Citation Nr: 22048149 Decision Date: 08/24/22 Archive Date: 08/24/22 DOCKET NO. 16-60 782 DATE: August 24, 2022 ORDER Entitlement to a waiver of recovery of an overpayment of transferred 38 U.S.C. Chapter 33 (Post-9/11 GI Bill or Chapter 33) educational assistance benefits in the calculated amount of $11,050 for tuition/fees and books/supplies, and to include whether the debt was validly created, is denied. FINDINGS OF FACT 1. The Department of Veterans Affairs (VA) awarded the appellant entitlement to Post-9/11 GI Bill benefits derived from the Veteran. The Veteran was obligated to serve on active duty until September 2015 to be eligible to transfer education benefits to his dependents; however, the Veteran separated from active duty in November 2014. In December 2014, the Department of Defense (DoD) confirmed that the Veteran did not satisfy the service requirements for eligibility to transfer Post-9/11 GI Bill education benefits to the appellant. 2. The appellant used the transferred Chapter 33 benefits in the calculated amounts of $10,237.50 for tuition and fees and $812.50 for books and supplies for a course of study, totaling $11,050 for education courses from July 2014 to December 2014. 3. As the DoD determined that the Veteran was ineligible to transfer Post-9/11 GI Bill education benefits to the appellant because the Veteran did not satisfy the service requirements, an overpayment of Post-9/11 GI Bill benefits was validly created. 4. Recovery of the overpayment of Post-9/11 GI Bill benefits in the calculated amount of $11,050 for tuition/fees and books/supplies would not be against the principles of equity and good conscience. CONCLUSION OF LAW The debt in the amount of $11,050 for overpayment of VA educational assistance benefits under the Transfer of Entitlement (TOE) provisions of the Post-9/11 GI Bill is valid, and the criteria for a waiver of recovery of an overpayment of such benefits are not met. 38 U.S.C. §§ 3301, 3311, 3313, 3319; 5302; 38 C.F.R. §§ 1.962, 1.965, 21.9550, 21.9570. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from June 1993 to November 2014. The appellant is the Veteran's dependent spouse. The appellant appeals a December 2014 notification letter by the Buffalo Regional Office (RO) that due to the Veteran's early retirement, an overpayment totaling $11,050 to the appellant was made and must be repaid. The appellant requested a Board of Veteran's Appeals (Board) hearing; however, she failed to appear. See October 2016 VA Form 9. As the appellant has not requested the hearing be rescheduled or established good cause for her failure to appear, her hearing request is considered withdrawn. See 38 C.F.R. § 20.704. Validity of Debt The record reflects that in July 2014, the appellant requested to use the Veteran's Post-9/11 GI Bill educational assistance benefits, and the Veteran transferred his benefits to the appellant, which was approved in July 2014. The RO then approved the appellant to receive the transferred educational assistance benefits for 19.5 resident credit hours from July 2014 to December 2014, totaling $11,050. In November 2014, the Veteran retired from service. See DD Form 214. In December 2014, the RO informed the appellant that because the Veteran did not complete his service obligation, she was not eligible for VA educational assistance benefits under the TOE provisions of Chapter 33. The appellant was informed that because of this change, VA had paid her more than she was due, which resulted in an overpayment of tuition/fees and books/supplies in the total amount of $11,050 for the term outlined above. The appellant contends that the creation of the debt, stemming from the overpayment of transferred Chapter 33 benefits she received from the Veteran, was improper because a Navy career counselor and DoD officials approved the transfer of benefits after the Veteran received an official retirement date from DoD and did not properly screen the paperwork provided, and both her and the Veteran relied on the information provided to them by DoD. See June 2016 Notice of Disagreement (NOD); October 2016 VA Form 9. Furthermore, she contends that recovery of the overpayment of the Post-9/11 GI Bill benefits should be waived as the repayment of the debt would result in undue financial hardship. Id. An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled, and may arise from virtually any VA benefits program, including educational assistance benefits. See 38 U.S.C. § 5302; 38 C.F.R. §§ 1.962, 1.956(a). Relevant to the issue on appeal, the Post-9/11 GI Bill, 38 U.S.C. Chapter 33, provides for VA educational assistance for members of the Armed Forces based on active duty service after September 10, 2001. 38 U.S.C. § 3311; 38 C.F.R. § 21.9520. An individual who is entitled to educational assistance under Chapter 33 based on his own active-duty service, and who is approved by a service department to transfer entitlement, may transfer up to a total of 36 months of his entitlement to one or more dependent. 38 U.S.C. § 3319; 38 C.F.R. § 21.9570. DoD is charged with making determinations of eligibility for transfer of Chapter 33 entitlement to dependents; VA has no authority to determine such eligibility. See 38 U.S.C. § 3319; 38 C.F.R. § 21.9570; 74 Fed. Reg. 14,654 (2009); Garza v. McDonald, 28 Vet. App. 222, 230 (2016). To be eligible to transfer educational assistance benefits, a transferor must have served six years on active duty or in the Selected Reserve at the time of his approval by the Secretary of the Army, and must have entered into an agreement to serve at least four more years as a member of the uniformed services. 