Citation Nr: 21075129 Decision Date: 12/17/21 Archive Date: 12/17/21 DOCKET NO. 18-51 535 DATE: December 17, 2021 ORDER 1. Challenge to the propriety of the creation of an overpayment that ensued from the Veteran's incarceration is denied. 2. Claim for a waiver of the debt arising from the overpayment that ensued from the Veteran's incarceration is granted. FINDINGS OF FACT 1. The Veteran has been incarcerated for a period in excess of 60 days while being qualified as an inmate convicted of a felony offense. 2. The Veteran's overpayment that ensued from his incarceration did not arise from a sole administrative error on the part of the Department of Veterans Affairs (VA). 3. The balance of equities establishes that the Veteran would not be unjustly enriched by a waiver of recoupment of the debt arising from the overpayment that ensued from his incarceration. CONCLUSIONS OF LAW 1. The Veteran's overpayment, which ensued from his incarceration, was properly created. 38 U.S.C. § 5313; 38 C.F.R. § 3.665. 2. A waiver of recoupment of the Veteran's overpayment (that ensued from his incarceration) is not contrary to the principles of equity and good conscience. 38 U.S.C. §§ 5302, 5313B; 38 C.F.R. §§ 1.962, 1.963, 1.965, 3.665, 3.666. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran, a military pensioner and a VA disability compensation beneficiary, had active duty from October 1985 to October 2005. Effective his separation from service, the Veteran was service connected for multiple disabilities having a combined rating of 80 percent, and his combined disability rating was increased to 90 percent effective February 2015. These matters come before the Board of Veterans' Appeals (Board) on appeal from: (a) the October 2017 final action notice, which was issued by a VA Regional Office (RO); and (b) the May 2018 decision rendered by the VA Committee on Waivers and Compromises (COWC). Since these matters were affected by the Veteran's and RO's mutual confusion, a summary of the underlying facts and procedural history is warranted. In January 2014, after working post service in a civilian employment, the Veteran became employed by a correctional facility. Although married, he was estranged from his wife, S.I.C.-M., while keeping relationships with his daughters, E.T.C.-D., who was emancipated and residing in Florida, and S.C.C. M., who was a minor residing with S.I.C.-M. in North Carolina. Shortly after becoming employed at the correctional facility, the Veteran became enamored with an inmate serving her prison sentence. After some extensive socialization the Veteran and the inmate engaged in a sexual intercourse. The inmate later reported the intercourse to the authorities, characterizing it as rape. The Veteran was charged with and pled guilty to sexual abuse of a ward. In November 2020, the District judge who had presided over the Veteran's criminal proceedings denied him § 2255 habeas relief. Hence, the Veteran, who is still serving his 84-month sentence at a Federal correctional facility in Michigan, presently qualifies as an inmate convicted of a felony offense for VA purposes, and he will continue to so qualify unless the Circuit Court or the U.S. Supreme Court grants him a writ of habeas corpus vacating the Veteran's conviction. Accord Dixon v. Nicholson, 20 Vet. App. 544 (2006). The Veteran's public record with the Federal Bureau of Prisons (FBOP) shows that, based on his good-prison-conduct credits, the Veteran is scheduled to be released from confinement in June 2022. Further, the Board is mindful of the Second Chance Act, 8 U.S.C. § 3624, a provision requiring FBOP to consider placement of inmates at residential reentry centers (RRCs), a Federal counterpart of halfway houses, for up to 12 months prior to the inmates' release, and FBOP's common practice to place inmates at RRCs for at least six months preceding their release. Therefore, the Board cannot rule out that the Veteran would be placed at an RRC in January 2022. Accordingly, the Board factors the circumstances of the Veteran's conviction and his upcoming release from imprisonment into the Board's analysis. After the Veteran's imprisonment began in June 2016, the amount of his VA benefits was required to be reduced from the amount payable for his 90 percent combined rating to that payable for a 10 percent rating. See 38 U.S.C. § 5313(A); 38 C.F.R. § 3.665(a). The period of such a reduction had to run from the 61st day of the Veteran's incarceration until the day following the date of his release from confinement or the date of the Veteran's placement in an RRC. Id. Hence, if during this period the Veteran was paid VA benefits in the amount exceeding that payable for a 10 percent rating, the excess payment qualified as an overpayment and became subject to recoupment by VA through incremental withholdings from the Veteran's properly paid VA benefits (i.e., first, from the Veteran's VA benefits in the amount payable for a 10 percent rating during his incarceration and, upon the Veteran's release from confinement or placement in an RRC, from