Citation Nr: 21075130 Decision Date: 12/17/21 Archive Date: 12/17/21 DOCKET NO. 14-00 316 DATE: December 17, 2021 ORDER The overpayment of nonservice-connected pension benefits in the amount of $3,315.00 was properly created; the appeal is denied. REMANDED The issue of waiver of overpayment of nonservice-connected pension benefits in the amount of $3,315.00 is remanded. FINDINGS OF FACT 1. The Veteran was awarded VA improved pension benefits effective May 6, 2011 based solely on his earned income; and was then also receiving Social Security Administration (SSA) income at that time, resulting in an income level that did entitle him to VA pension benefits. 2. Retroactive action was taken to terminate the pension, which resulted in the creation of the debt at issue; this action was proper. CONCLUSION OF LAW The overpayment of VA pension benefits in the amount of $3,315.00 was properly created. 38 U.S.C. §§ 101, 501, 1503, 1541; 38 C.F.R. §§ 3.2, 3.3, 3.23, 3.24, 3.271, 3.272, 3.274, 3.275, 3.350. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty in the U.S. Air Force from August 1972 to January 1975 This matter comes before the Board of Veterans' Appeals (Board) on appeal from a December 2012 decision by a Department of Veterans Affairs (VA) Regional Office (RO) and an August 2013 decision by the VA Debt Management Center (DMC). The Veteran testified before the undersigned Veterans Law Judge at a January 2021 videoconference hearing. A transcript of this hearing is of record. The Board remanded the appeal in March 2021 for further development. While the issue of whether the overpayment was properly created will be decided in the instant decision, a remand is required for the issue of entitlement to a waiver of the overpayment. Whether the overpayment of nonservice-connected pension benefits in the amount of $3,315.00 was properly created Basic entitlement to pension exists if a veteran of a period or periods of war (as defined in 38 C.F.R. § 3.3 (a)) meets certain net worth requirements and does not have an annual income in excess of the applicable maximum annual pension rate (MAPR), and is either age 65 or older or is permanently and totally disabled from nonservice-connected disability not due to the veteran's own willful misconduct. See 38 U.S.C. §§ 1521 (a) and (j), 5312; 38 C.F.R. §§ 3.3 (a), 3.23(a). Pension is not payable to a veteran whose annual income exceeds the rates set forth in 38 U.S.C. § 1521. Improved pension provides for maximum income levels under which eligibility is based and this amount is offset by annual income of the recipient minus any excepted unreimbursed medical expenses. For the purpose of determining initial entitlement, or for resuming payments on an award which was previously discontinued, the monthly rate of pension payable to a beneficiary shall be computed by reducing the beneficiary's applicable maximum pension rate by the beneficiary's annual rate of countable income on the effective date of entitlement and dividing the remainder by 12; whenever there is a change in a beneficiary's annual rate of countable income, the monthly rate of pension payable shall be computed by reducing the beneficiary's applicable MAPR by the beneficiary's new annual rate of countable income on the effective date of the change in the annual rate of income, and dividing the remainder by 12. 38 C.F.R. § 3.273. For computing income for improved pension, payments of any kind from any source shall be counted as income during the 12-month annualization period in which received unless specifically excluded under 38 C.F.R. § 3.272. 38 C.F.R. § 3.271 (a). The following is excluded from countable income for VA pension purposes: welfare benefits; maintenance benefits furnished by a relative, friend, or a charitable organization; VA pension benefits; casualty loss reimbursement; profit from the sale of property; joint accounts; unreimbursed medical expenses (to the extent that the medical expenses exceed 5 percent of the applicable MAPR); expenses of last illnesses, burials, and just debts; educational expenses; a portion of the beneficiary's children's income; Domestic Volunteer Service Act Programs payments; distributions of funds under 38 U.S.C. § 1718; survivor benefit annuities; Agent Orange settlement payments; restitution to individuals of Japanese ancestry; cash surrender value of life insurance policies; income received by American Indian beneficiaries from trust or restricted lands; Radiation Exposure Compensation Act payments; and Alaska Native Claims Settlement Act payments. 38 C.F.R. § 3.272. Income from the SSA is not excluded under 38 C.F.R. § 3.272. The amount of pension received is the difference between the recipient's countable income and the MAPR permitted by VA given the recipient's circumstances. Pension is not payable if the recipient's countable annual income exceeds the maximum limitation given the recipient's circumstances as set forth in the legislation. See generally 38 U.S.C. §§ 101, 1501. The Secretary shall deny or discontinue the payment of a veteran's pension based upon consideration of the annual income of a veteran, his/her spouse, and children. 38 U.S.C. § 1522. An overpayment is created when VA determines that a beneficiary or payee has received benefit payments in excess of the amount due or to which such beneficiary or payee is entitled. 38 C.F.R. § 1.962. When VA has determined that a debt is owed based on such an overpayment, and once it has satisfied certain procedural requirements, it may collect the debt by offsetting current or future benefit payments until the debt has been repaid. 