Citation Nr: 21029674 Decision Date: 05/14/21 Archive Date: 05/14/21 DOCKET NO. 16-25 704 DATE: May 14, 2021 REMANDED Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) benefits in the amount of $130,710.47, to include the question of whether the overpayment was properly created is remanded. REASONS FOR REMAND The Veteran had active service from January 1981 to January 1985. He died in March 2006. The Appellant is his surviving spouse. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a March 2016 decision by the Committee on Waivers and Compromises (Committee) of the Department of Veterans Affairs (VA) Regional Office (RO). Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) benefits in the amount of $130,710.47, to include the question of whether the overpayment was properly created is remanded. In this case, the Appellant has challenged the proper creation of the debt. As such further appellate review by the Board of Veterans' Appeals (Board) on the Appellant's waiver claim must be deferred pending formal adjudication of her 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 Appellant was either legally entitled to the benefits in question or, if the Appellant was not legally entitled, then it must be shown that VA was solely responsible for the Appellant 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 Appellant neither had knowledge of nor should have been aware of the erroneous award. Further, neither the Appellant'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 Appellant has made numerous contentions regarding the validity of the debt, including that the amount is incorrect and that she has not received VA benefits for years. The Board notes that several financial actions appear to have occurred around the same time, including withholding for attorney fees and dependency and indemnity compensation (DIC) for both the Appellant and her children. For these reasons, the Board finds a paid and due audit of the Veteran's entire financial account during the appellate period is also needed. The matter is REMANDED for the following action: 1. Prepare a paid and due audit of the Veteran's VA compensation/pension account from April 2006 to the present, to include DIC payments for both the Appellant and her children, and any withholdings for attorney fees. 2. Adjudicate the issue of whether the overpayment was properly created. Nathaniel J. Doan Veterans Law Judge Board of Veterans' Appeals Attorney for the Board A. Dean, 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.