Citation Nr: 21009396 Decision Date: 02/22/21 Archive Date: 02/22/21 DOCKET NO. 19-14 826 DATE: February 22, 2021 ORDER Entitlement to waiver of recovery of an overpayment of additional Department of Veterans Affairs (VA) compensation benefits for a dependent spouse in the amount of $2,099.80 is granted. FINDINGS OF FACT 1. The overpayment was not due to the Veteran’s fraud, misrepresentation or bad faith. 2. Recovery of the debt in this case in the amount of $2,099.80 is against equity and good conscience. CONCLUSION OF LAW The criteria for a waiver of the recovery of the overpayment of the additional VA disability compensation in the amount of $2,099.80 are met. 38 U.S.C. § 5302; 38 C.F.R. § 1.965. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran was awarded VA compensation benefits as well as additional benefits for a dependent spouse. The VA Agency of Original Jurisdiction (AOJ) notified the Veteran of his obligations to notify the AOJ of dependency changes. The Veteran was receiving benefits for T., his dependent spouse. In May 2013, the Veteran notified the AOJ of their divorce in February 2013. He also submitted the pertinent documentation. Action was subsequently taken by the AOJ approximately two and a half years later to retroactively reduce the Veteran’s compensation benefits to remove T. as his wife effective from March 1, 2013. This action resulted in the creation of an overpayment in the amount of $2,099.80. In June 2016, the AOJ Committee on Waivers and Compromises (COWC) denied a waiver of the recovery of the debt and the Veteran appealed. The COWC determined that there was no fraud, misrepresentation, or bad faith on the Veteran’s part with respect to the creation of the overpayment at issue, but the COWC further determined that recovery of the overpayment of VA compensation benefits would not be against the principles of equity and good conscience. VA law provides that recovery of overpayment of any benefits shall be waived if there is no indication of fraud, misrepresentation, or bad faith on the part of the person or persons having an interest in obtaining the waiver and recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. § 1.963 (a). The standard “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. In making this determination, consideration will be given to the following elements, which are not intended to be all-inclusive: (1) Fault of the debtor. Where actions of the debtor contribute to the creation of the debt. (2) Balancing of faults. Weighing fault of the 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. See 38 U.S.C. § 5302; 38 C.F.R. § 1.965 (a). In this case, the COWC found, and the Board agrees, that there is no evidence demonstrating that the indebtedness resulted from fraud, misrepresentation, or bad faith on the Veteran’s part. Therefore, waiver of indebtedness is not precluded if shown that it would be against the principles of equity and good conscience to require the Veteran to repay the debt to the government. 38 C.F.R. §§ 1.963, 1.965. With regard to fault, the AOJ advised the Veteran of his obligation to provide notification regarding any changes in dependency, and he timely complied with that obligation when he and T. divorced. The AOJ significantly delayed in taking action to remove T. as a dependent spouse. The AOJ was at greater fault for the creation of the overpayment. Recovery of the overpayment would not defeat the purpose of the benefit because the Veteran was not married to T. but received benefits for her as a spouse after their divorce. Also, as such, the Veteran was unjustly enriched in receiving additional compensation benefits. There is no evidence of the Veteran changed position to his detriment due to his reliance upon receipt of VA benefits. The Board further finds that collection of the overpayment would cause undue hardship to the Veteran. There are two financial status reports of record as well as testimony from a personal hearing. The Veteran’s monthly expenses exceed his monthly income and he does not have any liquid assets. In this case, the Board finds that a waiver of the recovery of $2,099.80 is warranted. The Board finds that the element of VA fault and financial hardship outweigh the elements not in the Veteran’s favor. S. L. Kennedy Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board J. Connolly, 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.