Citation Nr: 21024374 Decision Date: 04/22/21 Archive Date: 04/22/21 DOCKET NO. 18-46 788 DATE: April 22, 2021 REMANDED Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) disability compensation benefits in the amount of $14,200.00, to include the question of whether the overpayment was properly created, is remanded. REASONS FOR REMAND The Veteran had active service from December 2001 to April 2002 and August 2005 to January 2006, with additional service in the Reserves until 2008. In June 2013, VA notified the Veteran that they had received information showing the Veteran received full military retired pay and full VA compensation at the same time. The letter proposed to reduce the Veteran’s compensation benefits to recoup the improperly paid amount. The Regional Office (RO) did not take action to assess the overpayment debt created until August 2015, after which, in September 2015, the VA Debt Management Center (DMC) notified the Veteran of a $14,200.00 debt against her. The Veteran filed statements in September 2015 and December 2015 indicating her lack of understanding as to why this debt was being assessed against her and suggesting this debt was improperly created. In December 2015, the Veteran also submitted a Financial Status Report (FSR) to request a waiver of the debt. The RO has since responded by forwarding the waiver request to the VA Committee on Waivers and Compromises (COWC), but at no time has the RO adjudicated the matter of the validity of this debt, which the Veteran is clearly challenging. As such, further appellate review by the Board of Veterans’ Appeals (Board) on the Veteran’s waiver claim must be deferred pending formal adjudication of her challenge to the validity of the debt. Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991) (“when a Veteran raises the validity of the debt as part of a waiver application... it is arbitrary and capricious and an abuse of discretion to adjudicate the waiver application without first deciding a veteran’s challenge to the lawfulness of the debt asserted against him or her”); VAOPGCPREC 6-98 (July 24, 1998) (holding that when a veteran challenges the validity of the debt and seeks waiver of the debt, the [Regional Office] must first fully review the debt’s validity and, if the office believes the debt to be valid, prepare a written decision fully justifying the validity of the debt before referring the waiver request to the Committee on Waivers and Compromises). 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. 38 C.F.R. § 1.911(c)(1). Resolution of the creation issue must precede consideration of the waiver issue. Thus, this matter is REMANDED for the following action: (Continued on the next page)   Adjudicate the issue of whether the overpayment was properly created. This should include a full explanation of the creation of the debt at issue. If any issues remain in dispute, the case should be returned to the Board after appropriate appellate processing. MICHAEL E. KILCOYNE Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board A. Adamson, 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.