Citation Nr: 0003995 Decision Date: 02/15/00 Archive Date: 02/23/00 DOCKET NO. 93-25 989 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in White River Junction, Vermont THE ISSUE Entitlement to waiver of recovery of an overpayment of improved pension benefits in the amount of $1,718, to include the issue of whether the overpayment was properly created. REPRESENTATION Appellant represented by: The American Legion WITNESS AT HEARING ON APPEAL Appellant ATTORNEY FOR THE BOARD Debbie A. Riffe, Associate Counsel INTRODUCTION The veteran had active service from June 1944 to January 1947. This appeal arises from a January 1993 decision of the Committee on Waivers and Compromises of the White River Junction, Vermont Regional Office (RO), which denied the veteran's request for waiver of recovery of an overpayment of improved pension benefits in the amount of $2,238 on the basis that recovery would not be against equity and good conscience. The Board of Veterans' Appeals (Board) remanded the case to the RO in January 1996, August 1997, and December 1997 for additional development. Subsequently, the RO clarified in an April 1998 letter to the veteran and a May 1998 supplemental statement of the case that as a result of an April 1996 award adjustment the overpayment amount was reduced to $1,718. FINDINGS OF FACT 1. All relevant evidence necessary for an equitable disposition of the veteran's appeal has been obtained by the RO. 2. The veteran was awarded improved pension benefits effective in August 1989, based on income from Social Security; in award letters dated in July 1989, November 1989, January 1990, October 1990, November 1990, October 1991, and November 1991, he was notified that his pension benefits were based on countable annual income and that it was his duty to inform the VA of any income changes. 3. In a September 1990 Improved Pension Eligibility Verification Report (EVR), the veteran reported monthly income from Social Security of $299 and wages from employment of $879 for the period of August 1989 through July 1990. 4. By letter in November 1990, the RO notified the veteran of a reduction in his pension benefits, effective August 1989, on the basis of his EVR showing earnings that were not previously considered in determining entitlement to pension. 5. In a December 1990 decision, the RO granted the veteran's request for waiver of recovery of an overpayment of improved pension benefits in the "original amount" of $985; the "total debt" at that time was $1,058. 6. In a September 1991 EVR, the veteran reported monthly income from Social Security of $381.90 and an unspecified amount from wages for the period of August 1990 through July 1991; he indicated that he had worked for the town of Bristol, earning $80 in August 1990, $80 in December 1990, and $40 in January 1991. 7. In April 1992, the veteran's tax statements for 1989 were received, indicating that receipt of $1,934.61 in non- employee compensation from Mt. Abraham Union High School, $285 in wages from the town of Bristol, and $27.80 in interest income. 8. In response to a June 1992 RO request to clarify income, the veteran indicated that he received $1,936 from Mt. Abraham High School from July 1989 through December 1989, $364.74 from the town of Bristol from January 1990 through July 1991, and $364 from the town of Bristol from August 1990 through December 1990, and that there was no income from January 1991 through July 1992, except for $11 in interest for the period of August 1991 through July 1992. 9. In July 1992 EVRs, the veteran reported monthly income from Social Security of $371, $2,300.74 in wages for the period of July 1989 through July 1990, $364.74 in wages and $10 in interest for the period of August 1990 through July 1991, and $11 in interest for the period of August 1991 through July 1992. 10. In a September 1992 EVR, the veteran reported monthly income from Social Security of $371 and interest income of $21.97 for the period of August 1991 through July 1992; statements from his bank indicated interest income of $27.80 in 1989, $23.98 in 1990, and $21.97 in 1991. 11. By letter in October 1992, the RO notified the veteran that his pension benefits were reduced effective August 1989, on the basis of his verified income. 12. In a January 1993 decision, the RO denied the veteran's request for waiver of recovery of an overpayment of improved pension benefits in the amount of $2,238. 13. By letter in April 1996, the RO notified the veteran of an adjustment in his pension award, effective August 1989, on the basis of income information received in February 1996 from the town of Bristol and Mt. Abraham High School. 14. For the period from August 1989 through September 1992, the veteran was paid $8,061 in improved pension benefits when he was due $5,823 in pension benefits, thus creating a $2,238 overpayment; an April 1996 award action, which changed the period of time allotted to the receipt of earnings, reduced the overpayment amount by $520 to $1,718. 