Citation Nr: 21023079 Decision Date: 04/20/21 Archive Date: 04/20/21 DOCKET NO. 14-39 835 DATE: April 20, 2021 ORDER The overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $4,427.13 for the period of April 23, 1997 to February 22, 2001 was proper; the appeal as to the validity of the debt is denied. Entitlement to waiver of recovery of an overpayment of VA compensation benefits in the amount of $4,427.13 is denied. FINDINGS OF FACT 1. A March 1996 rating decision granted compensable service-connected benefits from July 20, 1995. 2. The Veteran was on active duty from September 1991 to July 1995 and April 1997 to September 2005, to include active service from April 23, 1997 to February 22, 2001. 3. The Veteran received both active duty pay and VA compensation for the period of April 23, 1997 to February 22, 2001. 4. On July 10, 2013, the Regional Office (RO) notified the Veteran that they were going to terminate compensation benefits for his period of active duty from April 23, 1997 to February 22, 2001. The adjustment was completed in the September 12, 2013 award, and this action resulted in an overpayment. 5. The overpayment of benefits in the amount of $4,427.13 was not due to the Veteran’s fraud, misrepresentation, or bad faith. 6. Recovery of the debt in the amount of $4,427.13 is not against equity and good conscience. CONCLUSIONS OF LAW 1. The termination of VA compensation benefits during the Veteran’s period of active duty from April 23, 1997 to February 22, 2001, was proper, and the overpayment debt was validly created. 38 U.S.C. §§ 5110, 5111, 5112, 5304(c); 38 C.F.R. §§ 3.4, 3.400, 3.401, 3.501, 3.654, 3.700. 2. The criteria for waiver of recovery of the overpayment of VA benefits in the amount of $4,427.13 are not met. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.962, 1.963(a), 1.965, 1.966. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran’s DD Form 214s of record show that he served on active duty from September 1991 to July 1995, and from April 23, 1997 to September 2005, with additional service from January 2003 to January 2004 and January 2005 to June 2005. This includes the period of time from April 23, 1997 to February 22, 2001, which is the subject of this decision. The matter comes before the Board of Veterans’ Appeals (Board) on appeal from a September 2013 decision letter issued by the VA Regional Office (RO). The appeal was previously before the Board in May 2018 when it was remanded for further development to confirm the Veteran’s periods of active service, to include contacting the Veteran’s branch of service to verify periods of active or inactive duty from April 23, 1997 to February 22, 2001. In October 2020, the Board remanded the appeal for further development including further confirmation of periods of active service as well as payments received during active service. In a February 2021 supplemental statement of the case (SSOC), the RO determined that the overpayment debt was validly created and denied the Veteran’s waiver request. It is now returned to the Board. 1. Validity of overpayment The Veteran asserts that he was not paid VA compensation benefits and active duty pay concurrently from April 23, 1997 to February 22, 2001, because he was not on active duty during that time period. Accordingly, he contends, that an overpayment could not have been validly created and that there is no valid debt. The Veteran’s DD Form-214 shows that the Veteran entered active duty on April 23, 1997 and separated on September 19, 2005. It shows net active service for this period as 4 years, 6 months, and 27 days. It also shows 3 years and 10 months of prior active service and 3 years, 9 months, and 17 days of total prior inactive service, and 1 year, 11 months, 19 days of foreign service. Remarks on the DD 214 indicate that the Veteran received separation pay of $12,253.50 for the period of February 23, 2001 to October 8, 2003. A March 1996 rating decision granted compensable service-connected benefits from July 20, 1995, the day after the Veteran separated from a period of active duty. Subsequently, the Veteran served on another period of active duty, from April 1997 to September 2005, to include active service from April 23, 1997 to February 22, 2001, as verified on his DD Form 214. During that period of active duty, the Veteran received both active duty and VA compensation pay. The RO retroactively terminated the Veteran’s VA compensation benefits during the period of active duty from April 23, 1997 to February 22, 2001; this action resulted in an overpayment. In January 2003, VA notified the Veteran that the Department of Defense indicated that he had returned to active duty on February 23, 2001 and requested that the Veteran clarify any discrepancy. A response from the Veteran was not received and his VA compensation benefits stopped, effective February 23, 2001 because the Veteran was on active duty and remained on active duty until September 2005. In October 2020, a VA development letter was sent to the Veteran regarding this issue; however, a response has not been received. In a September 30, 2005 statement, the Veteran reported that he served on active duty from September 20, 1991 to July 19, 1995, was awarded a 10 percent evaluation for his service-connected lower back condition, and that he returned to active duty from April 23, 1997 to September 19, 2005. An April 25, 2012 military personnel record shows that the Veteran’s Basic Active Service Date (BASD) is listed as April 23, 1997; however, his assignment information lists him as incoming personnel on February 27, 2001. A May 2, 2013 VA Memorandum provides a formal finding on the unavailability of complete service treatment records (STRs) for the Veteran’s periods of service in the Army from April 23, 1997 to September 19, 2005. After multiple attempts to locate the STRs, it was determined that complete STRs are unavailable for review, and a response from the Veteran has not been received. A June 14, 2013 VA Memorandum indicates that the Veteran entered active duty on April 23, 1997 and that the Veteran had an active felony warrant issued on July 14, 1997, after he went back on active duty. On July 10, 2013, the Veteran was notified that his compensation benefits were not properly adjusted to reflect his complete period of active duty service from April 23, 1997 to September 19, 2005. Because a veteran may not receive VA benefits while on active duty, the RO proposed to stop compensation payments. The RO indicated that the Veteran’s compensation award was terminated February 23, 2001, but that the record reflects that the Veteran actually returned to duty in April 1997. As such, the RO proposed to terminate compensation benefits for his period of active duty from April 23, 1997 to February 22, 2001. The letter advised the Veteran that he had 60 days to provide evidence showing that the proposed action should not be taken. The Veteran did not respond to the July 2013 notice, and in a September 2013 notification letter, the Veteran was advised that the proposed action had been taken. In the September 2013 Debt Management Center (DMC) – First Demand Letter, the Veteran was advised that he was paid $4,427.13 more than he was entitled to receive in VA compensation benefits. In October 2013, the Veteran, through his representative, provided a VA Form 21-4138 and stated that the VA is incorrect in the assumption that he was on active duty while receiving compensation which created an overpayment. The Veteran requested that the VA confirm that he received active duty pay from April 23, 1997 to February 22, 2001. The Veteran stated that Defense Finance and Accounting Service (DFAS) and IRS records would show no active duty pay during that time. In an October 2013 statement, the Veteran stated that from 1997 to 2001 the Veteran was not on active duty and did not receive compensation from the National Guard during that time. He stated that he has a misleading DD-214, but that a check of his DFAS pay records should show that he did not receive any active duty or National Guard pay during this time. In the November 2014 VA Form 9, the Veteran stated that he did not serve on active duty or get paid for active duty during the time period claimed by VA. He stated that he had submitted a DD-214 in support of his claim and that DFAS records show that he was entitled to VA compensation and that the overpayment was in error. DPRIS response on December 23, 2015, DD Form 1966/1 indicates active duty service on February 23, 1997. The records also indicate that physical inspection of the Veteran was conducted on February 24, 2000 and February 7, 2001 and that he was qualified for DAR on December 20, 2000. The DD-214 provided in these records shows that he entered active duty on April 23, 1997 and separated on September 19, 2005. In June 2016, the Veteran, through his representative submitted a few documents from DFAS and stated that it “shows a clear gap of active duty pay from August 31, 1995 to March 31, 2001.” However, the representative did not further explain how he reached this conclusion and the records submitted did not otherwise clarify this assertion. The RO previously attempted to obtain the Veteran’s complete military personnel records. A search of active duty service periods shows that the Veteran was on active duty with the Army from September 20, 1991 to July 20, 1995 and from February 23, 2001 to September 19, 2005 and National Guard service with the Army from July 21, 1995 to November 10, 1996 and Reserve service from November 11, 1996 to May 11, 1999. On June 5, 2019, the RO requested that the Veteran take any necessary steps to correct his DD-214, if it is indeed false. Attached to that letter were Department of Defense forms necessary to request a correction to his DD-Form 214 from the Department of the Army. The Veteran has not since responded to that request. On October 7, 2019 and November 12, 2019, two attempts were made to acquire records from both the Florida National Guard and the U.S. Army Reserve to confirm the Veteran’s service from April 23, 1997 to February 22, 2001. The RO notified the Veteran in November 2019 that the records cannot be located and therefore are unavailable for review. The RO stated that all efforts to obtain the needed information have been exhausted, and based on these facts, they determined that further attempts to obtain the records would be futile. The RO requested that the Veteran submit any available copies of service personnel records and any other relevant evidence to support his claim. The Veteran has not responded to that request. On November 26, 2019, the Florida National Guard provided documentation indicating that the Veteran was discharged from the Army National Guard on October 14, 1996 and assigned to the Reserve, effective November 10, 1996. In October 2020, the RO requested all Army active duty payments for the period of April 23, 1997 to February 22, 2001 from Defense Finance and Accounting Service (DFAS). The RO advised the Veteran that while records were requested, it is his responsibility to ensure that VA receives the necessary information. On December 10, 2020, a response was received from DFAS, indicating that they conducted detailed searches of active, Reserve, and National Guard pay systems; however, no records could be located for the period in question. In January 2021, a VA development letter was sent