BVA9507841 
DOCKET NO.  93-11 011     )       DATE
          )
          )

On appeal from the decision of the
Department of Veterans Affairs Regional Office in Louisville,
Kentucky

THE ISSUE

Entitlement to waiver of recovery of an overpayment of improved
disability pension benefits in the calculated amount of $1,361.

REPRESENTATION

Appellant represented by: Disabled American Veterans

ATTORNEY FOR THE BOARD

Darryl A. Joe, Associate Counsel

INTRODUCTION

The veteran had active military service from April 1952 to March
1958.

This matter comes before the Board of Veterans' Appeals (the
Board) on appeal from a September 1992 determination by the
Committee on Waivers and Compromises (Committee) of the
Louisville, Kentucky Regional Office (RO) of the Department of
Veterans Affairs (VA), which denied the veteran's request for
waiver of recovery of an overpayment of improved disability
pension benefits in the calculated amount of $1,361.

CONTENTIONS OF APPELLANT ON APPEAL

The veteran contends that he is entitled to waiver of recovery of
the overpayment of the improved pension benefits at issue.  He
maintains that he did not knowingly withhold information from VA.
He further argues, essentially, that requiring repayment of the
assessed overpayment would be against the principles of equity
and good conscience, since he and his wife are both unable to
work due to their respective physical disabilities, and rely on
no other income besides monthly VA and Social Security disability
payments.

DECISION OF THE BOARD

The Board, in accordance with the provisions of 38 U.S.C.A.
§ 7104 (West 1991), has reviewed and considered all of the
evidence and material of record in the veteran's claims file.
Based on its review of the relevant evidence in this matter, and
for the following reasons and bases, it is the decision of the
Board that waiver of the recovery of an overpayment of improved
disability pension benefits in the calculated amount of $1,361 is
warranted.

FINDINGS OF FACT

1.  All relevant evidence necessary for an equitable disposition
of the veteran's claim has been obtained by the RO.

2.  Effective October 1961, the veteran was awarded VA disability
pension benefits based on his countable income; at the time of
his award and on several subsequent occasions, he was advised of
the relationship of family income to his receipt of VA pension
and of the necessity for reporting any changes in income
promptly.

3.  The veteran's improved disability pension award was reduced
effective from July 1, 1991, through May 1992, based on the
increase in Social Security benefits paid to his daughter
[redacted].

4.  This action by the RO resulted in the creation of an
overpayment in the calculated amount of $1,361.

5.  The veteran was at fault in the creation of the indebtedness.

6.  The most recent financial data of record shows that the
veteran's monthly expenses exceed his monthly income by over
$300.

7.  Recovery of the overpayment would cause undue financial
hardship.

CONCLUSION OF LAW

Recovery of the overpayment of improved pension disability
benefits, in the calculated amount of $1,361, would violate the
standard of equity and good conscience.  38 U.S.C.A. §§ 5107,
5302 (West 1991);  38 C.F.R. §§ 1.963, 1.965 (1994).

REASONS AND BASES FOR FINDINGS AND CONCLUSION

The Board finds that the veteran's claim is well-grounded within
the meaning of 38 U.S.C.A. § 5107(a).  That is, we find that he
has presented a claim which is plausible or capable of
substantiation.  Further, after examining the record, we are
satisfied that all relevant facts have been properly developed
and that the data on file are sufficient for us to render a fair
and equitable determination in the matter at hand.

The Board's review of the record shows that the veteran was first
awarded VA disability pension benefits in April 1962.
Information submitted in support of the veteran's claim for
pension benefits showed that he was in receipt of Social Security
benefits.  At the time of the award, the veteran was unmarried
and reportedly did not have any dependent children.  An award
letter, with attachments, was forwarded to the veteran in May
1962, advising him of his responsibilities for providing VA with
prompt notice of any changes in his income.

Documents of record further demonstrate that the veteran married
his wife [redacted] in June 1969.  Thereafter, by separate award
actions, he was granted additional VA pension benefits for his
wife and three children, [redacted], [redacted], and [redacted].
Records further reflect that benefits were also paid out by the
Social Security Administration for the three children.  Following
various adjustments to the veteran's pension award, including his
election in April 1979 to receive improved pension benefits, he
was advised of the relationship between pension and family
income.  He was further instructed that he was to notify VA
immediately if he or any of his dependents received any other
income or if his dependents received any additional income in the
future.  The RO warned him that failure to inform VA promptly of
income changes would result in the creation of an overpayment in
his account.

In April 1991, the RO informed the veteran of a change in the
rate of his pension benefits.  In relevant part, he was advised
that he would be paid at the monthly rate of $267, based upon his
receipt of $489 in Social Security benefits, as well as
[redacted]'s receipt of $123 from the same source.  At the time of
the adjustment, [redacted] was the veteran's only remaining
dependent child for VA purposes.  Subsequently, by letter dated
in December 1991, the veteran was notified that his pension award
had again been amended.  He was advised that effective December
1, 1991, he was to be paid at the monthly rate of $278 and from
September 1, 1992, he would receive payments at the monthly rate
of $300.  The award letter explained that this action was based
on countable annual income of $7608 from December 1, 1991,
consisting of the his annual Social Security income of $6084 and
that of his daughter [redacted], totaling $1524, or $127 per
month.  Thereafter, in February 1992, the veteran reported in an
eligibility verification report that his daughter [redacted]
received $244 in monthly Social Security benefits.  A VA report
of contact shows that, in May 1992, the RO asked the Social
Security Administration to verify the rates of benefits paid from
December 1, 1990 to the veteran, his wife, and their remaining
dependent child, [redacted].  VA was advised that from December
1990 the veteran was paid at the rate of $489 per month, and from
December 1991, he received $507.  VA was also informed that
[redacted] received $123 per month from December 1990, but that
her rate was increased to $244 from June 1991, and to $253 from
December 1991.

