Citation Nr: A21020192 Decision Date: 12/17/21 Archive Date: 12/17/21 DOCKET NO. 211124-200251 DATE: December 17, 2021 REMANDED Entitlement to a waiver of recovery of an overpayment of Department of Veterans Affairs (VA) pension benefits in the amount of $65,978.00, to include the validity of the debt, is remanded. REASONS FOR REMAND The Veteran served on active duty from September 1953 to July 1955. This matter comes before the Board of Veterans' Appeals (Board) on appeal from an October 2021 administrative decision issued by the Committee on Waivers and Compromises (COWC) of a Department of Veterans Affairs (VA) Regional Office (RO). In the November 2021 VA Form 10182, Decision Review Request: Board Appeal, the Veteran elected the Direct Review docket. Therefore, the Board may only consider the evidence of record at the time of the agency of original jurisdiction (AOJ) decision on appeal. 38 C.F.R. § 20.301. Entitlement to a waiver of recovery of an overpayment of Department of Veterans Affairs (VA) pension benefits in the amount of $65,978.00, to include the validity of the debt, is remanded. The Veteran was awarded nonservice-connected pension and special monthly pension (SMP) by reason of being housebound benefits in March 2016, effective October 26, 2015. In that March 2016 rating decision, the RO determined that he was permanent and totally disabled for pension purposes due to his diabetes mellitus, hypothyroidism, coronary artery disease (CAD), and hypertension conditions. Moreover, the RO determined that an additional payment for SMP based on being housebound was warranted because his non-service-connected diabetes mellitus disability was considered at 100 percent disabling with additional disabilities evaluated at 60 percent or more. See 38 U.S.C. § 1521(e); 38 C.F.R. § 3.351(d). The rate of pension payable to an entitled payee is based on the amount of countable income received. Countable income consists of payments of any kind from any source received during a 12-month annualization period (e.g., one year), unless specifically excluded. 38 C.F.R. § 3.271. The maximum annual rate of pension (MAPR) is established by statute every year and is reduced by the veteran's countable annual income. Under 38 C.F.R. § 3.272, in pertinent part, VA pension benefits and medical expenses in excess of five percent of the MAPR that have been paid may be excluded from countable income. Medical insurance premiums and Medicare deduction may also be applied to reduce countable income. In a May 2016 notification letter, the Veteran was informed that he was being paid at a rate for a single veteran without dependents, effective June 1, 2016, as his spouse passed away one month prior. Part of the pension amount awarded was based on an October 2015 'Care Expense Certification' that showed the Veteran required indefinite care, effective that same month, at a rate of $2,500 per month. The caregiver, S.D., and the Veteran both signed this document. On review, the RO projected that caregiver, or assisted living cost to be a medical expense of $30,000 per year. In August 2017, the RO sent an amended award letter, explaining his VA pension benefits were being recalculated to readjust the Veteran's medical expenses. The RO requested the Veteran to fill out VA Form 21-8416, Medical Expenses Report, for the 2016 and 2017 calendar year, and return a form for receipt of any additional income. Another letter was sent in November 2017, by the RO, to correct the proposed effective date of payment at a pension rate for a single veteran with no dependents. Included in this letter was an income breakdown that showed the Veteran's annual income and expense amounts used to calculate his rate of pension. The RO also explained that the Veteran's pension rate depended on his income and would deduct any medical expenses he paid to reduce the income VA counted. Further, the RO explained that medical expenses of $16,320.00 would be a 'continuing deduction beginning January 1, 2017,' and that to prevent an overpayment, the Veteran was asked to immediately report any decrease in these unreimbursed medical expenses. Letters issued in December 2017, December 2018, December 2019, and February 2020 from VA proposed to reduce the Veteran's pension benefits, effective January of the new year. An overpayment was created based on the increases in countable income received from his Social Security Administration (SSA) benefits. The February 2020 letter also informed him that a monthly rate included an additional allowance because he was 'housebound.' DMC issued debt letters for the small overpayments over these years. In a September 2019 letter, the RO informed him that medical expenses of $17,107.00 would be deducted beginning January 1, 2019. Thereafter, the Veteran submitted a statement that an 'outside insurance' medical cost was not included in the SSA printout provided for the 2020 calendar year. See January 2020 letter. The Veteran then provided an updated SSA letter that reflected his medical insurance and prescription drug costs. Additionally, he submitted the VA Form 21-8416 for the 2018 and 2019 calendar years that indicated unreimbursed medical expenses for those years. However, these medical expenses no longer included any assisted living costs that the caregiver, S.D., provided back in October 2015 to justify