BVA9505184 
DOCKET NO.  93-08 525     )       DATE
          )
          )

On appeal from the decision of the
Department of Veterans Affairs Regional Office in Seattle,
Washington

THE ISSUE

Entitlement to waiver of recovery of an overpayment created from
a belated adjustment to disability compensation based on a change
in dependency status.

REPRESENTATION

Appellant represented by: Disabled American Veterans

WITNESSES AT HEARING ON APPEAL

Appellant and his spouse

ATTORNEY FOR THE BOARD

Thomas C. Taylor, Associate Counsel

INTRODUCTION

The veteran served on active duty from July to December 1956 and
from January 1958 to July 1977.

This matter comes before the Board of Veterans' Appeals (Board)
on appeal of a March 1992 determination by the Department of
Veterans Affairs (VA) Regional Office (RO) proposing a
retroactive adjustment of his disability compensation because of
his changed dependency status, thereby creating an overpayment of
VA benefits.

REMAND

The Board finds that the veteran's claim is well grounded within
the meaning of 38 U.S.C.A. § 5107.  The file contains the
veteran's reply to a blanket mailing from RO, received in
February 1992, indicating that he had obtained a divorce in 1988.
Subsequently, the RO informed him of their intention to
retroactively adjust his benefits downward.  The veteran contends
that he had twice previously informed the RO of his 1988 divorce,
and that because he elected to waive a portion of his retirement
pay to receive VA benefits, he had assumed all necessary
adjustments had been accomplished previously by the VA.  No
September 1988 correspondence from the veteran is of record.

The evidence of record indicates clearly that the veteran does
not disagree with the RO's reduction in his benefits, based on
his changed dependency status in 1988.  Rather, he seeks a waiver
of recovery of the overpayment in question.  This issue has not
as yet been properly developed by the RO, despite the fact that
the veteran was notified of an overpayment in the calculated
amount of $1,161 by letter dated in May 1992, and he contested
same by letter in June 1992 and by way of his November 1992
hearing testimony.

Entitlement to waiver of recovery of an overpayment of the VA
benefit in question is dependent on whether a recovery of the
indebtedness from the appellant would be against equity and good
conscience.  38 U.S.C.A. § 5302; 38 C.F.R. §§ 1.963(a) and
1.965(a).  However, before it may be determined whether equity
and good conscience afford waiver, there must not be any
"indication of fraud, misrepresentation, or bad faith" on the
part of the veteran in connection with the claim.  38
U.S.C.A.§ 5302(c) (West 1991).  Of course, various factors enter
into such decision, such as the relative fault of the debtor,
whether there is any unjust enrichment to the debtor, whether
there would be undue financial hardship involved in a recovery of
the overpayment, whether the recovery of the overpayment would
defeat the purpose of benefits otherwise authorized, and whether
the debtor relinquished a valuable right or detrimentally changed
his position by reason of having relied upon an erroneous
benefit.  38 C.F.R. § 1.965(a).

While the August 1992 statement of the case properly considered
the propriety of the indebtedness in question, the RO has not as
yet considered the veteran's request for waiver of the
overpayment thusly created.  Absent an initial adjudication of
this matter by the RO, the matter on appeal is not ripe as the
record before the Board is inadequate to render a fully informed
decision.  When, during the course of review the Board determines
that further evidence or clarification of the evidence or
correction of a procedural defect is essential for a proper
appellate decision, the Board shall remand the case to the agency
of original jurisdiction, specifying the action to be undertaken.
38 C.F.R. § 19.9.  Where the record before the Board is
inadequate to render a fully informed decision, a remand to the
RO is required in order to fulfill the statutory duty to assist.
Ascherl v. Brown, 4 Vet.App. 371, 377 (1993).

In order to fulfill its statutory duty to assist the veteran in
developing the facts pertinent to his claim, the case is REMANDED
to the RO for the following action:

1.        The RO should request from the veteran,
through his representative, all
documentation concerning prior divorces and
marriages.

2.        The RO should readjudicate the claim, to
include the request for waiver of recovery
of an overpayment, in light of all the
evidence, including any obtained pursuant
to the requested development.

If the benefit sought on appeal remains denied and the veteran
continues to disagree with the decision of the RO, he and his
representative should be issued another Supplemental Statement of
the Case, and they should be provided an opportunity to respond.
Thereafter, the RO should return the case to the Board for further
appellate consideration.

In taking this action, the Board implies no conclusion, either
legal or factual, as to any ultimate outcome warranted.  No action
is required of the veteran until he is notified by the RO.

          J. F. GOUGH
          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.

Under 38 U.S.C.A. § 7252 (West 1991), only a decision of the
Board of Veterans' Appeals is appealable to the United States
Court of Veterans Appeals.  This remand is in the nature of a
preliminary order and does not constitute a decision of the Board
on the merits of your appeal.  38 C.F.R. § 20.1100(b) (1994).