his full VA benefits in the amount corresponding to a 90 percent rating). This is so because the amount-reduction of VA benefits under 38 U.S.C. § 5313 and 38 C.F.R. § 3.665 is a measure qualitatively different from a reduction in a VA disability rating. Correspondingly, the full amount of the Veteran's VA benefits would be restored upon his release or placement in an RRC if he promptly notifies the RO of such a development. That said, the amount of the Veteran's VA benefits left unpaid under 38 U.S.C. § 5313 and 38 C.F.R. § 3.66 due to his incarceration is forfeited and would never be restored to the Veteran unless the Circuit Court or the U.S. Supreme Court grants him a writ of habeas corpus. Dixon, 20 Vet. App. 544. However, while a VA compensation beneficiary incarcerated for over 60 days based on his/her felony conviction is required to have the amount of his/her VA benefits reduced, and the excess has to be forfeited, the beneficiary's dependents, to include his/her spouse and children, may receive an apportionment of the forfeited amount upon establishing their financial hardship. In July 2016, i.e., one month after the Veteran's incarceration, the RO received a claim for apportionment executed by the Veteran's wife, S.I.C.-M. S.I.C.-M.'s submission demonstrated that she had retained a Veterans Service Organization (VSO) as a representative and executed VA Form 21-0788. However, S.I.C.-M.'s VA Form 21-0788 stated that her monthly net income was $4,985 and exceeded her monthly household expenses, even though she listed duplicative expenses in North Carolina and Puerto Rico (where she had already relocated from North Carolina). The VSO's cover page accompanying S.I.C.-M.'s VA Form 21-0788 was covered with boxes to check and statements related to her apportionment claim, and at the very bottom noted, "Veterans [sic] incarcerated as of June 2016." Two days after S.I.C.-M. filed VA Form 21-0788, FBOP notified VA that the Veteran had been incarcerated, with the exact date of his imprisonment, the exact nature of his conviction, and his place of incarceration in Michigan. In November 2016, the RO received another application for an apportionment but without the VSO's cover page. This new application was also VA Form 21-0788, made to appear as if it were executed by S.I.C.-M., and it stated that S.I.C.-M was seeking an apportionment for herself and for S.C.C.-M., with S.C.C.-M. as the Veteran's dependent minor child. While stating that S.C.C.-M. was residing in Puerto Rico, the new application stated that her monthly net income reduced to $4,449, and that she had no expenses in North Carolina. Therefore, the new VA Form 21-0788 demonstrated that S.C.C.-M. had an even more substantial discretionary monthly income. Later in November 2016, the RO issued a letter requesting the Veteran's financial information needed to determine whether an apportionment, if granted to S.I.C.-M. and/or S.C.C.-M., would impose an undue hardship on the Veteran in light of his income and expenses. The November 2016 letter made it clear that the RO had not noticed the fact of the Veteran's incarceration. Rather, the RO remained under the impression that the Veteran had been residing at the Florida address of E.T.C.-D, his oldest daughter. In January 2017, the Veteran, acting through E.T.C.-D. as a holder of his power of attorney (POA), filed a Statement in Support of Claim operating as his de facto Financial Status Report (FSR) executed in response to the RO's November 2016 letter. The Statement in Support of Claim showed that the Veteran was in receipt of his monthly military pension in the amount of $1,690 and VA benefits which, at the time, remained unreduced due to the RO's failure to acknowledge the fact of his incarceration. The Statement in Support of Claim also demonstrated that the Veteran's pre-incarceration monthly expenses, to include his obligations on installment contracts, were equal to his monthly income arising from the Veteran's military pension combined with his VA benefits, but he was also responsible for a $19,098 credit card debt. Later in January 2017, the RO issued two notification letters, one to S.I.C.-M. and another to the Veteran at E.T.C.-D.'s Florida address. The letter to S.I.C.-M. informed her that an apportionment to S.I.C.-M. was denied based on her discretionary monthly income, and an apportionment to S.C.C.-M. was denied because she no longer qualified as the Veteran's dependent minor child because S.C.C.-M. turned 18 years old in February 2015. Unfortunately, the RO's January 2017 letter to the Veteran was executed in less coherent terms. It stated: We have carefully considered the claim for an apportioned share of your benefits on behalf of your spouse [S.C.C.-M.]. Our letter dated Nov[ember] 2016 told you that we planned to reduce your compensation benefits . . . . After reviewing all evidence submitted by [S.C.C.