Citation Nr: A25035702 Decision Date: 04/17/25 Archive Date: 04/17/25 DOCKET NO. 240131-435191 DATE: April 17, 2025 ORDER Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the cumulative amount of $19,063.86, is denied. FINDING OF FACT Recovery of the debt at issue in this case in the cumulative amount of $19,063.86, is not against equity and good conscience. CONCLUSION OF LAW The criteria for waiver of recovery of an overpayment of VA compensation benefits in the cumulative amount of $19,063.86, have not been met. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.963(a), 1.965 REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran was a member of the Army National Guard from June 2000 to March 2001. He served on active duty in the U.S. Navy from March 2001 to March 2010. He was thereafter a member of the Army National Guard, during which he had multiple periods of active duty, active duty for training, and inactive duty training. This matter comes to the Board of Veterans' Appeals (Board) from two August 2023 decisions of the Committee on Waivers and Compromises (Committee) at a Department of Veterans Affairs (VA) Regional Office (RO), the Agency of Original Jurisdiction (AOJ), which denied the Veteran's request for a waiver of recovery of a cumulative overpayment of VA compensation benefits in the amounts of $9,278.26 (five debts combined) and $9,785.60 (three debts combined), for a total of $19,063.86. In January 2024, the Veteran submitted a VA Form 10182, Decision Review Request: Board Appeal (Notice of Disagreement), on which he identified the August 2023 decisions, the issue as denial of waiver for debt, and elected the Direct Review docket. Therefore, the Board may only consider the evidence of record at the time of the August 2023 decisions on appeal. 38 C.F.R. § 20.301. Any evidence submitted after the decisions on appeal cannot be considered by the Board. 38 C.F.R. §§ 20.300, 20.301, 20.801. If the Veteran would like VA to consider any evidence that was submitted that the Board could not consider, the Veteran may file a Supplemental Claim (VA Form 20-0995) and submit or identify this evidence. 38 C.F.R. § 3.2501. If the evidence is new and relevant, VA will issue another decision on the claim, considering the new evidence in addition to the evidence previously considered. Id. Specific instructions for filing a Supplemental Claim are included with this decision. Waiver The record reflects that in a July 2011 rating decision, the RO granted compensation benefits, effective March 11, 20210. The Veteran was notified of the decision in a July 2011 letter. This correspondence included a VA Form 21-8764, which informed the Veteran that his right to payment of compensation may be affected by his receipt of active duty or drill pay and that he must promptly notify VA if these circumstances arise. See 38 U.S.C. § 5304(c); 38 C.F.R. §§ 3.654, 3.700 (prohibiting the receipt of VA disability compensation benefits for any period for which the person receives active service pay, including active duty pay, drill, and active duty for training payments, and inactive duty for training payments made to Reservists and members of the National Guard). In March 2012, the RO notified the Veteran of a decision in a subsequent claim for additional compensation benefits. The Veteran was again provided a VA Form 21-8764 which advised him of the conditions affecting his right to continued compensation, to include the receipt of military pay. According to an April 2012 telephone contact, the Veteran called VA to report that he was returning to active duty for two years beginning in June 2012. He also requested a copy of his claims file, which was provided him. In a December 2012 letter, the RO notified the Veteran that it had terminated payment of his VA compensation based on his April 2012 report that he would be returning to active duty in June 2012. He was advised that this action had created an overpayment which was subject to repayment. In April 2013 telephone contact, the Veteran called to inquire about the debt he had incurred. He indicated that he had not been receiving VA notification letters because his address had changed and was incorrect in VA's systems. He further indicated that the April 2012 telephone contact was incorrect. He claimed that he had not been calling to report a return to active duty. Rather, he claimed that he had called at that time to report that he had joined the National Guard in April 2012. In addition, the Veteran reported that he was returning to active duty effective June 23, 2012 for 14 months. In a February 2016 letter, the RO asked the Veteran to submit DD Forms 214 for the dates he had returned to active duty so that VA could correct and/or reestablish his compensation benefits. In December 2016, VA received a DD Form 214 reflecting a period of active duty for training from June 23, 2013, to February 18, 2015. In June 2017, VA received a DD Form 214 reflecting a period of active duty from October 20, 2016, to April 5, 2017. In an August 2017 letter, the RO advised the Veteran that it had terminated payment of his compensation during those periods. He was thereafter notified of the resulting debts. In a June 2019 letter, the RO notified the Veteran that it proposed to retroactively adjust his VA compensation based on his receipt of 63 days of drill pay in Fiscal Year 2018. In a September 2019 letter, the RO notified the Veteran that it had taken the proposed action. He was thereafter notified of the resulting debt. In a February 2020 letter, the RO notified the Veteran of its decision in a claim for compensation benefits. The letter reminded him that his receipt of active duty or drill pay as a reservist or member of the National Guard might affect his right to VA payment of benefits. In a June 2020 letter, the RO notified the Veteran that it proposed to retroactively adjust his VA compensation based on his receipt of 174 days of drill pay in Fiscal Year 2019. In an August 2020 letter, the RO notified the Veteran that it had taken the proposed action. These letters were initially returned by postal authorities as undeliverable, but the RO thereafter obtained a new address for the Veteran and resent the correspondence in October 2020. He did not reply. This reduction action resulted in a debt of $5,100.29. In a December 2020 letter, the RO notified the Veteran that it proposed to retroactively adjust his VA compensation based on his receipt of 54 days of drill pay in Fiscal Year 2020. In a February 2021 letter, the RO notified the Veteran that it had taken the proposed action. This reduction action resulted in a debt of $1,608.17. In a December 2021 letter, the RO notified the Veteran that it proposed to retroactively discontinue payment of his compensation because VA had received information from the Department of Defense that he had returned to active duty from August 1, 2021, to November 12, 2021. The Veteran did not reply. In a February 2022 letter, the RO notified the Veteran that it had taken the proposed