15. The veteran was solely at fault in the creation of the overpayment of improved pension benefits in the amount of $1,718 by virtue of his failure to report the entire amount of his earned income from the town of Bristol and Mt. Abraham Union High School and his interest income in a timely manner to the VA; fault on the part of the VA has not been shown. 16. Recovery of the overpayment of improved pension benefits has not deprived the veteran of the ability to provide for life's basic necessities; failure to repay the debt would have resulted in unfair gain to the veteran. 17. Recovery of the overpayment has defeated the purpose of the benefit as the veteran is entitled to monthly payments of improved pension. 18. Reliance on VA benefits did not result in relinquishment of a valuable right or the incurrence of a legal obligation. CONCLUSION OF LAW Recovery of an overpayment of improved pension benefits in the amount of $1,718 would not be against equity and good conscience. 38 U.S.C.A. §§ 5107, 5302 (West 1991); 38 C.F.R. §§ 1.963(a), 1.965(a) (1998). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Background The overpayment in this case was created as a result of the fact that the veteran was paid improved pension benefits on the basis that his countable income did not exceed the maximum annual limit when, in fact, the earned income of the veteran was actually greater than the RO had been led to believe. The RO's Committee on Waivers and Compromises in January 1993 denied the veteran's request for waiver of recovery of the $2,238 debt, which was calculated after the RO discovered additional earned income of the veteran through an income verification match. A review of the record shows that in July 1989 the veteran submitted a claim for pension, which showed that his only income consisted of Social Security. By letter in July 1989, the RO awarded the veteran improved pension benefits effective from August 1989. The award letter informed the veteran that his pension was based on countable annual income from Social Security only and included the following instructions: Your rate of VA pension is directly related to you/your family's income. Adjustment to your payments must be made whenever your/your family's income changes. Therefore, you must notify us immediately if you/your family receive(s) any income from a source other than that shown above. You must also report any changes in the income shown above. Failure to inform the VA promptly of income changes may result in the creation of an overpayment in your account. The award letter contained VA Form 21-8768, reminding the veteran to promptly report income changes. By letter in November 1989, the RO notified the veteran that his pension award was amended, effective December 1989, based on a cost of living adjustment. The RO indicated that the award was still based only on income from Social Security. The RO requested the veteran to furnish an accurate statement of his income from all sources if the income information was incorrect and to notify it immediately if at a later date there was any change in income. In January 1990, a letter from the Social Security Administration (SSA) was received, informing the veteran of his new monthly payment amount of $327.90 to be deposited into his account beginning in January 1990. By letter in January 1990, the RO notified the veteran that his pension award was amended, effective August 1989, based on information from the SSA. The RO informed the veteran that he must promptly notify the VA if he received any income from a source other than Social Security. The letter also contained VA Form 21-8768, reminding the veteran to immediately report income changes. In an Improved Pension Eligibility Verification Report (EVR) received in September 1990, the veteran reported monthly income from Social Security of $299 and wages from employment of $879 for the period of August 1989 through July 1990 and $800 anticipated for the period of August 1990 through July 1991. The veteran did not report any unreimbursed medical expenses. By letter in October 1990, the RO notified the veteran of an amendment in his pension award, effective from September 1989, on the basis of his EVR. The RO informed the veteran that his pension award was based on countable annual income from Social Security and earnings of $879 from August 1989 through July 1990 and $800 from August 1990 through July 1991. The RO informed him that the adjustment resulted in an overpayment of benefits. The RO reminded the veteran that he must promptly notify the VA if he received income from any other sources than those listed or if there were any changes in the income he currently received. The letter contained VA Form 21-8768, reminding the veteran to immediately report income changes. By letter in October 1990, the VA notified the veteran of an overpayment of benefits in the amount of $985. In November 1990, the veteran requested a waiver of recovery of the overpayment of benefits in the amount of $985, indicating that he did not know the exact reason for the overpayment and