BVA9501365 DOCKET NO. 93-06 581 ) DATE ) ) On appeal from the decision of the Department of Veterans Affairs Regional Office in Atlanta, Georgia THE ISSUE Entitlement to waiver of recovery of an overpayment of improved death pension benefits. REPRESENTATION Appellant represented by: Veterans of Foreign Wars of the United States WITNESS AT HEARING ON APPEAL Appellant INTRODUCTION The veteran served on active duty from September 1950 to September 1953. This matter comes before the Board of Veterans' Appeals (Board) from a June 1992 decision by the Committee on Waivers and Compromises at the Department of Veterans Affairs (VA) regional office (RO). CONTENTIONS OF APPELLANT ON APPEAL The appellant contends that recovery of the overpayment of improved death pension benefits should be waived because she was not aware that she was required to report her interest income. She maintains that repayment of the overpayment would cause severe financial hardship, emphasizing that she has no outside income and cannot work due to physical limitations. 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 the preponderance of the evidence is against waiver of recovery of an overpayment of improved death pension benefits. FINDINGS OF FACT 1. All relevant evidence necessary for an equitable disposition of the appeal has been obtained by the RO. 2. Failure of the appellant to report interest and other income in 1989 resulted in an overpayment of improved death pension benefits in the amount of $13,726. 3. No fraud, misrepresentation or bad faith in the creation of the above overpayment has been demonstrated. 4. There was significant fault on the part of the appellant in creating the current debt. 5. Recovery of the overpayment would not cause undue financial hardship to the appellant nor defeat the purpose of the award of improved death pension benefits. 6. Failure to recover the overpayment would result in unfair gain to the appellant. CONCLUSION OF LAW Recovery of an overpayment of improved death pension benefits would not be against the principles of equity and good conscience. 38 U.S.C.A. §§ 5107, 5302 (West 1991); 38 C.F.R. §§ 1.963, 1.965 (1993). REASONS AND BASES FOR FINDINGS AND CONCLUSION The appellant's claim is "well-grounded" within the meaning of 38 U.S.C.A. § 5107(a) (West 1991). That is, she has presented a claim that is plausible. The Board is also satisfied that all relevant facts have been properly developed and no further assistance to the appellant is required to comply with the duty to assist mandated by 38 U.S.C.A. § 5107(a). In May 1987, the appellant was notified that her claim for VA death pension benefits had been approved. It was stated that her award had been based on no income of any kind from any source. She was advised that she was to notify the VA immediately of any change in income and that failure to inform the VA promptly of a change in income might result in the creation of an overpayment. In an Eligibility Verification Report (EVR) dated in December 1987, the appellant reported that she had received wages from employment which had begun in the middle of January 1987. In March 1988, the RO notified the appellant that her award of death pension benefits had been amended effective February 1987 based on her statement that she had become employed in January 1987. This resulted in an overpayment of approximately $2,000. (Recovery of this overpayment is not directly related to this appeal). An EVR was subsequently received from the appellant in November 1989. She reported that she had received no wages from employment and no interest and dividends between November 1, 1988, and October 31, 1989. In December 1990, another EVR was filed by the appellant. She specifically noted that she had received no wages from employment and no interest in dividends from November 1, 1989, to October 31, 1990. A verification of unearned income was signed by the appellant on August 28, 1991, acknowledging receipt of income in the amount of $5,777 in 1989 which had not previously been reported. The appellant's award of improved death pension benefits subsequently was retroactively terminated effective February 1989, resulting in an overpayment in the amount of $13,726. The appellant has not questioned the amount of the overpayment or that it was not properly created. In its decision in June 1992, the Committee on Waivers and Compromises found the appellant to be free of fraud, misrepresentation and bad faith in the creation of the overpayment. The Board agrees with this determination. As fraud, misrepresentation or bad faith in the creation of the overpayment has not been shown, recovery of the overpayment will be waived if such recovery would be against the principles of equity and good conscience. The standard "equity and good conscience" will be applied when the facts and circumstances in a particular case indicate 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 is 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) Undue hardship. Whether collection would deprive the debtor or family of basic necessities. (3) Defeat the purpose. Whether withholding of benefits or recovery would nullify the objective for which benefits were intended. (4) Unjust enrichment. Failure to make restitution would result in unfair gain to the debtor. (5) Changing position to one's detriment. Reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation. 38 U.S.C.A. § 5302; 38 C.F.R. §§ 1.963, 1.965. A financial status report was received from and discussed by the appellant at a personal hearing in September 1992. She reported a combined monthly net income of $1,150.17 and total monthly expenses of $1,304.61. Her monthly expenses included $405 as a mortgage payment; $250 for food; and $150 for doctors visits. She noted that her son helped pay the difference between her monthly net income and her monthly expenses. The appellant further reported that she had $150 cash in the bank, stocks and bonds valued in the amount of $53,000, and real estate equity in the amount of $51,000. The only installment contract and other debt reported was her mortgage payment. The above evidence establishes that there was significant fault on the part of the appellant in the creation of the overpayment in question. When she was notified of her award of death pension benefits in May 1987, she was specifically directed to report any change in income and cautioned that failure to do so would likely result in an overpayment. Further, an overpayment separate from that currently at issue was charged to the appellant in March 1988 for failing to report promptly her employment the previous year. Although she has contended to the contrary, the Board must conclude that she knew or should have known of her obligation to report the income she received in 1989. No fault on the part of the VA has been demonstrated. With respect to the question whether collection of the overpayment would deprive the appellant of basic necessities, the Board recognizes that her September 1992 financial status report shows that her total monthly expenses exceed her combined monthly net income by approximately $150. It is significant, however, that her only outstanding debt is a mortgage on her home and that she possesses stocks and bonds valued in the amount of $53,000. Her current medical expenses do not appear to be unusual. In addition, recovery of the overpayment would not defeat the purpose of the award of death pension benefits given the appellant's current monthly income. The Board notes that, as of September 1982, she was in receipt of Social Security benefits in the amount of $690. Failure of the appellant to make restitution would result in an unfair gain to her as she was not entitled to the benefits which constitute the overpayment. It is not shown that she relinquished a valuable right or incurred a legal obligation by relying on her VA benefits. For the above reasons and bases, the Board concludes that the preponderance of the evidence establishes that the repayment of the debt owed by the appellant would not be against the principles of equity and good conscience. Doubt as to any material issue has not been demonstrated. 38 U.S.C.A. §§ 5107, 5302; 38 C.F.R. §§ 1.963, 1.965. ORDER Entitlement to waiver of recovery of an overpayment of improved death pension benefits is denied. WAYNE M. BRAEUER 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.