BVA9505319 
DOCKET NO.  93-05 652     )       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 the overpayment of
Department of Veterans Affairs (VA) compensation benefits in the
amount of $6,624.

REPRESENTATION

Appellant represented by: Disabled American Veterans

ATTORNEY FOR THE BOARD

J. Connolly, Associate Counsel

INTRODUCTION

The veteran had active service from August 1940 to September
1945.

This matter came before the Board of Veterans' Appeals (Board) on
appeal from a August 1992, decision of the Committee on Waivers
and Compromises (Committee) of the New York, New York, Regional
Office (RO) of the VA.  The notice of disagreement was received
in September 1992.  The statement of the case was sent to the
veteran in November 1992.  The substantive appeal was received in
January 1993.

In a statement received in September 1993, the veteran indicated
that he is seeking an increased rating for his service-connected
disabilities as well as entitlement to service connection for
arthritis of the back and legs.  The Board refers these issues to
the RO for appropriate development.

REMAND

In correspondence received in March 1992, the veteran indicated
that he was seeking waiver of the debt and also indicated that he
was disputing the debt.  The veteran clearly stated that he did
not believe that the creation of the debt was in anyway his
fault, thus, indicative that he is alleging that the overpayment
was due to sole VA error.  The veteran related that he spoke to a
VA representative at the Nashville RO who stated that the
creation of the debt was "their mistake," and the veteran related
that he should not be responsible for their mistake, if there was
a mistake.

In light of the Board's finding that the veteran is disputing the
creation of the overpayment.  The United States Court of Veterans
Appeals has clearly stated when a debtor requests a waiver and
also asserts that the underlying debt is invalid, VA must resolve
both matters.  Schaper v. Derwinski, 1 Vet.App. 430 (1991).
Based on the veteran's statements, the Board has determined that
the veteran has raised the issue of whether the overpayment in
this case was properly created.  Furthermore, the Board has also
determined that the creation issue is inextricably intertwined
with the issue of waiver of the recovery of the overpayment,
currently certified for appellate review.  Thus, the issue of the
proper creation of the overpayment of compensation benefits
should be adjudicated by the RO prior to return of the case to
the Board.  Harris v. Derwinski, 1 Vet.App. 180 (1991).

Additionally, the Board observes that the most recent financial
status report is dated in 1992, therefore, the veteran should be
requested to complete a current financial status report.

Under the circumstances of this case, additional development is
necessary in order to fulfill the VA's duty to assist.
Accordingly, this matter is REMANDED for the following action:

1.  The RO should develop and adjudicate
the issue of whether the creation of the
overpayment of VA compensation benefits was
proper.  The period covered for the
overpayment, i.e., beginning and ending
dates, the amount, and the reason for the
creation of the overpayment must be set
forth separately in the determination.  The
RO should also address the issue of sole VA
error in the creation of the overpayment.
If that claim is not resolved to his
satisfaction, the veteran and his
representative should so be advised.  If
the veteran files a timely notice of
disagreement, he and his representative
should be provided with a statement of the
case as required by 38 U.S.C.A. § 7105(d)
(West 1991) as to this issue.

2.  The RO should contact the veteran and
request a completed and current Financial
Status Report.

3.  If the issue of whether the creation of
the overpayment of VA compensation benefits
was proper is not resolved in the veteran's
favor, the Committee should again formally
consider the veteran's claim of entitlement
to a waiver of the recovery of an
overpayment of VA compensation benefits.
If the action taken is adverse to the
veteran, he and his representative should
be furnished a supplemental statement of
the case that contains a summary of the
relevant evidence and a citation and
discussion of the applicable laws and
regulations.  He should also be afforded
the opportunity to respond to that
supplemental statement of the case before
the claim is returned to the Board.

No action is required of the veteran until further notice.  The
Board expresses no opinion, either factual or legal, as to the
ultimate determination warranted in this case pending completion
of the requested development.

          EUGENE A. O'NEILL
          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).