-M.] we have denied the apportionment claim. We have decided not to make the proposed change. You will continue to be entitled to [your full] monthly [VA benefits in the amount payable for a 90 percent combined disability rating]. In other words, the RO's January 2017 letter confirmed the RO's failure to acknowledge the Veteran's incarceration for a period in excess of 60 days based on his conviction of felony. Further, this January 2017 letter, while seemingly striving to convey the RO's decision to deny apportionments to S.I.C.-M. and S.C.C.-M., failed to convey the decision in simple English. Instead, the RO utilized the puzzling sentence "[w]e have decided not to make the proposed change," which was meant to be a paraphrasing of the RO's preceding phrase, "we have denied the apportionment claim," since the "proposed change" the RO referred to was S.I.C.-M.'s and S.C.C.-M.'s apportionment claims. However, the RO's poor wording, read jointly with the fact that VA was still continuing to disburse the Veteran's VA benefits, caused the Veteran's and E.T.C.-D.'s impression that the RO might have determined that the Veteran was still entitled to the full amount of his VA benefits: regardless of the fact his incarceration. In April 2017, i.e., two and a half months after the RO issued the poorly worded January 2017 letter to the Veteran and mailed it to E.T.C.-D.'s address, E.T.C.-D. sent a statement on the Veteran's behalf reflecting his misreading of the RO's letter. Specifically, E.T.C.-D.'s statement demonstrated that the Veteran had been aware ab initio that the amount of his VA benefits would be reduced due to incarceration. In addition, E.T.C.-D.'s statement clarified that the document, which appeared to be S.I.C.-M.'s second application for an apportionment (filed on behalf of her and S.C.C.-M.) was, in fact, executed by E.T.C.-D. upon the Veteran's directive to request an apportionment in order to avoid forfeiture of the difference between his full amount of VA benefits and the amount payable for a 10 percent rating. (The Board notes its concern with E.T.C.-D.'s application on behalf of S.I.C.-M. and S.C.C.-M. since E.T.C.-D. had no POA or other right to act on their behaves.) Three months later, i.e., in July 2017, the RO finally realized that the Veteran had become incarcerated 13 months prior and issued him a notification letter, which was properly mailed to his address at FBOP's Michigan correctional facility. The notification letter proposed to reduce the amount of the Veteran's VA benefits to that payable for a 10 percent rating, thus creating an overpayment. Further, a month later, i.e., in August 2017, the RO issued a substantively identical letter to the Veteran at E.T.C.-D.'s Florida address, providing him with a required period to respond. When the Veteran's period to respond expired in October 2017, the RO took the proposed action and issued the Veteran a final action notification letter. In January 2018, VA Debt Management Center (DMC), acting as VA's collection agent, issued the Veteran a demand letter informing him that the overpayment created as a result of the RO's October 2017 final action was in the amount of $25,457.61, and that the debt would be recouped through withholdings from his monthly VA benefits. Since the amount of the Veteran's VA benefits during the period of incarceration became reduced from $1,882.68 to $136.24 per month, DMC began withholding the entire amount of his VA benefits effective April 2018, creating the Veteran's impression that his VA benefits had been "stopped." The Board's approximation of the amount of the Veteran's overpayment debt recouped thus far, i.e., as of September 2021, is about $5,780, and the recouped amount is likely to increase to about $6,215 by January 2022, when the Veteran is likely to be placed by FBOP in an RRC under the Second Chance Act. Thus, assuming arguendo that the Veteran promptly notifies the RO of his placement in an RRC, it would take DMC about 10 months to fully recoup his debt. Hence, the Veteran would be required to find a way to balance his budget on his military pension for about 10 months after his release unless he becomes employed. Hence, it is not surprising that, in April 2018, the Veteran filed a claim for a waiver of his debt with COWC. In May 2018, COWC denied the Veteran's waiver claim. In June 2018, the Veteran filed a Notice of Disagreement (NOD) pointing out that his living expenses prior to confinement exceeded the income he had derived from his military pension and VA benefits, thus demonstrating that the Veteran had been employed at the Federal detention facility to balance his budget. The Veteran also clarified that E.T.C.-D. continued paying the expenses associated with his first and second mortgage, as well as his installment contracts, during his incarceration. Further, the Veteran expressed his bewilderment with the fact that his VA benefits "stopped" and pointed at the RO's poorly worded January 2017 letter, which led him to believe that the amount of his VA benefits would remain unchanged. In July 2018, the RO issued a Statement of the Case (SOC) puzzlingly maintaining that the Veteran was incarcerated in Florida, rather than in Michigan. The RO found that the Veteran's overpayment was properly created because, during his incarceration for a period in excess of 60 days based on his felony conviction, the amount of the Veteran's VA benefits had to be statutorily reduced to that payable for a 10 percent rating. In November 2018, acting through the VSO that represented S.I.C.