38 U.S.C. § 3319(b). The purpose of the ability to transfer unused education benefits is to promote recruitment and retention in the uniformed service. 38 U.S.C. § 3319(a)(2). Dependents are not eligible for transferred entitlement if the transferor fails to complete the amount of service he or she agreed to serve in the Armed Forces in order to participate in the transferability program, unless the transferor did not complete the service because of his or her death, a medical condition that preexisted such service on active duty and that the Secretary of the military department concerned determines is not service connected, a hardship as determined by the Secretary of the military department concerned, or a physical or mental condition that was not characterized as a disability and did not result from the individual's own willful misconduct but interfered with the individual's performance of duty as determined by the Secretary of the military department concerned. See 38 C.F.R. § 21.9570(l). Moreover, benefits are not payable to dependents under TOE if the transferor fails to complete the amount of service he agreed to serve unless the transferor is considered to have completed his or her service agreement as a result of being discharged for a disability or a reduction in force. See 38 U.S.C. §§ 3319(i), 3311(c)(4). In May 2014, the Buffalo RO notified the appellant, also a veteran, that she had exhausted all of her own Chapter 33 benefits prior to July 21, 2014. As a result, the appellant filed an Application for Family Member to Use Transferred Benefits (VA Form 22-1990E) for Centura College courses, starting in July 2014. The record reflects the appellant was approved to use the Veteran's education benefits for a course of study from July 2014 to December 2014, totaling $11,050. The appellant received these education benefits and completed her courses. In December 2014, the appellant again applied to use the Veteran's education benefits for new courses from December 2014 to February 2015; however, VA paused her application and contacted DoD to verify whether the Veteran was approved to participate in the TOE program, i.e., whether he met the requirements to be able to transfer his Post-9/11 GI Bill benefits to the appellant, as there was a discrepancy between his TOE obligated end date and his active duty separation date. DoD noted that the Veteran was discharged from service in November 2014, whereas his service obligation for the transfer of entitlement provision was not until September 2015. Because the Veteran separated from active duty prior to his service obligation date for TOE benefits, DoD determined that his dependents, including the appellant, were ineligible for transferred Post-9/11 GI Bill benefits. Based on DoD's determination, and after performing an administrative review of the Veteran and appellant's records, the AOJ found that an overpayment of Post-9/11 GI Bill benefits in the calculated amounts of $10,237.50 for tuition and fees, and $812.50 for books and supplies, was created totaling $11,050 overpayment of Chapter 33 benefits. The Board notes that the appellant has not asserted that the amount of these benefits was calculated incorrectly. Rather, in numerous statements throughout the appeal, she asserted that the creation of the debt was unfair. See June 2016 NOD. She noted the TOE benefits were approved after the Veteran received an official retirement date and DoD approved the TOE benefits knowing his retirement date was before the TOE obligated end date; thus, the appellant and Veteran relied on DoD and Navy counselors who improperly approved the TOE benefits. See October 2016 VA Form 9. Although the Board is sympathetic to the appellant's contentions, it must find that the overpayment of Post-9/11 GI Bill benefits in the calculated amount of $11,050 for tuition/fees and books/supplies was validly created. Specifically, DoD determined that the Veteran was ineligible to transfer Post-9/11 GI Bill education benefits to the appellant because he did not satisfy the service requirements. As noted above, the determination of an individual's eligibility to transfer education benefits is made by DoD and not by VA. See 38 U.S.C. § 3319; 38 C.F.R. § 21.9570. VA does not have the authority to determine such eligibility, and it cannot alter the DoD's determination on such eligibility. Furthermore, although the Board has considered the statements by the appellant that it is unfair that the debt was created, as she and the Veteran were not aware that if he retired prior to his September 2015 obligation date that the transferred benefits would be rescinded, the record does not show that the Veteran meets the exceptions when the transferor fails to complete the amount of service he or she agreed to serve in the Armed Forces in order to participate in the transferability program. Specifically, neither the appellant nor the Veteran have asserted, and the evidence does not show, that he did not complete his service contract due to: death; a medical condition that preexisted such service on active duty and that the Secretary of the military department concerned determined is not service connected; a hardship, as determined by the Secretary of the military department concerned; a physical or mental condition