to the Veteran, requesting a DD 215, Correction to Certificate of Release or discharge from active duty, for further clarification of the purported contradictory information on his DD 214 regarding the second period of active duty service. A response to this request has not been received. Here, VA has made several attempts to obtain and verify the Veteran’s periods of active service; however, as noted above, the Veteran has not assisted in obtaining the necessary and relevant evidence to support his contentions. VA has exhausted all efforts to obtain the Veteran’s STRs, military personnel records, DFAS records with payment history, and to resolve the issue as to whether active duty pay was received during the time period in question. While the Veteran and his representative submitted some DFAS records, they are ambiguous and have not provided the information necessary to resolve the issue at hand. The Veteran has not responded to requests for information nor has he otherwise assisted in the development or provided information or evidence to clarify any discrepancies or inconsistencies. 38 U.S.C. § 5304(c) prohibits the receipt of VA disability compensation benefits for any period for which the person receives active service pay. See 38 C.F.R. §§ 3.654, 3.700. This includes active duty pay, drill, and active duty for training payments, and inactive duty training payments made to Reservists and members of the National Guard. Reservists may waive their pension, compensation, or retirement pay for periods of field training, instruction, other duty, or drills. As discussed above, the evidence of record shows that the Veteran served on active duty from April 23, 1997 to February 22, 2001 and was paid during that time. While DFAS records could not provide information for that time period, the competent evidence of record shows that the Veteran served on active duty during that time period. Additionally, the Veteran has not assisted in obtaining information or evidence to show whether or not payments were received during that time period or if he had further information that would provide clarity. VA has conducted thorough research into the contradictory evidence of record regarding the Veteran’s dates of active service; however, the most competent evidence of record, the Veteran’s DD-214 shows active duty service from April 1997 to September 2005. Additionally, in the September 26, 2005 statement, the Veteran himself stated that he returned to active duty with the Army from April 23, 1997 to September 19, 2005, the exact dates in question. Thus, based on the Veteran’s DD-214 and his own September 2005 statement, as well as the lack of any competent evidence to indicate otherwise, the Board finds that the Veteran did serve on active duty during the period in question. The evidence shows that the Veteran was in receipt of VA compensation benefits during that period of active duty, from April 23, 1997 to February 22, 2001. As noted above, concurrent receipt of active duty pay and VA compensation benefits is prohibited. When VA became aware that the Veteran’s compensation benefits were not properly adjusted to reflect the Veteran’s period of active duty service, the Veteran was advised of the proposal to terminate compensation payments from April 23, 1997 to February 22, 2001. The Veteran has not provided sufficient information to show that termination of those benefits was improper, and the period of time when the Veteran received concurrent benefits, from April 23, 1997 to February 22, 2001, resulted in the overpayment debt of $4,427.13. Based on the foregoing, because pertinent law and regulation prohibits payment of both active duty and VA compensation pay, the Board finds that the overpayment debt of VA compensation benefits was properly created. The debt is valid; the appeal is denied. 2. Waiver of overpayment debt A Veteran has the right to dispute the existence and amount of the debt. 38 C.F.R. § 1.911(c). In determining whether a waiver of overpayment is appropriate, the inquiry is focused on three distinct questions. First, VA must determine if the overpayment at issue was validly created. See Schaper v. Derwinski, 1 Vet. App. 430, 434-35 (1991) (noting that before adjudicating a waiver application, the lawfulness of the overpayment must first be decided). The term “overpayment” refers only to those benefit payments made to a designated living payee or beneficiary in excess of the amount due or to which such payee or beneficiary is entitled. See 38 U.S.C. § 5302; 38 C.F.R. § 1.962. As relevant to this appeal, 38 U.S.C. § 5304(c) prohibits the receipt of VA disability compensation benefits for any period for which the person receives active service pay. See 38 C.F.R. §§ 3.654, 3.700. This includes active duty pay, drill, and active duty for training and inactive duty training payments made to Reservists and members of the National Guard. Id. Reservists may waive their pension, compensation, or retirement pay for periods of field training, instruction, other duty, or drills. A waiver may include prospective periods and contain a right of recoupment for the days for which the reservist did not receive payment for duty by reason of failure to report for duty. 38 C.F.R. § 3.700(a)(1)(iii). Second, if the debt is valid, VA must determine if fraud, misrepresentation, or bad faith played a role in its creation. If it did, waiver of the overpayment is automatically precluded, and further analysis is not warranted. See 38 U.S.C. § 5302(a); 38 C.F.R. §§ 1.963(a), 1.965(b); see also Ridings v. Brown, 6 Vet. App. 544 (1994) (holding that the Board must independently address the matter of bad faith before addressing whether waiver would be