Citation Nr: A21018549 Decision Date: 11/19/21 Archive Date: 11/19/21 DOCKET NO. 200701-95519 DATE: November 19, 2021 REMANDED Entitlement to waiver of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $22,425.49, due to concurrent receipt of military drill pay in fiscal years (FY) 2010, 2011, 2012, 2013, 2014, 2017, and 2018, to include whether the overpayment was properly created, is remanded. REASONS FOR REMAND The Veteran served on active duty from May 1993 to August 1993, March 1997 to July 1997, August 2003 to August 2004, July 2005 to September 2006, and June 2009 to September 2009, with additional Reserve service. Prior to discussing the reasons for remand, the Board of Veterans' Appeals (Board) must first clarify the issue properly on appeal. In this case, the Board notes that the Veteran initiated an appeal based on the May 2020 decision issued by the Committee on Waivers and Compromises (COWC) of the Department of Veterans Affairs (VA) Regional Office (RO). This decision addressed the issue of an entitlement to waiver of overpayment of VA compensation benefits due to concurrent receipt of military drill pay in FY 2016 alone. However, earlier, in a February 2020 decision, the RO restored the reduction of VA compensation benefits for FY 2016, based on the fact that the Veteran elected to waive receipt of his military pay. As this constituted a full award of the benefit sought on appeal, no case or controversy exists before the Board for consideration, which would then ordinarily result in dismissal of this appeal. However, the Veteran, on his July 2020 VA Form 10182, Decision Review Request: Board Appeal (Notice of Disagreement (NOD)), challenged whether an overpayment was ever properly created, as he contended that on the relevant VA forms for payment election, he elected to waive receipt of military pay. Even though he indicated on the form that the decision appealed was issued in May 2020, the Board found on review, and within one year of the VA Form 10182, the COWC had also issued a decision in June 2020 that denied waivers of the overpayment of VA compensation benefits due to concurrent receipt of military drill pay for FYs 2011, 2012, 2013, 2014, 2016, 2017, and 2018. As a result, the Board will liberally interpret his NOD to contain an appeal of the June 2020 decision issued by COWC, to include whether the overpayment was properly created. See Hall v. McDonough, --- Vet. App. ---, 2021 U.S. App. Vet. Claims LEXIS 1838, 7-9 (October 18, 2021) (stating that VA regulations provide claimants a cause of action for appellate review by initiating an appeal via a notice of disagreement and the exercise of jurisdiction requires VA to engage in requisite fact-finding). Here, the Board's fact-finding efforts conclude that taking jurisdiction of the noted FYs is appropriate for appellate review. Accordingly, this issue has been added to the appeal. See also 38 C.F.R. § 20.202(a). Similarly, the Board has characterized the issue to include FY 2010, as the evidence of record showed that the Veteran's contentions began with disputing the reduction in payments due to military drill pay received in that fiscal year, as well. Id. The Board, however, declines to address the issue of waiver of an overpayment for FY 2015 in this decision, as the Veteran perfected an appeal under the legacy review system. A Board hearing was held in October 2021 with a different Veterans Law Judge and the rules under 38 C.F.R. §§ 20.602, 20.604 will be followed in the instance regarding FY 2015. Otherwise, as this decision constitutes an initial decision issued after February 19, 2019, the modernized review system, also known as the Appeals Modernization Act (AMA), applies here. In the July 2020 VA Form 10182, Decision Review Request: Board Appeal, the Veteran elected the Hearing docket. Therefore, the Board may only consider the evidence of record at the time of the agency of original jurisdiction (AOJ) decision on appeal, as well as any evidence submitted by the Veteran or his representative at the hearing or within 90 days following the hearing. 38 C.F.R. § 20.302(a). The Veteran testified at a June 2021 Board virtual hearing before the undersigned for the issue of waiver of overpayment and the creation of that debt for FYs other than 2015, as explained; a transcript is of record. Evidence was added to the claims file during a period of time when new evidence was not allowed. As the Board is remanding the claim for further development, this additional evidence will be considered by the RO in the adjudication of those claims. Finally, the Veteran has two additional appeals that will be addressed in separate Board decisions at a later time. Specifically, his claims for service connection for infertility and traumatic brain injury will be addressed under docket number 191209-52010 in the modernized review system, while his claim for waiver of an overpayment for VA compensation benefits due to concurrent drill pay in FY 2015 will be addressed under docket number 17-64 186 in the legacy review system. The issue of whether a waiver of an overpayment of VA compensation benefits in the amount of $22,425.49, due to concurrent receipt of military drill pay in FY 2010, 2011, 2012, 2013, 2014, 2017, and 2018, to include whether the overpayment was properly created, is remanded. As relevant to this appeal, 38 U.S.C. § 5304(c) prohibits the receipt of VA disability compensation benefits for any period for which the person receives active service pay. See 38 C.F.R. §§ 3.654, 3.700. This pay includes active duty pay, drill, and active duty for training payments, and inactive duty for training payments made to Reservists and members of the National Guard. Id. After separation from active service, the Veteran began service in the Army Reserve. In June 2010, the RO awarded claims of service connection and established VA compensation benefits, effective August 27, 2008. Subsequently, in August 2016, VA sent a letter to the Veteran informing him that information received from the Defense Manpower Data Center (DMDC) indicated he received 341 days of military drill pay concurrently while receiving VA compensation benefits for FYs 2010, 2011, 2012, 2013, and 2014. In November 2016, the RO sent a separate notification letter stating that his VA compensation payments would be reduced due to concurrent receipt of military drill pay for the following FYs