Citation Nr: 22010403 Decision Date: 02/23/22 Archive Date: 02/23/22 DOCKET NO. 19-28 991 DATE: February 23, 2022 REMANDED 1. Challenges to the propriety of the creation of an overpayment arising from concurrent receipts of Department of Veterans Affairs (VA) disability compensation benefits and Department of Defense (DoD), Defense Finance Accounting Service's (DFAS) disbursements for Unit Training Assembly (UTA) periods that took place during the fiscal year (FY) 2016 are remanded. 2. Challenges to the validity of the amount of the overpayment arising from concurrent receipts of VA disability compensation benefits and DFAS' disbursements for UTAs executed during the FY 2016 are remanded. 3. Claim for a waiver of the overpayment debt arising from concurrent receipts of VA disability compensation benefits and DFAS' disbursements for UTAs executed during the FY 2016 is remanded. REASONS FOR REMAND The Veteran, who had active duty from June 1982 to December 1993, from October 2009 to January 2011, and from October 2011 to November 2012, has been service connected for various disabilities effective November 1996, and his combined rating was raised to 70 percent effective March 2013. However, the Veteran regularly executed UTA periods, to include during FY 2016. UTA periods, commonly referred to as "drill weekends," typically present a form of training that, more often than not, occurs once a month. Because UTAs are DFAS-compensated activities, the term "drill pay" refers to the monetary compensation DFAS disburses to veterans for execution of UTAs. Notably, since there are two paid UTA periods in a single calendar day, there are four paid UTA periods in a single drill weekend. Therefore, veterans typically execute up to 48 UTA periods during an FY, which runs from October 1 of the calendar year which precedes the number of the FY at issue through September 30 of the calendar year at issue. That said, a veteran may also execute more or less than 48 UTA periods per an FY, depending on his/her service unit's need to conduct UTAs (which could be conducted much more frequently than once a month) and the veteran's physical/mental abilities to execute UTAs. Relevant here, veterans are eligible to receive VA disability compensation benefits while they are in drilling status. However, concurrent receipt of VA benefits and DFAS' drill pay is prohibited. Therefore, a veteran who executes UTAs, is required to choose between his/her DFAS' drill pay and his/her VA benefits paid for those days when the UTA periods are executed, and to waive the benefit (s)he elects not to receive. 10 U.S.C. § 12316; 38 U.S.C. § 5304(c). Typically, a waiver application is filed as to prospective UTA periods, and it contains the right to the distribution of VA benefits for the period for which the veteran would not receive DFAS' drill pay, e.g., due to the veteran's inability to report for execution of his/her scheduled UTAs for medical reasons. 38 C.F.R. § 3.700(a)(1)(iii). Given the waiver requirement, VA award notifications include a statement reminding veterans that they are required to notify VA of their elections if they plan or are scheduled to execute UTA periods. Generally, veterans tend to elect to receive DFAS' drill pay instead of VA benefits: because the drill pay amount per a calendar day typically presents a greater financial benefit, regardless of the combined rating assigned to the veteran's disabilities underlying his/her VA compensation. A veteran's failure to timely file a waiver of his/her VA benefits for the days coinciding with the veteran's scheduled UTA periods necessarily results in his/her concurrent receipts of DFAS' drill pay and VA benefits, that is, if the veteran actually executes his/her scheduled UTAs. In such a scenario, after DFAS disburses the veteran's drill pay and notifies VA of said disbursement, VA qualifies the veteran's VA benefits distributed during the days for which DFAS disbursed drill pay as an overpayment. Therefore, VA first notifies the veteran of its proposal to retroactively reduce his/her VA benefits so as to eliminate the concurrent distribution through recoupment of the overpayment. For instance, such recoupment could be proposed to be executed through incremental withholdings from the veteran's future VA benefits. Upon affording the veteran an opportunity to respond to the proposal, e.g., by submitting evidence showing that (s)he did not execute the UTAs underlying the overpayment or that (s)he executed a different amount of UTAs during the FY at issue, VA takes the final action by notifying the veteran of the creation of the overpayment and initiation of the collection of the overpayment debt arising from the overpayment, as well as the means to seek a waiver of the debt. Here, in May 2017, a VA agency of original jurisdiction (AOJ) issued the Veteran a notice proposing to charge him with an overpayment based on 63 UTAs that the Veteran had allegedly executed during the FY 2016. In August 2017, the AOJ issued the Veteran a final action notice informing him that he was charged with the proposed overpayment, and it was in