the housebound allowance VA has provided in the Veteran's pension benefits. As a result, in August 2020, VA sent him a letter proposing to remove all fees paid to S.D., as the Veteran did not claim any 'caregiver fees;' VA noted that the last time the Veteran verified that he was paying S.D. was when he first applied for benefits. Since VA did not receive confirmation of payment to S.D., all fees paid to S.D. from the very beginning of when the pension benefits were awarded would be removed. The letter further explained that because the caregiver fee was no longer a medical expense that would reduce the Veteran's countable income, his reported annual income of $28,679.00 would thus exceed the MAPR for a Veteran for 2015. Therefore, the Veteran would no longer be able to receive VA pension benefits and an overpayment would result due to this action. Since this letter was only proposing to take action to stop his VA pension benefits, VA included a VA Form 21P-8416, which contained an 'In-Home Care worksheet' that would allow the Veteran to claim in-home care fees to submit and return with verification of payments issued. In September 2020, the Veteran requested waiver of any overpayment that may result from no longer qualifying for VA pension benefits. In January 2020, VA terminated the Veteran's pension benefits, effective November 1, 2015. The reduction resulted in an overpayment. In September 2021, the Debt Management Center (DMC) assessed a debt of $65,978.00. DMC referred the Veteran's waiver request in that same month, and subsequently, the COWC denied his waiver in October 2021. The Veteran timely initiated this appeal under the Appeals Modernization Act (AMA), as the decision appealed was issued after February 19, 2019. In his November 2021 VA Form 10182, the Veteran averred that he disagreed with the amount of debt owed. Specifically, he argued that he did not understand how the debt was created and requested an audit, as he had always paid the overpayments created by his SSA benefits over the years. The Board construes the Veteran's statement as a challenge to the validity of the debt. Under the AMA, a remand is not permitted except for certain pre-decisional errors. 38 C.F.R. §§ 20.303, 20.802. In this case, however, the Board notes that a Veteran has the right to dispute the existence and amount of the debt. 38 C.F.R. § 1.911(c). In determining whether a waiver of overpayment is appropriate, VA must first determine if the overpayment at issue was validly created. See Schaper v. Derwinski, 1 Vet. App. 430, 434-35 (1991) (noting that before adjudicating a waiver application, the lawfulness of the overpayment must first be decided). The Board recognizes that the Schaper decision was made in the context of the Legacy review system, and this particular decision is made under the AMA. However, 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. Here, the Veteran has disputed the amount of the debt. Given that the RO has not explained how the assisted living costs were calculated each year since 2015 or adjudicated the validity of this debt in the first instance, the Board finds that remand is warranted to include providing a proper audit detailing the actual breakdown of the calculated medical expenses per year, beginning in 2015, detailing the amount of the overpayment, how the overpayment was calculated per year beginning in 2015, and detailing how the medical expenses were deducted from countable income. This action should precede consideration of the waiver issue. Proper notice should be issued to the Veteran thereafter. As the validity of the debt is being remanded, the Board invites the Veteran to submit any unreimbursed medical expenses from the 2015 calendar year to the present, to include detailing any caregiver or assisted living incurred due to his 'housebound' status for his SMP benefit. See March 2016 rating decision (explaining that the Veteran was permanent and totally disabled for pension purposes due to his diabetes mellitus, hypothyroidism, CAD, and hypertension conditions and because of these conditions, as rated, would warrant an SMP for reasons of being housebound benefit). The matter is REMANDED for the following actions: 1. Prepare an audit of the Veteran's VA pension benefits since the beginning of the award that was made effective October 26, 2015. (a) The audit should explain the creation of the debt, to include amount paid for the applicable time period. (b) The audit should also explain the breakdown of the calculated medical expenses per year, including how the assisted living costs were calculated each year beginning from 2015. (c) The audit must contain the amount of net worth and income that was attributed to the Veteran during the applicable time period, including the amount of countable income considered after medical expenses were deducted. The Veteran should be provided a written copy of the detailed audit. 2. Once the development above has been completed, the issue of validity of the overpayment of pension benefits, should be adjudicated by the AOJ. The Veteran should be provided the proper notice of any such determination and afforded the necessary time to respond. Thereafter, if necessary, the issue of waiver of recovery of the overpayment should be readjudicated. E. Choi Acting 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.