Citation Nr: 21047995
Decision Date: 08/05/21	Archive Date: 08/05/21

DOCKET NO. 15-46 351
DATE:  August 5, 2021

ORDER

The reduction of Department of Veterans Affairs (VA) Parents Dependency Indemnity Compensation (DIC) pension benefits due to excessive income, effective January 1, 2000, was proper; the appeal is denied.

The overpayment of VA Parents DIC benefits in the amount of $29,496.00 was properly created; the appeal is denied.

The request for a waiver of recovery of overpayment of VA benefits in the amount of $29,496.00 was not timely filed; the appeal is denied.

FINDINGS OF FACT

1. The Appellant began receiving Social Security Administration (SSA) benefits in December 1999, causing her countable income to increase beyond net worth limitations for receipt of VA DIC pension benefits.

2. The Appellant failed to report her increased income, and failure to do so resulted in the creation of the overpayment of $29,496.00 currently at issue.

3. The Appellant knew or should have known that she was not entitled to the erroneous award of $29,496.00 in VA DIC pension benefits.

4. In a December 2008 letter, the Appellant was notified that she owed a debt of $29,496.00; the letter stated that the Appellant had the right to request a waiver of the recovery of the debt.

5. The May 2011 Notice of Disagreement (NOD) is the earliest indication in the record that the Appellant requested a waiver of the recovery of the debt. 

6. There was no delay in the Appellant's receipt of the notification of indebtedness as a result of VA or postal authority error, or due to other circumstances beyond the debtor's control.

CONCLUSIONS OF LAW

1. Reduction of the Appellant's pension benefits effective January 1, 2000, due to change in countable income was proper. 38 U.S.C. §§ 1310, 1315, 5110, 5112; 38 C.F.R. §§ 3.250-3.263, 3.278, 3.279, 3.660.

2. The overpayment of VA pension benefits in the amount of $29,496.00 was validly created. 38 U.S.C. §§ 1310, 1315, 5110, 5112; 38 C.F.R. §§ 3.250-3.263, 3.278, 3.279, 3.660.

3. The Appellant did not timely apply for a waiver of recovery of overpayment of VA benefits in the amount of $29,496.00. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.963(b)(2).

REASONS AND BASES FOR FINDINGS AND CONCLUSIONS

The Veteran served on active duty from August 1984 to January 1989. The Veteran died in June 2012, and the Appellant is the Veteran's surviving parent.

This case is before the Board of Veterans' Appeals (Board) on appeal from a December 2008 notification of the reduction of VA Parents Dependency Indemnity Compensation (DIC) pension benefits, effective January 1, 2000. The RO reduced the Appellant's DIC pension benefits effective January 1, 2000 because the Appellant no longer met the income threshold requirements set by law, after receiving information from the Social Security Administration (SSA) showing that the Appellant had been receiving Social Security benefits. The notice shows that the Appellant's SSA benefits, effective January 1, 2000, equaled $5,592.00, exceeding the maximum annual death pension limit set by law for a surviving parent with no dependents.

In January 2019 the Board remanded the case for additional development of the record, to include adjudication as to whether the overpayment debt was properly created, and, if so, to readjudicate the Appellant's claim seeking waiver of recovery of the overpayment.

Validity of Debt

An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. 38 U.S.C. § 5302; 38 C.F.R. § 1.962. Overpayments created by retroactive discontinuance of benefits will be subject to recovery if not waived. 38 C.F.R. § 3.660(a)(3).

Dependency and Indemnity Compensation (DIC) may be awarded to a surviving spouse, child, or parent of a veteran who dies from a service-connected or compensable disability. 38 U.S.C. § 1310; 38 C.F.R. § 3.5(a). Basic entitlement exists for a parent of the Veteran if, among other things, the parent's annual income is not in excess of the applicable maximum benefit rate. 38 U.S.C. § 1315. Thus, DIC benefits payable to parents are subject to limitations on annual income. Per 38 C.F.R. § 3.25, no payment of DIC to a parent may be less than $5 a month. VA has provided a website listing both current and historical income limitations for DIC benefits. Parents DIC, Effective 12/1/99, Veteran's Benefits Administration, https://www.benefits.va.gov/COMPENSATION/resources_comp0499.asp (last accessed on July 30, 2021). 

For PDIC, the calculation of annual income is governed by 38 C.F.R. §§ 3.250 to 3.270. See 38 C.F.R. § 3.270(a)(4). The amount of annual income is calculated by subtracting the value of unusual medical expenses from a value that the Board will refer to as reported annual income. See 38 C.F.R. § 3.262 (l)(1) (discussing "reported annual income" as part of the calculation of unusual medical expenses).

