Citation Nr: 21030390 Decision Date: 05/18/21 Archive Date: 05/18/21 DOCKET NO. 17-22 470A DATE: May 18, 2021 REMANDED Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) additional dependency compensation benefits in the amount of $10,197.03, to include the question of whether the overpayment was properly created is remanded. REASONS FOR REMAND In correspondence of record and at his Board of Veterans' Appeals (Board) hearing, the Veteran challenged the proper creation of the debt. He debt was created when the Regional Office (RO) retroactively removed dependents of the Veteran following his divorce from his spouse in May 2010. The RO indicated that the initial notice of the dependency changes was received in February 2016. However, the Veteran maintains that on multiple occasions in 2011, the Veteran reported his divorced status during VA medical treatment. He further indicated that his reports to VA medical personnel should have at a minimum triggered VA's duty to furnish him with dependency forms for him to fill out since there was constructive notice that his dependency had changed. Then, in 2015, during the processing o VA benefits, the Veteran maintains that he was told that he had three dependents (as opposed to five which he originally had) so he believed that dependents had been removed especially since their names were not listed. Further, he indicated that the amount of the overpayment is over $21,000, all of which he is appealing, so the amount indicated in the waiver decision is incorrect. As such further appellate review by the 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 matters are REMANDED for the following action: 1. Perform a paid and due audit of VA compensation benefits. Indicate how the debt was calculated, taking into consideration the Veteran's statements that his total debt is over $21,000, and he is disputing the whole debt and in the alternative desires a waiver of the whole debt. 2. Adjudicate the issue of whether the overpayment was properly created, to include the raised matter of sole administrative error. If the claim continues to be denied, including on this basis, 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. KELLI A. KORDICH 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.