believed it to be inaccurate. By letter in November 1990, the RO informed the veteran that the overpayment was created as a result of the income questionnaire he completed in September 1990 wherein he reported wages from all employment of $879. The RO stated that the veteran's benefits were retroactively adjusted to include the wage income, which created the overpayment for the period of August 1989 through September 1990. By letter in November 1990, the RO notified the veteran of a reduction in his pension benefits, effective August 1989, on the basis of his EVR showing earned income of $879 that was not previously considered in determining the veteran's pension entitlement. The RO informed him that the adjustment resulted in an overpayment of benefits. The RO reminded the veteran that he must promptly notify the VA if he received income from any other sources than those listed or if there were any changes in the income he currently received. The letter contained VA Form 21-8768, reminding the veteran to immediately report income changes. In December 1990, the RO received the veteran's financial status report on which he stated that he could not afford to repay the debt and did not understand why the debt existed. In a December 1990 decision, the RO granted the veteran's request for waiver of recovery of an overpayment of improved pension benefits in the "original amount" of $985. (It was also noted that the veteran's "total debt" at that time was $1,058.) In an EVR received in September 1991, the veteran reported that his income consisted of Social Security benefits of $381.90 per month and an unspecified amount from wages for the period of August 1990 through July 1991. On an attached sheet, the veteran indicated that he had worked for the town of Bristol, Vermont, earning $80 in August 1990, $80 in December 1990, and $40 in January 1991. Also attached to the EVR was a SSA form on which the veteran requested a partial withholding of monthly Social Security benefits in a matter in which he had been overpaid $215. By letter in October 1991, the RO notified the veteran that his pension award was amended, effective October 1991, based on his report of Social Security income beginning in October 1991. The RO requested additional information regarding the veteran's Social Security benefits and withholding. By subsequent letter in October 1991, the RO notified the veteran that his pension award was amended, effective October 1991, on the basis of a review of his EVR showing that his sole source of income was Social Security benefits. The RO reminded the veteran that he must promptly notify the VA if he received income from any other sources than those listed or if there were any changes in the income he currently received. This letter contained VA Form 21-8768, reminding the veteran to immediately report income changes. In October 1991, a computer-generated document from the SSA was received in response to the RO's October 1991 request, reflecting that beginning in December 1990 the veteran's monthly payment was $357 and that the overpayment was taken out at a rate of $25 per month from September 1990 through March 1991. By letters in November 1991, the RO notified the veteran of amendments to his pension award, effective from August 1990, on the basis of information from the SSA. The RO reminded the veteran that he must promptly notify the VA if he received income from any other source than Social Security or if there were any changes in the income he currently received. This letter contained VA Form 21-8768, reminding the veteran to immediately report income changes. In April 1992, the veteran's tax statements for 1989 were received, indicating that he received $1,934.61 in non- employee compensation from Mt. Abraham Union High School, $285 in wages from the town of Bristol, and $27.80 in interest income. By letter in June 1992, the RO requested the veteran to verify his income for the period of July 1989 through July 1992 and explain the source of the $1,934.61 income from Abraham High School. In response, the veteran indicated that he received $1,936 from Mt. Abraham High School from July 1989 through December 1989, $364.74 from the town of Bristol from January 1990 through July 1991, and $364 from the town of Bristol from August 1990 through December 1990. He indicated that he did not have any income from January 1991 through July 1992, except for $11 in interest for the period of August 1991 through July 1992. He stated that $1,936 was not "self-employed income" as characterized by the RO but earned income at Mt. Abraham High School only in 1989. In EVRs received in July 1992, the veteran reported that he received $371 per month in Social Security benefits; that for the period of July 1989 through July 1990 he received wages of $2,300.74; that for the period of August 1990 through July 1991 his income consisted of $364.74 in wages and $10 in interest; and that for the period of August 1991 through July 1992 he received $11 in interest. By letter in August 1992, the RO notified