Citation Nr: 0003572	
Decision Date: 02/11/00    Archive Date: 02/15/00

DOCKET NO.  96-08 219	)	DATE
	)
	)


On appeal from the
Department of Veterans Affairs Regional Office in Muskogee, 
Oklahoma



THE ISSUE

Entitlement to waiver of recovery of an overpayment of 
disability compensation benefits in the amount of $848.


ATTORNEY FOR THE BOARD

T. S. Tierney, Counsel


INTRODUCTION

The veteran served on active duty from April 1985 to November 
1991.  He reentered active service in January 1993 and the 
evidence indicates that he is still on active duty.

This matter came before the Board of Veterans' Appeals 
(Board) on appeal from an April 1995 decision by the 
Committee on Waivers and Compromises (Committee) located in 
the Department of Veterans Affairs (VA), Regional Office in 
New York, New York.  Jurisdiction over the claims folder was 
subsequently transferred to the Muskogee, Oklahoma, Regional 
Office (RO).

The veteran initially requested a Travel Board hearing before 
a member of the Board.  In September 1997, however, the 
veteran canceled the scheduled hearing and did not request a 
rescheduling of the hearing.

In June 1998, the Board remanded the case for additional 
development.  The RO has completed the development requested 
and the case is ready for appellate review.


FINDINGS OF FACT

1.  In December 1991, the veteran filed a claim for service 
connection; in a rating decision of May 1993, the claim was 
granted and monetary benefits were awarded.

2.  In January 1993, the veteran re-enlisted in the military; 
he received disability compensation benefits through May 1994 
creating an overpayment.

3.  The veteran has savings bonds valued at $550.00 and his 
monthly take home pay is well in excess of his monthly 
expenses for the necessities of life.


CONCLUSION OF LAW

Recovery of the overpayment of VA disability compensation 
benefits would not be against equity and good conscience.  38 
U.S.C.A. §§ 5107, 5302 (West 1991); 38 C.F.R. §§ 1.963, 1.965 
(1999).


REASONS AND BASES FOR FINDINGS AND CONCLUSION

The Board finds that the veteran's claim is well grounded 
within the meaning of 38 U.S.C.A. § 5107(a).  That is, the 
veteran has presented a claim which is plausible.  The Board 
is satisfied that all available evidence necessary for an 
equitable disposition of the claim has been obtained and that 
no further assistance to the veteran is required to comply 
with the duty to assist mandated by 38 U.S.C.A. 
§ 5107(a).

The veteran seeks a waiver of recovery of an overpayment of 
disability compensation benefits.  In December 1991, he filed 
a claim for service connection for permanent injury to his 
testicles.  In a rating decision of May 1993, service 
connection was granted for varicocele of the left testis.  A 
10 percent evaluation was assigned from November 22, 1991.  
The veteran was notified of this decision in May 1993 and 
that the monthly rate was $83 from December 1, 1991, and $85 
from December 1, 1992.

The evidence of record indicates that the RO received 
evidence in March 1994 that the veteran had re-enlisted in 
the military and was on active duty.  The veteran was 
informed of an overpayment of disability compensation 
benefits in June 1994.  

In October 1994, the veteran requested a waiver of recovery 
of the overpayment.  He noted that in June or July of 1993 he 
had received his first compensation check from VA and had 
contacted someone at VA and provided his new address and 
information that he was in the military.  He was told that 
that information would be put into the computer.  He 
continued to receive checks from VA and then received a 
letter in March or April of 1994 informing him that the 
checks would be stopped.  The veteran noted that he called a 
toll-free number and was informed at that time that he could 
not receive any disability compensation payments while back 
on active duty.  The person he spoke to informed him that the 
problem would be brought before a board to determine if he 
would continue to receive payments.  According to the 
veteran, all payments stopped until he received another 
payment in July of 1994 and he thought that VA was going to 
continue to pay him.

In April 1995, the Committee found that the veteran did not 
know prior to July 1993 of the regulation, 38 C.F.R. 
§ 3.654(b), which provides that compensation benefits are 
discontinued effective the date preceding re-entrance onto 
active duty.  Based on this finding, the Committee decided 
that the overpayment for the period from January 1, 1993, 
through June 30, 1993, would be waived in part based on the 
veteran's lack of knowledge of the VA regulation prohibiting 
payment of compensation benefits while on active duty.  
However, the Committee further decided that the overpayment 
for the period from July 1, 1993, through May 4, 1994, was 
created due to fault on the part of the veteran and the 
overpayment created during that period of time was not 
waived.  Waiver was granted in part for the amount of 
$609.00, which the Committee determined covered the period 
from January 1, 1993 through June 30, 1993, and the balance 
in the amount of $848.00 was due as the balance of the 
overpayment.

The question to be resolved is whether collection of the 
indebtedness should be waived.  Recovery of an overpayment of 
any VA benefit may be waived if recovery of the indebtedness 
from the payee would be against equity and good conscience.  
38 U.S.C.A. § 5302; 38 C.F.R. § 1.963(a).  The factors which 
must be considered are the extent to which the actions of the 
veteran contributed to the creation of the debt, a weighing 
of the fault on the part of the veteran against any VA fault, 
whether collection would deprive the veteran of basic 
necessities, whether recovery would nullify the objective for 
which the benefits were intended, whether failure to make 
restitution would result in unfair gain to the veteran, and 
whether the reliance on VA benefits resulted in 
relinquishment of a valuable right or incurrence of a legal 
obligation.  38 C.F.R. § 1.965.

