aware of his obligation end date in June 2018 for eligibility for TOE benefits. As far as the exception regarding early discharge due to 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, this requires a determination by the Secretary of the military department concerned. 38 C.F.R. §21.9570(l)(1)(D). In this case, such a determination has not been made. The Veteran conceded as much in January 2020 when he stated that the military would not grant him a waiver or a medical retirement. As noted, VA does not have the authority to alter DOD's reasons for the Veteran's separation, or the characterization of his service. The service department's findings on such matters are conclusive and binding on VA. See, e.g., Duro v. Derwinski, 2 Vet. App. 530 (1992); Dacoron v. Brown, 4 Vet. App. 115, 120 (1993). The Board further finds that the overpayment was not due to sole administrative error on the part of VA for the period prior to August 2016. Rather, all educational assistance benefits paid prior to August 2016 were based on the TOE approval that the Veteran had received and his continued military service to fulfill his service obligation as required under the TOE provisions. Once the Veteran retired, he failed to meet those service obligations and the appellant was no longer eligible to receive transferred Post-9/11 GI Bill benefits. Thus, the overpayment for the period prior to August 2016 was not due to sole administrative error. Since the appellant was not legally entitled to the benefits in question for the period prior to August 2016 and since VA was not solely responsible for the appellant being erroneously paid benefits for this period, the Board finds that the overpayment in the amount of $54,400.18 was properly created and is valid. The Board is sympathetic to the appellant's position, especially considering that the RO initially found her eligible for Chapter 33 educational assistance benefits; however, the governing law is clear, and the Board is bound by the laws and regulations that apply to Veterans claims. 38 U.S.C. § 7104(c); 38 C.F.R. §§ 19.5, 20.101(a). REASONS FOR REMAND Waiver of the Overpayment The appellant asserts that recovery of the overpayment at issue in this appeal would result in financial hardship. The most recent Financial Status Report (FSR) of record from the appellant is dated in March 2017 when she was still in school. She explained at that time that she was in her junior year of a five-and-a-half year accelerated master's program and she was completely dependent on her parents. As the FSR is several years old it may not accurately represent the appellant's current financial situation. Consequently, a remand is necessary for the purpose of obtaining updated financial information from the appellant before weighing factors of equity and good conscience regarding the waiver request. See 38 C.F.R. § 1.963(a). Furthermore, considering that the appellant and Veteran shall be jointly and severally liable for the overpayment, the Veteran should be asked to submit a FSR as well. 38 U.S.C. § 3319(i)(1). The matter is REMANDED for the following action: 1. Ask the Appellant to submit an updated FSR and ask the Veteran to submit one as well. (Continued on the next page) 2. Then, readjudicate the request for a waiver of the overpayment of educational assistance benefits in the amount of $54,400.18. If the decision is adverse to the appellant, issue a supplemental statement of the case and allow appropriate time for response. Then, return the case to the Board. Kristin Haddock Veterans Law Judge Board of Veterans' Appeals Attorney for the Board A. Shawkey, 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.