Citation Nr: 21022080 Decision Date: 04/14/21 Archive Date: 04/14/21 DOCKET NO. 17-04 858 DATE: April 14, 2021 ORDER Entitlement to a waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $7,608.37 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 by VA in this case in the amount of $7,608.37 is against equity and good conscience. CONCLUSION OF LAW The overpayment was not due to fraud, misrepresentation or bad faith of the Veteran, and recovery of the overpayment of VA compensation benefits in the amount of$7,608.37 would be against equity and good conscience and, therefore, is waived. 38 U.S.C. §§ 5107, 5302(a); 38 C.F.R. §§ 1.963(a), 1.965(a). REASONS AND BASES FOR FINDINGS AND CONCLUSION The law provides for the rates of disability compensation, and for payment of additional compensation for dependents of veterans who are at least 30 percent disabled. 38 U.S.C. §§ 1114 (c), 1115, 1134, 1135. The Veteran was, at all times relevant to this issue and the period of time in question, rated appropriately to receive additional compensation for a spouse. In August 2011, a VA Form 21-686c, Declaration of Status of Dependents, was received from the Veteran in which he reported that he was married to C. In a November 2012 VA letter, the RO informed the Veteran that he had been awarded additional benefits for his spouse, C., and he was informed that he should promptly inform that office of VA of any change in the status of his dependent and that a failure to do so might result in an overpayment which must be repaid. He was provided a VA Form 21-8764 which reiterated that additional benefits were included for his spouse as well as a dependent and that failure to notify the Regional Office (RO) in a prompt fashion of a dependency change would result in an overpayment. In January 2013, the Veteran’s spouse, C., died. That same month, the Veteran notified the RO of C.’s death. The RO did not undertake action to remove C. as the Veteran’s spouse from his award. In April 2013, the Veteran was granted a total disability rating based individual unemployability from May 2011. Although he was informed that he was being paid for a spouse, a portion of the entitlement periods, as noted, predated his spouse’s death. Because his amount of compensation changed, the Board notes that it is reasonable to find that the Veteran should have been on notice that he was receiving more benefits than he was entitled to receive because C. was continued on his award after her death. In May 2015, the RO informed the Veteran that C. was removed as his dependent effective February 1, 2013 because she died in January 2013. See 38 U.S.C. § 5112; 38 C.F.R. § 3.401. The Veteran was then notified that the retroactive adjustment resulted in an overpayment totaling $7,608.37. The Veteran submitted a financial status report and requested a waiver of the recovery of the debt. In an October 2015 decision, the Committee on Waivers and Compromises (Committee) considered the Veteran’s claim for waiver. The Committee did not find fraud, misrepresentation, or bad faith on the Veteran’s part with respect to the creation of the overpayment at issue. The Board agrees with this determination. The Committee further found that recovery of the debt in this case in the amount of $7,608.37 is not against equity and good conscience. The Veteran appealed that determination to the Board of Veterans’ Appeals. The Veteran has presented contentions in support of his appeal, to include at a Board hearing. The Board notes that the RO issued a statement of the case which addressed the validity of the debt issue rather than the waiver issue. The Veteran clarified that the issue on appeal is the waiver issue at his hearing. The Board finds that the Veteran is not prejudiced by consideration of this issue herein because the waiver is being granted in full. In cases where fraud, misrepresentation, or bad faith on the Veteran’s part with respect to the creation of the overpayment at issue has not been demonstrated, and, therefore, waiver is not precluded pursuant to 38 U.S.C. § 5302(a), the Board must determine whether recovery of the indebtedness would be against equity and good conscience, thereby permitting waiver under 38 U.S.C. § 5302(a) and 38 C.F.R. §§ 1.963(a), 1.965(a). In making this determination, consideration is given to the following elements, which are not intended to be all-inclusive: (1) fault of 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). See 38 C.F.R. § 1.965(a). The overpayment was created because the RO delayed in taking the proper action to retroactively remove the Veteran’s dependent, C., from his award after the Veteran immediately notified the RO of her death. As previously noted above, it is reasonable to find that the Veteran did not know that he continued to receive benefits for C. after he requested that she be removed from his award. The RO failed to promptly remove her from the award. Thus, the RO is at fault for the creation of the debt. With regard to the other elements of equity and good conscience, there is no financial hardship in this case. In regard to whether failure to collect would cause unjust enrichment to the debtor, the Board notes that the Veteran received benefits to which he was not entitled and as such, would cause unjust enrichment to the debtor. Likewise, there is no indication that the Veteran’s reliance on VA benefits resulted in relinquishment of another valuable right. As to whether recoupment of those benefits would defeat the purpose of the benefit, the Veteran was no longer married, so, recoupment of those benefits would not defeat the purpose of the benefit. On the whole the Board finds that, in weighing all of the elements of equity and good conscience, the elements of primary fault on the part of VA outweigh the elements that are not in his favor. The Veteran acted in accordance with the VA notice and notified the RO of his spouse’s death the same month that she died. The RO then engaged in a significant delay in taking the proper action for over two years. Accordingly, waiver of recovery of the overpayment is warranted. [SIGNATURE ON NEXT PAGE] JONATHAN B. KRAMER 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.