Citation Nr: 21024863 Decision Date: 04/26/21 Archive Date: 04/26/21 DOCKET NO. 15-19 483 DATE: April 26, 2021 ORDER Entitlement to waiver of recovery of an overpayment of Veterans Retraining Assistance Program (VRAP) benefits in the amount of $6,537.06 is denied. FINDINGS OF FACT 1. The creation of the overpayment in the amount of $6,537.06 was not the result of fraud, misrepresentation, or bad faith on the part of the Veteran. 2. Recovery of the overpayment in the amount of $6,537.06 would not violate equity and good conscience. CONCLUSION OF LAW The criteria for waiver of recovery of an overpayment of VRAP education benefits in the amount of $6,537.06 have not been met. 38 U.S.C. § 5302 (2012); 38 C.F.R. §§ 1.963, 1.965 (2020). REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from August 1979 to August 1985. This appeal to the Board of Veterans’ Appeals (Board) arose from a November 2014 decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Buffalo, New York. By that decision, the RO notified the Veteran that his request for waiver of overpayment of VRAP benefits had been denied. The Veteran disagreed with the decision and this appeal ensued. In September 2015, the Veteran testified at a Board video-conference hearing before the undersigned Veterans Law Judge; a transcript of the hearing has been associated with the record. In November 2018, the Board remanded the appeal, noting that in addition to requesting a waiver of recovery of the overpayment, the Veteran had disputed the validity of the debt. The Board determined that adjudication of the Veteran’s waiver claim was to be deferred pending adjudication by the agency of original jurisdiction (AOJ) of the issue of whether the debt was validly created. The Board thus remanded the matter for the AOJ to adjudicate the issue of whether the overpayment of VRAP benefits in the amount of $7,635.73 was properly created, advising the Veteran of the need to separately perfect an appeal of that issue. In April 2019, the RO issued a decision in which it found that the Veteran was debited in error for the Winter 2014 term, as he was enrolled full-time for that term. The RO continued to find, however, the because the Veteran was not enrolled full-time in a program of study for the Spring 2014 term, he was not entitled to payment of VRAP benefits for that term. The RO thus found that the remaining overpayment in the amount of $6,537.06 was validly created. (Parenthetically, the Board notes that issue on appeal has been corrected to reflect the remaining amount of overpayment owed.) In June 2019, in response to the RO’s April 2019 decision, the Veteran filed a VA Form 10182 (Decision Review Request: Board Appeal (Notice of Disagreement)), wherein he requested Direct Review by a Veterans Law Judge. In this regard, the Board notes that on August 23, 2017, the President signed into law the Veterans Appeals Improvement and Modernization Act, Pub. L. No. 115-55 (to be codified as amended in scattered sections of 38 U.S.C.), 131 Stat. 1105 (2017), also known as the Appeals Modernization Act (AMA). This law creates a new framework for veterans dissatisfied with VA’s decision on their claim to seek review. The AMA was implemented effective February 19, 2019; accordingly, because the Veteran’s rating decision regarding whether the overpayment of VRAP benefits, and resulting debt, was validly created was issued after that date, the Veteran’s appeal as to that issue will be handled under the AMA. In April 2020, the Board again remanded the appeal because the AOJ had not yet adjudicated the threshold determination of whether the Veteran’s debt was validly created. Thereafter, the AOJ determined that the Veteran’s debt was validly created. In a December 2020 decision, the Board also determined that the debt was properly created. In December 2020, the Committee on Waivers and Compromises upheld the previous, November 2014 decision. A supplemental statement of the case denying waiver was also issued in December 2020. Entitlement to waiver of recovery of an overpayment of VRAP benefits in the amount of $6,537.06 is denied. As the Board has determined that the Veteran’s debt was validly created, the Board can now adjudicate the merits of his claim for waiver. As noted in the December 2020 Board decision, the Veteran explained that for the Winter 2014 term, he registered for a three-credit course and received a grade. For the Spring 2014 term, he registered for four courses. In November 2013, the Veteran said that he relocated from Baltimore to Georgia and took the courses online. On the day one of the courses was to begin, he learned that it had been cancelled by the school. He said that he asked the BCCC school certifying official whether he needed to return to Baltimore to choose another course. The Veteran said the BCCC school certifying official told him that since he was registered for the other three courses, the school certifying official said that he would add the Winter 2014 term course as a Spring 2014 term course instead of a Winter 2014 term course. The Veteran said that the BCCC school certifying official said that he would send VA the corrected certification form to reflect that change. The Veteran seeks a waiver of the debt because he would have taken the course but for its cancellation by the school. Further, the Veteran said that he relied on the information provided by the BCCC school certifying official, who assured him that he could apply his Winter 2014 term course to his Spring 2014 term to satisfy his full-time enrollment requirement. Recovery of an overpayment of VA benefits may be waived if recovery of the indebtedness would be against equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. § 1.963 (a). 