38 U.S.C. § 5314; 38 C.F.R. §§ 1.911, 1.912a(a). An October 2011 rating decision granted entitlement to pension benefits effective May 6, 2011. The Veteran was awarded $200 monthly due to his calculated annual earnings of $9,425.00. He was provided VA Form 21-8768 which stated, in pertinent part, that the Veteran was obligated to provide prompt notice of any change in family income or net worth and that a failure to provide such would result in the creation of an overpayment which would be subject to recovery. It further stated that when reporting income, the total amount and source of all income received should be reported. The Veteran disagreed with his monthly pension benefits, stating he was not working and received $841.00 in Social Security Administration (SSA) benefits. See November 2011 notice of disagreement (NOD). He also submitted documentation showing he last worked November 12, 2011. See June 2012 correspondence. A September 2012 SSA letter indicated he was receiving $1,069.80 monthly. An August 2012 VA notification letter stated the Veteran's pension award was terminated effective September 1, 2012, as he was receiving more income than previously known due to his SSA benefits. The letter also stated the Veteran could provide additional financial information within 60 days or his award would be adjusted effective June 1, 2011, resulting in an overpayment. A December 2012 VA notification letter stated the Veteran did not provide the requested information, and the proposed action had been taken. The Veteran's pension was terminated effective June 1, 2011, due to his SSA income, creating the overpayment in question. A separate January 2013 letter from the DMC notified the Veteran that he had an overpayment in the calculated amount of $3,315.00. This amount was derived from his receipt of pension from May 2011 to September 2012, prior to it being terminated effective June 1, 2011; in other words, it is the total amount of the $200 monthly pension benefits he received for nearly 16 months. In June 2012, the Veteran submitted a letter that VA interpreted as a request to add his daughter to his award. In January 2013, the Veteran applied to add his daughter to his award. See January 2013 VA Form 21-686c. In January 2015, the Veteran was notified that his dependent daughter had been added to his award effective June 1, 2012, thus resulting in an income adjustment and reinstatement of his pension benefits effective the same date. The change did not affect his overpayment. The pertinent question is whether the overpayment of nonservice-connected pension benefits in the amount of $3,315.00 was properly created. The debt at issue was created due to the Veteran's income, including from the SSA and earned income, exceeding the income limit. The overpayment in question was accrued before to the addition of the dependent daughter to the Veteran's award. VA pension was terminated effective June 1, 2011, and reinstated when his daughter was added to his award effective June 1, 2012. The MAPR for a Veteran with no dependents for the annual year commencing December 1, 2011 was $11,830 and from December 1, 2012 was $12,465. See Veteran Benefits Administration, Veterans Pension Rate Table (http://benefits.va.gov/PENSION/current_rates_veteran_pen.asp). When the Veteran was first awarded pension benefits, he was awarded $200 monthly based on his reported $9,425 earned income. However, this calculated income did not include his Social Security benefits, which were later calculated as $12,732. Therefore, for this period, the Veteran's combined income was $22,157, which well exceeded the MAPR of $11,830. The Veteran reported, and the record reflects, that he last worked on November 12, 2011. Therefore, his earned income was subtracted from his income calculation as of the first day of the following month, so December 1, 2011. This resulted in a total income of $12,828 in Social Security Administration benefits, still exceeding the applicable MAPR of $12,465. In sum, the Veteran was provided improved pension benefits from May 2011 to September 2012, before it was terminated effective June 2011. The Veteran received SSA income during that time. The actions to terminate the pension benefits created an overpayment. The total recalculated debt is in the amount of $3,315.00 because the Veteran was overpaid this amount. In its March 2021 remand, the Board provided the Veteran with an opportunity to submit additional information regarding his employment, income, and any medical expenses he incurred during the appellate period. The Veteran submitted a May 2021 letter stating he had no new information to provide. He also stated he was not at fault in the creation of a debt. The Board has considered the Veteran's statement which relate to the issue of a waiver, which is being remanded below. The debt was properly created because the Veteran had income from SSA which affected the right to pension benefits, an income-based benefit. The RO took proper action to retroactively terminate the pension benefits to reflect that his income exceeded that allowed for VA pension. REASONS FOR REMAND Entitlement to waiver of overpayment of nonservice-connected pension benefits in the amount of $3,315.00 is remanded. Following the Board's March 2021 remand, the AOJ issued a supplemental statement of the case (SSOC) in July 2021. However, the SSOC did not readjudicate the issue of entitlement to a waiver of the overpayment. Therefore, another remand is necessary. See Manlincon v. West, 12 Vet. App. 238, 240-241 (1999). The matter is REMANDED for the following action: Issue an SSOC to the Veteran and his representative that addresses the issue of entitlement to waiver of overpayment of nonservice-connected pension benefits in the amount of $3,315.00, to include whether the waiver request was timely. Then follow all appropriate appellate procedures. Vito A. Clementi Veterans Law Judge Board of Veterans' Appeals Attorney for the Board A. Dean, Counsel The Board's action is binding only in this case. This decision is not precedential and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.