Citation Nr: 21075860 Decision Date: 12/21/21 Archive Date: 12/21/21 DOCKET NO. 19-03 122 DATE: December 21, 2021 ORDER The overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $11,438.49 was properly created; to this extent the appeal is denied. A waiver of the recovery of the overpayment of VA compensation benefits in the reduced amount of $9,064 is granted. FINDINGS OF FACT 1. In a December 2005 letter, the Regional Office (RO) informed the Veteran that he had been awarded additional benefits for his spouse (A.) from January 1, 2006, and he was informed that he should promptly inform that office of VA of any change in the status of his dependent; he was provided a VA Form 21-8764 which reiterated that additional benefits were included for his spouse and that failure to notify the RO in a prompt fashion of a dependency change would result in an overpayment. 2. In October 2006, the marriage of the Veteran and A. was annulled. 3. The Veteran and W. married in June 2012. 4. In January 2014, a VA Form 21-0538, Status of Dependents Questionnaire with supporting documents was received by the RO and reflected that the Veteran's marital status had changed. 5. The RO then retroactively removed A. from the Veteran's award effective January 1, 2006, and added W. to his award effective February 1, 2014, the first day of the month following the receipt of his VA Form 21-0538 Status of Dependents Questionnaire. 6. The actions of the RO resulted in the creation of an overpayment in the amount of $11,438.49. 7. The overpayment was not due to the Veteran's fraud, misrepresentation or bad faith. 8. Recovery of the overpayment of the VA compensation benefits in the remaining amount of $9,064 would be contrary to the principles of equity and good conscience. CONCLUSIONS OF LAW 1. The overpayment of VA compensation benefits in the amount of $11,438.49 was properly created. 38 U.S.C. §§ 5110, 5111, 5112; 38 C.F.R. §§ 3.401, 3.501. 2. The criteria for a waiver of the amount of $9,064 are met. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.963(a), 1.965. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The law provides for the rates of disability compensation, and for payment of additional compensation for dependents of veterans who are at least 30 percent disabled. 38 U.S.C. §§ 1114 (c), 1115, 1134, 1135. The Veteran was, at all times relevant to this issue and the period of time in question, rated appropriately to receive additional compensation for a spouse. In a December 2005 letter, the RO informed the Veteran that he had been awarded additional benefits for his spouse (A.) from January 1, 2006. He was informed that he should promptly inform that office of VA of any change in the status of his dependent. He was provided a VA Form 21-8764 which reiterated that additional benefits were included for his spouse and that failure to notify the RO in a prompt fashion of a dependency change would result in an overpayment. In October 2006, the marriage of the Veteran and A. was annulled. The Veteran and W. subsequently married in June 2012. In January 2014, a VA Form 21-0538, Status of Dependents Questionnaire with supporting documents was received by the RO and reflected that the Veteran's marital status had changed, as indicated. The RO then retroactively removed A. from the Veteran's award effective January 1, 2006, and added W. to his award effective February 1, 2014, the first day of the month following the receipt of his VA Form 21-0538 Status of Dependents Questionnaire. The actions of the RO resulted in the creation of an overpayment in the amount of $11,438.49. Under 38 U.S.C. § 5112 (b)(2), the effective date of reduction or discontinuance of compensation by reason of divorce of a dependent of a payee shall be the last day of the month in which such divorce occurs. See also 38 C.F.R. § 3.501 (d)(2). In this case, since the marriage was annulled, there was no valid marriage serving as a basis for the Veteran to receive additional benefits for A. as his spouse at any time. Thus, her removal from the date that she was originally added to the Veteran's award was proper. With regard to W., an effective date of the award of any benefit or any increase therein by reason of marriage shall be the date of such event if proof of such event is received by the Secretary within one year from the date of the marriage, birth, or adoption. 38 U.S.C. § 5110 (n); 38 C.F.R. § 3.401 (b). Otherwise, the effective date is the date notice is received of the dependent's existence, if evidence is received within one year of the Department of Veterans Affairs request. 38 C.F.R. § 3.401 (b). The payment of monetary benefits based on an award or an increased award of compensation, dependency and indemnity compensation, or pension, may not be made to an individual for any period before the first day of the calendar month following the month in which the award or increased award became effective. The term "award or increased award" means an original or reopened award or an award that is increased because of an added dependent, increase in disability or disability rating, or reduction in income. 