-M., the Veteran filed an appeal and requested a Board hearing. In July 2020, a Veterans Law Judge (VLJ) other than the undersigned issued a decision reading the Veteran's NOD as raising a challenge to the creation of his overpayment in addition to a claim for a waiver of his overpayment debt. The VLJ remanded these matters to the RO with a directive to adjudicate the aspect of the Veteran's statements that the VLJ construed as asserting a sole administrative error. In conjunction with said remand, the VLJ noted that the Veteran did not need to be availed to a Board hearing prior to the issuance of the remand order since he could have such a hearing in the future, after the RO's adjudication. On a closer look, the Board acknowledges that the sole administrative error inquiry is purely legal and a subset of the propriety-of-the-creation-of-the-overpayment issue duly adjudicated by the RO, first in its October 2017 final action letter and then in the July 2018 SOC, both times acting on a fully developed record. Further, while the Veteran is entitled to a Board hearing on his waiver claim, the Veteran is not entitled to a Board hearing on his challenges to the propriety of the creation of the overpayment. 38 C.F.R. § 1.911(c)(2). In other words, such a challenge must be adjudicated on the record, which here was fully developed ab initio. The Board's July 2020 decision was received by the RO only in September 2020. However, one day prior to the RO's receipt of the Board's July 2020 decision, the RO issued a September 2020 memorandum pointing out that the period of the Veteran's overpayment was incorrect and had to be increased by two days (thus increasing the amount of his overpayment debt by about $119, i.e., from $25,185 to $25,304). In addition, the RO's September 2020 memorandum stated: There was no error with the timeliness of processing of the award. Under manual reference III.v.1.I.3.d. "The payment of benefits in an amount exceeding a beneficiary's entitlement that is due to claims processing delays is not considered administrative error." Having summarized the factual and procedural history of these matters, the Board now turns to the analysis of the Veteran's claims. At the onset, the Board notes that this case is ripe, in its entirety, for a complete resolution on the record without availing the Veteran to a Board hearing. As noted supra, the Veteran is not entitled to a hearing on his challenge to the propriety of the creation of his overpayment. Further, a Board hearing on his waiver claim is not warranted because a grant of a full waiver qualifies as a full remedy, even though the Veteran's embedded challenge to the creation of the Veteran's overpayment is denied. Waterhouse v. Principi, 3 Vet. App. 473 (1992). In other words, the Veteran would not be prejudiced by the Board's full grant of his waiver claim without a Board hearing. The Board now turns to the Veteran's challenge to the propriety of the creation of his overpayment. For a determination that an overpayment was improperly created, a debtor is required to establish that (s)he was legally entitled to the benefit in question or, if the debtor was not legally entitled to the benefit, then (s)he is required to establish that VA committed a sole administrative error. To establish that the overpayment was created as the result of such an error, the debtor is required to show that his/her actions or failure to act neither caused nor even contributed to his/her erroneous receipt of the benefit, and in addition that the claimant neither knew nor should have known that the benefit was distributed in error. 38 U.S.C. § 5112(b)(9), (10); 38 C.F.R. § 3.500(b)(2); Jordan v. Brown, 10 Vet. App. 171 (1997). Simply put, it is an exacting legal requirement. Here, the Veteran does not dispute that he has been incarcerated based on a felony conviction that was not overturned on direct appeal or by a grant of a habeas writ followed by the Veteran's retrial that yielded his acquittal or the prosecutor's election to withdraw the Veteran's charges in their entirety. Therefore, effective the 61st day of his confinement, the Veteran was entitled only to the amount of VA benefits payable for a 10 percent disability compensation rating. Accordingly, the Veteran was not entitled to the receipt of VA benefits in a higher amount unless he shows that VA committed a sole administrative error. However, because: (a) E.T.C.-D.'s April 2017 letter stated that the Veteran instructed her to seek an apportionment for S.I.C.-M. and S.C.C.-M. in order to avoid forfeiture of his VA benefits exceeding the amount he would be entitled to during his incarceration; and (b) the second prong of the sole administrative error analysis requires the Veteran's to establish that he neither knew nor should have known that VA benefits in excess of those payable for a 10 percent rating were disbursed to him erroneously, E.T.C.