BVA9504330 
DOCKET NO.  92-14 972     )       DATE
          )
          )

On appeal from the decision of the
Department of Veterans Affairs Regional Office in Providence,
Rhode Island

THE ISSUE

Entitlement to waiver of the recovery of an overpayment of
Section 306 disability pension benefits, in the calculated amount
of $4,240.

REPRESENTATION

Appellant represented by: Disabled American Veterans

ATTORNEY FOR THE BOARD

Suzie St. Vil, Associate Counsel

INTRODUCTION

The veteran had active military service from March 1944 to
December 1945.  He has been represented throughout his appeal by
the Disabled American Veterans.

This matter came before the Board of Veterans' Appeals
(hereinafter Board) on appeal from a February 1992 decision by
the Committee on Waivers and Compromises (Committee) at the
Providence, Rhode Island Regional Office (RO), which denied the
veteran's request for waiver of the recovery of an overpayment of
Section 306 disability pension benefits, in the calculated amount
of $4,240.  The appeal was received at the Board in August 1992.

In October 1994, the Board remanded the case to the RO for
further development.  A financial status report was received in
November 1994.  A supplemental statement of the case was issued
in December 1994.  The case has now been returned to the Board
for further appellate consideration.

CONTENTIONS OF APPELLANT ON APPEAL

The veteran essentially contends that recovery of the overpayment
would be against equity and good conscience.  It is maintained
that the veteran was not at fault in the creation of the
overpayment at issue.  The veteran explains that while he
received proceeds from the sale of his home, he fully believed,
based upon information from the Internal Revenue Service, that
the proceeds of the sale or interest earned thereon was
unreportable income as it was not taxed by that agency or any
state agencies.  The service representative points out that the
veteran and his wife live on a fixed income from Social Security
benefits.  It is argued that the veteran's income is clearly
insufficient to meet the veteran's needs.  The veteran further
maintains that he and his wife have both become quite ill and
will continue to have significant medical expenses in the future.
As a result, it is argued that repayment of the debt would cause
the veteran to suffer undue financial hardship and would defeat
the purpose of the benefit.  It is requested that the veteran be
accorded the benefit of the doubt.

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 preponderance of the evidence is against the claim
for waiver of the recovery of the overpayment of Section 306
disability pension benefits, in the calculated amount of $4,240.

FINDINGS OF FACT

1.  All relevant evidence necessary for an equitable disposition
of the veteran's claim has been obtained by the RO.

2.  The veteran's failure to promptly notify the Department of
Veterans Affairs (VA) that he had received additional interest
income during 1989 caused the overpayment of Section 306
disability pension benefits, in the calculated amount of $4,240;
there was no fault by the VA.

3.  Recovery of the debt would not cause undue financial
hardship, and failure to recover the debt would result in unjust
enrichment.

4.  The other equitable elements weigh against the veteran.

CONCLUSION OF LAW

Recovery of the overpayment of Section 306 disability pension
benefits, in the calculated amount of $4,240, 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, 3.660(a)(1) (1993).
REASONS AND BASES FOR FINDINGS AND CONCLUSION

Initially, we note that we have found that 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, we find that
he has presented a claim which is plausible.  Moreover, after
careful review of the evidentiary record, we are also satisfied
that all relevant facts have been properly developed.  Therefore,
no further assistance to the veteran is required to comply with
the duty to assist as mandated by 38 U.S.C.A. § 5107(a).

The pertinent facts in this case are not in dispute and may be
briefly described.  By rating action of September 1976, the RO
found the veteran to be permanently and totally disabled for
pension purposes, effective January 20, 1976.  He was informed of
this award by VA letter dated in October 1976.  Attached to this
letter was VA Form 21-6896, which advised the veteran of the need
to promptly report his income from all sources as well as any
change in his income.  That attachment further notified the
veteran that the rate of pension payable was based on income and
that the failure to promptly and accurately report income to VA
could result in an overpayment of benefits which would be subject
to recovery.  He was provided similar notice in September 1978.

In December 1985, November 1986, and October 1987, the veteran
completed and submitted Eligibility Verification Reports (EVR),
reporting his and his wife's income for the years in question.
These forms had clearly marked spaces with express instructions
for the reporting of any interest income received.  For the years
covered by these forms, the veteran reported "0" interest income.

In a November 1988 EVR, the veteran indicated that he was in
receipt of social security benefits in the amount of $634 per
month, and his wife was receiving $269 per month.  The veteran
also reported that his annual interest and dividends was $72.15
for 1988.  He further reported cash in the bank totaling
$8,461.15.

In November 1989, the veteran submitted an EVR which reported
monthly Social Security benefits of $660.90 for himself, and
$280.90 for his wife.  In the spaces plainly provided for the
reporting of all interest income on the EVR, the veteran reported
that he and his wife each had annual interest and dividends of
$223.06 in 1989, and expected to receive the same in 1990.  The
EVR further indicated that the veteran and his wife each had cash
in bank accounts totaling $10,424.98.

By letter dated in January 1990, the VA requested information on
the additional $12,000 of combined net worth reflected on the
November 1989 EVR.  Received later in January 1990 was a
statement from the veteran (VA Form 21-4138), wherein he
explained that the $10,424 in savings reflected money held in a
joint account, rather than separate accounts.  The veteran also
reported paying $1,624 for health insurance in 1989, as well as
other expenses.

