Citation Nr: 21026673 Decision Date: 05/03/21 Archive Date: 05/03/21 DOCKET NO. 18-05 814A DATE: May 3, 2021 ORDER 1. The overpayment of educational assistance benefits under Chapter 33, Title 38, United States Code (Chapter 33 or Post-9/11 GI Bill) in the amount of $578.24 was properly created. 2. The request for a waiver of recovery of an overpayment of educational assistance benefits under the Post-9/11 GI Bill in the amount of $578.24 is denied. FINDINGS OF FACT 1. In January 2015, the Veteran submitted a training agreement showing that he was participating in a four-year apprenticeship or on-the-job training to become an industrial maintenance mechanic from November 3, 2014, to November 3, 2018. 2. After receiving the Veteran's monthly certifications of on-the-job training and apprenticeship (VA Forms 22-6553d-1) showing the hours worked routinely since January 2015, the Agency of Original Jurisdiction (AOJ) processed and released payment in October 2016 for the books and supplies stipend for the period between August 1, 2016, and July 31, 2017. 3. In January 2017, the AOJ received a notice of change in student status (VA Form 22-1999b) showing that the Veteran had successfully completed the requirements for the industrial maintenance mechanic apprenticeship program early, effective January 1, 2017. 4. Based on the Veteran's completion of the apprenticeship program on January 1, 2017, an overpayment in the amount of $578.24 was validly created as the AOJ had disbursed the books and supplies stipend from January 1, 2017, to July 31, 2017. 5. Recovery of the overpayment of educational assistance benefits under the Post-9/11 GI Bill in the amount of $578.24 would not be against the principles of equity and good conscience. CONCLUSIONS OF LAW 1. The overpayment of educational assistance benefits under the Post-9/11 GI Bill in the amount of $578.24 is valid. 38 U.S.C. §§ 3311, 3313, 5302; 38 C.F.R. §§ 21.7136, 21.7144, 21.9640. 2. The criteria for a waiver of recovery of an overpayment of educational assistance benefits under the Post-9/11 GI Bill in the amount of $578.24 have not been met. 38 U.S.C. §§ 3311, 3313, 5302; 38 C.F.R. §§ 1.962, 1.965, 21.9550. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran had active duty from April 2007 to May 2011. This case was previously before the Board in October 2020, at which time the Board characterized the issue on appeal as entitlement to waiver of recovery of an overpayment of educational assistance benefits under the Post-9/11 GI Bill in the amount of $578.24, to include the matter of whether the debt was properly created. However, after reviewing the relevant evidence and contentions, the Board determines that this matter should be recharacterized as it appears on the title page of this decision based on the applicable law and facts of this case. In October 2020, the Board remanded the matter on appeal to ask the Veteran to complete and submit a Financial Status Report (VA Form 5655), ask the Committee on Waivers and Compromises (Committee) to issue a decision on the Veteran's request for a waiver of overpayment, and to issue a supplemental statement of the case (SSOC) if any benefit was denied by the AOJ. The record shows that the AOJ contacted the Veteran through electronic mail (e-mail) and sent him an October 2020 letter asking him to complete and submit the attached VA Form 5655. This letter also informed him that if he did not reply within 30 days of the letter, the appeal process would proceed based on the information already in the record. The Veteran failed to reply to this letter within the allotted time, and he failed to submit his updated financial status information, including the VA Form 5655. The Committee issued a decision in November 2020 denying the Veteran's request for a waiver of the overpayment and the AOJ issued a December 2020 SSOC denying the waiver of overpayment. There was substantial compliance with the Board's October 2020 remand instructions. See Stegall v. West, 11 Vet. App. 268 (1998). 1. Validity of the Debt The Veteran contends that the creation of the debt in the amount of $578.24 stemming from an overpayment of Chapter 33 on-the-job training or apprenticeship benefits for a books and supplies stipend was improper because he was being penalized for finishing the apprenticeship program early. An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. See 38 U.S.C. § 5302; 38 C.F.R. § 1.962. An overpayment may arise from virtually any benefits program administered pursuant to VA law, including pension, compensation, dependency and indemnity compensation, educational assistance benefits and subsistence allowance, insurance benefits, burial and plot allowances, clothing allowance, and automobile or other conveyance and adaptive equipment allowances. See 38 C.F.R. § 1.956(a). The preliminary issue of the validity of a debt is a threshold determination that must be made prior to a decision on a request for waiver of the indebtedness. See Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991). In other words, before deciding a request for waiver, VA must first consider the validity of the debt. 