In June 1992, the RO informed the veteran that his payments were
being reduced based on the discovery that [redacted]'s Social
Security benefits were increased in June 1991.  The increased
income was credited effective July 1, 1991, and created an
overpayment in his account in the calculated amount of $1,361.

A waiver of recovery of an overpayment, or waiver of collection
of any indebtedness is precluded where fraud, misrepresentation,
or bad faith is found to exist.  38 U.S.C.A. § 5302(c) (West
1991);  38 C.F.R. § 1.965(b) (1994).  The Committee has
determined that there was no willful intention on the part of the
veteran to commit fraud, misrepresent a material fact, or
exercise bad faith in the creation of the overpayment that has
been assessed against him.  In view of this, the Board now seeks
to determine whether the evidence establishes that recoupment of
the indebtedness would be against equity and good conscience, in
which case recovery of that overpayment may be waived.  38
U.S.C.A. § 5302;  38 C.F.R. §§ 1.963, 1.965.  The following is
pertinent to this matter:

The standard "equity and good conscience"
will be applied when the facts and
circumstances in a particular 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 debtor contribute to
creation of the debt.

2.  Balancing of faults.  Weighing
fault of debtor against VA fault.

3.  Undue hardship.  Whether
collection would deprive 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.

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(a).

The record in this case demonstrates that the veteran was advised
on several occasions of the relationship between his family's
income and his entitlement to VA disability pension benefits, as
well as his responsibility for providing VA with prompt notice of
income changes.  Although the veteran's previous actions in
causing an earlier overpayment have no bearing on the outcome, it
is clear that the circumstances surrounding that overpayment, in
addition to the abundance of information furnished him, certainly
put him on notice with respect to his obligations as a VA pension
beneficiary.  In light of the facts surrounding the most recent
overpayment, the Board is left with no alternative but to find
that the veteran was solely at fault in the creation of the
indebtedness at issue, as he failed to provide VA with prompt
notice of the increase in Social Security benefits paid for his
daughter [redacted].

Notwithstanding our above finding, we must point out that fault
is only one consideration to be analyzed in this case.  Pertinent
regulations require that the VA must also consider other
equitable factors, such as undue financial hardship, when
deciding a veteran's waiver request.  In this regard, we observe
that in a Financial Status Report filed by the veteran in October
1992, he reported that his monthly net income was $849,
reflecting the amount he received in VA disability pension and
Social Security benefits, including an amount paid for his
daughter [redacted].  The veteran also reported that he had
monthly expenses of $1,189, resulting in a monthly deficit of
over $300.  The veteran's expenses are moderate.  Included in the
veteran's monthly expenses is the $300 he pays on a monthly basis
for medication.  The veteran also indicated that he incurs a
monthly expense of $150 for home oxygen.  In listing the value of
his assets, the veteran reported $0 in a checking account, $5000
worth of furniture and household goods, a 1978 Plymouth Volare
worth $500, and his home estimated to be worth $40,000.  The
veteran also indicated that he was able to pay his monthly bills
by either remitting payment for some bills every other month, by
sending incremental payments to his creditors, or by not paying
anything at all.

A finding of financial hardship would be justified if the
collection of the indebtedness would deprive the veteran of food,
clothing, shelter, or other basic necessities.  Financial
information furnished by the veteran reflects that he faces a
substantial deficit after satisfying his monthly expenses.  As
noted above, these expenses are moderate.  He has few assets.
Further, we believe that the veteran's age and present state of
health severely limits any opportunities he might have for future
employment.  Under these circumstances, the Board finds that
requiring that the veteran repay his debt would deprive him of
the basic necessities of life and result in financial hardship.
The undue financial hardship which would result from recovery of
the indebtedness outweighs the veteran's fault in the creation of
the overpayment.  The fact that the veteran was recently awarded
pension at the aid and attendance rate, which generated an award
of retroactive benefits, does not persuade the Board that
requiring repayment would not impose financial hardship.

After careful consideration of the record, the Board concludes
that recovery of the overpayment would be against equity and good
conscience.  Waiver of the recovery of the overpayment of
improved pension in the amount of $1,361 is granted.

ORDER

Entitlement to waiver of recovery of an overpayment of improved
disability pension benefits in the calculated amount of $1,361 is
granted.

          N. R. ROBIN
          Member, Board of Veterans' Appeals

The Board of Veterans' Appeals Administrative Procedures
Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740, ___
(1994), permits a proceeding instituted before the Board to be
assigned to an individual member of the Board for a
determination.  This proceeding has been assigned to an
individual member of the Board.

NOTICE OF APPELLATE RIGHTS:  Under 38 U.S.C.A. § 7266 (West
1991), a decision of the Board of Veterans' Appeals granting less
than the complete benefit, or benefits, sought on appeal is
appealable to the United States Court of Veterans Appeals within
120 days from the date of mailing of notice of the decision,
provided that a Notice of Disagreement concerning an issue which
was before the Board was filed with the agency of original
jurisdiction on or after November 18, 1988.  Veterans' Judicial
Review Act, Pub. L. No. 100-687, § 402 (1988).  The date which
appears on the face of this decision constitutes the date of
mailing and the copy of this decision which you have received is
your notice of the action taken on your appeal by the Board of
Veterans' Appeals.