that was not characterized as a disability and did not result from the individual's own willful misconduct but interfered with the individual's performance of duty, as determined by the Secretary of the military department concerned; a disability; or, reduction in force. See 38 U.S.C. §§ 3319(i), 3311(c)(4). The Veteran served over twenty-one years of active duty and his DD Form 214 reflects the Veteran honorably separated from Navy due to sufficient service for retirement. To the extent the appellant asserts that she relied on erroneous information provided or omitted by VA or DoD staff regarding the Veteran's eligibility to transfer benefits to his dependents or the resulting debt from such transferred benefits, VA is not liable for their reliance on said erroneous or omitted information dispensed by VA or DoD employees. See Harvey v. Brown, 6 Vet. App. 416, 424 (1994). Inaccurate advice does not create any legal right to benefits where such benefits are otherwise precluded. See Shields v. Brown, 8 Vet. App. 346, 351 (1995). Likewise, erroneous advice given by a government employee cannot be used to estop the government from denying benefits. See McTighe v. Brown, 7 Vet. App. 29, 30 (1994). This must be frustrating to the appellant, and the Board recognizes this frustration. While the Board is sympathetic to the appellant's contentions, it is bound by the findings of DoD in this matter. The proper course for the appellant and Veteran, if they believe there is a reason to dispute DoD's determination or the content of military records, is for the Veteran to pursue such a disagreement with DoD. See Sarmiento v. Brown, 7 Vet. App. 80, 85 (1994). As DoD determined the Veteran was ineligible to transfer Post-9/11 GI Bill education benefits to the appellant because he did not satisfy the service requirements, an overpayment of Post-9/11 GI Bill benefits in the calculated amount of $11,050 for tuition/fees and books/supplies was validly created. Waiver of the Debt The appellant is seeking a waiver of overpayment of the transferred Chapter 33 education benefits as she contends she would endure financial hardship if she was required to repay the debt totalling $11,050. See May 2015 appellant letter; June 2016 NOD; October 2016 VA Form 9. Specifically, in her May 2015 request for waiver, the appellant stated the Veteran "took a job in a different state and we must maintain two residents on only one source of income until our four kids and I move to Alabama with him," and repayment of the debt "would make it almost impossible to maintain two residents." The record reflects that after the Veteran retired from the Navy in November 2014, he took a job in Alabama while the appellant and children remained in Virginia. See May 2015 VA Form 5655. Over a year later, the appellant and Veteran still had their Virginia home and the appellant started a massage therapy studio for business. See April 2016 VA Form 5655. Recovery of the overpayment of any VA benefits will be waived if: (1) the application for relief is filed in a timely manner; (2) there is no indication of fraud, misrepresentation, or bad faith on the part of the person having an interest in the waiver; and (3) recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 38 U.S.C. § 5302(a), (c). As noted above, the Board determined this debt was validly created because the overpayment of eduction benefits resulted from the appellant receiving Chapter 33 benefits from the Veteran, who was ineligible to transfer such benefits to her. The record shows that the application for waiver was timely because it was received within 180 days of the notice of the indebtedness. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.963(b)(2). Despite the April 2015 decision by the VA Committee on Waivers and Compromises (Committee) denying the Veteran's request for waiver and noting that the appellant acted in bad faith, the Board has reviewed the evidence of record and does not find that there was fraud, misrepresentation, or bad faith on the part of the Veteran or the appellant. Thus, the only issue to be determined is whether recovery of the indebtedness from the appellant who received such benefits would be against equity and good conscience. The standard "equity and good conscience" will be applied when the facts and circumstances in a case indicate a need for reasonableness and moderation in the exercise of the Government's rights. The decision reached should not be unduly favorable or adverse to either side. The phrase "equity and good conscience" means arriving at a fair decision between the obligor and the Government. In making this determination, consideration will be given to the following elements, which are not intended to be all-inclusive: (1) Fault of the 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. 