Citation Nr: A21020666 Decision Date: 12/30/21 Archive Date: 12/30/21 DOCKET NO. 210721-173614 DATE: December 30, 2021 REMANDED Entitlement to a waiver of recovery of overpayment of Department of Veterans Affairs (VA) pension benefits, to include the question of whether the overpayment was properly created, is remanded. REASONS FOR REMAND The Veteran served on active duty from October 1942 to September 1943. The Appellant is the Veteran's surviving spouse. In a July 2021 VA Form 10182 Notice of Disagreement (NOD), the Appellant selected Direct Review and expressed disagreement with a July 6, 2021 notification letter, which advised that her pension benefits were stopped effective January 1, 2020 and that she had been overpaid benefits. The Appellant asserted that VA made a clear and unmistakable, administrative error in granting her claim for pension, and that she should not be liable for VA's error. She stated that her net worth was properly reported and of record in October 2020 and that her debt should be waived. Regarding pension benefits, a Veteran or beneficiary must meet the net worth requirements of 38 C.F.R. § 3.274 and have an annual income not in excess of the maximum annual pension rate (MAPR) specified in 38 C.F.R. §§ 3.23. See 38 C.F.R. § 3.3(a)(2). The Appellant must meet the specific income and net worth requirements for each annual pension year. See 38 C.F.R. § 3.3(a)(2). In determining income for this purpose, payments of any kind from any source are counted as income during the 12-month annualization period in which received unless specifically excluded. See 38 U.S.C. § 1503; 38 C.F.R. § 3.271. In determining annual income, all payments of any kind or from any source shall be included except for listed exclusions which do not include Social Security Administration (SSA), wage income, or retirement income. See 38 U.S.C. § 1503(a); see also 38 C.F.R. § 3.271(a). Generally speaking, an overpayment debt is created when VA determines that a beneficiary has received benefits to which they were not entitled. When a claimant's income or net worth changes, it may result in a discontinuation of or reduction in eligible pension benefits. Until VA is made aware of the change and adjusts the benefits accordingly, the beneficiary may incorrectly continue to receive benefits. Upon notification of a change or error, VA discontinues the benefits retroactively, assessing a debt to the claimant for pension benefits they received but to which they were not entitled, based on the specific income and net worth requirements noted above. Here, it appears from review of the record that the overpayment debt in question was created because the Appellant's net worth was found to exceed the net worth requirements noted above. In March 2021 correspondence, the Appellant was advised that her net worth exceeded the 2020 net worth limitation for Survivor's Pension. In July 2021 correspondence, the Appellant was notified that her pension benefits were stopped, beginning January 1, 2020, and that she was overpaid benefits. Presumably, the Appellant's pension benefits were adjusted as of January 2020, and the debt resulted from pension benefits she erroneously received from January 2020 until the pension benefits were stopped in July 2021. However, none of the correspondence sent to the Appellant explains how or why the debt was created or calculated, and the Appellant has not been notified of her due process rights. In fact, here, review of the record does not reveal the actual amount of the overpayment debt assessed to the Appellant. As she has not been fully advised of the reasons for or the calculation of her debt, and she was not adequately advised of her rights to request a waiver or to appeal the creation of the debt, this represents a failure of VA's duty to notify and assist the Appellant in her claim. Thus, remand is warranted to correct this pre-decisional duty to assist error. In the July 6, 2021 notification letter, it advises the Appellant that because of a change in her net worth, VA stopped her pension benefits beginning January 1, 2020. It advises that the Appellant had one year from the date of the letter to appeal the decision. It also explains that a separate initial proposal letter would tell her more about the overpayment and that VA's Debt Management Center (DMC) will send her a letter explaining how much she was overpaid, as well as how to repay the debt. However, a First Demand Letter from DMC is not of record. In October 2021 correspondence from the Pension Management Center (PMC), it advises that DMC has not sent a debt letter to the Appellant because her debt was created during the Covid-19 relief period and was automatically placed on suspension. PMC advised that collection actions resumed on October 1, 2021, and that debt notification letters will be sent out over the next year. 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 any consideration of a waiver issue. Here, as noted above, in the July 2021 NOD, the Appellant has asserted disagreement with the creation of the debt and requested that the debt be waived. Thus, this represents a challenge to the validity of the debt as well as an assertion that a waiver of the debt is needed. The Board shall decide all questions pertaining to its jurisdictional authority to review a particular case. 38 C.F.R. § 20.104(c). Additionally, decisions of the Board must be based on a de novo review of the evidence of record at the time of the agency of original jurisdiction (AOJ) decision on the issue or issues on appeal, and any additional evidence considered as part of the evidentiary record pursuant to applicable statute and regulation. 38 U.S.C. §§ 7104(d), 7113; 38 C.F.R. § 20.801(a). Here, the AOJ has not addressed the validity of this debt, and the Board does not have before it the evidence necessary to determine its jurisdiction, nor the amount of the debt, such as a DMC First Demand Letter. Under AMA, the Board may remand for correction of either a pre-decisional duty to assist error or "any other error by 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. The Board acknowledges that, as noted above, a DMC First Demand Letter is not yet available due to the Covid-19 relief period. However, once the First Demand Letter is made available, its association with the record would correct the discrepancy and satisfy the regulatory and statutory duties under 38 U.S.C. § 5302(b) and 38 C.F.R. § 1.965. That correction raises a reasonable possibility of aiding in substantiating the Appellant's claim. Accordingly, remand under AMA for these and similar circumstances remains appropriate. The matters are REMANDED for the following action: 1. The AOJ must ensure that the electronic record is complete, to include a copy of the original DMC First Demand Letter, when it becomes available. The AOJ should ensure that all evidence upon which the debt decision is based is identified in the notice to the Appellant and associated with the record. If it is determined that no such document exists due to a typographical or other error, issue a formal finding in accordance with the provisions of 38 C.F.R. § 3.159(e)(1). 2. Adjudicate the issue of whether the Appellant's debt was properly created and calculated. The AOJ must make an administrative decision regarding the validity of the debt question. 3. Perform a paid and due audit of the Appellant's pension benefits, and specifically explain, why, and how any debts for this Appellant were created. 4. The AOJ must specifically address the raised matter of sole VA administrative error. 5. Afford the Appellant with the opportunity to submit a VA Form 5655, Financial Status Report, listing all of her monthly income, expenses, assets, and debts. Supporting documentation should be requested from the Appellant as deemed appropriate. 6. After affording the Appellant all necessary due process, and undertaking the necessary development, adjudicate the issue of waiver of recovery of an overpayment of VA compensation benefits, including referral of the waiver request to the Committee on Waivers and Compromises. 7. The Appellant must be advised how to timely appeal and/or request review of the decision. 38 C.F.R. § 20.203. L. B. CRYAN Veterans Law Judge Board of Veterans' Appeals Attorney for the Board A. Labi, 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.