Citation Nr: 21012777 Decision Date: 03/05/21 Archive Date: 03/05/21 DOCKET NO. 14-38 852A DATE: March 5, 2021 ORDER Entitlement to a waiver of recovery of the overpayment of education benefits under Title 38, United States Code, Chapter 33 (Post-9/11 GI Bill or Chapter 33) in the calculated amount of $3,019.42 is denied. FINDING OF FACT Recovery of the overpayment of education benefits under the Post-9/11 GI Bill program in the calculated amount of $3,019.42 would not be against the principles of equity and good conscience. CONCLUSION OF LAW The criteria for a waiver of recovery of the overpayment of education benefits under the Post-9/11 GI Bill program in the calculated amount of $3,019.42 have not been met. 38 U.S.C. §§ 3311, 3313, 5302; 38 C.F.R. §§ 1.962, 1.965, 21.9550. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran had active duty from November 2005 to October 2007. In his November 2014 Substantive Appeal to the Board (VA Form 9), the Veteran indicated that he wanted to appear at a Board hearing. However, he later withdrew that request in April 2019. 38 C.F.R. § 20.704(e). This case was previously before the Board in January 2020, at which time, the Board determined that the overpayment of education benefits under the Post-9/11 GI Bill program in the calculated amount of $3,019.42 was validly created but remanded the Veteran’s claim to a waiver of recovery of the overpayment of these education benefits for the Agency of Original Jurisdiction (AOJ) to ask him to complete and submit updated Financial Status Reports (VA Form 5655) covering the period since 2014 to the present and to issue a supplemental statement of the case (SSOC) if any benefit was denied by the AOJ. The record shows that the AOJ sent the Veteran a September 2020 letter asking him to complete and submit the attached VA Forms 5655 for the period since 2014. This letter also informed him that if he did not reply within 30 days of the letter, the appeal process would proceed based on the information already in the record. The evidence does not show that the September 2020 letter was returned to VA as undeliverable. Thus, the Veteran is presumed to have received the September 2020 letter. However, the Veteran failed to reply to this letter within the allotted time, and he failed to submit his updated financial status information, including any new VA Forms 5655. Thus, the AOJ issued an October 2020 SSOC denying the waiver of overpayment. There was substantial compliance with the Board’s January 2020 remand instructions. See Stegall v. West, 11 Vet. App. 268 (1998). The Veteran contends that the recovery of the overpayment of the Post-9/11 GI Bill benefits should be waived as the repayment of the debt in the calculated amount of $3,019.42 would result in undue financial hardship. An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. See 38 U.S.C. § 5302; 38 C.F.R. § 1.962. An overpayment may arise from virtually any benefits program administered pursuant to VA law, including pension, compensation, dependency and indemnity compensation, educational assistance benefits and subsistence allowance, insurance benefits, burial and plot allowances, clothing allowance, and automobile or other conveyance and adaptive equipment allowances. See 38 C.F.R. § 1.956(a). The preliminary issue of the validity of a debt is a threshold determination that must be made prior to a decision on a request for waiver of the indebtedness. See Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991). In other words, before deciding a request for waiver, VA must first consider the validity of the debt. 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. See 38 C.F.R. § 1.911(c)(1); see also VAOPGCPREC 6-98. The propriety and amount of the overpayment at issue are matters that are integral to a waiver determination. See Schaper, 1 Vet. App. at 434. As noted above, the Board determined in the January 2020 decision that the debt in question was validly created. The Board found that the Veteran received education benefits under Chapter 33 in the amount of $2,769.69 for tuition and fees; $131.25 for books and supplies; and $118.48 for a housing allowance, or in the calculated amount of $3,019.42, that he was not legally entitled to keep and that the overpayment was not the result of sole VA error. Specifically, the record showed that the Veteran received education benefits under the Post-9/11 GI Bill program for a period of study at a technical school from December 2012 to March 2013. Although he was initially certified for a total of 13.5 credit hours for this period of study, his credit hours were reduced to 9 hours, then reduced to 4 hours; and then he ultimately withdrew from that coursework on January 7, 2013. Based on his withdrawal from all classes, the Board determined that an overpayment of Chapter 33 educational assistance benefits in the calculated amount of $3,019.42 was validly created. Nonetheless, the Veteran is seeking a waiver of the overpayment of these education benefits because he would endure a financial hardship in paying the debt. Recovery of the overpayment of any VA benefits must be waived if: (1) the application for relief is filed in a timely manner; (2) there is no indication of fraud, misrepresentation, or bad faith on the part of the person having an interest in the waiver; and (3) recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 38 U.S.C. § 5302(a), (c). The record shows that the application for waiver was timely because it was received within 180 days of the notice of the indebtedness. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.963(b)(2). The Board has reviewed the evidence of record and does not find that there was fraud, misrepresentation, or bad faith on the part of the Veteran in creation of this debt. Thus, the only issue to be determined is whether recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. The standard “equity and good conscience” will be applied when the facts and circumstances in a case indicate a need for reasonableness and moderation in the exercise of the Government’s rights. The decision reached should not be unduly favorable or adverse to either side. The phrase “equity and good conscience” means arriving at a fair decision between the obligor and the Government. 