Citation Nr: 21031117 Decision Date: 05/20/21 Archive Date: 05/20/21 DOCKET NO. 10-16 804 DATE: May 20, 2021 ORDER Entitlement to a waiver of recovery of Department of Veterans Affairs (VA) pension benefits in the amount of $20,370.50 is denied. FINDINGS OF FACT 1. The creation of the overpayment in the amount of $20,370.50 was not the result of fraud, misrepresentation, or bad faith on the part of the Veteran. 2. Repayment of the $20,370.50 debt, which has already been repaid, would not deprive the Veteran of the basic necessities of life, would not result in financial hardship, and recovery of the overpayment would not defeat the purpose for which benefits were intended. 3. The failure of the Government to insist upon its right to repayment of the assessed overpayment would result in unjust enrichment of the Veteran. CONCLUSION OF LAW The criteria for waiver of recovery of an overpayment of pension benefits in the amount of $20,370.50 have not been met. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.963, 1.965. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from June 1972 to June 1974. In December 2011, the Veteran testified before a Veterans Law Judge (VLJ). A transcript of the hearing is of record. In May 2016, the Veteran was notified that the VLJ who presided over the December 2011 hearing was no longer with the Board. As the VLJ who presided at a hearing must participate in the decision on the claim (38 U.S.C. § 7107(c); 38 C.F.R. § 20.707), the Veteran was offered the opportunity for another hearing before the VLJ who would decide his case, which the Veteran accepted. However, in July 2016, the Veteran withdrew his hearing request. Thus, his request for a Board hearing is considered withdrawn. 38 C.F.R. § 20.704(e). In April 2012 and October 2016, the Board remanded the claim for further development. In October 2019, the Board determined that the Veteran's debt was valid. The Board also denied the Veteran's waiver request. However, in September 2020, the United States Court of Appeals for Veterans Claims (Court) issued a decision vacating the part of the Board's decision that denied the waiver. The Court agreed with the parties that in denying the Veteran's waiver claim, the Board provided inadequate statement of reasons or bases. The parties stated that the Board determined that evidence of undue hardship had not been received; however, the Board failed to address potentially favorable evidence provided by the Veteran in the form of hearing testimony. Specifically, during his December 2011 Board hearing, the Veteran testified regarding his financial hardship. The VLJ presiding at the hearing stated that such testimony regarding financial hardship would take the place of a financial statement. However, the parties stated that the Board did not address this testimony in its decision. The Court remanded the claim for further development. The Board notes that the parties did not appeal the validity issue. As such, that issue is not before the Board. Waiver of Overpayment Despite the validity of the overpayment debt, the Veteran may still receive a waiver for the debt created. 38 C.F.R. § 1.962. Recovery of overpayments of any benefits made under the laws administered by VA shall be waived if there is no indication of fraud, misrepresentation, or bad faith on the part of the person or persons having an interest in obtaining the waiver and if the recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.962, 1.963(a), 1.965. In this case, the Board has not found any evidence of fraud, misrepresentation, or bad faith on the part of the Veteran in the creation of the overpayment. The next question is whether the facts dictate that a waiver should be granted under the standard of "equity and good conscience." The phrase "equity and good conscience" means the arrival 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, (2) balancing of faults between the debtor and VA, (3) undue hardship of collection on the debtor, (4) defeat of the purpose of an existing benefit to the appellant, (5) unjust enrichment of the appellant, and (6) whether the appellant changed positions to his or her detriment in reliance upon a granted VA benefit. 38 U.S.C. § 5302; 38 C.F.R. § 1.965(a). After reviewing all the evidence of record, the Board finds that recovery of the overpayment would not violate principles of equity and good conscience. The first and second elements pertain to the fault of the debtor versus the fault of VA. In this case, the Board finds that the fault in creating the debt is entirely with the Veteran. There is no evidence that VA is at fault for the incurrence of this debt. Additionally, collection of the debt would not cause the Veteran undue financial hardship. In May 2008, the Veteran submitted a Financial Status Report. The Veteran indicated his net household monthly income was $931.00. His living expenses including rent or mortgage, food, utilities and heat, other expenses, and monthly payments on installment contracts and other debts, totaled $820.00. He also indicated installment contracts and other debts. The Veteran owed a debt created in 2000 for $3,000.00 to $4,000.00, a debt created in 2002 for 1,000.00 to $2,000.00, and a debt created in 2003 for $1,500.00 to $3,000.00. The debts were all due to injuries. He stated that the entire balances were unpaid, and the entire balances were due monthly. The Veteran reported owning his home. He had an undetermined amount of cash in the bank. The Veteran also stated that he would be able to pay "whatever is just and proper" towards his debt. The Veteran's income exceeded his expenses by $111.00. The Board finds that this indicates that collection of the debt would not impair his ability to provide for basic necessities. Therefore, no evidence of undue hardship has been revealed. In