the veteran of a proposal to reduce his pension payments, effective August 1989, on the basis of his income statements. In an EVR received in September 1992, the veteran reported that his income consisted of Social Security benefits of $371 per month and interest income of $21.97 for the period of August 1991 through July 1992. He submitted statements from his bank, indicating that he received interest income of $27.80 in 1989, $23.98 in 1990, and $21.97 in 1991. By letter in October 1992, the RO notified the veteran that his pension benefits were amended effective August 1989, on the basis of his verified income. The RO informed the veteran that its action created an overpayment in his account. By letter in November 1992, the VA notified the veteran of an overpayment in the amount of $2,238. Later that same month, the veteran requested a waiver of recovery of the overpayment. He stated that he did not understand the reason for the overpayment and that since he retired in 1989 all his income tax statements were in the possession of the RO. He indicated that he did not know how he could repay anything given his current income after monthly expenses were paid. In December 1992, the RO received the veteran's financial status report which reflected that his monthly income exceeded monthly expenses by $33.55. In a January 1993 decision, the RO denied the veteran's request for waiver of recovery of an overpayment of improved pension benefits in the amount of $2,238, on the basis that it would not be against equity and good conscience. The RO stated that the veteran's fault in the creation of the overpayment outweighed any factors which may have been in his favor. The veteran expressed his disagreement with the RO's decision in February 1993, indicating that he did not owe the debt. At a March 1993 hearing at the RO before the Committee on Waivers and Compromises, the veteran testified that he stopped earning wages from Mt. Abraham High School in June 1989; that he did not know where income of $2,200 in wages from August 1989 through July 1990 and $364 thereafter came from; that the $879 reported in 1990 was from the school; that his Social Security benefits had been reduced; and that he could not afford to repay the debt. On his June 1993 substantive appeal, the veteran indicated that he still did not understand how the debt was created. He stated that he could not afford the $65 that was being withheld from his check to repay the debt. In a statement received in August 1993, the veteran indicated that he only agreed to have $65 withheld from his check so that he would not lose his entire check. He stated that he could hardly live on his income from Social Security and VA and still did not understand how he was overpaid benefits. By letter in November 1993, the RO informed the veteran that for the period of August 1989 through September 1992 he was paid $8,061 and was due $5,823, thus creating an overpayment of $2,238. In January 1996, the RO requested the town of Bristol and Mt. Abraham Union High School to provide income information concerning the veteran, and in February 1996 the RO received responses. The town of Bristol indicated that the veteran's first payment was dated July 28, 1989; that he earned $285 from July 6, 1989 through December 1989; that his last payment in 1990 was dated December 28, 1990; that he received $285 from January 1990 through July 1990; and that he received $160 from August 1, 1990 through the date of his last payment. The bookkeeper of the high school indicated that the veteran's total income for 1989 was $7,154.98. This amount included $681.12, which represented a final bi-weekly check of $454.08 and accrued vacation of $227.04 paid in July 1989, and $1,934.61, which represented "a purchased service" of $1,579.76 following his retirement from September 1989 to November 1989 with the balance of $354.85 earned prior to June 30, 1989. The bookkeeper reported that the veteran was also paid $21 from January 1990 through July 1990; that his final payment was dated in October 1990 for work completed in September 1990, according to his time sheet which was submitted late; and that he had income of $263.50 from August 1990 through September 1990. By letter in April 1996, the RO notified the veteran of an adjustment in his pension award, effective August 1989, on the basis of income information received from the town of Bristol and Mt. Abraham High School. The RO informed the veteran that the award action had the effect of lessening the amount of his overpayment. By letter in May 1996, the RO furnished the veteran an audit of his overpayment. The RO indicated that for the period of August 1989 through September 1992 the veteran was paid $8,061 and was entitled to only $5,823, thus creating an overpayment of $2,238. The RO indicated that pension benefits were again adjusted in September 1993, due to a change in his Social Security benefits, which had the effect of adding $12 to his overpayment, and that a final adjustment to the veteran's benefits was