38 U.S.C. § 5111 (a), (d). In this case, in written statements and at his Board of Veterans' Appeals (Board) hearing, the Veteran indicated that he submitted all the requisite evidence at a VA hospital in 2006 and hospital personnel did not inform him that he needed to turn it in to any other location. Likewise, he indicated that he turned in his marriage certificate to W. in 2012 after their marriage to the hospital, but his documents were not passed along. The Veteran did not provide his information to the RO. Written statements can be accepted as evidence of certain dependency events, such as marriage, when certain information is included such as the date and month of marriage and the full name of a spouse. See 38 C.F.R. § 3.204; see also McColley v. West, 13 Vet. App. 553, 557 (2000). However, in this case, the Veteran's record does not reflect the written statements with sufficient information to update his dependency information. Nonetheless, as discussed below, the Board is waiving the debt in full. Although the Veteran had a spouse, W., from June 2012, the RO did not receive notice of her existence until more than one year after their marriage. See 38 C.F.R. § 3.401. W. was added to the award from February 1, 2014, the first day of the month following the receipt of his VA Form 21-0538 Status of Dependents Questionnaire by the RO. Thus, the Board finds that the overpayment in this case is valid. To the extent that the Veteran feels this is unfair because there was a period of overlapping time when he was in fact married (to W.), that argument pertains to a claim for a waiver of the recovery of the debt which is addressed below. The Veteran's request for a waiver of the overpayment was referred to the Committee on Waivers and Compromises (Committee). In February 2019, the Committee considered the Veteran's claim for waiver. The Committee made a specific determination that there was no fraud, misrepresentation, or bad faith on the Veteran's part with respect to the creation of the overpayment at issue. The Board agrees with this determination. The Committee then waived the portion of the debt incurred when W. was not added to the Veteran's award following their marriage to the date when she was added. However, the Committee further determined that recovery of the remaining overpayment of $9,064 would not be against equity and good conscience. In cases where there is no fraud, misrepresentation, or bad faith on the Veteran's part with respect to the creation of the overpayment at issue, and, therefore, waiver is not precluded pursuant to 38 U.S.C. § 5302 (a), in order to dispose of the matter on appeal, the Board must determine whether recovery of the indebtedness would be against equity and good conscience, thereby permitting waiver under 38 U.S.C. § 5302 (a) and 38 C.F.R. §§ 1.963 (a), 1.965(a). The pertinent regulation in this case provides that the standard of "equity and good conscience" will be applied when the facts and circumstances in a particular case indicate a need for reasonableness and moderation in the exercise of the Government's rights. 38 C.F.R. § 1.965 (a). The elements of equity and good conscience are as follows: (1) fault of debtor, where actions of the debtor contribute to creation of the debt; (2) balancing of faults, weighing fault of debtor against VA fault; (3) undue hardship, whether collection would deprive debtor or family of basic necessities; (4) defeat the purpose, whether withholding of benefits or recovery would nullify the objective for which benefits were intended; (5) unjust enrichment, failure to make restitution would result in unfair gain to the debtor; (6) changing position to one's detriment, reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation. The first and second elements pertain to the fault of the debtor versus the fault of the VA. After consideration of the record, the Board finds that Veteran credibly indicated that he thought he had notified VA of the termination of his marriage to A. when he told the VA hospital that their marriage had been annulled. This occurred several months after the initial award. Although the RO was not provided this information, the Board finds that the Veteran believed that he had provided the notification by informing the hospital. In regard to whether failure to collect would cause unjust enrichment to the debtor, the Board notes that the Veteran received benefits to which he was not entitled, and as such, would cause unjust enrichment to the debtor. Likewise, there is no indication that the Veteran's reliance on VA benefits resulted in relinquishment of another valuable right. As to whether recoupment of those benefits would defeat the purpose of the benefit, as noted, the Veteran was not permitted to receive the additional compensation for A. The financial status report does not show financial hardship. In sum, the Board believes that the Veteran provide notice to the VA hospital as he indicated and that he believed that VA thereby knew of his marital status. There are no notifications regarding the Veteran's payments for a spouse dated from the time of the annulment until when the Veteran remarried; thus, it is credible that the Veteran believed that he was being paid correctly. Accordingly, in view of this particular factor in this case, which the Board is weighing in the Veteran's favor and according the most weight, the Board finds that recovery of the remaining overpayment of $9,064, would be against equity and good conscience and waiver of recovery of the overpayment is warranted. Waiver is granted for the remaining amount of $9,064. LAURA E. COLLINS 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.