Reported annual income is equal to the sum of all sources of yearly income after each yearly income value is corrected, if necessary, as required by statute. The basic rule is that "[p]ayments of any kind or from any source will be counted as income unless specifically excluded." 38 C.F.R. § 3.252(c). See also 38 C.F.R. § 3.262(a). Some individual forms of income are reduced by 10 percent, including retirement benefits, age-based and survivors SSA benefits, and SSA disability income. See 38 C.F.R. §§ 3.262(e)(2), (f), (i)(2). For these types of income, the remaining 90 percent is considered income received. Rates are to be rounded down to the nearest dollar. See 38 C.F.R. § 3.29(b). 

1. Whether reduction of VA DIC pension benefits due to excessive income, effective January 1, 2000, was proper

2. Whether the overpayment of VA DIC pension benefits in the amount of $29,496.00 was properly created

The Appellant contends that reduction of her VA DIC pension benefits, starting January 1, 2000, was improper and that the resulting overpayment in the amount of $29,496.00, is not valid.

The pertinent question is whether the overpayment from the period of January 2000 through December 2008 was properly created. The debt at issue in this case was created when VA retroactively reduced the Appellant's DIC pension based on the discovery of previously unreported income from the SSA.

The Appellant and her spouse, the Veteran's father, applied for DIC benefits in June 1990, noting their marital status as "Married  living with other parent of veteran." In an August 1990 Eligibility Verification Report, the Appellant listed her income as $15,697. In a February 1991 notification letter, the Appellant and her spouse were advised that their claim for DIC had been denied. It shows that their listed income of $15,697 exceeded the income limit of $7,697 yearly for parents. 

In the February 1991 DIC Parent's Eligibility Verification Report, the Appellant noted their marital status as "Married  living with other parent of Veteran" and reported income of $10,500.

In the February 1995 DIC Parent's Eligibility Verification Report, it shows that the Appellant was "separated from spouse" and that the other parent of the Veteran was living. The Appellant listed annual wages from all employment as $4,377.97 and other annual income as $2,992.00, totaling $7,369.97.

VA received information from the SSA showing that the Appellant had been receiving Social Security benefits, after becoming eligible for SSA benefits in December 1999. The March 2008 notification letter advises that they proposed to reduce the Appellant's benefit payments as follows: from $277.00 to $5.00, effective January 1, 2000; $309.00 to $5.00, effective February 1, 2000; $320.00 to $5.00, effective December 1, 2000; $329.00 to $5.00, effective December 1, 2001; $334.00 to $5.00, effective December 1, 2002; $342.00 to $5.00, effective December 1, 2003; $352.00 to $5.00, effective December 1, 2004; $367.00 to $5.00, effective December 1, 2005; $380.00 to $5.00, effective December 1, 2006; and $389.00 to $5.00, effective December 1, 2007. It advises that the adjustment would result in an overpayment of benefits which have been paid to the Appellant. 

In a May 2008 statement, the Appellant stated that she was sorry for the lack of understanding on income and not realizing that the disability benefit was considered income to report. She stated that she could have easily sent in the awards letter that she received every year but that she just did not know. She indicated that VA's information was true, and that she knows she probably owes VA and to let her know.

Following a retroactive adjustment, the above-noted overpayment was created. In a December 2008 letter, the Appellant was advised that the proposed action based on the information received from SSA had been taken. The letter shows that on May 7, 2008, VA received the Appellant's statement in which she stated that she was in receipt of Social Security benefits, and that because of the adjustment in income, she had been paid too much. It advises that DIC rate depends on income and number of dependents, and that paid medical expenses may be used to reduce the countable income. It notes that it is her responsibility to advise of income changes or if she gains a dependent. The letter states that if the Appellant does not agree with this decision, she has one year from the date of this letter to appeal it.

The December 2008 letter provides an income breakdown showing no medical expenses from January 1, 2000 to January 1, 2009, and Social Security benefits totaling $5,592.00 from January 1, 2000 to December 1, 2000, $5,796.00 from January 1, 2001 to December 1, 2001, $5,940.00 from January 1, 2002 to December 1, 2002, $6,024.00 from January 1, 2003 to December 1, 2003, $6,153.00 from January 1, 2004 to December 1, 2004, $6,324.00 from January 1, 2005 to December 1, 2005, $6,576.00 from January 1, 2006 to December 1, 2006, $6,792.00 from January 1, 2007 to December 1, 2007, $6,948.00 from January 1, 2008 to December 1, 2008, and $7,356.00 from January 1, 2009.

