Citation Nr: 21006286 Decision Date: 02/03/21 Archive Date: 02/03/21 DOCKET NO. 19-11 964 DATE: February 3, 2021 REMANDED Entitlement to a waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $13,462.61 is remanded. REASONS FOR REMAND The Board of Veterans’ Appeals (Board) denied the Veteran’s appeal in November 2019. The Veteran appealed that determination to the United States Court of Appeals for Veterans Claims (Court). Pursuant to a Joint Motion for Remand (JMR), the Court vacated the Board’s decision and remanded the matter back to the Board. The JMR, in pertinent part, addressed at length the Veteran’s contentions that the Agency of Original Jurisdiction (AOJ) was on notice that he was incarcerated, to include for a likely felony, when he was awarded and paid VA benefits at the full rate (not reduced due to his incarceration). The Board notes that the matters addressed in the JMR regarding the Veteran’s arguments go beyond the element of fault with regard to the considerations of equity and good conscience for a waiver, and rather amount to assertions of sole VA error in the creation of the debt. As such formal adjudication of the Veteran’s challenge to the validity of the debt must be undertaken. Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991) (“when a Veteran raises the validity of the debt as part of a waiver application... it is arbitrary and capricious and an abuse of discretion to adjudicate the waiver application without first deciding a veteran’s challenge to the lawfulness of the debt asserted against him or her”); VAOPGCPREC 6-98 (July 24, 1998) (holding that when a veteran challenges the validity of the debt and seeks waiver of the debt, the [Regional Office] must first fully review the debt’s validity and, if the office believes the debt to be valid, prepare a written decision fully justifying the validity of the debt before referring the waiver request to the Committee on Waivers and Compromises). 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 consideration of the waiver issue. In that consideration of the propriety of the creation for a determination that the overpayment was not properly created such that the debt was not valid, it must be established that the Veteran was either legally entitled to the benefits in question or, if the Veteran was not legally entitled, then it must be shown that VA was solely responsible for the Veteran being erroneously paid benefits. Administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law. VAOPGCPREC 2-90 (July 17, 1989); 55 Fed. Reg. 27757 (1990). Sole administrative error connotes that the Veteran neither had knowledge of nor should have been aware of the erroneous award. Further, neither the Veteran’s actions nor his or her failure to act must have contributed to payment pursuant to the erroneous award. 38 U.S.C. § 5112 (b)(9), (10); 38 C.F.R. § 3.500 (b)(2); Jordan v. Brown, 10 Vet. App. 171 (1997) (sole administrative error is not present if the payee knew, or should have known, that the payments were erroneous). Thus, a finding of sole administrative error requires not only error on the part of VA, but that the beneficiary is unaware that the payments are erroneous. The Court noted that, “[s]tated another way, when an overpayment has been made by reason of an erroneous award based solely on administrative error, the reduction of that award cannot be made retroactive to form an overpayment debt owed to VA from the recipient of the erroneous award.” Erickson v. West, 13 Vet. App. 495, 499 (2000). The matters are REMANDED for the following action: Adjudicate the issue of whether the overpayment at issue in this case was properly created, to include the raised matter of sole administrative error. If the claim continues to be denied, including on this basis, issue the Veteran and his representative an appropriate supplemental statement of the case (SSOC) which addresses both the creation and waiver issues and afford them the opportunity to respond. S. L. Kennedy Veterans Law Judge Board of Veterans’ Appeals J. Connolly, Attorney for the Board Department of Veterans Affairs 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.