38 C.F.R. § 1.965. Addressing the factors set forth in 38 C.F.R. § 1.965(a), the creation of the debt resulted from the appellant receiving education benefits under Chapter 33 from the Veteran even though he was ineligible to transfer such benefits to the appellant, as he did not serve on active duty until the obligated TOE end date in September 2015. Moreover, as noted in July 2015, the Committee denied the appellant's waiver request for overpayment of Chapter 33 benefits noting award letters sent to the Veteran and appellant notified them that she was responsible for all debts resulting from any changes in service time. Also, to enter the TOE benefits system the Veteran was informed that his obligated end date for program eligibility was September 2015, he agreed that "failure to complete that service may lead to an overpayment to VA for any payments made," and he was "responsible for any overpayments due to not completing [his] additional obligated term of service agreement." As such, the record suggests the fault for creation of the debt is on the Veteran and appellant, not VA. Further, the Board finds that recovering the overpayment will not result in undue financial hardship to the appellant. The Board acknowledges that the appellant contended early in the appeal process that she would experience a financial hardship in repaying VA for the overpayment in question. The appellant submitted two VA Forms 5655 showing her monthly expenses and monthly income. The first VA Form 5655, which was signed in March 2015 but received by VA in May 2015, noted a total monthly net income from the Veteran of $6,245 with monthly expenses totaling $5,229.90, including monthly payments for other debts totaling $1,183 per month. As part of "other living expenses," the appellant noted an additional $1,435 each month went to maintain their second residence in Virginia "until we move after the school year" to Alabama with the Veteran. See May 2015 VA Form 5655. Despite the reported strain of maintaining two residences in different states, the appellant reported a net monthly income of $1,015.10 after expenses. Id. Overall, the appellant stated she could pay $25 a month toward her Chapter 33 debt. Id. The second VA Form 5655, from April 2016, showed the Veteran's monthly net income increased to $7,145 and the appellant "just started a massage therapy studio" but reported no income. The reported monthly rent or mortgage payment increased from $1,600 to $2,800 and the appellant still reported to have the Virginia residence costing an additional $1,235 each month. The appellant reported the same monthly credit card/loan debt and estimated average monthly expenses of $6,329.90 with an overall decreased net monthly income of $815.10 after expenses. Again, the appellant stated she could pay $25 a month toward her Chapter 33 debt. The Board notes that even though the appellant herself reported no income and she was burdened with maintaining two houses, the evidence is against a finding that repayment of this debt would cause undue financial hardship. This debt, a shared burden between the appellant and the Veteran, could be offset with help from the Veteran. The record reflects the Veteran and appellant's net monthly income after expenses is over $800 each month, if not more. Moreover, the Board acknowledges the appellant's claim that maintaining two residences in different states created a financial hardship, but she continuously stated that she was going to sell the Virginia home, which would undoubtedly decrease monthly expenses and perhaps become a source of income. Thus, any financial hardship appears temporary. Further, the appellant indicated that she would be able to pay $25 per month, and she reported starting a new business in 2016, which conceivably increased her monthly income. The repayment of the debt owed would not deprive the appellant of the basic necessities if repaid in structured installments based on her age and future earning potential. Accordingly, although the appellant has asserted that repayment of the debt would cause her undue financial hardship, the record indicates otherwise. Thus, the Board finds repayment of this debt would not cause undue financial hardship. The appellant does not claim that she changed her position to her detriment in reliance on the overpaid amount, nor does the record indicate that she did so. Thus, this factor does not provide a basis for waiving the recovery of the overpayment. Additionally, the evidence does not reflect that collection of the overpayment would defeat the purpose for which the benefits were intended; however, it does reflect that the appellant would be unjustly enriched if recovery of the overpayment was waived. The appellant received instruction for massage therapy classes from the Chapter 33 TOE benefits from July 2014 to December 2014 and noted she started a massage therapy studio in September 2015. See April 2016 VA Form 5655. Thus, these factors do not provide a basis for waiving the recovery of the overpayment. The debt is valid, and her financial position is such that repayment of the overpayment would not result in undue hardship. (Continued on the next page) Given the fault on the part of the appellant and Veteran, that the appellant has the ability to repay the debt without resulting undue hardship, and that to permit the appellant to keep the overpayment would result in her unjust enrichment because there are no equitable circumstances appearing in the record that would make retention of the overpayment anything other than unfair gain, the Board finds that recovery of the overpayment of transferred Post-9/11 GI Bill educational assistance benefits in the calculated amount of $11,050 for tuition/fees and books/supplies would not be against the principles of equity and good conscience for the reasons laid out above. 38 U.S.C. § 5302(a); 38 C.F.R. § 1.965(a). Accordingly, the request for a waiver of the overpayment is denied. DONNIE R. HACHEY Veterans Law Judge Board of Veterans' Appeals Attorney for the Board J. Bona, 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.