In the December 2008 DMC  First Demand Letter, the Appellant was advised that she was paid $29,496.00 more than she was entitled to receive. It advises that she has the right to dispute the debt and to request a waiver, with information regarding her options included in the enclosed document.

In April 2010, May 2010, January 2011, and February 2011, VA advised that the Appellant submitted, and VA received, VA Form 21-8416, Medical Expense Reports. However, VA advised that the Medical Expense Report was not signed by the Appellant, and without her signature, it was not considered a claim for VA purposes. The letters provide guidance on the proper way to complete the Medical Expense Report and advised that it must be signed and returned.

Per Board remand directives, the RO issued a supplemental statement of the case (SSOC) addressing whether the Appellant's overpayment was properly created, including an audit of all amounts paid to the Appellant. It provides that, effective January 1, 2001, annualized social security income (SSI) of $5,796.00 was reduced by 10 percent per the regulatory exclusion of a portion of retirement amounts for countable income of $5,216.00. Effective January 1, 2001, annualized SSI of $5796.00, reduced by 10 percent, resulted in countable income of $5216.00; effective January 1, 2002, annualized SSI of $5940.00, reduced by 10 percent, resulted in countable income of $5,346.00; effective January 1, 2003, annualized SSI of $6,024.00, reduced by 10 percent resulted in countable income of $5,421.00. Effective January 1, 2004, annualized SSI of $6,153.00, reduced by 10 percent, resulted in countable income of $5,537.00, and the Appellant reported medical expenses of $814.00 for that period. Regulation allows amounts over 5% of income ($307.00) as deductible medical expenses, making the allowable deduction $507.00 and income for VA purposes of $5,030.00. Effective January 1, 2005, annualized SSI of $6,324.00, reduced by 10 percent, resulted in countable income of $5,691.00; effective January 1, 2006, annualized SSI of $6,576.00, reduced by 10 percent, resulted in countable income of $5,918.00; effective January 1, 2007, annualized SSI of $6,792.00, reduced by 10 percent, resulted in countable income of $6,112.00; effective January 1, 2008, annualized SSI of $6,948.00, reduced by 10 percent, resulted in countable income of $6,253.00. The Appellant's countable income for each year listed corresponds with the allowance of a monthly benefit of $5.00 for one of two parents living apart.

As noted above, the Appellant was provided with an Eligibility Verification Report and instructions, which instructed, in pertinent part, that the Appellant was required to report all income unless specifically indicated otherwise. 

During the period in question, the Appellant was separated from her spouse. A monthly rate of $5, for one of two parents not living with spouse, corresponded with income between $4,650 to $10,226, effective December 1, 1999; income between $4,787 to $10,584, effective December 1, 2000, income between $4,901 to $10,871, effective December 1, 2001; income between $4,963 to $11,024, effective December 1, 2002; income between $5,063 to $11,256, effective December 1, 2003; income between $5,188 to $11,560, effective December 1, 2004; income between $5,375 to $12,034, effective December 1, 2005; income between $5,538 to $12,432, effective December 1, 2006; income between $5,650 to $12,718, effective December 1, 2007; income between $5,938 to $13,456, effective December 1, 2008; and income between $5,938 to $13,456, effective December 1, 2009. As listed above, the Appellant's income each year was within the income range resulting in a monthly benefit rate of $5.

Review of the record reveals that after receiving information from SSA that the Appellant was in receipt of SSA benefits, VA determined that the Appellant's receipt of SSA benefits, effective from January 1, 2000, put her in receipt of income in excess of income limitations for DIC pension benefits. As DIC benefits are income-based, and she had SSA income which had not originally been considered in conjunction with her DIC benefits, the Appellant's monthly payments required adjustment.

In her May 2008 statement, the Appellant acknowledged that VA's information was correct but that she lacked understanding on income and did not realize that the disability benefit was considered income to report. She indicated that she could have sent in the annual award letters but did not realize she needed to do so, and she expressed that she now probably owes VA.

As noted above, the December 2008 DMC letter reflects that the Appellant was informed that she was paid $29,496.00 more than she was entitled to receive. The letter stated that since she was currently receiving VA benefits, benefits would be withheld until the overpayment was recouped, with withholding beginning in March 2009. The letter listed her rights, options, and where to call if she had questions, and that she had the right to dispute the debt and to request a waiver. The letter added that information regarding these options is on the enclosed document entitled, Notice of Rights and Obligations.

