Citation Nr: 21014573 Decision Date: 03/15/21 Archive Date: 03/15/21 DOCKET NO. 17-48 074A DATE: March 15, 2021 ORDER Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $59,094.78 is denied. 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 is not against equity and good conscience. CONCLUSION OF LAW Recovery of the overpayment of VA compensation benefits would not be contrary to the principles of equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.963(a), 1.965. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran had active service from July 1981 to July 2004. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from a March 2017 decision by the Committee on Waivers and Compromises (Committee) of the Department of Veterans Affairs (VA) Regional Office (RO). It was most recently before the Board in December 2019, when it was remanded for further development, specifically for adjudication of whether the overpayment was properly created. This separate issue is not in appellate status. Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $59,094.78 A July 2005 rating decision granted service connection for various disabilities and assigned a combined 40 percent rating. In August 2005, the Veteran was notified of that determination and was provided a VA Form 21-8764. The VA Form 21-8764 states, in pertinent part, that compensation is subject to future adjustment, and that “benefits will be reduced upon incarceration in a Federal, State, or local penal institution in excess of 60 days for conviction of a felony.” Thereafter, information was received that showed the Veteran had been incarcerated for a felony. In August 2016, the Veteran was advised that VA proposed to retroactively reduce his VA benefits based on his incarceration. In November 2016, the RO retroactively reduced the Veteran’s VA compensation benefits effective August 27, 2011, which was the 61st day of incarceration. This action resulted in an overpayment of $59,094.78. The Veteran requested a waiver of the recovery of the overpayment. 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 Committee 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 appellant to repay the debt to the government. 38 C.F.R. §§ 1.963, 1.965. Here, the Veteran did not promptly notify VA of his incarceration. Therefore, the Board finds the Veteran was at fault in the creation of the debt. Further, waiving recovery of the overpayment would defeat the purpose of the benefit because the Veteran was not entitled to receive the amount of compensation he was paid. There is also no evidence that the Veteran changed position to his detriment due to his reliance upon receipt of VA benefits. To the extent the Veteran contends there is financial hardship, that factor is outweighed by the other elements of equity and good conscience. The Veteran has stated on an January 2017 Financial Status Report that his household’s monthly net income is $5,879.00. He reported that his household’s monthly expenses total $5,190.00. Therefore, his monthly income exceeds his expenses. The Board acknowledges the Veteran’s reports of financial difficulties, including debts. However, as the overpayment at issue represents a valid debt to the U.S. Government, there is no reason that the Veteran should not accord the Government the same consideration that he accords his other creditors. For these reasons, the Board finds that any financial hardship the Veteran may experience from recovery of this debt is outweighed by the other elements of equity and good conscience. In this case, the Board finds that a waiver of the recovery of the overpayment is not warranted. Nathaniel J. Doan Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board A. Dean, 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.