Citation Nr: 21008693 Decision Date: 02/17/21 Archive Date: 02/17/21 DOCKET NO. 14-39 115 DATE: February 17, 2021 REMANDED Propriety of creation of an overpayment of Department of Veterans Affairs (VA) benefits in the amount of $58,340.30 due to a retroactive termination of pension benefits is remanded. The claim for a waiver of an overpayment in the amount of $58,340.30 is remanded. REASONS FOR REMAND The Veteran honorably served on active duty from October 1973 to September 1976. This matter is back before the Board of Veterans’ Appeals (Board) on appeal from a December 2013 administrative decision of the Department of Veterans Affairs (VA) Committee on Waivers and Compromises (Committee). This matter was previously remanded in September 2018. The Veteran testified before the undersigned at a videoconference Board hearing in January 2018. A transcript of the hearing is of record. 1. Propriety of creation of an overpayment of Department of Veterans Affairs (VA) benefits in the amount of $58,340.30 due to a retroactive termination of pension benefits is remanded. 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). The Veteran, through her representative, requested an audit of her account and noted that the debt that VA says she owes “is in error from 2005 to the present.” See October 2013 Third Party Correspondence. In July 2014, the Veteran submitted a notice of disagreement (NOD) with the unfavorable waiver determination, but which provided argument directly addressing the validity of debt and the underlying propriety of the decision that created the debt. See July 2014 NOD. The Board construes this as a notice of disagreement with the debt creation. A remand is required for the agency of original jurisdiction (AOJ) to issue a statement of the case. 38 C.F.R. § 20.200; Manlincon v. West, 12 Vet. App. 238, 240-41 (1999). 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). After the September 2018 Board remand, the Veteran submitted eligibility verification reports and medical expense reports, reflecting potential deductions from the Veteran’s countable income that were not considered when the debt was established. There is no time limit for submitting a report of deductible expenses to reduce or eliminate an overpayment on a pension account. Accordingly, remand for issuance of a statement of the case addressing validity of debt is required. 2. The claim for a waiver of recovery of overpayment in the amount of $58,340.30 is remanded. In this case, the Veteran has challenged the proper creation of the debt. As such further appellate review by the Board of Veterans’ Appeals (Board) on the Veteran’s waiver claim must be deferred pending formal adjudication of her challenge to the validity of the debt. 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). The Veteran also requested an audit in light of this debt, which has not been provided to her. Further, the Board notes that the Committee returned the case to the Board without promulgation of a supplemental statement of the case (SSOC). Lastly, the last financial status report on file is from 2014 and an updated report on financials is warranted. Accordingly, remand is required for an audit, an invitation the Veteran to submit a new financial status report, and issuance of an SSOC. The matters are REMANDED for the following action: 1. Send the Veteran and her representative a statement of the case addressing whether the overpayment was properly created, to include the amount of debt owed. This should include review and consideration of the Veteran’s submitted eligibility verification reports and medical expense reports covering the debt period but submitted after the debt was created. If the Veteran perfects an appeal by submitting a timely VA Form 9, the issue should be returned to the Board for further appellate consideration. 2. Provide the Veteran and her representative with an audit of the Veteran’s debt from 2005 to the present. This may be done in conjunction with the first directive. 3. Provide the Veteran with an opportunity to submit an updated financial status report (VA Form 5655). 4. After the issue regarding whether the overpayment was properly created is resolved to the Veteran’s satisfaction, perfected on appeal, or finally denied, issue a supplemental statement of the case (SSOC) that addresses the waiver issue, if appropriate (i.e., if creation of the overpayment debt was valid). MATTHEW W. BLACKWELDER Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board S. Lambert 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.