completed in August 1994, which had the effect of adding $8 to his overpayment. The RO stated that from an agreement with the veteran it withheld $65 per month beginning in March 1993 and that the withholdings continued until the debt was cleared in December 1995. In June 1996, the veteran's financial status report was received, indicating a total monthly income of $687 and total monthly expenses of $592.85. By letter in September 1997, the RO furnished the veteran with an audit of his overpayment. The RO indicated that for the period of August 1989 through April 1996 the veteran was paid $17,003 and was entitled to $17,535, as reflected by an April 1996 award action, and that the veteran was issued a "retro" check in the amount of $532 in May 1996. In October 1997, the RO furnished the veteran with a follow-up letter to further explain its audit, indicating that for the period of August 1989 through September 1992 the veteran was paid $8,061 when he was due $5,823 in pension benefits, thus creating a $2,238 overpayment which he paid back. In an April 1993 VA memo, the veteran's case was reviewed, particularly with regard to the April 1996 award adjustment. It was stated that the RO made the pension adjustment in April 1996, although a subsequent supplemental statement of the case did not reflect the adjustment, and that the adjustment had resulted in the return to the veteran of a substantial sum, thereby reducing the overpayment at issue. The RO added that no part of any overpayment was ever impacted by or inclusive of an overpayment previously created. By letter in April 1998, the RO furnished the veteran a letter and audit, explaining the overpayment at issue. The RO indicated that the veteran was awarded pension benefits effective in August 1989 based on his report of income from Social Security. An adjustment following his September 1990 EVR in which he reported earnings of $879 for August 1989 through July 1990 and anticipated earnings of $800 for August 1990 through July 1991 resulted in a $1,058 overpayment which was forgiven based on a request for waiver of recovery of the debt. The $2,238 overpayment at issue was created in October 1992 when an income verification match revealed actual earnings of $2,300 for August 1989 through July 1990, $364 for August 1990 through July 1991, and interest income of $21 annually. The overpayment was based on the difference between the earned income the veteran had reported on his EVR and the amount reported by the Internal Revenue Service. The pension award was adjusted again in April 1996 for the period of August 1989 through October 1991 based on verified earned income from the town of Bristol and Mt. Abraham, and the $2,238 overpayment was reduced by $520 leaving a balance of $1,718. In a letter received in April 1998, the veteran indicated that since he was married in June 1997 his income from Social Security and VA has been reduced. II. Analysis The veteran's claim is well grounded within the meaning of 38 U.S.C.A. § 5107(a). That is, he has presented a claim which is plausible. All relevant facts have been properly developed, and no further assistance is required to comply with the duty to assist as mandated by 38 U.S.C.A. § 5107(a). The Board must next determine whether the debt was properly created, particularly in light of the veteran's testimony and statements that he did not understand how the overpayment was created. Improved pension is a benefit payable by the VA to veterans of a period of war because of disability. Basic entitlement exists if, among other things, the veteran's income is not in excess of the applicable maximum pension rate specified in 38 C.F.R. § 3.23. 38 U.S.C.A. § 1521(a); 38 C.F.R. §§ 3.3(a)(3) (1998). The maximum annual rate is periodically increased from year to year. 38 C.F.R. § 3.23(a). The maximum annual rate of improved pension for a veteran was $6,463 effective in December 1988, $6,767 effective in December 1989, $7,133 effective in December 1990, and $7,397 effective in December 1991. Payments of any kind from any source shall be counted as income during the 12-month annualization period in which received unless specifically excluded. 38 C.F.R. § 3.271(a). Medical expenses in excess of 5 percent of the maximum annual pension rate may be excluded from an individual's income for the same 12-month period to the extent they were unreimbursed. 