action. This resulted in debt totaling $3,077.14. These first three debts cumulatively totaled $9,785.60 ($5,100.29 plus $1,608.17 plus $3,077.14). In February 2022, the Veteran was sent a letter to the same effect as the February 2020 and December 2020 letters for a reduction for 37 drill days in FY 2021. In February 2021, he was advised action had been taken and that his benefits would be adjusted for 37 drill days in FY 2021. This resulted in a debt totaling $1,116.22 In April 2022, the RO advised the Veteran that it had received information regarding a change in his veteran status as information from the Department of Defense showed a return to active duty from January 2022 to February 2022. He was advised that VA proposed to terminate his VA compensation for that period. In June 2022, he was notified that action had been taken. This resulted in a debt of $1,245.97. In May 2022, the Veteran was sent another letter for additional active service in February 2022. In July 2022, he was notified that action had been taken. This resulted in a debt totaling $351.43. In January 2023, the RO advised the Veteran that it had received information regarding a change in his veteran status as information from the Department of Defense showed a return to active duty from October 2022 to December 2022. He was advised that VA proposed to terminate his VA compensation for that period. In March 2023, he was notified that action had been taken. This resulted in a debt totaling $1,804.39. In February 2023, the Veteran was sent a letter to the same effect as the February 2020, December 2020, and February 2022 letters for a reduction for 149 drill days in FY 2022. In July 2023, he was advised action had been taken and that his benefits would be adjusted for 149 drill days in FY 2022. This resulted in a debt totaling $4,760.25. These next five debts cumulatively totaled $9,278.26 ($1,116.22 plus $1,245.97 plus $351.43 plus $1,804.39 plus $4,760.25). In August 2023, the Veteran submitted a Financial Status Report in connection with his request for a waiver of the debts at issue. He indicated that his monthly income totaled $4,446.82, consisting of disability compensation and "Irregular or 'gig' income." He indicated that his monthly expenses totaled $4,720. This consisted of $1500 in rent or mortgage, $200 for food, $180 for utilities, and $2640 for health expenses, pet care, transportation and car expenses, entertainment, household maintenance, HOA fees, and property tax. He also reported $249 in monthly payments on installment debts. The Veteran reported cash assets of $25,233, stocks and bonds of $50,174.54, and a vehicle asset. He reported an Internal Revenue Service debt of $38,715, which was unpaid. He reported what appear to be credit card balances of $5,975.85 and $2123, with a monthly payment of $249, corresponding to the $249 reported monthly payment on installment debt reported on his monthly expenses. Both of these accounts were current. On the Financial Status Report, the Veteran claimed that he "did not know that the Compensation and Pension wasn't automatically turned off during the times when I was on orders." The Veteran indicated that he had not received VA notices because he had been moving from place to place and had not done a change of address. He also reported potential long-term medical issues which he thought might cause him to lose his ability to perform active duty in the future. In August 2023 decisions, the Committee considered the request for a waiver of the overall amount for all debts, $19,063.86. In the decisions on appeal, the Committee did not find fraud, misrepresentation, or bad faith. The Board is bound by this favorable finding, absent clear and unmistakable evidence. 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). The first and second elements pertain to the fault of the debtor versus the fault of VA. The debt at issue in this appeal arose from the Veteran's failure to timely report his receipt of drill pay and returns to active duty. The record reflects some delivery issues due to multiple changes in address. Not all VA communications, however, were returned as undeliverable. Regardless, a Veteran has an obligation to keep VA apprised of his or her whereabouts. Thompson v. Brown, 8 Vet. App. 169, 175 (1995) (finding VA may rely on the "last known address" shown of record and burden is on A Veteran to keep VA apprised of his or her whereabouts). Based on the numerous communications he received from VA, the Board finds that the Veteran knew or should have known that he was not entitled to receive both compensation and military pay. The Board has considered his statement to the affect that he assumed VA "automatically turned off" his compensation during periods he was receiving military pay, but finds that because he continued to receive compensation at the same rate during his periods of active duty, he knew or should have known that his VA compensation had not been "turned off." For the foregoing reasons, the Board finds that the Veteran was at fault in the creation of the cumulative debt at issue. The record further reflects RO took prompt action to adjust the Veteran's VA compensation upon learning of the Veteran's drill pay and returns to active duty, after providing him with the necessary due process. The Board therefore finds that the Veteran bears the fault in this case. 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 legally entitled and as such, his retention of this money would cause unjust enrichment to him. There is no indication that the Veteran's reliance on this benefit resulted in relinquishment of another valuable right. As to whether recoupment of those benefits would defeat the purpose of the benefit, recoupment of those benefits would not defeat the purpose of the benefit since the Veteran was not entitled to VA compensation benefits while receiving active duty and drill pay. The Board has also considered whether the Veteran would suffer undue financial hardship if forced to repay the debt at issue which is his contention. A review of the financial status report reveals that although his reported monthly expenses slightly exceeded his monthly income, the Veteran some discretionary expenses such as entertainment and also listed significant assets and savings. Moreover, all but one of the debts are current and the Board finds the Veteran owes his VA debt the same consideration he extends to most of his other creditors. Based on the foregoing, the Board finds no basis upon which to conclude that repayment of this debt would result in undue hardship or deprive the Veteran of basic necessities. After weighing all of the enumerated factors, the Board finds that recovery of the overpayment at issue does not violate the principles of equity and good conscience. Thus, waiver of the recovery of the overpayment of the overall debts of $19,063.86 is denied. K. Conner Veterans Law Judge Board of Veterans' Appeals Attorney for the Board J. Connolly 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.