Of note, the document entitled Notice of Rights and Obligations has not been associated with the claims file. Nevertheless, the December 2008 letter shows that there were enclosures with the letter. There is a "presumption of regularity" under which it is presumed that government officials have properly discharged their official duties. Clear evidence to the contrary is required to rebut the presumption of regularity. Ashley v. Derwinski, 2 Vet. App. 307 (1992). Although Ashley dealt with regularity of procedures at the Board, in Mindenhall v. Brown, 7 Vet. App. 271 (1994), the Court applied this presumption of regularity to procedures at the RO. In this case, no clear evidence to the contrary has been presented to rebut the presumption of regularity or that the attachment to the December 2008 letter was not included with the letter. Neither the Appellant nor her representative has claimed that they were not notified of the creation of the debt or that she could submit a waiver request. As such, it is presumed that the enclosure Notice of Rights and Obligations was sent to the Appellant at her address of record in December 2008.

That document, contained in VA Form 0748, explains that the Appellant had the right to dispute the existence or amount of her debt and that if her benefits were scheduled for offset (which they were in his case), she had to write VA within the next 30 days to avoid that action. It was noted that if her dispute was received timely, VA would suspend the offset action until there was confirmation that the debt was valid and the amount was correct. Additionally, the document informed the Appellant that she had 180 days from the date of the letter to submit a request for waiver of her debt. She did not submit a dispute within 30 days or a waiver within 180 days of the December 2008 letter.

The reduction of VA DIC benefits was proper, and the resulting overpayment debt was properly created. The Appellant received VA benefits in excess of that to which she was entitled to receive based on her income, and she was made aware of these income limitations and reporting requirements in multiple documents from and communications with VA. 

The Appellant was in receipt of income from SSA which affected her right to DIC benefits, an income-based benefit, from the effective date of the grant of the SSA payments. The RO took proper action to retroactively reduce the DIC benefits to reflect her SSA income, resulting in the Appellant's overpayment debt of $29,496.00. Thus, the debt is valid, and the Appellant's claims must be denied.

3. Whether the request for a waiver of VA pension benefits in the amount of $29,496.00 was timely filed

Under applicable criteria, a request for waiver of an indebtedness shall only be considered if made within 180 days following the date of a notice of indebtedness to the debtor. The 180-day period may be extended if the individual requesting waiver demonstrates, as a result of error by either the VA or the postal authorities, or due to other circumstances beyond the debtor's control, there was a delay in such individual's receipt of the notification of indebtedness beyond the time customarily required for mailing. If the debtor does substantiate there was such a delay in the receipt of the notice of indebtedness, the 180-day period shall be computed from the date of the debtor's actual receipt of the notice of indebtedness. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.963(b)(2). 

In March 2008, the RO informed the Appellant that they proposed to reduce her VA pension benefit payments because information received from the SSA shows that the Appellant had been receiving Social Security benefits. In the Appellant's May 2008 statement, she acknowledged that VA's information was accurate, that she did not realize she needed to report the SSI, and stated that she prays that it does not jeopardize or stop her benefits.

In the December 2008 correspondence, the Appellant was notified that the proposed action to reduce her benefits had been taken, effective January 1, 2000. The letter states that if the Appellant does not agree with this decision, she has one year from the date of this letter to appeal the decision and that the enclosed VA Form-4107, "Notice of Procedural and Appellate Rights," explains her rights.

In a December 2008 DMC  First Demand Letter, the Appellant was notified that she owed a debt of $29,496.00. The letter advised that the Appellant had the right to dispute the debt and to request a waiver of the recovery of the debt. It advises that information regarding her options was included in the enclosed document entitled Notice of Rights and Obligations. 

In a May 2011 notice of disagreement (NOD), the Appellant stated that she "disagrees with the decision" and that she "sent a request for hardship previously and have yet to hear back on that request." In a February 2015 report of general information, the Appellant was contacted for clarification of the NOD, but she could not remember. A February 12, 2015 notification letter again requests clarification of the May 2011 letter and that the Appellant advise VA if it was her intention to request a waiver of the debt she currently owes. The letter advises that because the time limit to file an appeal on the March 31, 2011 decision expires on March 31, 2012, the Appellant must respond to within 60 days of this letter in order to keep her appeal viable. It advises that if a response is not received within 60 days, the unclear May 2011 communication received June 6, 2011 will not be considered a NOD.

An NOD, stamped received June 15, 2015, and previously stamped received on May 22, 2015, and dated as April 10, 2015, the Appellant stated that she disagrees with the decision finding that she a change in income due to a change in medical expenses. She stated that she still incurs medical expenses and that should not be a basis for a change in her income. She stated that she requests a waiver of the debt she allegedly owes as it is a great financial hardship for her to lose benefits or to repay benefits. 