-D.'s April 2017 letter, in and by itself, clearly demonstrates that the Veteran failed to meet the second prong of the sole administrative error inquiry. Therefore, the Veteran's challenge to the propriety of the creation of his overpayment is denied. In conjunction with so finding, the Board acknowledges that the July 2020 Board decision suggested that VA might have committed a sole administrative error because "a July 2016 correspondence from the Veteran's representative indicat[ed that] he was incarcerated as of June 2016[, h]owever, [the Veteran] was not notified until October 2017 that his benefits would be reduced." On a closer look, the Board finds there was not a sole administrative error. Indeed, the June 2016 submission was not the Veteran's statement filed by the VSO as his representative; rather, it was the VSO's cover page of the application for an apportionment filed by S.I.C.-M. (i.e., the cover page filled with boxes to check and statements related to her apportionment claim, with a notation at the bottom reading, "Veterans [sic] incarcerated as of June 2016"). The VSO's cover page suggested only vaguely that the Veteran was in confinement for 30 days and was silent as to whether he was confined due to a pretrial detention or conviction, and if the latter whether the conviction was based on a felony offense or a misdemeanor, and whether the imposed sentence was for a period of imprisonment in excess of 60 days. Moreover, the cover page utilized a generic plural noun "Veterans" and did not provide the RO with any information as to the place of the Veteran's confinement and his prisoner's number, or the court that rendered his conviction. Therefore, upon receipt of the cover page, the RO was without any means to locate the relevant information and no basis to presume that the amount of the Veteran's VA benefits had to be reduced as a result of his incarceration for a period in excess of 60 days due to his felony conviction. Thus, the VSO's cover page did not qualify as a valid notice for the purposes of 38 U.S.C. § 5313 and 38 C.F.R. § 3.665. (However, the RO was notified by FBOP of all of the Veteran's information related to his incarceration two days after the RO's receipt of the VSO's June 2016 cover page.) Further, the Board notes that the RO's October 2017 letter issued by the RO was the final action notice, and the Veteran was informed of the RO's proposal to reduce the amount of his VA benefits three months prior, in the RO's July 2017 notification letter sent to his address at the Michigan correctional facility. Further, the Veteran was re-notified of the same in the August 2017 notification letter sent by the RO to the E.T.C.-D. address in Florida (which the Veteran had been utilizing as his mailing address prior to and during his incarceration). In sum, the RO notified the Veteran of its proposal to charge him with an overpayment 11 months after the overpayment period began to run on the 60th day of his incarceration. Hence, the Board examines whether this 11-month procrastination affects the Board's above-reached finding that the Veteran's overpayment was properly created. As noted supra, one day before docketing the June 2020 VLJ's decision, the RO issued a memorandum quoting VA's Adjudications Procedures Manual (M21) that "[t]he payment of benefits in an amount exceeding a beneficiary's entitlement that is due to claims processing delays is [never] considered [an] administrative error." Notably, the RO's reliance on the blanket M21 statement is as incorrect as the July 2020 VLJ's suggestion that the RO's 11-month delay in processing information as to the Veteran's incarceration might qualify as a sole administrative error. In Shephard v. Shinseki, 26 Vet. App. 159, 162, 167-68 (2013), the U.S. Court of Appeals for Veterans Claims observed that, in the event VA fails to mitigate a debt resulting from VA's unreasonably excessively procrastination, e.g., by delaying the reduction of the amount of an incarcerated veteran's VA benefits by more than two and a half years, the procrastination aspect might be relevant to the legal analysis of what portion of the debt was unduly created due to the unreasonable delay. Here, the RO's delay in the reduction of the amount of the Veteran's VA benefits was only 11 months. Moreover, 60 days of this 11-month period qualified as a required delay: since the RO was obligated to provide the Veteran with a period to respond to the RO's notification letter proposing the reduction in the amount of his VA benefits. Given that the 9-month period of the delay present here is markedly shorter than the two and-a-half-year period addressed in Shephard, the Board is without a basis to find that the RO's procrastination invalidated any portion of the overpayment. That said, the nuanced analysis set forth in Shephard cannot be reconciled with the RO's blanket position based on M21 (which is a nonbinding source that cannot