his April 2021 Appellate Brief, the Veteran, through his representative, stated that the Veteran's 2008 Financial Status Report showed that the Veteran was experiencing undue hardship before VA began recouping the debt. However, the representative also stated that the 2008 Financial Status Report is irrelevant because VA recouped the Veteran's benefits between February 2009 and October 2012. However, even if the 2008 Financial Status Report was not considered, the Board still concludes that collection of the debt would not cause the Veteran undue financial hardship. In December 2011, the Veteran testified at a Board hearing. During the Board hearing, the Veteran stated that his VA pension was his only source of income. He stated that in 2008, he "made" a payment plan with VA to pay $400.00 per month towards his debt. Beginning in December 2009, his pension was reduced from $985.00 to $585.00. Regarding his expenses, the Veteran stated that he had to pay $146.00 per month for gas for his home. He also had to pay $30.00 per month for propane for cooking. He also had to pay for light, water, garbage, and groceries. Along with his monthly expenses, the Veteran bought a used car for $400.00. Every month or so, he bought parts for the car and hired someone to fix the car. At the time of the hearing, he stated that the car was running "pretty good." He also had to purchase $178.00 in tires. The Veteran stated that he inherited an old trailer from his grandmother, and he was fixing up the house. He noted that the raw materials, windows, door, flooring, and paint were expensive. The Veteran stated that he did the things that had to be done. He also stated that he had been doing pretty good because he did not throw his money away. For example, he stated that he knew he had to drive to the hearing, so he saved money to purchase gas. In an April 2013 Supplemental Statement of the Case, VA noted that the overpayment had been fully recouped. The Board notes that during his December 2011 Board hearing, the Veteran stated that his expenses included $146.00 per month for gas for his home and $30.00 per month for propane for cooking. He also paid for light, water, garbage, and groceries. He did not indicate how much he paid for his light, water, garbage, and groceries. The Board notes that although the Veteran's pension benefits were reduced by $400.00, he was still able to afford the basic necessities of life. Additionally, after paying his utilities, gas, propane, garbage, and food, the Veteran had excess money which he used to purchase and fix a car, purchase tires, and fix his house. The Veteran stated that he did the things that had to be done; however, he had been doing pretty good because he did not throw his money away. He was also able to save money to purchase gas for his drive to the Board hearing. Based on the evidence of record, the Board finds that there is no credible evidence of undue financial hardship presented by recoupment of this debt, especially since the Veteran chose to repay the debt by setting up a payment plan and agreeing to pay $400.00 per month. The fourth and fifth factors consider whether recovery of the overpayment would defeat the purpose for which the benefits were intended and whether the Veteran would be unjustly enriched if a waiver was granted. VA's nonservice-connected pension benefits are derived from a needs-based program intended to assure that veterans can meet their basic needs if they are mentally or physically disabled. The Board notes that the Veteran was entitled to nonservice-connected pension benefits, but the legal criteria for the payment of nonservice-connected pension benefits, defined under 38 U.S.C. § 1505 and 38 C.F.R. § 3.666 provides that a person who is incarcerated in a Federal, State, or Local penal institution in excess of 60 days for conviction of a felony will not be paid pension benefits beginning on the 61st day of incarceration. 38 U.S.C. § 1505; 38 C.F.R. § 3.666. The Board finds that the recovery of the overpayment created by the Veteran's failure to inform VA of his incarceration would not defeat the purpose of the VA benefits. Thus, the collection of the debt did not defeat the purpose for which the benefits were intended. Additionally as noted in the previous denial, the debt has already been repaid, a waiver of such an overpayment would essentially require VA to pay the Veteran additional benefits that were not due to him. Therefore, if the waiver is granted, the Veteran would be unjustly enriched. The Board also notes that there is no indication that the Veteran detrimentally changed his position in reliance on the overpayment. The sixth factor to be considered is whether reliance on VA benefits resulted in relinquishing a valuable right or incurring a legal obligation. The Veteran has not claimed that he relinquished any right or incurred any legal obligation, relied upon VA to his detriment, nor is there any evidence of such. Thus, this sixth factor does not support the Veteran's request for a waiver of overpayment that has already been repaid. The Board's inquiry is not necessarily limited to the six factors discussed above. However, nothing in the record suggests any other reason for waiver of the charged overpayment, and the Veteran has pointed to none. The Board notes, in response to the Board's 2012 remand, the Veteran submitted an updated Financial Status Report. However, since he has already repaid the debt, the updated waiver would not alleviate any past hardship that was imposed. Therefore, the Board finds that the balance of equity and good conscience does not require waiver of the debt. The Veteran's claim for waiver is denied. MICHAEL LANE Veterans Law Judge Board of Veterans' Appeals Attorney for the Board T. Moore 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.