Citation Nr: 21025291 Decision Date: 04/27/21 Archive Date: 04/27/21 DOCKET NO. 18-18 608 DATE: April 27, 2021 REMANDED Entitlement to waiver of recovery of overpayment of Department of Veterans Affairs (VA) benefits in the amount of $36,262.68, to include whether the overpayment was properly created, is remanded. REASONS FOR REMAND The Veteran served in the Air Force National Guard, with periods of active duty, based on DD-214s of record, from June 2000 to February 2001, October 2001 to September 2002, March 2004 to September 2004, April 2008 to June 2008, January 2009 to March 2009, February 2010 to February 2010, September 2010 to November 2010, November 2010 to January 2011, March 2011 to March 2011, January 2012 to March 2012, July 2013 to October 2013, and August 2014 to June 2015. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from a July 2017 Debt Management Center (DMC) First Demand Letter, advising that the Veteran was paid $36,262.68 more than he was entitled to receive. In a September 2017 decision, the Committee on Waivers and Compromises (Committee) denied the request for a waiver because the request was not made within the 180-day time period from debt notification in July 2017. However, in the January 2018 statement of the case (SOC), the Regional Office (RO) found that the request was timely but denied the waiver on the merits. In October 2014, the Veteran suffered a traumatic brain injury during active service. The Veteran’s father and co-guardian, M.E., was designated as the Veteran’s legal guardian in December 2014, and he was subsequently designated as the Veteran’s VA appointed fiduciary on December 18, 2014. A February 2015 rating decision found that the Veteran was not competent to handle disbursement of funds. 1. Entitlement to waiver of recovery of overpayment of VA benefits in the amount of $36,262.68 Here, in a July 27, 2016 letter, the Veteran’s representative noted that they were disputing the overpayment debt of $36,262.68 alleged in the July 7, 2016 letter. They disputed the alleged debt because no explanation had been provided to substantiate the overpayment, and they requested an itemized breakdown of the monthly overpayments as well as a narrative explanation as to the reason why the payments must be returned. In a March 2017 statement, the Veteran’s fiduciary noted that they were disputing the debt because it was miscalculated by VA and needed to be corrected prior to payment. In a July 2017 statement, the Veteran, through his fiduciary, stated that VA had not clearly explained how the debt was calculated and why the Veteran must repay benefits received during periods that he did not receive Air Force salary. Also of note, in the March 2018 VA Form 9, the Veteran’s fiduciary noted that they are seeking a waiver of $11,464.36 of the $36,262.68 overpayment debt charged by VA, as well as the additional collection fee of $10,153.55 being charged as a result of VA sending the debt to the Department of Treasury for collection. As indicated above, the Veteran suffered a traumatic brain injury during active duty in October 2014. The Veteran’s DD Form 214 from his last period of active duty shows that he entered active duty on August 25, 2014, and that he was discharged from service on June 16, 2015; however other records appear to show that he remained on active duty until September 2015 because of a medical hold. More specifically, Air National Guard orders reflect that the Veteran’s federal Air Force active duty was extended from April 4, 2015 to September 28, 2015 pending resolution of medical issues under an Activation Medical Hold pursuant to Title 10 of the United States Code; and, a VA Form 21-8951 indicates that the Veteran had 256 training days during the fiscal year 2015. Accordingly, it is not clear from the record when the Veteran actually stopped receiving active duty pay from the Air Force, and the Veteran’s fiduciary contends that the Veteran did not receive active duty pay for at least a portion of the time when he received VA benefits. Furthermore, it appears that VA was not aware of the Veteran’s final period of active duty until June 2015 when the Veteran’s poly-trauma unit case manager from the VA medical center submitted a copy of his active duty orders regarding the Activation Medical Hold. An April 2018 Report of General Information indicates that a request to terminate VA benefits was received on June 2, 2015; due process was sent to the Veteran in July 2015; however, the Veteran’s benefits should have been terminated upon receipt of request but final action was not taken to terminate the Veteran’s benefits until over one year later on June 21, 2016. In sum, while it appears that the Veteran was receiving VA compensation benefits during at least part of his final period of active duty, it is not entirely clear when the Veteran stopped receiving active duty pay, and as such, it is not clear how much, if any, the Veteran was overpaid VA compensation benefits at the same time he received active duty pay. As noted above, the Veteran, through his court-appointed fiduciary, has challenged the proper creation of the debt. As such, further appellate review by the Board on the Veteran’s waiver claim must be deferred pending formal adjudication of the 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. In that consideration of the propriety of the creation, for a determination that the overpayment was not properly created such that the debt was not valid, it must be established that the Veteran was either legally entitled to the benefits in question or, if the Veteran was not legally entitled, then it must be shown that VA was solely responsible for the Veteran being erroneously paid benefits. Administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law. VAOPGCPREC 2-90 (July 17, 1989); 55 Fed. Reg. 27757 (1990). Sole administrative error connotes that the Veteran neither had knowledge of nor should have been aware of the erroneous award. Further, neither the Veteran’s actions nor his or her failure to act must have contributed to payment pursuant to the erroneous award. 38 U.S.C. § 5112(b)(9), (10); 38 C.F.R. § 3.500(b)(2); Jordan v. Brown, 10 Vet. App. 171 (1997) (sole administrative error is not present if the payee knew, or should have known, that the payments were erroneous). Thus, a finding of sole administrative error requires not only error on the part of VA, but that the beneficiary is unaware that the payments are erroneous. The United States Court of Appeals for Veterans Claims (Court) noted that, “[s]tated another way, when an overpayment has been made by reason of an erroneous award based solely on administrative error, the reduction of that award cannot be made retroactive to form an overpayment debt owed to VA from the recipient of the erroneous award.” Erickson v. West, 13 Vet. App. 495, 499 (2000). The matters are REMANDED for the following action: 1. The AOJ must ensure that the electronic record is complete, to include confirming that all of the Veteran’s service records are associated with the record, including DD-214s and other personnel records verifying his periods of active service, as well as records of all military active duty payments. Document all actions taken to fulfill this request. If any pertinent documents cannot be located and it is determined that further efforts to obtain them would be futile, the AOJ should so indicate. 2. Prepare a complete and detailed paid and due audit of the Veteran’s VA compensation benefits, specifying his confirmed periods of active duty service. The audit must specifically address all military payments made and benefits received during the Veteran’s final period of active duty beginning in August 2014. 3. After the above development, the AOJ must make an administrative decision regarding the validity of the overpayment debt in the amount of $36,262.68. The decision must include a response to the July 2016 request for explanation of the creation of the debt as well as the challenge to the additional collection fee of $10,153.55 being charged as a result of this debt, as noted in the March 2018 VA Form 9. (Continued on the next page)   4. If the claim continues to be denied, obtain a complete and current financial status report, and readjudicate the merits of the request for a waiver. 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.