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. See 38 C.F.R. § 1.911(c)(1); see also VAOPGCPREC 6-98. The propriety and amount of the overpayment at issue are matters that are integral to a waiver determination. See Schaper, 1 Vet. App. at 434. The Veteran's case involves the provisions of 38 U.S.C. Chapter 33, or the Post-9/11 GI Bill, which provides for VA educational assistance for members of the Armed Forces based on active duty service after September 10, 2001. 38 U.S.C. § 3311; 38 C.F.R. § 21.9520. The Post-9/11 Veterans' Educational Assistance Improvements Act of 2010 (Improvements Act or P.L. 111-377), enacted on January 4, 2011, made several amendments to the Post-9/11 GI Bill and other veterans' educational assistance programs. This Act expanded the eligible programs of education to include apprenticeship and on-the-job training, effective October 1, 2011. Under Chapter 33, an eligible veteran is awarded a monthly housing allowance at a certain rate based on the period and length of training, as well as assistance for tuition and fees. See 38 U.S.C. § 3313(g)(3)(B). Moreover, individuals pursuing apprenticeship or on-the-job training more than half-time receive a books and supplies stipend each academic term in the amount of $83.00 per month, reduced according to the length of time served on active duty. The facts are not in dispute. The record shows that the Veteran filed an Application for VA Education Benefits (VA Form 22-1990) in August 2012 in which he elected to receive Chapter 33 benefits in lieu of education benefits under 38 U.S.C Chapter 30 (the Montgomery GI Bill), effective August 29, 2012. In January 2015, the Veteran submitted a training agreement showing that he was participating in a four-year apprenticeship or on-the-job training program to become an industrial maintenance mechanic from November 3, 2014, to November 3, 2018. Thereafter, the Veteran and the training institution submitted multiple VA Forms 22-6553d-1 showing the monthly hours that the Veteran worked routinely between January 2015 and January 2017. Over the course of these months, the AOJ processed these certifications, issued monthly housing payments, and processed and issued the books and supplies stipend on a yearly basis. As is pertinent here, on October 7, 2016, the AOJ released the payment for the books and supplies stipend to the Veteran for the period between August 1, 2016, and July 31, 2017 based on the certifications that he would be participating in the apprenticeship during that timeframe. However, on January 17, 2017, the AOJ received a VA Form 22-1999b showing that the Veteran had successfully completed the requirements for the industrial maintenance mechanic apprenticeship program, effective January 1, 2017. In March 2017, the AOJ notified that Veteran that based on his completion of this apprenticeship program early, or prior to July 31, 2017, an overpayment in the amount of $578.24 was created as the AOJ had disbursed the books and supplies stipend from January 1, 2017, to July 31, 2017, even though the Veteran did not attend the on-the-job training or apprenticeship program after January 1, 2017. Initially, the Board notes that the Veteran has not asserted, and the record does not suggest, that the amount of the debt in question was incorrectly calculated. Specifically, the overpayment in the amount of $578.24 was calculated based on the monthly stipend rate of $83.00 for the days between January 1, 2017, and July 31, 2017. See https://www.va.gov/education/about-gi-bill-benefits/how-to-use-benefits/on-the-job-training-apprenticeships/. Rather, the Veteran contended in the May 2017 Notice of Disagreement (NOD), as well as in the January 2018 Substantive Appeal to the Board (VA Form 9), that it was not right for the VA to require him to pay back the books and supplies stipend just because he completed the apprenticeship program early. He explained that he used VA's stipend to buy all of his books and study materials up front, and that he took classes back to back, as fast as he could, in order to complete the apprenticeship program early. He asked VA to forgive the overpayment debt and to not penalize him for the hard work it took to complete the coursework early. Likewise, in the January 2018 VA Form 9, the Veteran asserted that all VA cared about was the start and finish dates of his apprenticeship program, and not the fact that he would have received even more money from VA, rather than owing money to VA, if he had completed the program on a regular timeline as he would have been entitled to a monthly housing stipend for the period from January 1, 2017, to July 31, 2017. While the Board is sympathetic to the Veteran's statements that he should not be penalized for completing the on-the-job training or apprenticeship program early, it must find that the overpayment in the amount of $578.24 was validly created as the AOJ had disbursed the books and supplies stipend from January 1, 2017, to July 31, 2017, but the Veteran did not participate in the on-the-job training or apprenticeship program after January 1, 2017. The books and supplies stiped is awarded for each academic term in the amount of $83.00 per month, and the evidence shows that the Veteran did not participate in the apprenticeship after January 1, 2017, even though the AOJ provided him with the stipend for each month until July 31, 2017. Thus, while the Board recognizes the Veteran's frustration, it is bound by the applicable law and regulations. In this case, there is, unfortunately, no legal basis for granting the benefit requested by the Veteran because he received monetary benefits to which he was not entitled to after January 1, 2017. As the overpayment of Post-9/11 GI Bill educational assistance benefits in the amount of $578.24 was properly created, the Veteran's claim must be denied as a matter of law. Where the law, rather than the facts, is dispositive, the benefit of the doubt provisions as set forth in 38 U.S.C. § 5107(b) do not apply. See Sabonis v. Brown, 6 Vet. App. 426 (1994). 