Citation Nr: 21028494 Decision Date: 05/11/21 Archive Date: 05/11/21 DOCKET NO. 18-50 172A DATE: May 11, 2021 REMANDED Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits due to the concurrent payment of active duty pay, to include the question of whether the overpayment was properly created is remanded. REASONS FOR REMAND In March and April 2004, the Veteran notified the Regional Office (RO) that he had been on active duty since March 2000 for a four-year period. He requested that VA terminate his benefits. In an April 2004 letter, the RO stopped VA compensation benefit payments effective February 29, 2000 because VA law and regulations do not permit the concurrent payment of active duty pay and VA compensation pay. DD Forms 214 reflects that the Veteran was on active duty from February 1986 to February 1990; from March 1991 to April 1991; and from November 1995 to January 2016. In June 2016, the RO sent a letter to the RO informing the Veteran that the RO had received information from the military concerning his active duty service. Specifically, his current DD Form 214 showed that he was on active duty from November 6, 1995 to January 31, 2016. Based on this information, the RO proposed to stop his compensation payments during this period of time. The RO proposed to stop his VA compensation payments effective November 6, 1995 to January 31, 2016. Based on these dates and his original rating decision, his grant of benefits from September 24, 1997 would be void. He was told that the retroactive adjustment might result in an overpayment of benefits that he was paid. If the proposed action is implemented and results in an overpayment, the RO indicated that the RO would notify the Veteran of the exact amount of the overpayment and give repayment information. Thereafter, information was received which showed that the Veteran was on active duty February 18, 1986 to February 17, 1990, and from March 30, 2000 to January 13, 2016 with retirement on February 2, 2016. In a July 2017 letter, the Veteran was informed that the RO would stop VA compensation benefits from an effective date of February 29, 2000 to January 31, 2016 based on the dates received from his current DD Form 214. The RO indicated that as proposed in the notice of proposed adverse action, the grant of compensation benefits from September 24, 1997 would be voided. In April 2018, the Veteran was advised that the aforementioned action had resulted in an overpayment totaling $52,409.48. In August 2018, the Committee on Waivers and Compromises (Committee) of the RO waived a portion of the debt totaling $34,509.48. The remaining total was $17,800. A December 2018 letter informed the Veteran that based on the information in his military retired pay files and VA records, he was entitled to a retroactive Concurrent Receipt of Retired and Disability Pay (CRDP) compensation payment of $49,861.39. The remainder of the Veteran's debt was recouped from the payment. The Veteran testified at a hearing before the Board of Veterans' Appeals (Board) in January 2021. At that hearing and in prior written correspondence, the Veteran disputed the creation of the debt. He indicated that he got out of the military in 1990. After that time, he was awarded VA disability compensation and was receiving about $75 a month. In 2000, he decided to go on active duty. He subsequently requested for VA to terminate his VA compensation payments. He said that he completed the repayment for the VA compensation he had received 2000-2004 during 2004. Subsequently, he received notice from the VA saying he was due payment for CRDP. He did not understand this notice and contacted VA. He explained that VA obviously thought he was on active duty from 1995 to his end date. He said VA then recouped the debt and he had his DD Form 214 corrected. He said that the debt on appeal is the result of VA error. In this case, the Veteran has challenged the proper creation of the debt. 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 his 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 ("the 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 Board finds that the RO must address the issue of creation and sole VA error, taking into consideration the Veteran's service dates. (Continued on the next page) The matters are REMANDED for the following action: Adjudicate the issue of whether the overpayment was properly created, to include the raised matter of sole administrative error, taking into consideration the Veteran's service dates. If the claim continues to be denied, including on this basis, afford the Veteran to submit a complete and current financial status report. Then, issue the Veteran and his representative an appropriate supplemental statement of the case (SSOC) which addresses both the creation and waiver issues and afford them the opportunity to respond. Eric S. Leboff 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.