Citation Nr: 21040054 Decision Date: 07/02/21 Archive Date: 07/02/21 DOCKET NO. 14-41 236 DATE: July 2, 2021 ORDER The reduction in Department of Veterans Affairs (VA) disability compensation for the recouping of active duty military pay from January 15, 2005 to June 17, 2006, in the amount of $8,698.49 was proper; the appeal is denied to this extent only. REMANDED Propriety of the reduction in VA disability compensation for the recouping of 10 days of military drill pay for Fiscal Year (FY) 2008, for 3 days of military drill pay in FY 2009, and 24 days of military drill pay for FY 2010, is remanded. FINDINGS OF FACT 1. The Veteran concurrently received VA disability payment and active duty military pay from January 15, 2005 to June 17, 2006. 2. The Veteran received $8,698.49 in active duty military pay from January 15, 2005 to June 17, 2006. CONCLUSION OF LAW The reduction in VA disability compensation for the recouping of active duty military pay from January 15, 2005 to June 17, 2006, in the amount of $8,698.49 was proper. 10 U.S.C. § 12316; 38 U.S.C. § 5304 (2020); 38 C.F.R. §§ 3.654, 3.700 (2020). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from February 1982 to December 1993, and from January 2005 to June 2006, with other service in the Army National Guard. These matters come before the Board of Veterans' Appeals (Board) on appeal from an October 2012 rating decision issued by a VA Regional Office (RO), which is the agency of original jurisdiction (AOJ). The Veteran appealed a single decision by the AOJ which combined all the withholdings. The Board has herein separated out the issues of the recoupment from the active service pay and the withholding from the periods of drill pay in order to provide the Veteran with the swiftest adjudication. Propriety of the reduction in VA disability compensation for the recouping of active duty military pay from January 15, 2005 to June 17, 2006. Generally, pension, compensation, or retirement pay on account of any person's own service shall not be paid to such person for any period for which such person receives active service pay. See 38 U.S.C. § 5304(c); 38 C.F.R. §§ 3.654, 3.700. An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits in excess of the amount to which he or she was entitled. 38 C.F.R. § 1.962. Whenever the Secretary finds that an overpayment has been made to a veteran or eligible person, the amount of such overpayment shall constitute a liability of such veteran or eligible person to the United States. See Mountford v. Shinseki, 24 Vet. App. 443, 450, n.6 (2011) (citing 38 U.S.C. §§ 3685, 5314). To establish improper creation of an overpayment, i.e., an invalid debt, evidence must show that the Veteran was legally entitled to the VA compensation benefits at issue, or, if she was not legally entitled to these benefits, then it must be shown that VA was solely at fault for the erroneous payment of excess benefits. Initially, the Veteran does not argue that she was not in active service from January 15, 2005, to June 17, 2006, and her personnel records, including her DD 214 Certificate of Release of Discharge from Active Duty confirm her active service at that time. She also does not dispute that she was paid active service military pay for this period. Rather, her contention is that VA miscalculated the amount of the overpayment, and has thus withheld more than she was paid. Therefore, as there is no dispute as to her active service status and receipt of active service pay, the Board finds the withholding was proper. Next, the Board will determine the correct rates for withholding. In this regard, at the time of her active service period, the Veteran received $501 per month in VA disability compensation from January 2005 to November 2005. From December 2005 to June 2006, the Veteran received $521 per month in VA disability compensation. See March 2015 VA Audit; see also May 2005 VA 21-8947 Compensation and Pension Award. The daily rate of pay for disability compensation is based on an average 30-day month, therefore dividing each rate of pay by 30, her daily rate of pay for each period was $16.70 and $17.37, respectively. Beginning in January 2005, the Veteran entered into active duty on the 15th of the month. Accordingly, counting the 15th, the Veteran received active service pay for 16 days. In calculating this number, the Board has not counted the 31st, as to do so would count an extra day of payment when considered in light of an average 30-day month, and the Veteran did not receive an extra $16.70. Thus, using the daily rate of $16.70, the Veteran received $267.20 in concurrent VA disability compensation for January 2005. Next, the Veteran received $501 per month from February 2005 to November 2005, a period of 10 months. Therefore, for this period, the Veteran received $5,010 in concurrent VA disability compensation. From December 2005 to May 2006, the Veteran received $521 per month, for a period of 6 months. Therefore, her concurrent VA disability compensation during this period was $3,126. Finally, in June 2006, the Veteran separated from active duty on the 17th of the month. Diving the monthly rate by 30, her daily compensation rate for this period was $17.37. Therefore, multiplying her daily rate by the number of days she received active service pay, 17, she received $295.29 in concurrent VA disability compensation for June 2006. Taking all her concurrent pay together, she was overpaid a total of $8,698.49. As will be discussed in the remand section, it is unclear exactly how the AOJ calculated