Citation Nr: 22017709 Decision Date: 03/25/22 Archive Date: 03/25/22 DOCKET NO. 15-31 186 DATE: March 25, 2022 ORDER The overpayment of Department of Veterans Affairs (VA) pension benefits in the amount of $47,350.30 was properly created; the appeal is denied. FINDINGS OF FACT 1. The appellant divorced L. and remarried A., whose employment income affected the appellant's entitlement to VA improved pension benefits; the appellant did not promptly notify VA of his remarriage and change in household income. 2. The retroactive action taken to reduce and/or terminate the pension resulted in the creation of the debt at issue; this action was proper. CONCLUSION OF LAW An overpayment of $47,350.30 in VA benefits was properly created. 38 U.S.C. §§ 101, 1503, 1521, 5110; 38 C.F.R. §§ 3.21, 3.23, 3.271, 3.272. REASONS AND BASES FOR FINDINGS AND CONCLUSION The appellant had active service from November 1972 to February 1975. He was discharged under conditions other than honorable. See November 2020 Administrative Decision. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a January 2015 decision by the Department of Veterans Affairs (VA) Regional Office (RO), notifying him that his pension was terminated effective March 1, 2009. Initially, the Board notes that the appellant has only appealed whether the overpayment was properly created. The issue of entitlement to a waiver was decided in January 2015. The appellant has not appealed that issue, so it is not presently before the Board. Whether the overpayment of VA pension benefits in the amount of $47,350.30 was properly created Basic entitlement to pension exists if a veteran of a period or periods of war (as defined in 38 C.F.R. § 3.3 (a)) meets certain net worth requirements and does not have an annual income in excess of the applicable maximum annual pension rate (MAPR), and is either age 65 or older or is permanently and totally disabled from nonservice-connected disability not due to the veteran's own willful misconduct. See 38 U.S.C. §§ 1521 (a) and (j), 5312; 38 C.F.R. §§ 3.3 (a), 3.23(a). Pension is not payable to a veteran whose annual income exceeds the rates set forth in 38 U.S.C. § 1521. Improved pension provides for maximum income levels under which eligibility is based and this amount is offset by annual income of the recipient minus any excepted unreimbursed medical expenses. For the purpose of determining initial entitlement, or for resuming payments on an award which was previously discontinued, the monthly rate of pension payable to a beneficiary shall be computed by reducing the beneficiary's applicable maximum pension rate by the beneficiary's annual rate of countable income on the effective date of entitlement and dividing the remainder by 12; whenever there is a change in a beneficiary's annual rate of countable income, the monthly rate of pension payable shall be computed by reducing the beneficiary's applicable MAPR by the beneficiary's new annual rate of countable income on the effective date of the change in the annual rate of income, and dividing the remainder by 12. 38 C.F.R. § 3.273. For the purpose of computing income for improved pension, payments of any kind from any source shall be counted as income during the 12-month annualization period in which received unless specifically excluded under 38 C.F.R. § 3.272. 38 C.F.R. § 3.271 (a). The following is excluded from countable income for VA pension purposes: welfare benefits; maintenance benefits furnished by a relative, friend, or a charitable organization; VA pension benefits; casualty loss reimbursement; profit from the sale of property; joint accounts; unreimbursed medical expenses (to the extent that the medical expenses exceed 5 percent of the applicable MAPR); expenses of last illnesses, burials, and just debts; educational expenses; a portion of the beneficiary's children's income; Domestic Volunteer Service Act Programs payments; distributions of funds under 38 U.S.C. § 1718; survivor benefit annuities; Agent Orange settlement payments; restitution to individuals of Japanese ancestry; cash surrender value of life insurance policies; income received by American Indian beneficiaries from trust or restricted lands; Radiation Exposure Compensation Act payments; and Alaska Native Claims Settlement Act payments. 38 C.F.R. § 3.272. Income from the SSA is not excluded under 38 C.F.R. § 3.272. The amount of pension actually received is the difference between the recipient's countable income and the MAPR permitted by VA given the recipient's circumstances. Pension is not payable if the recipient's countable annual income exceeds the maximum limitation given the recipient's circumstances as set forth in the legislation. See generally 38 U.S.C. §§ 101, 1501. The Secretary shall deny or discontinue the payment of a veteran's pension based upon consideration of the annual income of a veteran, his/her spouse, and children. 38 U.S.C. § 1522. An overpayment is created when VA determines that a beneficiary or payee has received benefit payments in excess of the amount due or to which such beneficiary or payee is entitled. 38 C.F.R. § 1.962. When VA has determined that a debt is owed based on such an overpayment, and once it has satisfied certain procedural requirements, it may collect the debt by offsetting current or future benefit payments until the debt has been repaid. 38 U.S.C. § 5314; 38 C.F.R. §§ 1.911, 1.912a(a). A June 2001 rating decision granted entitlement to pension benefits. The appellant was provided VA Forms 21-8768 which stated, in pertinent part, that the appellant was obligated to provide prompt notice of any change in family income or net worth and that a failure to provide such would result in the creation of an overpayment which would be subject to recovery. It further stated that when reporting income, the total amount and source of all income received should be reported. The pertinent question is whether the overpayment was properly created. The debt at issue in this case was created when VA retroactively terminated the appellant's pension based on the discovery of previously unreported household income due to remarriage. On a January 2002 Improved Pension Eligibility Verification Report form, the appellant reported that neither he nor his spouse, L., had earned income, but both received income through the Social Security Administration (SSA). In November 2008, information showed that the appellant and his spouse continued to have income through SSA only. In December 2013, VA notified the appellant that it received information that the appellant and his spouse, L., had divorced in June 2003. It proposed to remove his spouse from his award. The appellant submitted a new Improved Pension Eligibility Verification Report in December 2013, indicating he was no longer married to L. as they had divorced in July 2003. He also reported he had married A. in February 2009, and that she received employment income of $1,400 monthly. In September 2014, VA notified the appellant that based on his spouse's income, it proposed to stop pension benefits effective March 1, 2009. In the January 2015 decision on appeal, VA stated that the appellant's pension had been terminated effective March 1, 2009, based on excessive income. The Board finds that the debt was properly created because the appellant did not timely report that he was no longer married to L. and that he had income from his new spouse, A., which affected the right to pension benefits, an income-based benefit. The RO took proper action to retroactively reduce the pension benefits to reflect the appellant's household income. The Board is cognizant that the appellant believes he informed VA of his divorce, subsequent remarriage, and income; however, the claims file does not reflect this. The law is clear that the appellant must timely report any change in the status of his dependents and that he is not entitled to receive pension benefits if his income exceeds the maximum limitation set by legislation. The persuasive evidence shows that the retroactive action taken to reduce and/or terminate the pension payments was proper and that the overpayment of VA pension benefits in the amount of $47,350.30 was properly created. The appeal is denied. C. CRAWFORD Veterans Law Judge Board of Veterans' Appeals Attorney for the Board A. Dean, 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.