Citation Nr: 21024962 Decision Date: 04/27/21 Archive Date: 04/27/21 DOCKET NO. 16-58 394A DATE: April 27, 2021 ORDER Entitlement to a waiver of indebtedness for an overpayment in the amount of $4,622.00, to include whether the creation of the debt was valid, is denied. FINDINGS OF FACT 1. The Veteran received military drill pay for a period of 55 days in Fiscal Year (FY) 2008, 64 days in FY 2009, 64 days in 2010, and 8 days in FY 2011. 2. The Veteran’s VA disability compensation was properly reduced for concurrent receipt of military service drill pay for FYs 2008-2011 which created a debt of $4,007.40. 3. In June 2016, the Veteran was issued a retroactive payment which was excessive by $614.60. 4. The current overpayment is derived from the $4,007.40 debt and $614.60 debt which total $4,622. 5. The overpayment was not due to the Veteran’s fraud, misrepresentation, or bad faith. 6. Recovery of the overpayment is not against equity and good conscience. CONCLUSIONS OF LAW 1. The reduction in the VA disability compensation benefits to offset the concurrent receipt of active service drill pay for concurrent receipt of active service drill pay for the period of FYs 2008-2011 and to adjust for an excessive retroactive pay was proper. 38 U.S.C. §§ 5107, 5304(c); 38 C.F.R. §§ 3.654, 3.700. 2. Recovery of the overpayment of $4,622 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 CONCLUSIONS 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 payments, and inactive duty for 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). The Veteran served in the Army National guard from September 1988 to September 1996 and from August 2000 to January 2007, with initial active duty for training (IADT) from March 1989 to June 1989. He had periods of active duty for training (ACDUTRA) from July 2005 to August 2006 and in September 2005. He had additional service in the Army Reserve, with ACDUTRA from August 2008 to September 2008. The AOJ received information from the Defense Manpower Data Center (DMDC) that the Veteran received military drill pay concurrently while receiving VA benefits for a period of 55 days in FY 2008, 64 days in FY 2009, 64 days in 2010, and 8 days in FY 2011. The Board of Veterans’ Appeals (Board) notes that each FY extends for 365 days of an annual year, not a calendar year (from October 1st through September 30th of the following year). In June 2016, the Veteran was sent notice of an overpayment resulting from the concurrent drill pay in FYs 2008, 2009, 2010, and 2011. Thereafter, the Veteran was informed that the adjustment generated a $4,007.40 overpayment. In addition, an additional $614.60 debt was incurred because the Veteran received a higher retroactive payment than entitled. The total debt was $4,622. It appeared from the Regional Office (RO) notices that the Veteran had adjusted drill pay for the years of 2015 and 2016. In August 2016, a Decision of Waiver on Indebtedness by the Committee on Waivers and Compromises (Committee) denied the waiver request for the debt in the amount of $4,622.00 (the Veteran’s $4,007.40 debt from drill pay combined with the additional $614.60 debt incurred from receiving a higher retroactive payment than entitled). This decision specifically indicated that the $4,007.40 debt was created from dates between October 2015 and June 2016 from military drill pay. The case was remanded for an audit and to resolve the creation period for the debts and for reconsideration of the waiver matter. The Veteran disputed the debt because he indicated that he did not have drill dates after FY 2011 so he should not have accrued a debt for drill pay for FYs 2015 and 2016. Thereafter, an audit was performed for the drill payments which continued to reflect the current debt amount for FYs 2008-2011, only. In addition, the RO resolved that there was no overpayment from drill pay for FYs 2015 and 2016; rather, adjustments for the overall overpayment amount was made during that time period to recoup the monies from his VA payments during those years. So, while there was an adjustment, that was only to recoup the debt, not based on any additional drill pay adjustment for those FYs (2015-2016). The Veteran does not appear to dispute the reported drill days as indicated for FYs 2008-2011. Based on a review of the record, the Board finds that the RO appropriately withheld the Veteran’s VA compensation benefits for a period of 55 days in FY 2008, 64 days in FY 2009, 64 days in 2010, and 8 days in FY 2011. The RO has fully recouped the overpayment, including the $614.60 from the higher retroactive payment. As noted, the RO withheld monies from later VA payments to the Veteran and those adjustments were not for additional drill periods. The reference to 2015-2016 was only based on when money was withheld not when the debt was incurred. Accordingly, the reduction in the VA disability compensation benefits to offset the concurrent receipt of military drill pay and for the higher retroactive payment was proper. The creation of the debt was proper. With regard to the waiver matter, the Committee did not find fraud, misrepresentation, or bad faith in this case; however, the Committee determined that it would not be against the principles of equity and good conscience if the debt was collected. 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 first and second elements pertain to the fault of the debtor versus the fault of VA. After consideration of the record, the Board finds that the Veteran was at fault because he received and negotiated payment from both drill pay, and compensation pay for the same time periods. VA was at fault for issuing the excessive retroactive payment. 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. There is no evidence that recoupment of the benefits in question would defeat the purpose of the benefit. The Board has also considered whether the Veteran would suffer undue financial hardship if forced to repay the debt at issue. A review of the financial status report reveals that monthly debt slightly exceeds income; however, the form did not include the Veteran’s monthly income from the Social Security Administration (SSA) of $,1757. Thus, while he has limits on his income potential and expenses, there is not financial hardship. There is no evidence that the Veteran and his family would be deprived of their basic necessities of living. The record in this case 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 the elements not in the Veteran’s favor outweigh the instance of VA fault in this case and that the 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 cumulative debt is not warranted. D. SMART Acting 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.