BVA9505942 DOCKET NO. 93-13 363 ) DATE ) ) On appeal from the decision of the Department of Veterans Affairs Regional Office in Atlanta, Georgia THE ISSUE Entitlement to a waiver of recovery of an overpayment of disability pension benefits in the calculated amount of $5,319. REPRESENTATION Appellant represented by: The American Legion WITNESS AT HEARING ON APPEAL Appellant ATTORNEY FOR THE BOARD William Harryman, Counsel INTRODUCTION The veteran had active service from January 1944 to December 1945. This case came before the Board of Veterans’ Appeals (Board) on appeal from a decision of the Committee on Waivers and Compromises (Committee) of the Department of Veterans Affairs (VA) Regional Office (RO) in Atlanta, Georgia, in May 1992 which denied the claimed benefits. CONTENTIONS OF APPELLANT ON APPEAL The veteran asserts that the interest income which constituted the bulk of the excess income resulting in an overpayment of VA disability pension benefits actually belonged to his daughter. He contends that, although reported to the Internal Revenue Service (IRS) on his Social Security number, the interest accrued to a joint bank account which belonged to his daughter. The veteran also contends that it would cause him financial hardship to repay the indebtedness. 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 recovery of the overpayment of pension benefits would not violate the standard of equity and good conscience. FINDINGS OF FACT 1. The veteran has been overpaid pension benefits in the amount of $5,319. 2. The veteran was notified by VA, at the time he filed his initial application for pension and subsequently, that pension was an income based program, that he should notify the VA immediately of any changes in income, and that failure to properly report income could cause an overpayment which would be subject to recovery. 3. The veteran is completely at fault in the creation of the overpayment of pension benefits, which resulted from the retroactive termination of his award, after it was learned that he had previously unreported interest income. 4. The failure of the Government to insist upon its right to repayment of the assessed overpayment would result in unjust enrichment of the veteran, inasmuch as he accepted benefits to which he was not entitled. 5. Repayment of the debt would not deprive the veteran of the basic necessities of life, or otherwise defeat the purpose of the pension benefit program. 6. There are no other elements of the standard of equity and good conscience which mandate waiving recovery of the overpayment. CONCLUSION OF LAW Recovery of the overpayment of pension benefits would not violate the standard of equity and good conscience. 38 U.S.C.A. §§ 5107, 5302 (West 1991); 38 C.F.R. §§ 1.963(a), 1.965(a) (1994). REASONS AND BASES FOR FINDINGS AND CONCLUSION At the outset, the Board finds that the veteran has met his burden of submitting evidence sufficient to justify a belief by a fair and impartial individual that his claim is well grounded; that is, the claim is not implausible. See Murphy v. Derwinski, 1 Vet.App. 78, 81 (1990). Additionally, there is no indication that there are additional, pertinent records which have not been obtained. Accordingly, there is no further duty to assist the veteran in developing the claim, as mandated by 38 U.S.C.A. § 5107(a). Factual background The record reflects that the veteran has been determined to be eligible for VA pension benefits since 1974 and had been in receipt of same under the Section 306 pension program, in the amount of $197 monthly. In 1991, the RO received information that the veteran had unearned and unreported income during 1989. In October 1991, the veteran submitted a copy of his 1989 IRS Form 1040, showing $10,291 in interest income from four accounts. The RO determined that this income had not previously been reported by the veteran and that, therefore, he had countable income of $16,680 for 1989, an amount well in excess of the maximum allowable for continued pension benefits, $7,697. Accordingly, the RO terminated the veteran’s pension benefits, effective January 1, 1990. The veteran testified at a personal hearing before the Committee in December 1992. He again stated that the money in the accounts actually belonged to his daughter, but he admitted that the accounts bore his name and his Social Security number. Therefore, interest was reported to the IRS under his name. He stressed, however, that the interest which accrued was left in the accounts for the sole benefit of his daughter and that none of the money was his. The veteran also testified that his monthly expenses exceeded his income, and that he should, therefore, not be required to pay back the overpayment at issue. Analysis The law precludes waiver of recovery of an overpayment or waiver of collection of any indebtedness where any one of the following elements is found to exist: (1) Fraud, (2) misrepresentation, (3) bad faith. 38 U.S.C.A. § 5302 (West 1991). The Board’s review of the record reflects that the Committee has resolved this question in favor of the veteran, finding, in essence, that his actions did not represent the intentional behavior to obtain government benefits to which he was not entitled, which is necessary for a finding of fraud, misrepresentation or bad faith. The Board agrees that the evidence is in equipoise on the question of willful intent and the matter is therefore resolved to that extent in the veteran’s favor. Because it has been determined by the Committee that there was no willful intention on the part of the veteran to commit fraud, misrepresent a material fact, or exercise bad faith in the creation of an overpayment that has been assessed against him, the Board’s review is limited to the issue of whether the evidence establishes that recovery of the indebtedness would be against equity and good conscience, in which case recovery of that overpayment may be waived. 