and number of drill days: 1. FY 2010: 80 days; 2. FY 2011: 66 days; 3. FY 2012: 51 days; 4. FY 2013: 71 days; and 5. FY 2014: 73 days. Thereafter, in December 2018, VA informed the Veteran that his VA compensation benefits would again be reduced as information was received from the DMDC that he completed 81 drill days in FY 2017. In January 2019, VA received the Veteran's VA Form 21-8951-2, which reflected that for FY 2018, he completed 48 training days. On the second page, the Veteran checked the box indicating he elected to waive military pay in order to retain his VA compensation, and then he signed and dated it. In September 2019, the Debt Management Center (DMC) informed the Veteran that his debt increased, and the current balance was $20,914.55. One month later, the Veteran submitted a VA Form 5655, Financial Status Report, on which he requested a waiver and indicated he waived military pay. DMC then forwarded his request for a waiver to COWC for consideration. On the transfer form, DMC noted consideration of FYs 2011, 2012, 2013, 2014, 2016, 2017, and 2018. As noted earlier, the RO then restored the payments reduced for FY 2016 in February 2020. In June 2020, COWC issued the decision on appeal and found that the relevant debt period included FYs 2011, 2012, 2013, 2014, 2016, 2017, and 2018. In this case, the Veteran has challenged the validity of the debt. During his Board hearing testimony, the Veteran testified he notified VA multiple times that he elected to waive his military pay to receive VA compensation payments. See Hearing Transcript, pages 3-4. He averred that from the start, he elected to waive his military pay with "full knowledge and full implications of what that meant." Id. A review of the file also reflected that in December 2016, the Veteran emailed VA, questioning the validity of the debt set forth in the November 2016 notification letter and stated that he filed VA Form 21-8951 that stated he waived military pay. The evidence of record also showed he initiated multiple Congressional inquiries stating the same. See e.g., November 2016 Congressionals, May 2019 email correspondence. Moreover, review of the record reflected some submissions where the Veteran elected to waive military pay. See January 2019 VA Form 21-8951-2 for FY 2018, May 2019 VA Form 21-8951-2 for FY 2017. The Court of Veterans Appeals (Court) has directed that appellate review by the Board on the Veteran's waiver claim must be deferred pending formal adjudication of the Veteran's challenge to the validity of the debt, which must be undertaken by the AOJ. Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991) ("when a Veteran raises the validity of the debt as part of a waiver application... it is arbitrary and capricious and an abuse of discretion to adjudicate the waiver application without first deciding a veteran's challenge to the lawfulness of the debt asserted against him or her"); VAOPGCPREC 6-98 (July 24, 1998) (holding that when a veteran challenges the validity of the debt and seeks waiver of the debt, the [Regional Office] must first fully review the debt's validity and, if the office believes the debt to be valid, prepare a written decision fully justifying the validity of the debt before referring the waiver request to the Committee on Waivers and Compromises). A debtor may dispute the amount or existence of a debt, which is a right that may be exercised separately from a request for waiver or at the same time. 38 C.F.R. § 1.911(c)(1). Resolution of the creation issue must precede consideration of the waiver issue. The Board recognizes that the Schaper decision was made in the context of the legacy appeals process and this decision is made under the AMA. Under the AMA, the Board may remand for correction of either a pre-decisional duty to assist error or "any other error by the AOJ in satisfying a regulatory or statutory duty, if correction of the error would have a reasonable possibility of aiding in substantiating the appellant's claim." See 38 C.F.R. § 20.802. In Schaper, the Court decided it was an error to fail to first adjudicate validity of debt based on the statutory and regulatory waiver consideration of "equity and good conscious." See 1 Vet. App. at 437; see also 38 U.S.C. § 5302(b). Additionally, the standard of "no reasonable possibility" is not fulfilled under the "mere belief that the likelihood" of substantiating the claim is low. See Jones v. Wilkie, 918 F.3d 922, 926 (2019) (interpreting similar language from 38 U.S.C. § 5103A). The Board, thus, considers it a correctible error by the AOJ in satisfying their regulatory and statutory duties under 38 U.S.C. § 5302(b) and 38 C.F.R. § 1.965 and that correction raises a reasonable possibility of aiding in substantiating the Veteran's claim. Given the state of the record and that the Veteran has been consistent in his statements since the November 2016 notification letter, the Board finds that review of the debt's validity must begin in FY 2010 and also include the other fiscal years mentioned above. Accordingly, remand under the AMA for these and similar circumstances remains appropriate. The matter is REMANDED for the following actions: 1. A request should be made to the Defense Finance and Accounting Service (DFAS) to determine whether the Veteran was paid drill training pay for the 80 days in Fiscal Year 2010; 66 days in Fiscal Year 2011; 51 days in Fiscal Year 2012; 71 days in Fiscal Year 2013; 73 days in Fiscal Year 2014; 81 days in Fiscal Year 2017; and 48 days in Fiscal Year 2018 by requesting leave and earnings statements and a payment worksheet for Fiscal Years 2010, 2011, 2012, 2013, 2014, 2017, and 2018; these must be associated with the claims file. 2. Prepare an audit of the Veteran's VA compensation account during Fiscal Years 2010, 2011, 2012, 2013, 2014, 2017, and 2018, after the above actions are completed, with consideration of the Veteran's training days. The audit report must be associated with the claims folder, and a copy must be sent to the Veteran. 3. After completing the development above, adjudicate the issue of whether the overpayment at issue in this case was properly created, to include consideration of the multiple submissions of VA Form 21-8951 or 21-8951-2 received. Tiffany Dawson Veterans Law Judge Board of Veterans' Appeals Attorney for the Board M. Tang, 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.