Citation Nr: 22017958 Decision Date: 03/27/22 Archive Date: 03/27/22 DOCKET NO. 17-56 514 DATE: March 27, 2022 REMANDED The issue of entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $26,375.60 is remanded. REASONS FOR REMAND The Veteran served on active duty during the Vietnam Era September 1967 to October 1970. As explained below, the Board finds the Veteran has raised the issue of the proper creation of the debt, to include the matter of sole administrative error. Resolution of the creation issue must precede consideration of the waiver issue. Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991) ("when a Veteran raises the validity of the debt as part of a waiver application... it is arbitrary and capricious and an abuse of discretion to adjudicate the waiver application without first deciding a veteran's challenge to the lawfulness of the debt asserted against him or her"); VAOPGCPREC 6-98 (July 24, 1998) (holding that when a veteran challenges the validity of the debt and seeks waiver of the debt, the [Regional Office] must first fully review the debt's validity and, if the office believes the debt to be valid, prepare a written decision fully justifying the validity of the debt before referring the waiver request to the Committee on Waivers and Compromises). The Veteran's overpayment debt subject to his appealed request for waiver is due to the retroactive adjustment of his disability compensation benefits from April [REDACTED], 2009, the 61st day of his incarceration. See 38 C.F.R. § 3.665 (explaining that benefits are subject to a reduction beginning on the 61st day of incarceration for conviction of a felony committed after October 7, 1980). Historically, the Veteran notified the RO of his incarceration in a letter received in May 2009. The Veteran's sister, E.W., submitted a request for apportionment in July 2009. The apportionment request was denied in August 2009. A VA and Social Security Administration State Prisoner Computer Match confirmed that the Veteran associated with the record in August 2009 indicated that the Veteran was confined since February [REDACTED], 2009, due to a felony conviction. A November 2009 VA notification letter informed the Veteran of a proposal to reduce his compensation benefits from April [REDACTED], 2009. The Veteran's sister, E.W., again requested an apportionment in January 2010; the request was denied. A January 2010 notification letter advised the Veteran that the retroactive adjustment to his compensation benefits was completed and an overpayment was created from April [REDACTED], 2009. A February 2010 Debt Management Center first demand letter explained that an overpayment debt of $26,375.60 was assessed. The Veteran requested a waiver of the overpayment debt, which was considered and denied in the July 2017 decision on appeal by the Committee on Waivers and Compromises (COWC). The COWC stated that the Veteran's waiver request was received on April 26, 2017, and this was not within the 180-day time limit for filing an application for waiver. The Board notes that the waiver request is not of record. The Veteran first indicated disagreement with the creation of the overpayment and raised the issue of sole administrative error in August 2017. See August 2017 Notice of Disagreement. He reported that he had no knowledge of the overpayment debt, as he was incarcerated from 2009 to May 2013 and his benefit checks were stolen and cashed. In the substantive appeal received in November 2017, the Veteran asserted that he along with his representative, the court, and the state department of corrections notified VA of his incarceration. The Veteran asserted that his benefit checks were intercepted from his post office box and deposited at a bank while he was incarcerated. In a December 2017 statement, the Veteran asserted that his payments, which were supposed to be stopped, were intercepted and cashed by his sister, E.W., without his knowledge. At the August 2021 Board hearing, the Veteran testified that he reported his incarceration to VA and received no correspondence or compensation from VA during his incarceration. The Veteran testified that he closed his P.O. Box and had his mail forwarded to his mother's address, but that his sister reopened the P.O. Box and intercepted his mail from VA, as well as his benefit payments. The Veteran said he therefore had no knowledge of the overpayment debt until well after the fact. The Board construes such statements as disagreement with the validity of the overpayment debt due to sole administrative error. See 38 C.F.R. § 1.911(c)(1) (A debtor may dispute the amount or existence of a debt, which is a right that may be exercised separately from a request for waiver or at the same time); see also VAOPGCPREC 2-90 (July 17, 1989); 55 Fed. Reg. 27757 (1990) (administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law); 38 C.F.R. § 3.350(b)(2). As such further appellate review by the Board on the Veteran's waiver claim must be deferred pending adjudication of a threshold determination of the propriety of the creation of the debt. The matters are REMANDED for the following action: 1. Obtain and associate with the claims file any outstanding documents relating to the debt, to include the waiver request received April 26, 2017. 2. Adjudicate the issue of whether the overpayment of compensation benefits in the amount of $26,375.60 was properly created, to include the raised matter of sole administrative error. If the benefits, to include the waiver issue, sought on appeal remain denied, furnish the Veteran and his representative a Supplemental Statement of the Case (SSOC). An appropriate period of time should be allowed for response. MICHAEL LANE 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.