be relied upon mechanically, without analysis. Overton v. Wilkie, 30 Vet. App. 257, 259 (2018)), because had the procrastination continued for a period of two and a half years or longer, it would have necessarily triggered the Shephard analysis and could, potentially, invalidate a portion of the Veteran's overpayment. Having sorted these matters out, the Board now turns to the Veteran's claim for a waiver of the debt arising from his overpayment upon stressing that the Board is intentionally omitting to utilize the $25,185 amount of the Veteran's overpayment debt stated in DMC's January 2018 demand letter/COWC's May 2018 decision. This is so because, in July 2020, the RO issued a memorandum implicitly increasing the amount of the Veteran's overpayment by $119, i.e., from $25,185 to $25,304, but this calculation was not performed by the RO; rather it was performed by the Board. In other words, the Board has no assurances as to the exact amount of the Veteran's overpayment, as currently calculated by the RO. Therefore, the Board uses the phrase "an overpayment resulting from the Veteran's incarceration," which means the overpayment arising from all VA's disbursements of compensation benefits in excess of those payable for a 10 percent rating during the period that ran from the 61st day of the Veteran's confinement to the date of the RO taking action on its October 2016 final action notification letter. A debt is waived, and there is no recoupment of the overpayment of VA benefits if it is determined that recoupment would be against "equity and good conscience." 38 U.S.C. § 5302(a); 38 C.F.R. § 1.962. The concept of "equity and good conscience" means that the facts of a case indicate the need for reasonableness and moderation in the exercise of the Federal government's rights, i.e., the Board's decision should not be unduly favorable or adverse to either side. Therefore, the equity analysis encompasses such considerations as whether the fault on the part of VA outweighs the fault of the debtor in creating the overpayment (the balance-of-fault element), whether recoupment of the debt would deprive the debtor of basic necessities, such as food, shelter, clothing, and medical care (the financial-hardship element), whether recoupment of the debt would nullify the objective for which the debtor's VA benefits that became subject to recoupment were awarded (the nullification element), whether the debtor has changed his/her position for the worse in reliance on the VA benefits (the reliance element), whether the failure to make restitution would result in an unfair gain to the debtor (the unjust-enrichment element). 38 U.S.C. § 5302; 38 C.F.R. § 1.965(a). Notably, the aforesaid list of waiver elements is not exhaustive, and the Board is required to factor into its final balance-of-equities analysis all other considerations that might be relevant to the unique circumstances at bar. Ridings v. Brown, 6 Vet. App. 544, 546 (1997). Here, the Board acknowledges that the events associated with the Veteran's conviction and the fact of his upcoming release into an RRC and/or complete release from custody present circumstances affecting the outcome of the Board's analysis as to three elements of the Veteran's waiver claim, i.e., the nullification, reliance, and financial-hardship elements, which are inextricably intertwined here since all three are implicated by the Veteran's financial needs. The Board is without a basis to presume that the Veteran would be able to obtain employment with any ease, especially given his advanced age at the time when the Veteran would be released from custody. (Unlike in VA cases addressing compensation claims, the Board is permitted to consider a debtor's age when addressing his/her waiver claim since the debtor's age relates to his/her ability to handle financial hardship.) Based on these factors, the Board concludes that the Veteran would be entirely dependent on the income from his VA benefits and his military pension for all of the Veteran's living expenses. Accordingly, the Board examines the Veteran's financial information through the prism of the facts unique to his conviction and upcoming release. Here, in February 2018, the Veteran executed his VA Form 5655 FSR, which he submitted jointly with his June 2018 NOD as a supplement to his de facto FSR previously filed by E.T.C.-D. Hence, the Board reads these FSRs jointly since each of these documents contains internal inconsistencies that are best resolved by comparison. For instance, in his de facto FSR, the Veteran stated that he had a real estate property in North Carolina, with the mortgage balance in the amount of $184,984.50, and his monthly mortgage payment was $1,200.95. However, in his VA Form 5655 FSR, the Veteran stated that he owned no real estate property, and yet his monthly mortgage has remained $1,200.95. Hence, the Board gathers that the Veteran was residing with his family when he worked at the correctional facility, that his wife S.I.C.-M. was residing in their North Carolina house with their daughter S.C.C.