the amount of $7,240.23. In December 2017, the Veteran filed a Notice of Disagreement (NOD) challenging the propriety of the creation of the overpayment and pointed out that he was seeking a waiver of his overpayment debt: in addition to challenging the propriety of its creation. However, no decision on his waiver claim was issued by the VA Committee on Waivers and Compromises (COWC), even though the Veteran's waiver claim was timely, given that it was filed within 180 days from the date of the AOJ's August 2017 final action notice. In August 2019, the AOJ issued a Statement of the Case (SOC) inexplicably asserting that the Veteran executed 67 UTAs rather than 63 UTAs during FY 2016 (even though the AOJ's discussion was seemingly based on only 63 UTAs). Moreover, the AOJ's SOC stated that the overpayment was properly created. No statement in the SOC suggested that the Veteran's timely waiver claim was adjudicated by COWC. In September 2019, the Veteran filed his VA Form 9 Substantive Appeal, pointing out that, during FY 2016, the Veteran was on medical leave and, therefore, he did not execute any UTAs. In November 2021, the Veteran's representative filed an Appellant's Brief reiterating the same. The propriety of the creation of the Veteran's overpayment turns on whether DFAS actually disbursed any UTA compensation to the Veteran as to FY 2016. (In the event DFAS did execute such a disbursement, but executed it in error, the Veteran's challenges should be raised with DFAS, and the Board has no jurisdiction over such challenges, if raised.) If no such a disbursement took place, then no payment of his VA benefits simultaneous with such a disbursement was possible, meaning that the Veteran's overpayment was improperly created. Given that VA does not have access to DFAS' payment records, the Board is without means to resolve the Veteran's challenges to the propriety of the creation of his overpayment until and unless VA requests and obtains DFAS' audit of the Veteran's DoD account. Further, if DFAS' audit of the Veteran's DoD account demonstrates that he had received drill compensation for a certain amount of UTAs executed during FY 2016, the Veteran's VA overpayment debt should be recalculated to reflect the amount of UTAs stated in DFAS' audit. Finally, after such a recalculation is performed, the Veteran should be availed to an opportunity to submit his VA Form 5655 Financial Status Report (FSR) and regardless of whether or not he submits his FSR have his waiver claim adjudicated by COWC. Accordingly, while the Board regrets additional delay, a remand is required. The matters are REMANDED for the following action: 1. Contact DFAS with a request to conduct an audit of the Veteran's DFAS records for the purposes of establishing: (a) whether the Veteran was disbursed any DoD funds based on his execution of UTAs during FY 2016; and, if yes, (b) the exact amount of FY 2016 UTAs and the dates of the UTAs underlying DFAS' disbursement. Associate DFAS' audit report with the claims file. 2. Upon completion of the foregoing and any other developments deemed necessary, recalculate the amount of the Veteran's overpayment debt, if any, in accordance with the information stated in DFAS' audit report. 3. If, upon completion of the foregoing and any other developments deemed necessary, it is determined that the Veteran should have been charged with an overpayment based on his simultaneous receipt of DFAS' UTA-based compensation and VA benefits received during the FY 2016, request the Veteran to submit his FSR and provide the Veteran with a reasonable opportunity to reply. 4. Upon completion of the foregoing and any other developments deemed necessary, and regardless of whether the Veteran files his FSR, if it is determined that the Veteran should have been charged with an overpayment based on his simultaneous receipt of DFAS' UTA-based compensation and VA benefits received during the FY 2016, forward the Veteran's claims file to COWC for an initial adjudication of the Veteran's waiver claim. 5. If, upon completion of the foregoing and any other developments deemed necessary, it is determined that the Veteran should have been charged with an overpayment based on his simultaneous receipt of DFAS's UTA-based compensation and VA benefits with regard to the FY 2016 and, in addition, it is determined that the Veteran's waiver claim should not be granted (or should not be granted in full), issue the Veteran and his representative a Supplemental SOC adjudicating his challenges to the propriety of the creation of his overpayment and the amount of his overpayment, and his waiver claim. 6. The Veteran has the right to submit additional evidence and argument on the matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). 7. The law requires that all claims that are remanded by the Board of Veterans' Appeals for an additional development must be handled in an expeditious manner. 38 U.S.C. §§ 5109B, 7112. Cynthia M. Bruce Veterans Law Judge Board of Veterans' Appeals Attorney for the Board Anna Kapellan, Associate 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.