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 various elements which are not intended to be all-inclusive. The elements are the fault of the debtor where such actions contribute to creation of the debt, balancing of faults where VA fault is also involved, whether collection of the debt would cause the debtor undue financial hardship by depriving him of basic necessities, whether collection would defeat the purpose of the VA benefit, whether failure to make restitution would result in unjust enrichment, and whether reliance on VA benefits resulted in relinquishment of a valuable right (i.e., changing position to one's detriment). 38 C.F.R. § 1.965 (a). Where fraud, misrepresentation, or bad faith on the part of the Veteran is shown, denial of waiver of recovery of an overpayment may be made without regard to factors considered in applying the equity and good conscience standard. 38 U.S.C. § 5302. Bad faith generally describes unfair or deceptive dealing by one who seeks to gain thereby at another's expense. Thus, a debtor's conduct in connection with a debt arising from a VA benefit/services program exhibits bad faith if such conduct, although not undertaken with actual fraudulent intent, is undertaken with intent to seek an unfair advantage, with knowledge of the likely consequences, and results in a loss to the Government. 38 C.F.R. § 1.965 (b)(2). In order to establish misrepresentation, the VA must show that there was a willful misrepresentation of a material fact or the willful failure to disclose a material fact with the intent of obtaining or retaining, or assisting an individual to obtain eligibility for VA benefits. In order to determine whether misrepresentation exists, VA must prove a willful intent on the part of the debtor. The burden of proof lies solely with VA. 38 C.F.R. §§ 1.962 (b), 1.965(b)(1). The record does not demonstrate fraud, misrepresentation, or bad faith on the part of the Veteran. In this regard, the Veteran asserts that he relied on the information provided by his school’s certifying official, who assured him that he could apply his Winter 2014 term course to his Spring 2014 term to satisfy his full-time enrollment requirement. Thus, there is no basis for denying the Veteran's claim on the basis of fraud, misrepresentation, or bad faith. The remaining consideration is whether recovery of the indebtedness would be against equity and good conscience. As noted above, when considering whether recovery of the debt would be against equity and good conscious consideration is given to the following six elements: (1) fault of debtor, (2) balancing of fault, (3) undue hardship, (4) defeat the purpose of the debt, (5) unjust enrichment, and (6) changing position to one's detriment. See 38 C.F.R. § 1.965 (a). The first two elements for consideration under 38 C.F.R. § 1.965 (a) are the fault of the debtor, and balancing the fault of the debtor and VA. The Board finds that the Veteran was at fault in the creation of the overpayment, and VA was not at fault in the creation of the Veteran's indebtedness. The Board has found that the overpayment of VRAP benefits was properly created based on the change of enrollment status due to the Veteran's reduction from full-time to part-time status. While the Veteran has alleged that he was forced to reduce his credit hours due to a class cancellation, the Board finds that he is, nonetheless, at fault in creating the debt based on his change in status, because he did not notify the VA that he was not enrolled as a full-time student. VA was not at fault in the creation of the overpayment since it paid the Veteran VRAP benefits based on the school’s December 2013 certification that the Veteran was attending school full time from January 27, 2014 to May 25, 2014. As to the element of undue financial hardship, the regulation provides that consideration should be given to whether collection of the indebtedness would deprive the debtor of the basic necessities. The Veteran submitted a Financial Status Report in April 2014 that indicates a net monthly income less expenses of $532. Although the Board recognizes that the report is approximately seven years old, the AOJ requested that the Veteran submit an updated financial status report in July 2019. To date, no such report has been received. After taking care of basic necessities such as shelter and food, the Veteran is expected to accord a debt to VA the same regard given to any other debt. Therefore, the Veteran would have after deducting his shelter, food, and utilities, $532 a month to contribute towards repayment. This is not undue hardship. With regard to the other elements pertaining to the principles of equity and good conscience as set forth by 38 C.F.R. § 1.965 (a), the Board finds that recovery of the overpayment would not defeat the purpose for which benefits were intended. That is, he was paid VRAP benefits for attending school full time from January 27, 2014 to May 25, 2014, when he was not actually attending full time. Therefore, he was not entitled to the benefits. The Board further finds that the failure of the Government to insist upon its right to repayment of the assessed overpayment which has already been recovered would result in unjust enrichment of the Veteran as he would be able to recuperate funds which he was not entitled to. Thus, the collection of the debt did not defeat the purpose for which the benefits were intended. Also, there is no evidence that the Veteran relinquished a valuable right or incurred any legal obligations resulting from reliance on VA benefits. For the reasons discussed above, the Board finds that the recovery of the overpayment would not be against the principles of equity and good conscience. See 38 C.F.R. §§ 1.963, 1.965. Because the preponderance of the evidence is against the claim for a waiver of recovery of the overpayment of VA benefits in the amount of $6,537.06, the benefit of the doubt doctrine is not for application and the claim is denied. See 38 U.S.C. § 5107; 38 C.F.R. § 3.102. Matthew Tenner Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board Roya Bahrami, 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.