In a May 2015 notification letter, the RO advised the Appellant that a response to the February 12, 2015 letter requesting clarification of her previously NOD had not been received within 60 days of the February 12, 2015 letter. It shows, therefore, that any evidence submitted would be considered a new claim and would be used to offset her debt.

A June 2015 notification letter advises the Appellant that they were writing regarding correspondence received on June 15, 2015. It shows that a review of the file shows that a NOD was received on June 6, 2011, and that the Appellant was contacted on February 10, 2015. After an unsuccessful attempt for clarification over the phone, a February 12, 2015 letter was sent, seeking clarification of the NOD. The Appellant was afforded 60 days from the date of the February 12, 2015 letter to clarify the NOD, and otherwise the unclear communication received on June 6, 2011 would not be considered a NOD. An unsigned response was received on May 22, 2015; a signed response was received on June 15, 2015. However, both signed and unsigned responses were received after expiration of the 60-day deadline. Therefore, the Appellant's unclear communication received June 6, 2011 was not considered a valid NOD. 

In September 2015, the Appellant filed VA 5655 Financial Status Report (FSR), stating that she disputes that she owes a debt to VA and that she requests a waiver due to financial hardship.

In a September 2015 Decision on Waiver of Indebtedness, the Committee on Waivers and Compromises (Committee) denied the Appellant's request for a waiver. The Committee stated that 38 U.S.C. § 5302(a) and 38 C.F.R. § 1.963(b) state than an application for waiver must be made within 180 days from the date of notification of an indebtedness. They stated that the Appellant was previously notified of her indebtedness on December 20, 2008, the right to request waiver, and the 180-day time limit for filing an application for waiver. It shows that as a result of this time limit imposed by both statute and regulation, they must deny her waiver request because she failed to submit her application for waiver within 180 days of the date of the notification.

In a VA Form 9, the Appellant stated that she believes she is entitled to a waiver of the overpayment and that she cannot repay the amount of overpayment claimed. She stated that she is unable to work and draws only Social Security benefits.

In a January 2016 Statement and a June 2018 appellate brief, the Appellant, through her representative stated that in the May 5, 2008 statement, she expressed regret for the overpayment, that she was not aware that Social Security payments were considered income, and that she hoped that the overpayment would not stop her payments. She noted that she had stated on her September 30, 2015 NOD, that paying the money back would constitute a hardship, and that the original May 2008 letter constitutes an attempt to request a waiver. 

Review of the record shows that the first indication after the December 2008 notification of the debt that the Appellant was attempting to request a waiver of the recovery, was in the May 2011 NOD. The Appellant's request was denied as it was not received with 180 days of the notification letter. In conjunction with her appeal, the Appellant asserted that she requested a waiver in her May 2008 statement.

While the Appellant asserts that her request for a waiver dates back to her May 2008 statement, that statement was submitted prior to actual notice of the Appellant's overpayment debt. In addition, the May 2008 statement does not express, or imply, any specific need for a waiver of the debt. At the earliest, a request for waiver, or indication of a need for a waiver, was received in May 2011, almost two and a half years after notification of the overpayment debt in December 2008, well outside the 180-day period. Neither the Appellant nor her representative has asserted a lack of knowledge of the time limit for submitting a waiver request, and the record does not indicate otherwise. Thus, the Appellant had adequate knowledge and awareness of her responsibilities. 

Of note, the December 2008 correspondence indicated that the Appellant had one year from the date of the letter to appeal the decision. However, even allowing for one year from the date of the December 2008 notification of the debt, VA did not receive proper documentation or statements indicating that the Appellant requested a waiver of the debt within a year of that notice. In fact, a somewhat clear request for a waiver was not received until the May 2011 NOD where the Appellant stated that she "sent a request for hardship previously and have yet to hear back on that request," referring to her May 2008 statement. 

Regulations provide that a waiver request must be submitted within 180 days of notification of an overpayment debt. Here, the May 2011 NOD is the earliest indication in the record that the Appellant was requesting or indicating a need for a waiver. The May 2011 NOD was submitted well after the 180-day deadline, and, therefore, the request for a waiver was not timely.

Because there is no evidence in the record establishing that there was a delay in the Appellant's receipt of the notification of indebtedness beyond the 30 days accepted by the Board as a result of an error by either VA or the postal authorities, or due to other circumstances beyond the Appellant's control, the Board concludes that the she did not timely request a waiver of recovery of an overpayment of VA benefits. Thus, pursuant to the law and regulations pertinent to this matter, the request for a waiver was not timely, and the claim must be denied.

 

 

L. B. CRYAN

Veterans Law Judge

Board of Veterans' Appeals

Attorney for the Board	A. Labi, 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.