Citation Nr: 21074516 Decision Date: 12/15/21 Archive Date: 12/15/21 DOCKET NO. 18-19 137A DATE: December 15, 2021 REMANDED Entitlement to a waiver of recovery of an overpayment of Department of Veterans Affairs (VA) benefits in the amount of $11,164.39, to include the question of whether the overpayment was properly created is remanded. REASONS FOR REMAND The Veteran served on active duty in the United States Army from May 2015 to February 2016. The Veteran has additional service in the Army National Guard. For his meritorious service, the Veteran has been awarded (among other decorations) the Army Commendation and Achievement Medals. 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 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. Reservists may waive their pension, compensation, or retirement pay for periods of field training, instruction, other duty, or drills. A waiver may include prospective periods and contain a right of recoupment for the days for which the reservist did not receive payment for duty by reason of failure to report for duty. 38 C.F.R. § 3.700(a)(1)(iii). Following his separation from service in February 2016, the Veteran served in the National Guard. In May 2017, the Agency of Original Jurisdiction (AOJ) informed the Veteran that VA received information from the Defense Manpower Data Center (DMDC) that he received military drill pay concurrently while receiving VA benefits during Fiscal Year (FY) 2016, finding that he had 162 drill days He was provided a VA Form 21-8951, Notice of Waiver of VA Compensation or Pension to Receive Military Pay and Allowances. He was told that based on this information, VA would take steps to make a retroactive adjustment for the days you were receiving drill pay. The form provides a place for the Veteran to indicate the number of drill days served, and for him to sign this form, secure the signature of his unit commander or designee, and return the completed form to VA. The AOJ adjusted the Veteran's pay which resulted in an overpayment of $11,164.39. The Veteran requested a waiver of the recovery of that overpayment which was denied in January 2018 and the denial was appealed by the Veteran. He offered testimony and evidence at a September 2021 Board of Veterans' Appeals (Board) hearing. The Veteran completed the VA Form 21-8951, Notice of Waiver of VA Compensation or Pension to Receive Military Pay and Allowances. He indicated that during FY 2016 he had 43 drill days, he signed this form, and he secured the signature of his unit commander. The Veteran also submitted verification from the Colorado Army National Guard dated in June 2017 as well as other supporting evidence. In this case, the Veteran has challenged the proper creation of the debt. As such further appellate review by the Board on the Veteran's waiver claim must be deferred pending formal adjudication of his challenge to the validity of the debt. 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 matters are REMANDED for the following action: Adjudicate the issue of whether the overpayment was properly created taking into consideration the argument and evidence of record including his VA Form 21-8951, Notice of Waiver of VA Compensation or Pension to Receive Military Pay and Allowances and the June 2017 letter of the Colorado Army National Guard. (Continued on next page) If the claim continues to be denied, including on this basis, issue the Veteran and his representative an appropriate supplemental statement of the case (SSOC) which addresses both the creation and waiver issues and afford them the opportunity to respond, Evan M. Deichert Veterans Law Judge Board of Veterans' Appeals Attorney for the Board J. Connolly 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.