BVA9502412 DOCKET NO. 93-06 985 ) DATE ) ) On appeal from the decision of the Department of Veterans Affairs Regional Office in St. Petersburg, Florida THE ISSUE Entitlement to waiver of recovery of an overpayment of improved disability pension benefits. REPRESENTATION Appellant represented by: James R. Kennedy, Jr., Attorney INTRODUCTION The veteran had active service from August 1953 to June 1955. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a decision of the Committee on Waivers and Compromises at the Department of Veterans Affairs (VA), St. Petersburg, Florida, Regional Office (RO). The Board notes that the veteran executed a power of attorney in favor of The American Legion in June 1955. In November 1991, James R. Kennedy, Jr., an attorney, indicated that he was now representing the veteran. Although Mr. Kennedy has not formally been appointed as the veteran's representative, he will be recognized as such for the purposes of this appeal. CONTENTIONS OF APPELLANT ON APPEAL The veteran contends that waiver of recovery of an overpayment of improved disability pension benefits should be granted due to the financial hardship which would result from such recovery. He avers that the interest income of his ex-spouse which led to the overpayment at issue was generated from an account controlled by her family and was never made available to him. He contends that they lived only on the improved disability pension benefits he received. He further relates that he now has significant medical expenses and no income other than his VA pension benefits. DECISION OF THE BOARD In accordance with the provisions of 38 U.S.C.A. § 7104 (West 1991), following review and consideration of all evidence and material of record in the veteran's claims file, and for the following reasons and bases, it is the decision of the Board that the evidence of record supports waiver of recovery of an overpayment of VA improved disability pension benefits. FINDINGS OF FACT 1. All relevant evidence necessary for an equitable disposition of the veteran's appeal has been obtained by the RO. 2. There was fault on the part of the veteran in creation of an overpayment of VA improved disability pension benefits in failing to report his then spouse's interest income in 1989; willful intent for the purpose of obtaining improved disability pension benefits is not shown. 3. Recovery of the indebtedness would seriously impair the veteran's ability to discharge his financial obligations and would defeat the purpose for which VA disability compensation benefits are awarded. CONCLUSION OF LAW Recovery of an overpayment of VA improved disability pension benefits would be against 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 veteran's claim is well grounded within the meaning of 38 U.S.C.A. § 5107(a); effective on and after September 1, 1989. That is he has presented a claim which is plausible. All relevant facts have been properly developed. A review of the record shows that the veteran's award of VA disability pension benefits was based on zero income. He married in July 1987. In Eligibility Verification Reports dated in July 1989, July 1990, and July 1991, the veteran reported that he and his spouse had no income of any kind, of any source, including interest income. An October 1991 letter from the VA to the veteran indicates that he had provided notification that during 1989 his spouse had had interest income in the amount of $2,509. Based on the veteran's spouse's interest income of $2,509, his award of VA disability pension benefits was amended effective February 1, 1989. This action resulted in an overpayment in the amount of $8,385.66. The veteran has not questioned the amount of the overpayment or claimed that the overpayment was improperly created. The RO has determined that the veteran's failure to report his then spouse's interest income in 1989 was bad faith on his part, thus precluding waiver of the overpayment at issue. Bad faith requires a willful intention to seek an unfair advantage or to neglect or refuse to fulfill some duty or contractural obligation. In order to determine whether misrepresentation or bad faith exists, the VA must prove a willful intent on the part of the debtor. The burden of proof lies solely with the VA. The Board, however, finds that although the veteran bears sole responsibility for the creation of the overpayment, it is not demonstrated that his failure to report his wife's interest income represents a willful intent on his part to obtain a higher rate of VA improved disability pension benefits. Consequently, recovery of the overpayment in question may be waived if such recovery would be against the principles of equity and good conscience. 38 C.F.R. § 1.965. 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. The Financial Status Report submitted by the veteran in August 1992 reveals that his combined monthly net income, his award of VA disability pension benefits, was $598 and that his total monthly expenses were $610. He noted that he had furniture and household goods valued in the amount of $300 and a 1975 automobile, also valued in the amount of $300. Medical records on file confirm that the veteran has several significant medical conditions, including hypertension, diabetes mellitus, and arthritis of multiple joints. Taking into account the veteran's limited income, medical condition, and minimal assets, recovery of the indebtedness likely will result in financial hardship. Recovery of the overpayment would further defeat the purpose for which the benefits were intended, i.e., to provide the veteran with a minimum level of financial security. As the veteran has meager personal assets, it does not appear that there was any unjust enrichment of the veteran as a result of the overpayment in this case. Accordingly, the Board is of the opinion that recovery of the overpayment of VA improved disability pension benefits in the amount of $8,385.66 would be against equity and good conscience. Accordingly, waiver of recovery of the indebtedness is in order. 38 U.S.C.A. § 5302; 38 C.F.R. §§ 1.963, 1.965. The benefit of the doubt has been resolved in the veteran's favor. 38 U.S.C.A. § 5107. ORDER Entitlement to waiver of recovery of an overpayment of improved disability pension benefits is granted. 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.