BVA9500604 
DOCKET NO.  93-02 631     )       DATE
          )
          )

On appeal from the decision of the
Department of Veterans Affairs Regional Office in Nashville,
Tennessee

THE ISSUE

Entitlement to waiver of recovery of an overpayment of improved
pension benefits in the amount of $5,312.

ATTORNEY FOR THE BOARD

K. J. Alibrando, Associate Counsel

INTRODUCTION

The veteran served on active duty from August 1952 to August
1956.

This appeal arises from a September 1992 decision of the Regional
Office's Committee on Waivers and Compromises (RO), which denied
the veteran's request for waiver of recovery of an overpayment on
the basis that recovery of the debt would not be against equity
and good conscience.

CONTENTIONS OF APPELLANT ON APPEAL

The appellant asserts, in effect, that recovery of the
overpayment should be waived.  He asserts that recovery of the
debt would be against equity and good conscience.

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 evidence supports a waiver of recovery of one
third, equaling $1,770.67, of an overpayment of improved pension
benefits in the amount of $5,312 and is against waiving recovery
of the remaining indebtedness.

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 failed to report that he was receiving Social
Security benefits of $688 per month effective in February 1991
and $714 effective in December 1991.

3.  The veteran and the VA were equally at fault in the creation
of the overpayment.

4.  Financial hardship would not result from recovery of two
thirds, equaling $ 3,541.34, of an overpayment of improved
pension benefits in the amount of $5,312 and failure to repay
that amount would result in unfair gain to the veteran.

5.  Recovery of the remainder of the debt amounting to $1,770.67
would cause financial hardship.

CONCLUSION OF LAW

1.  Recovery of two thirds, equaling $3,541.34, of an overpayment
of compensation benefits in the amount of $5,312 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) (1993).

2.  Recovery of one third, equaling $1,770.67, would 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) (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).  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).

Some of the basic facts are not in dispute.  The overpayment in
this case was created as a result of the fact that the veteran
was paid improved pension benefits based on the fact that he was
not in receipt of Social Security benefits.  His October 1990
claim for pension listed no Social Security income and wages of
$100.  In that application, the veteran indicated that he
intended to apply for Social Security benefits in October 1990.
By letter dated in January 1991, the veteran was notified that he
was awarded pension benefits effective in November 1990 and that
the rate of pension was based on earned income of $100.  Page Two
of that letter indicated that the rate of VA pension was directly
related to his income and that any changes in income should be
reported immediately.  The RO also requested that the veteran
furnish information regarding the award of Social Security
benefits and indicated that additional benefits might not be paid
to the veteran if that information was not provided.  In
addition, the RO enclosed VA Form 21-8768 which also advised the
veteran that he was required to promptly report any change in his
income and number of dependents.  In November 1991, the veteran
submitted an Improved Pension Eligibility Verification Report
(EVR) which indicated that he was receiving Social Security
benefits of $688 per month and no additional income from any
other source.  The veteran also indicated that he had a bank
account with a $2600 balance.

As noted above, by letter dated in January 1992, the RO requested
that the veteran provide information regarding receipt of Social
Security benefits and any interest income.  The veteran failed to
respond to that letter.  A statement submitted by Sara E. Dean,
NationsBank, Springfield, Indiana in January 1992 shows that the
veteran had a regular, non-interest bearing, checking account
with that institution.  In January 1992, the RO made inquiry to
the Social Security Administration and determined that the
veteran was in receipt of Social Security benefits effective in
February 1991 in the amount of $688.  That inquiry showed that as
of December 1991, the veteran's benefits had increased to $714
per month.  By letter dated in February 1992, the RO notified the
veteran that his improved pension benefits had been terminated
effective in April 1991 due to excessive income.

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.  38 C.F.R. § 3.3(a)(3)
(1991).  Effective December 1, 1990, the maximum annual rate of
improved pension for a veteran was $ 7,133, and effective in
December 1, 1991, the maximum annual rate was $ 7,397.  38 C.F.R.
§ 3.23(a).  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).