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 debtors contribute to the creation of the debt; (2) Balancing of faults – weighing fault of the debtor vs. the fault of VA; (3) Undue hardship – whether collection would deprive the 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; and (6) Changing position to one’s detriment – reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation. 38 C.F.R. § 1.965. Moreover, as noted in the April 2013 decision, the Committee on Waivers and Compromises (Committee) denied the Veteran’s waiver request for overpayment of these Chapter 33 benefits on the basis that he was significantly responsible for the creation of this debt, as he received VA education benefits for periods of non-attendance, courses dropped, or courses not counting toward his degree, which VA does not pay. Thus, the Committee found that the Veteran was significantly at fault and bore the burden of the creation of the debt. The Board finds that recovering the overpayment will not result in undue financial hardship to the Veteran. The Board acknowledges his assertion throughout the appeal that the repayment of this debt would result in a financial hardship for himself and his family. In support of this contention, he submitted a January 2013 VA Form 5655 in which stated he was employed for FedEx Freight from March 2012 to the present and that his spouse was not employed. He noted that he received monthly gross wages of $2,200.00 and additional VA and Social Security Administration (SSA) benefits of $1,800.00 per month. He noted that his monthly expenses were $2,900. He also noted that he would be able to pay $200.00 per month to pay back the VA education debts. He asserted that he had three dependents. He also submitted the May 2014 VA Form 5655 in which he noted that he was employed as a truck driver from March 1, 2014, to the present, and that his spouse was unemployed. He stated that his total monthly net income was $4,733.00 and that his total monthly expenses were $4,602.00. His monthly net income consisted of $2,700.00 of gross salary and $2,033.00 from VA and SSA benefits. He further noted that he would be able to pay $100.00 per month to repay his VA education debts. As noted in the January 2020 Board decision, he subsequently submitted additional evidence in November 2014 which reflected that his financial situation had become worse. Specifically, he contended that several nonprofit organizations had provided financial assistance to him and his family, including helping pay the costs of utilities, food, gas, delinquent bills, etc. However, evidence associated with the claims file since these November 2014 submissions, including VA treatment records from May 2018 and July 2019, show that the Veteran was again employed until 2018 as a truck driver, but was required to leave such employment due to legal problems and symptoms associated with his psychiatric disabilities. Likewise, an April 2018 VA mental health note showed that the Veteran reported that he had four children living with him and his wife, and that he described his employment status as retired or disabled. He indicated that he received $4,163.00 in VA compensation and $1,100.00 in Social Security Disability Income (SSDI) per month. Accordingly, although the Veteran asserted in November 2014 that he had a financial hardship, which appears to have been temporary, the January 2013 and May 2014 VA Forms 5655 showed that his monthly income exceeded his monthly expenses. Furthermore, the record since that time, which does not include any updated VA Forms 5655 as was requested by the AOJ in September 2020, shows that he has been employed for a time after November 2014, and that he has continued to receive approximately the same amount, or greater, of monthly income due to VA and SSA benefits. Based on subsequent awards of additional VA compensation benefits, the Veteran has been in receipt of over $3,000/month since March 2014 and in receipt of over $4,000/month since September 2017 from VA alone. Overall, the repayment of the debt owed would not deprive the Veteran of the basic necessities if repaid in structured installments based on his age and future earning potential. Accordingly, although the Veteran has asserted that repayment of the debt would cause him undue financial hardship, the record indicates otherwise. Thus, the Board finds that repayment of this debt would not cause undue financial hardship. The preponderance of the evidence is against a finding that collection of the overpayment would defeat the purpose of an existing benefit. The Veteran does not claim that he changed his position to his detriment in reliance on the overpaid amount. Nor does the record indicate that he did so. Thus, this factor does not provide a basis for waiving the recovery of the overpayment. The Board finds that the Veteran would be unjustly enriched if the recovery of the overpayment was waived as he received VA education benefits to which he was not entitled to at the government’s expense. The debt is valid, and his financial position is such that repayment of the overpayment would not result in undue hardship. Given the fault on the part of the Veteran, that he has the ability to repay the debt without resulting undue hardship, and that to permit him to keep the overpayment would result in his unjust enrichment because there are no equitable circumstances appearing in the record that would make retention of the overpayment anything other than unfair gain, the Board finds that the recovery of the overpayment of education benefits under the Post-9/11 GI Bill program in the calculated amount of $3,019.42 for tuition and fees, books and supplies, and a housing allowance would not be against the principles of equity and good conscience. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.965(a). Accordingly, the request for a waiver is denied. A. P. SIMPSON Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board A. Hodzic, 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.