appropriate). Finally, if VA determines that the debt is valid, and that fraud, misrepresentation, and/or bad faith had no part in its creation, VA must then consider whether collection of the debt would be against equity and good conscience. See 38 U.S.C. § 5302(b); 38 C.F.R. §§ 1.962, 1.963, 1.965. Recovery of overpayments of any benefits made under the laws administered by VA 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 if the 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. §§ 1.962, 1.963(a), 1.965. The February 2021 decision on waiver of indebtedness on appeal from the Committee on Waivers and Compromises (Committee) denied the Veteran’s request for a waiver but did not find fraud, misrepresentation, or bad faith on the Veteran’s part. See 38 C.F.R. § 1.963(a) (in cases where there is no fraud, misrepresentation, or bad faith on the Veteran’s part with respect to the creation of the overpayment at issue, waiver is not precluded pursuant to 38 U.S.C. § 5302(a)). The next question is whether the facts dictate that a waiver should be granted under the standard of “equity and good conscience.” The phrase “equity and good conscience” means the arrival 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, (2) balancing of faults between the debtor and VA, (3) undue hardship (whether the collection of the debt would deprive the debtor or family of basic necessities), (4) defeat of 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 positions to one’s detriment (reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation). 38 U.S.C. § 5302; 38 C.F.R. § 1.965(a). After reviewing all the evidence of record, the Board finds that recovery of the overpayment would not violate principles of equity and good conscience. The first and second elements pertain to the fault of the debtor versus the fault of VA. As noted above, the creation of this debt was the sole fault of the Veteran. The Veteran received concurrent VA compensation benefits and active duty pay during a period of active service. The law is clear, and absent a finding of incompetency, the Veteran is responsible for notifying VA of any changes in status. In the February 2021 Decision, the Committee found the Veteran at fault in the creation of the debt given that he retained compensation benefits he should have known he was not entitled to receive or retain covering a period in which he was on active duty. In fact, in the September 2005 statement, the Veteran specifically stated that he was on active duty from April 23, 1997 to September 19, 2005. Review of the file does not reveal evidence showing he was discharged for the time period in question. The Veteran was provided with numerous opportunities to provide information to support his assertion that he was not on active duty during the period in question and did not receive concurrent benefits. The RO has made multiple attempts to obtain confirmation of the Veteran’s correct dates of service and payments received; however, the Veteran has not assisted in this endeavor and has not provided sufficient competent evidence to corroborate his assertion. As such, there is no evidence that VA is at fault for the creation of this debt. Additionally, collection of the debt would not cause the Veteran undue financial hardship. The October 2013 Financial Status Report (FSR) shows that the Veteran’s marital status is single, he had two dependent children at that time, and that he was gainfully employed. In the October 2013 FSR, the Veteran noted that he had not received a compensation check which is causing great hardship to him and his four dependent children. He noted that if not granted a waiver, to subtract $200 a month from his compensation check. Despite an October 6, 2020 request for an updated FSR, as well as notification that failure to return a completed FSR within 30 days would result in denial of his request due to incompletion, an updated FSR has not been submitted by the Veteran. The most recent, and only, FSR of record is from October 2013, and while it shows that the Veteran’s expenses exceeded his income, a review of the record does not reveal current evidence of financial hardship. As such, the Veteran’s current financial status is unknown. Accordingly, there is no basis upon which to find undue hardship. 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, nor is there any indication that recoupment of those benefits would defeat the purpose of the benefit. The Board’s inquiry is not necessarily limited to the six factors discussed above. The record does not demonstrate any additional factors which should be considered in adjudicating the Veteran’s claim for a waiver of the indebtedness, nor has the Veteran identified any such factors. After weighing all of the enumerated factors, the Board finds that total recovery of the overpayment does not violate the principles of equity and good conscience. Thus, waiver of the recovery of the overpayment of the debt of $4,427.13 is not warranted. (Continued on the next page)   When all the evidence is assembled VA is then responsible for determining whether the evidence supports the claim or is in relative equipoise, with the claimant prevailing in either event, or whether a preponderance of the evidence is against the claim in which case the claim is denied. Gilbert v. Derwinski, 1 Vet. App. 49, 55 (1990); Ortiz v. Principi, 274 F. 3d 1361 (Fed. Cir. 2001). The preponderance of the evidence is against the Veteran’s claim for a waiver; the benefit of the doubt doctrine is not for application, and the claim must be denied. L. B. CRYAN Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board A. Labi, Associate 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.