Citation Nr: 22015649 Decision Date: 03/18/22 Archive Date: 03/18/22 DOCKET NO. 18-07 906 DATE: March 18, 2022 ORDER Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) non-service connected pension benefits in the amount of $5,083.13 is denied. FINDINGS OF FACT 1. The Veteran was incarcerated due to a felony in August 2016. 2. The Regional Office (RO) retroactively terminated the Veteran's non-service connected pension benefits effective October 9, 2016, the 61st day of incarceration after the felony conviction; this action resulted in an overpayment in the amount of $5,083.13. 3. The overpayment was not due to the Veteran's fraud, misrepresentation or bad faith. 4. Recovery of the debt in this case in the amount of $5,083.13 is not against equity and good conscience. CONCLUSION OF LAW Recovery of the overpayment of additional VA pension benefits in the amount of $5,083.13 would not be contrary to the principles of equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. § 1.965. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from November 1992 to November 1995. In a January 2010 notification letter, the Veteran was awarded non-service connected pension benefits. The Veteran was informed that his benefits would be terminated upon incarceration in a Federal, State, or local penal institution in excess of 60 days for conviction of a felony. Under pertinent VA laws and regulations, pension benefits are not to be paid to (or for) a veteran who is imprisoned in a Federal, State, or local penal institution as the result of conviction of a felony or misdemeanor for any part of the period beginning sixty-one days after such individual's imprisonment begins and ending when such individual's imprisonment ends. 38 U.S.C. § 1505; see also 38 C.F.R. § 3.666 and Latham v. Brown, 4 Vet. App. 265 (1993). Pension benefits will resume on the day of the veteran's release if notice is received within one year following said release; otherwise, resumption of benefits will be effective the date notice of such release is received. 38 C.F.R. § 3.666 (c). In August 2016, the Veteran was incarcerated following a felony conviction. In November 2016, information was received by the RO through a Bureau of Prisons match that the Veteran was incarcerated following the conviction of a felony. In a November 2016 notification letter, the RO advised the Veteran that VA proposed to retroactively terminate his VA benefits based on his incarceration. In accordance with VA law and regulation, the RO properly retroactively reduced the Veteran's non-service connected pension benefits effective October 9, 2016; this action resulted in an overpayment in the amount of $5,083.13. In August 2017, the Committee on Waivers and Compromises (COWC) of the RO determined that there was no fraud, misrepresentation, or bad faith on the Veteran's part with respect to the creation of the overpayment at issue, but the Committee further determined that recovery of the overpayment of VA compensation benefits would not be against equity and good conscience. In cases where fraud, misrepresentation, or bad faith on the Veteran's part with respect to the creation of the overpayment at issue has not been demonstrated, and, therefore, waiver is not precluded pursuant to 38 U.S.C. § 5302(a), the Board must determine whether recovery of the indebtedness would be against equity and good conscience, thereby permitting waiver under 38 U.S.C. § 5302(a) and 38 C.F.R. §§ 1.963(a), 1.965(a). In making this determination, consideration is given to the following elements, which are not intended to be all-inclusive: (1) fault of debtor (where actions of the debtors contribute to the creation of the debt); (2) balancing of faults (weighing fault of the debtor vs. the fault of VA); (3) undue hardship (whether collection would deprive the debtor or family of basic necessities); (4) defeat the purpose (whether withholding of benefits or recovery would nullify the objective for which benefits were intended); (5) unjust enrichment (failure to make restitution would result in unfair gain to the debtor); and (6) changing position to one's detriment (reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation). See 38 C.F.R. § 1.965(a). In this case, the COWC found, and the Board agrees, that there is no evidence demonstrating that the indebtedness resulted from fraud, misrepresentation, or bad faith on the Veteran's part. Therefore, waiver of indebtedness is not precluded if shown that it would be against the principles of equity and good conscience to require the Veteran to repay the debt to the government. 38 C.F.R. §§ 1.963, 1.965. As to the principles of equity and good conscience part of the Board's analysis, the record shows the Veteran was at fault in the creation of the debt in failing to report his change to incarcerated felon. The Veteran asserts that VA is at fault in the creation of the debt due to a delay in processing the November 2016 notification of his incarceration. However, a review of the evidentiary record shows that the RO informed the Veteran of the proposed termination of his benefits the same month the notification of his incarceration was received. The Veteran's benefits were thereafter terminated in March 2017. There is no evidence of record indicating that the Veteran notified VA of his August 2016 incarceration prior to the November 2016 Bureau of Prisons match. The Veteran made no effort to minimize the amount of the overpayment by requesting a reduction of his benefits while VA reviewed his case. The Veteran did not contact VA to report his incarceration until May 2017. Following his conviction, VA was required to terminate his non-service connected pension benefits from the 61st date of incarceration, as indicated above. As such, the Veteran is at fault in the creation of the debt. In regard to whether failure to collect would cause unjust enrichment to the debtor, the Board notes that the Veteran received benefits to which he was not entitled and as such, would cause unjust enrichment to the debtor. Likewise, there is no indication that the Veteran's reliance on VA benefits resulted in relinquishment of another valuable right. As to whether recoupment of those benefits would defeat the purpose of the benefit, the Veteran received pension benefits to which he was not entitled so there is no defeat of the purpose of the benefit. As to whether the recovery of the assessed overpayment would deprive the Veteran of basic necessities, the Board notes that the Veteran received all of his care from the penal institution while he was incarcerated. Thus, his basic necessities are being met. The Veteran was released from incarceration in March 2020. In April 2020, the Veteran's non-service connected pension benefits were reinstated effective March 1, 2020, in the amount of $1,147.00 per month. The Veteran reported his monthly expenses in an April 2020 Financial Status Report (FSR). A review of these records shows that the Veteran's income exceeds his expenses for rent, food, and utilities. The Board acknowledges that the Veteran has reported monthly payments for other debts, to include court costs and consumer debt. However, the current valid debt to the U.S. Government should be accorded the same consideration as other creditors. The Veteran has reported being behind on his rent and being in danger of becoming homeless, but there is no indication based on a review of the evidentiary record that he became homeless at any point during the applicable period. Further, in a December 2021 statement, the Veteran reported that the overpayment debt had been recouped. There is no evidence that the Veteran was actually deprived of basic necessities of living. See April 2020 FSR. As such, the Board finds that there is no financial hardship. The record does not demonstrate any additional factors which should be considered in adjudicating the Veteran's claim for a waiver of the indebtedness, nor has the Veteran identified any such factors. After weighing all of the enumerated factors, the Board finds that total recovery of the overpayment does not violate the principles of equity and good conscience. Thus, waiver of the recovery of the overpayment of the debt of $5,083.13 is not warranted. TANYA SMITH Veterans Law Judge Board of Veterans' Appeals Attorney for the Board T. Bynum, 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.