Where fraud, misrepresentation, or bad faith on the part of 
the veteran is shown, denial of waiver of recovery of an 
overpayment of VA benefits may be made without regard to 
factors considered in applying the equity and good conscience 
standard.  38 U.S.C.A. § 5302(c); 38 C.F.R. §§ 1.963(a), 
1.965(b).

Initially, the Board finds that the evidence does not 
demonstrate fraud, misrepresentation or a showing of bad 
faith by the veteran.  Therefore, the Board will consider 
whether collection of the overpayment would be against equity 
and good conscience. 

Although the veteran alleges that he informed VA of his 
return to active duty, the record contains nothing which 
tends to substantiate this contention.  The Board further 
notes that persons dealing with the Government are charged 
with knowledge of federal statutes and lawfully promulgated 
agency regulations "regardless of actual knowledge of what is 
in the [r]egulations or of the hardship resulting from 
innocent ignorance." See Morris v Derwinski, 1 Vet. App. 260, 
265 (1991) (citing Fed. Crop Ins. Corp. v. Merrill, 33 U.S. 
380, 384-385, 68 S. Ct. 1, 3, 92 L.Ed. 10 (1947)).  

As noted above, disability compensation is to be discontinued 
the day preceding a veteran's return to active duty.  
38 C.F.R. § 3.654.  Therefore, the veteran is charged with 
knowledge that he was not entitled to VA compensation once he 
returned to active duty.  Even assuming that the veteran 
timely notified VA of his return to active duty and that VA 
should have terminated his compensation payments at an 
earlier date, the fact remains that the overpayment would not 
have occurred had the veteran not negotiated the compensation 
checks to which he was not entitled.  Therefore, the Board 
concludes that the veteran was at fault in the creation of 
the overpayment.  Any fault on the part of VA is, in the 
Board's opinion, outweighed by the fault of the veteran. 

Since the veteran received compensation to which he was not 
entitled, waiver of the indebtedness would result in unjust 
enrichment.  VA compensation is not intended for persons 
serving on active duty so collection of the indebtedness 
would not defeat the purpose of the benefit.  The veteran has 
not alleged and there is no indication in the record that the 
reliance on VA benefits resulted in relinquishment of a 
valuable right or incurrence of a legal obligation.

With respect to whether collection of the indebtedness would 
deprive the veteran of basic necessities, the Board notes 
that the veteran submitted a financial status report in 
November 1994.  He reported that his monthly gross salary was 
$2,121.90 with monthly deductions from income of $584.51.  He 
indicated that the deductions from his monthly income 
included an amount for car payments.  He stated that his 
total monthly expenses were $1,295.00, including $20.00 for 
cable television and $90.00 for payments on installment 
contracts and other debts.  The deduction from income for car 
payments and some of the veteran's reported monthly expenses 
clearly are not for the basic necessities of life.  However, 
even assuming that all of the deductions and expenses 
reported by the veteran should be considered, he still 
reported a surplus of income over expenses of more than 
$250.00 per month.

The veteran provided a new financial status report in 
December 1995.  On this occasion he reported that his monthly 
gross salary was $1,765.00.  He reported monthly deductions 
from income of $316.89, which included amounts for dental 
insurance, debt payments and a donation.  There is no 
indication that debts being paid through the deductions were 
incurred for basic necessities.  Clearly, any amount deducted 
for a donation is not for basic necessities.  He reported 
total monthly expenses of $1,444.71, including a monthly 
payment of $806.71 on installment contracts and other debts.  
With respect to these debts, he identified expenditures for 
transportation, furniture and tools.  There is no indication 
that the debts were incurred for basic necessities.  The 
veteran also stated that he had savings bonds with a current 
value of $550.00, which were intended for his children's 
education.

In its remand, the Board noted that the aforementioned 
financial status reports reflected a significant drop in the 
veteran's gross monthly income, notwithstanding the fact that 
he continued on active duty.  Pursuant to the Board's remand, 
the RO requested the veteran to submit a new financial status 
report with substantiation of his reported income and major 
expenses.  The veteran failed to do so.

The government is entitled to the same consideration as the 
veteran's other creditors.  The veteran's net monthly income, 
to include the amounts deducted by the veteran for a donation 
and debts, exceeds his monthly expenses for basic necessities 
by more than $800.00.

Therefore, the Board must conclude that collection of the 
indebtedness would not deprive the veteran or his dependents 
of the basic necessities of life.

For these reasons, the Board is of the opinion that 
collection of the indebtedness through reasonable monthly 
payments would not be against equity and good conscience.    


ORDER

Waiver of recovery of overpayment of disability compensation 
benefits in the amount of $848.00 is denied.



		
	SHANE A. DURKIN
	Member, Board of Veterans' Appeals