38 C.F.R. § 3.272(g)(1)(iii). A review of the record shows that the veteran was paid improved pension benefits from August 1989 through July 1990 on the basis of Social Security income, when in fact he also received wages from employment during that period. On the basis of the veteran's September 1990 EVR showing that he had earnings of $879 during that period, the RO reduced his pension award which created an overpayment of $985. In December 1990, the RO's Committee on Waivers granted the veteran's request for waiver of recovery of the overpayment. However, the RO subsequently learned through an income verification process and the veteran himself that he had substantially underreported his income in the September 1990 EVR. The additional amount of earnings and interest income was then considered by the RO in further reducing the veteran's pension award. This reduction action in October 1992 created a second overpayment in the amount of $2,238, which is the debt at issue in this decision. As noted in an audit issued to the veteran in April 1998, the present overpayment is based in part on the difference between the earned income reported by the veteran in September 1990 and the additional amount of income discovered through the income verification process and the veteran. A subsequent adjustment to the veteran's award in April 1996, following receipt of income information from the town of Bristol and Mt. Abraham High School, reduced the overpayment to $1,718. As demonstrated in the April 1998 audit, this reduction was effected after the RO changed the time periods allotted to the receipt of income by the veteran during the period of August 1989 through October 1991. The evidence shows that beginning August 1989 the veteran's income--beyond that considered by the RO in its previous decision in December 1990--amounted to $1,421 annually ($2,300-$879) in earnings, $21 in annual interest, and $4,138 annually in Social Security benefits. Beginning August 1990, the veteran's earnings decreased to $364, and he was also in receipt of interest income and Social Security benefits. The RO has properly reduced his pension benefits effective in August 1989, which is in accord with the provisions of 38 C.F.R. § 3.660, to account for the receipt of previously unreported income. In short, for the entire overpayment period in issue, that is August 1989 through September 1992, the veteran was paid $8,061 in pension benefits when he was entitled to $5,823, thereby creating an overpayment of $2,238, which was reduced further by award action in April 1996 to $1,718. The Board concludes the overpayment of pension benefits was not in excess of the amount calculated by the RO. Pursuant to 38 U.S.C.A. § 5302(c) and 38 C.F.R. § 1.965(b), a finding of fraud, misrepresentation or bad faith precludes a grant of a waiver of recovery of the overpayment. The Committee on Waivers in its July 1996 decision determined that waiver of recovery of an overpayment of improved pension benefits was not precluded by a finding of fraud or misrepresentation. As a result, the Board's decision on the present issue will be limited to the determination of whether or not waiver of recovery of the overpayment of improved pension benefits is warranted on the basis of equity and good conscience. The RO denied the veteran's claim for waiver on the basis that recovery of the overpayment would not be against equity and good conscience. 38 U.S.C.A. § 5302(a); 38 C.F.R. § 1.963(a). The standard of "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. Whether the actions of the debtor contributed to the creation of the debt. 2. Balancing of faults. Weighing of the fault of the debtor against that of the 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. Whether failure to make restitution would result in unfair gain to the debtor. 6. Changing position to one's detriment. Whether reliance on VA benefits resulted in relinquishment of a valuable right or the incurrence of a legal obligation. 38 C.F.R. § 1.965(a). Based on a review of the entire record and having considered the contentions of the veteran, the Board concludes that the veteran was solely at fault in the creation of the debt because he failed to report in a timely manner the entire amount of his earnings from the town of Bristol and Mt. Abraham Union High School and his interest income for the period in question. The record shows that the veteran was awarded improved pension benefits in July 1989. He was informed by the RO at that time that his award of pension was based on countable annual income and that he must immediately report any changes in sources and amounts of income. He was reminded again in award letters in November 1989, January 1990, October 1990, November 1990, October 1991, and November 1991 to promptly report income changes. Despite the numerous reminders of his duty to report, the veteran failed to inform the RO of the total amount of his earnings and interest income in EVRs received in September 1990 and September 1991. It was not until after the RO conducted an income verification match and requested additional confirmation of the veteran's earnings from the veteran in June 1992, and the town of Bristol and Mt. Abraham Union High School in January 1996, that the RO learned of the full extent of the veteran's income for the period of August 1989 through September 1992. The veteran contended in November 1992 that since his retirement in 1989 the RO had in its possession all of his tax statements. The evidence of record, however, does not show this to be the case. Consequently, the Board finds that the veteran was at fault for the creation of the overpayment of $1,718 because he failed to report his