the total withholdings, as they only included a March 2015 paid and due audit without explanation. However, in the audit the AOJ noted that the Veteran's disability compensation was increased to $1,517 beginning June 18, 2006, but she was only paid at the $521 rate for the month. This calculation was incorrect because increased payments are paid for the calendar month following the month in which the award became effective. See 38 C.F.R. § 3.31. Thus, she was due $431.56 (the difference between the daily rate of $17.37 and $50.57 for 13 days). Taking the amount owed out of the amount due, her total would then be $8,266.93. This amount is $0.10 different than the amount withheld by the AOJ; thus, it appears the AOJ only calculated the withholding applicable to her active service pay in the original recoupment. Nevertheless, as noted above, the withholding of VA disability pay to recoup for active service pay from January 15, 2005, to June 17, 2006, was proper. Further, the Board has recalculated the amount of the withholding and it is properly $8,698.49, minus any amounts owed to the Veteran. As the recoupment is required by law, the Veteran's appeal, to this extent, must be denied. REASONS FOR REMAND 1. Propriety of the reduction in VA disability compensation for the recouping of 10 days of military drill pay for FY 2008, for 3 days of military drill pay in FY 2009, and 24 days of military drill pay for FY 2010. The general prohibition of concurrent pension, compensation, or retirement pay and active service pay applies to active duty pay, drill, and active duty for training payments, and inactive duty for training payments made to Reservists and members of the National Guard. 38 C.F.R. §§ 3.654, 3.700. Reservists may waive their pension, compensation, or retirement pay for periods of field training, instruction, other duty, or drills; such waiver may include prospective periods and contain a right of recoupment for the days for which the reservist did not receive payment for duty by reason of failure to report for duty. 38 C.F.R. § 3.700(a)(1)(iii). In April 2009, March 2011, and April 2011 letters, the RO notified the Veteran of a proposal to retroactively adjust the Veteran's compensation benefits for 10 days of military drill pay in FY 2008, for 3 days of military drill pay in FY 2009, and 24 days of military drill pay for FY 2010, based on information received from the Defense Manpower Data Center (DMDC). In September 2011, the RO notified the Veteran it planned on adjusting the compensation level to recoup the overpayment for these days. The Veteran responded that she did not, in fact, complete any drills during this time, and rather she was paid for travel to attend medical board proceeding examinations. To the Veteran's argument, the statute and regulation address the concurrent receipt of VA disability compensation and active service pay. Notably, the underlying reason for the pay is not of concern, and receipt of active service pay for travel would also be considered under the law. Regardless, the RO reduced the VA disability compensation. Such action resulted in an overpayment confirmed by the VA Debt Management Center. The information received from the DMDC is not of record. This information formed the basis of the RO's decision and should have been associated with the record in order to provide the Veteran with the complete information needed to pursue her claim, as well as for the Board to analyze the merits of the appeal properly. Additionally, there is no information in the record, including personnel records or Defense Finance and Accounting Service (DFAS) pay stubs, that confirms her pay status and the days in which she received such pay. Further, implicit in any analysis of the validity or creation of the debt is an accurate accounting. As above, the Veteran's electronic claims file currently does not contain any reviewable accounting or documentation of exactly how the Veteran's alleged overpayment was actually calculated. Consequently, the AOJ should conduct an audit to confirm the Veteran's dates of receipt of active service pay, to include for drills or for travel purposes, and to verify her drill pay as well as other VA compensation benefits provided during FYs 2008, 2009, and 2010, and so inform the Veteran when readjudicating the matter of the validity of any debt created by receipt of active service pay for drill or travel. The matters are REMANDED for the following action: 1. Obtain written verification of the Veteran's FYs 2008, 2009, and 2010, drill days, travel days, and receipt of active service pay from appropriate sources, to include the DMDC, the personnel officer or operations superintendent in the Veteran's unit, obtaining information from the Veteran's Military Master Pay Account (MMPA), and/or obtaining verification of all drill pay for FYs 2008, 2009, and 2010, from the DFAS, as necessary. All responses should be clearly documented in the electronic claims file. 2. Prepare an audit of the Veteran's VA compensation account during FYs 2008, 2009, and 2010, with consideration of the Veteran's verified drill days, travel days, and receipt of active service pay, and any records from DMDC, MMPA, and DFAS. The audit should clearly show the amount and how any overpayment was calculated. The audit report must be associated with the electronic claims file, and a copy must be sent to the Veteran. J. B. FREEMAN Veterans Law Judge Board of Veterans' Appeals Attorney for the Board Jonathan M. Estes 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.