-M., but the Board is without a basis to presume that the Veteran is still responsible for the North Carolina mortgage. This is particularly so because in May 2018 S.I.C.-M. filed another claim for an apportionment, this time stating that she had no income and no assets (to include real estate) and verifying that she permanently moved to Puerto Rico. Accordingly, the Board reads the Veteran's statement that he pays $1,200.95 monthly mortgage as his estimate that, after the Veteran's release from incarceration, he expects to pay a similar amount in rent, which the Board finds reasonable. Further, the Veteran's de facto FSR stated that he was paying $15 per month for water and $54 for electricity, but the de facto FSR was silent as to his monthly heating bill. Thus, the Board adopts the Veteran's statement as to a $202 monthly combined bill for utilities and heat provided in his VA Form 5655 FSR. In addition, while the Veteran's de facto FSR indicated that he was paying $242.79 per month for a "family plan" phone plan (covering his cellphone and, seemingly, S.C.C.-M.'s and S.I.C.-M.'s accounts), the Veteran's VA Form 5655 FSR shows that his cellphone plan had changed to an individual plan of $85 per month. Moreover, the Board is without a basis to accept the Veteran's statement that he would have a $65 per month charge for a landline at his house since the Veteran, at this juncture, has no place of residence, and the Board finds that an additional telephone line cannot qualify as the Veteran's basic life necessity upon his release. In contrast, the Veteran's VA Form 5655 FSR and his de facto FSR stated that his monthly food bill is $0 and omitted stating any expenses for clothes. Therefore, while the Board is mindful that the Veteran is provided with food and clothes while he is being held in confinement, the Board anticipates that the Veteran would need to purchase his own food and clothes upon his release. In sum, upon the Board's joint reading of the Veteran's VA Form 5655 FSR and his de facto FSR, which reflected the Veteran's pre-incarceration expenses qualifying as those spent on basic life necessities, the Board estimates that his monthly expenses upon the Veteran's release from confinement would be about $1,205 for rent, $205 for utilities, $25 for health insurance, $85 for a cellular phone plan, $30 for identity theft protection, $600 for food, $100 for clothes, and $100 for incidental purchases, i.e., about $2,350 per month. In addition, the Veteran has an installment contract obligating his $694 monthly payment toward a $39,355.49 credit union loan. Moreover, the Veteran appears to have an outstanding debt in the amount of $1,047 to the U.S. Internal Revenue Service, and a $19,098 credit card debt (that might have been marginally reduced due to E.T.C.-D.'s willingness to cover the Veteran's minimum monthly payments). Plus, the Board is mindful that the Veteran would be required to pay for transportation (or lease a vehicle and make installment payments, as well as car insurance and gas payments). Accordingly, the Board estimates that the sum of all of the Veteran's debts and expenses associated with basic life necessities would be about $3,600 per month upon his release, that is, excluding his self-evident need to purchase initial household goods and furniture. The Veteran further stated that his monthly military pension is $1,723, and his VA compensation restored back to the amount corresponding to a 90 percent combined rating would be $1,887.18 (or marginally increased due to the December 1, 2021, annual recalculation). Therefore, the Veteran's net monthly income would be about $3,610, i.e., just $10 or so more than his monthly basic line necessities and debts paid on installment contracts, and these $10 would be either spent on or saved for his purchases of furniture and household items. Therefore, even incremental withholdings from the Veteran's VA benefits would deprive him of basic life necessities and nullify the objectives for which his VA benefits were awarded. (Continued on the next page) Hence, the financial-hardship, nullification, and reliance elements of the waiver analysis strongly counsel in favor of his waiver claim. Moreover, since the RO failed to promptly act on the FBOP's July 2016 notice, the balance-of-fault element also counsels in favor of the Veteran's waiver claim. Therefore, while the Board acknowledges that the Veteran was unjustly enriched because he was temporarily in receipt of his full VA benefits during his incarceration post the 60th day of his confinement, the Board finds that the balance of equities supports the Veteran's waiver claim. Accordingly, this claim is granted in full. (The Board notes that a waiver of a VA overpayment debt may have tax implications and recommends the Veteran to consult a tax professional.) In conclusion, the Board takes this opportunity to thank the Veteran for his service. Cynthia M. Bruce Veterans Law Judge Board of Veterans' Appeals Attorney for the Board Anna Kapellan, Associate 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.