A review of the record shows that the veteran was paid improved
pension benefits  on the basis of $100 income when it fact he was
receiving Social Security benefits. Although the veteran failed
to provide information regarding those benefits,  the RO, after
awarding pension benefits, ascertained that he was in receipt of
Social Security benefits as of February 1991 of $688 per month
from February 1991 and $714 effective in December 1991.  The
record clearly shows that the veteran's actual income was
excessive for the receipt of improved pensions benefits and that
the overpayment was properly created.

The RO has 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; 38 C.F.R. § 1.963(a).  The
factors to be considered in determining whether recovery of the
overpayment would violate the principles of equity and good
conscience included the following: Whether the actions of the
debtor contributed to the creation of the debt; a weighing of the
fault of the debtor against that of the VA; whether collection
would deprive the debtor of basic necessities; whether
withholding of benefits or recovery would nullify the objective
for which benefits were intended; whether failure to make
restitution would result in unfair gain to the debtor; and
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).

The record shows that the veteran was notified by the RO that the
amount of pension he was entitled to receive was based directly
on the amount of his income and that he was required to report
any changes in his income.  The veteran failed to report that he
was in receipt of Social Security benefits until he submitted the
November 1991 EVR.  However, the Board notes that in his January
1993 substantive appeal, the veteran asserted that he is unable
to read or write due to a stroke.  He also indicated that he has
a seventh grade education.  Additionally, when the veteran
applied for pension benefits, he indicated that he intended to
apply for Social Security benefits.  Prior to awarding pension
benefits, the RO did not attempt to determine whether the veteran
was in receipt of Social Security benefits.  The award letter,
dated in January 1991, was somewhat confusing because, while it
indicated that pension benefits had been awarded based on
reported income, it also requested information regarding Social
Security benefits noting that increased benefits would not be
payable until the evidence was received.  Taking into
consideration the veteran's limited education and stroke-related
disabilities, the Board concludes that the veteran was only
partially at fault in the creation of the overpayment because he
failed to timely inform the RO of the receipt of Social Security
benefits.  The Board finds that the VA was equally at fault for
its failure to determine whether the veteran was receiving Social
Security benefits prior to awarding VA pension benefits since the
veteran had notified the RO of his intention to apply for Social
Security.

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.  Another factor
to be considered is whether the recovery of the overpayment would
defeat the purpose for which the benefits are intended.  In this
case the purpose would not be defeated as the veteran is not
entitled to pension benefits due to excessive income.

In addition, the Board must also consider whether recovery of the
debt would result in financial hardship.  The most recent
information concerning his assets, income and expenses was
submitted in a May 1992 financial status report.  He reported
cash in the bank of $2000 and a monthly net income of $714, all
from Social Security benefits.  The veteran related total monthly
expenses of $515, including $80 for rent or mortgage payment,
$160 per month for food, $120 per month for utilities and heat,
$25 for telephone, $40 for insurance, $50 for clothing, $10 for
non reimbursable medical expenses and $30 for gas.  He indicated
that he had no  monthly payments on installment contracts and
other debts.  His net monthly income exceeds his net expenses by
$199.  In December 1992, the veteran asserted that the cost of
propane heat for his home had increased, although he was unable
to state what that additional cost would be.

Based on the income and expense information of record, the Board
concludes that the veteran has demonstrated that recovery of the
entire debt will result in financial hardship.  The veteran's
sole source of his $714 per month income is from Social Security
benefits.  The current financial status report shows a surplus
income each month of $199 so that there are some funds available
to be applied to the overpayment.  Nevertheless, the Board notes
that the amount of the overpayment is large relative to the
veteran's income.  Moreover, although the evidence does not show
that the veteran would be deprived of the basic necessities, he
does maintain a very modest lifestyle and depends on an older
model vehicle as his sole source of transportation.  Accordingly,
considering all the equities in the case, the Board concludes
that a partial waiver is warranted.  Hence a waiver of one-third
of the overpayment, equaling $1770.67, is granted.  Recovery of
the remaining two thirds of the debt, $3,541.34, would not be
against equity and good conscience.

ORDER

Waiver of recovery of one third of an overpayment of compensation
benefits, equaling $1,770.67, is granted.

Waiver of recovery of the remaining overpayment in the amount of
$3,541.34 is denied.

C.W. SYMANSKI
          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.