2. Request for a Waiver of Recovery of Overpayment As noted above, the Board determines that the overpayment of educational assistance benefits under the Post-9/11 GI Bill in the amount of $578.24 was validly created. Nonetheless, the Veteran is seeking a waiver of the overpayment of these education benefits. Specifically, he asked VA to forgive this debt in the May 2017 NOD. Recovery of the overpayment of any VA benefits must be waived if: (1) the application for relief is filed in a timely manner; (2) there is no indication of fraud, misrepresentation, or bad faith on the part of the person having an interest in the waiver; and (3) recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 38 U.S.C. § 5302(a), (c). The record shows that the application for waiver was timely because it was received within 180 days of the notice of the indebtedness. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.963(b)(2). The Board has reviewed the evidence of record and does not find that there was fraud, misrepresentation, or bad faith on the part of the Veteran in creation of this debt. Thus, the only issue to be determined is whether recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. The standard "equity and good conscience" will be applied when the facts and circumstances in a case indicate a need for reasonableness and moderation in the exercise of the Government's rights. The decision reached should not be unduly favorable or adverse to either side. 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 the following elements, which are not intended to be all-inclusive: (1) Fault of the 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. 38 C.F.R. § 1.965. As noted in its November 2020 decision, the Committee denied the Veteran's waiver request for overpayment of these Chapter 33 benefits, in part, on the basis that he was responsible for the creation of the debt. Specifically, the Veteran's early completion of the apprenticeship program resulted in the creation of the debt because VA cannot pay the books and supplies stipend during the time that the Veteran was not enrolled or participating in the on-the-job training or apprenticeship program regardless of any mitigating circumstances. Thus, the Committee found that the Veteran was at fault and bore the burden of the creation of the debt. The Board finds that recovering the overpayment will not result in undue financial hardship to the Veteran. The Board notes that the AOJ requested the Veteran's financial information in October 2020 when the Veteran was asked to submit a VA Form 5655, which the Veteran failed to submit. Overall, the record does not show that the repayment of the debt would cause him undue financial hardship as he is presumed to be employed following his completion of the apprenticeship program and designation as a journeyman since January 1, 2017. Thus, the Board finds that repayment of this debt would not cause undue financial hardship. The preponderance of the evidence is against a finding that collection of the overpayment would defeat the purpose of an existing benefit. The Veteran does not claim that he changed his position to his detriment in reliance on the overpaid amount. Nor does the record indicate that he did so. Thus, this factor does not provide a basis for waiving the recovery of the overpayment. The Board finds that the Veteran would be unjustly enriched if the recovery of the overpayment was waived as he received VA education benefits to which he was not entitled to at the government's expense. The debt is valid, and his financial position is such that repayment of the overpayment would not result in undue hardship. Given the fault on the part of the Veteran, that he has the ability to repay the debt without resulting undue hardship, and that to permit him to keep the overpayment would result in his unjust enrichment because there are no equitable circumstances appearing in the record that would make retention of the overpayment anything other than unfair gain, the Board finds that the recovery of the overpayment of educational assistance benefits under the Post-9/11 GI Bill in the amount of $578.24 would not be against the principles of equity and good conscience. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.965(a). Accordingly, the request for a waiver is denied. A. P. SIMPSON Veterans Law Judge Board of Veterans' Appeals Attorney for the Board A. Hodzic, 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.