income in a timely manner after he had been advised of the reporting requirements. As to whether there was any fault on the part of the VA which could be used to offset the veteran's fault, there is no indication of any fault on the part of the VA. The VA, upon learning of the income changes, took prompt action to reduce the veteran's pension benefits. It is clear that the veteran's actions, or lack of action, caused the overpayment without any fault on the part of the VA to offset his fault. In addition, the Board must also consider whether recovery of the debt resulted in financial hardship to the veteran. The evidence of record shows that the VA recovered the debt by withholding $65 per month during the period of March 1993 to December 1995. Prior to the recovery, the veteran indicated in November 1992 that he did not know how repayment could be made given his financial condition. In a financial status report received in December 1992, the veteran reported that his monthly income exceeded monthly expenses by $33.55. Subsequent to the recovery of the debt, a financial status report was received in June 1996. The veteran reported a monthly net income of $687 from his Social Security ($414) and VA pension ($273). He related total monthly expenses of $592.85, including $120 for rent or mortgage, $77.70 for food, $18.75 for life insurance, $48.50 for automobile insurance, $120 for gas and oil, and $7.90 for automobile payment. The veteran did not report any monthly payments on installment contracts or any other debts. He listed assets of $120 cash in the bank, $16 cash on hand, and two automobiles. His net monthly income exceeded his net monthly expenses by $94.15. Based on the income and expense information of record, it is concluded that the record demonstrates that recovery of the debt has not caused the veteran undue financial hardship. While the veteran may have encountered financial difficulty in repaying the overpayment, he was not deprived of providing for life's basic necessities on repayment. Another factor to be considered is whether the recovery of the overpayment had defeated the purpose for which the benefits are intended. In this case, the veteran is entitled to receive improved pension benefits, and withholding some of these benefits to repay the debt had defeated the purpose of the benefit. However, the veteran's VA pension did not constitute his sole source of income, according to his financial status reports received in December 1992 and June 1996, because he also received Social Security which constituted the larger share of his total income. The Board also finds that failure to make restitution would have resulted in unfair gain to the veteran because he received monetary benefits to which he had no legal entitlement. The VA made erroneous payments of benefits based on incorrect income information provided by the veteran, which he in turn failed to rectify, and he, in turn, benefited. To have allowed him to profit by retaining money erroneously paid as a result of his own fault under these circumstances clearly would have constituted unjust enrichment. The Board must consider whether reliance on benefits resulted in relinquishment of a valuable right or the incurrence of a legal obligation. The veteran has not contended, nor does the evidence show, that he had relinquished a valuable right or incurred a legal obligation in reliance on his VA benefits. In sum, the Board concludes that the facts of this case, when weighed against the various elements to be considered, do not demonstrate that recovery of the overpayment of benefits was against equity and good conscience. On the one hand, the veteran is entitled to pension benefits, and recovery of the overpayment has defeated the purpose for which the benefits are intended. On the other hand, the veteran was solely at fault in the creation of the debt because he failed to report the total amount of his earnings and interest income to the RO in a timely manner, as requested. To have allowed him to retain $1,718 when he has not shown his entitlement to such benefits would have constitute unjust enrichment for him. Also, recovery of the debt has not resulted in financial hardship for the veteran. Lastly, he has not relinquished a valuable right or incurred a legal obligation in reliance on his VA benefits. In light of the factors of no fault on the part of the VA, unjust enrichment, no financial hardship, and no incurrence of a legal obligation in reliance on his benefits, the Board finds that the Government's right to full restitution should not be moderated. These factors outweigh the factor of defeating the purpose of the benefits. As the preponderance of the evidence favors the conclusion that waiver of recovery of the overpayment be denied, the doctrine of giving the benefit of the doubt to the veteran is not for application in this case. ORDER Entitlement to waiver of recovery of an overpayment of improved pension benefits in the amount of $1,718 is denied. C. W. SYMANSKI Member, Board of Veterans' Appeals