38 U.S.C.A. § 5302; 38 C.F.R. §§ 1.963, 1.965. The following is pertinent to this matter: The standard "equity and good conscience" will be applied when the facts and circumstances in a particular case indicate a 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 will be given to the following elements, which are not intended to be all-inclusive: 1. Fault of debtor. Where actions of the debtor contribute to creation of the debt. 2. Balancing of faults. Weighing fault of the debtor against VA fault. 3. Undue hardship. Whether collection would deprive the debtor or family of basic necessities. 4. Defeat the purpose. Whether withholding of benefits or recovery would nullify the objective for which the VA benefits were intended. 5. Unjust enrichment. Failure to make restitution would result in unfair gain to the debtor. 6. Changing position to one’s detriment. Reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation. 38 C.F.R. § 1.965(a). The Board has carefully reviewed the entire record, in light of the veteran’s contentions and the applicable law and regulations. A VA pension recipient must notify the VA of all circumstances which will affect his or her entitlement to receive, or the rate of, the benefit being paid. Such notice must be furnished when the recipient acquires knowledge that his or her income changed. 38 C.F.R. § 3.660(a)(1). After consideration of the record, the Board concurs with the RO that the veteran was at fault in the creation of the overpayment. He had been properly advised that the pension program was income based and that he was under an obligation to accurately and completely report all income and the sources thereof. His claim that he believed that he didn’t need to report the interest income since it belonged to his daughter is totally without merit. (See discussion below.) The claims folder is replete with written notification to him of the necessity to report all income, including interest income. Nonetheless, the veteran reported on multiple EVRs that his sole source of income was from Social Security. His rate of pension was based on this amount, and he was fully apprised of this fact by VA. Clearly the veteran’s income for the period in question was at a level which did not permit payment of pension and had he provided correct financial information to VA, the award, or continued award, of pension would not have been made. The RO took prompt, appropriate action to terminate his award and thus all fault in the creation of the debt rests with the veteran. At this juncture, the Board also points out that, in view of the assertion of the veteran that he was only a joint owner of the various interest producing accounts, he was provided ample opportunity to submit supporting documentation, but failed to do so. Had such documents been submitted, the RO would, of course, have made any necessary adjustment to his award. The Board has also considered another element of the standard of equity and good conscience, that is, whether recovery of the overpayment from the veteran would result in undue financial hardship. He claims that it will. The Board recognizes that the Financial Status Report (FSR) submitted in October 1992 shows that the veteran's monthly expenses exceed his net income from Social Security (in the amount of $645) by $20. However we note that one of his reported expenses, utilities and heat, appears to be excessive for a single individual. More importantly, although the veteran has contended that the bank accounts which accrued the $10,291 in interest income were totally for the benefit of his daughter, the fact remains that the accounts were in his name and interest accrued on those accounts was reported to the IRS under his Social Security number. Moreover, the veteran’s hearing testimony in December 1992 indicates to the Board that the accounts were still in existence at that time, still in his name and still accruing interest. Legally, the accounts are the veteran’s and the interest accruing to the various accounts, as well as principal amounts in those accounts, is properly attributed to him. Also, the veteran reported on his 1989 Form 1040 that he had income-producing property, although his rental expenses for 1989 exceeded his rental income. This evidences assets which could be used to repay the debt. Therefore, despite the negative monthly balance reported by him on the FSR submitted in October 1992, the Board finds that the veteran’s income and assets far exceed his expenses. Repayment of the indebtedness will not deprive him of the basic necessities of life. Another factor to be considered is whether recovery of the overpayment would defeat the original purpose of the benefit, by nullifying the objective for which it was intended. Pension, as noted above, is an income based program, intended to provide a basic level of support for otherwise eligible veterans with wartime service. Recovery of those amounts to which the veteran was not entitled in view of his countable income would not defeat the purpose of the benefit. On the other hand, the failure of the Government to insist upon its right to repayment of this debt would result in his unjust enrichment at the expense of the Government. The veteran in this case did not, according to the available record, change his position to his detriment as a result of the award of pension. Considering the degree of fault in this case, the Board is not persuaded that recovery of the overpayment at issue would be unfair, unconscionable, or unjust. This is so particularly since the veteran continued to accept VA pension at a time when he had substantially higher income than he had previously reported to VA. Furthermore, the evidence of record discloses no other element of the standard of equity and good conscience which would persuade the Board that the Government should waive its right to the repayment of the assessed overpayment. The evidence in this case is not so evenly balanced that there is doubt as to any material issue. 38 U.S.C.A. § 5107(b). (CONTINUED ON NEXT PAGE) ORDER Waiver of recovery of the overpayment of pension benefits is denied. N. R. ROBIN 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.