In December 1990, the veteran filed an EVR which showed that he
and his wife had total annual interest and dividends of $302.74
in 1990.  He also reported that they had cash in bank accounts
totaling $3,371.23.

The record reflects that in response to correspondence from the
VA dated in August 1991, inquiring about unearned income during
the year 1989, the veteran signed a certification acknowledging
receipt of interest income in 1989, totaling $6,357.

By letter dated in September 1991, the veteran was informed that
the VA proposed to terminate his disability pension benefits,
effective January 1, 1990.  He was informed that his benefits
were being terminated because his Social Security benefits and
interest income for 1989 totaled $12,791, after adjustment for
allowable medical expenses reported by him for that year.  He was
advised that this amount exceeded the annual pension income limit
of $10,350.  Subsequently, in October 1991, the veteran requested
that his pension payments be reduced or terminated.

In a Financial Status Report, filed by the veteran in October
1991, he reported that his and his wife's monthly net income,
from Social Security benefits and interest, totaled $1,103.  He
estimated his monthly expenses to be $1,102.  The veteran
reported total assets of $45,000, including $20,000 in cash in
the bank.  Also received in October 1991 were VA Forms 21-8416
reflecting medical expenses for the veteran and his wife for 1989
and 1990.  The expenses reported for 1989 were in an amount
similar to the amount considered by the RO in computing the
veteran's income for 1989, about which he was notified in
September 1991.  The veteran's October 1991 financial status
report reflects, among the $1,102 monthly expenses, the amount of
$227 for medical insurance and medical expenses.

By letter dated in December 1991, the veteran was informed that
his VA disability pension benefits had been terminated effective
January 1, 1990, because his countable income for 1989 exceeded
the income limitation set by law.  This resulted in the creation
of the overpayment of pension in the amount of $4,240.

Received in November 1994 was another Financial Status Report.
The veteran reported monthly net income of $1,063.66, primarily
from Social Security benefits, after total monthly deductions for
Medicare of $82.  He calculated his monthly expenses to be
$1,186.33, although this figure included $82 monthly Medicare
deductions which were already accounted for as a deduction from
gross monthly income.  Thus, without consideration of Medicare,
the calculation of the veteran's total monthly expenses was
1,104.33.  Among his listed expenses were:  $300 for food, $65
for utilities and heat, $177.63 for insurance supplements, $48.25
for wife's insurance, $40 for telephone, $35 for gas, $35 for
cable, $205 for prescriptions, $40.50 for house insurance, $13
for house tax, $39 for car insurance, $17 for garbage collection,
$8.95 for life insurance, and $50 for miscellaneous.  The veteran
reported total assets of $60,221.07, including:  $5,196.07 cash
in the bank, $25 cash on hand, a 1987 automobile valued at
$5,000, and real estate valued at $50,000.  The veteran reported
that monthly expenses included credit installment payments each
month of $30, of which none was overdue.

Received by the RO in December 1994 were several letters and
other correspondence from the veteran.  In one letter, he
reported that income for the year was $12,758.36, and his
expenses totaled $12,667.67.  In another letter, the veteran
reported monthly net income of $1,055, and monthly expenses of
approximately $1,073.00.  He also reported various yearly
expenses, at least some of which were apparently not included in
the accounting of monthly expenses, although it is not clear
whether some or not some of the expenditures were being shown on
both a monthly and yearly basis.  The veteran also reported an
expense of $33 per visit for visits to physicians, although no
clear information regarding the frequency of such visits was
provided.  The veteran did state in his letter that with their
income and savings, he and his wife were able to "barely meet"
their monthly living expenses.  Attached to this letter was a
copy of a bank statement dated in October 1994, reflecting a
joint savings account balance of $4,605.07.

The Board points out that the applicable law and regulations
provide that, assuming there is no fraud, misrepresentation, or
bad faith, as here, when collection would be against equity and
good conscience, the VA will waive its right to collect the
indebtedness.  38 U.S.C.A. § 5302; 38 C.F.R. §§ 1.963, 1.965.
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 various elements
which are not intended to be all inclusive.  These elements are
the fault of the debtor where such actions contribute to creation
of the debt, balancing of faults where VA fault is also involved,
whether collection of the debt would cause the debtor undue
financial hardship by depriving him of the basic necessities,
whether collection would defeat the purpose of the VA benefit,
whether failure to make restitution would result in unjust
enrichment and whether reliance on the VA benefits resulted in
relinquishment of a valuable right, i.e., changing position to
one's detriment.  38 C.F.R. § 1.965(a).

As already noted above, the information that the veteran had
received interest income of some $6,357 during 1989 was only
received some two years later when the veteran verified that he
had received that amount of interest for 1989.  This was a much
greater amount than the amount which he had previously reported
for 1989.  He had been given specific repeated notices of his
obligation to report all income to VA, and despite such
notification, he vastly underreported his interest income on the
EVR submitted by him for 1989.  Under 38 C.F.R. § 3.660(a)(1), a
pension beneficiary has the obligation to promptly notify VA of
any material change in income which could affect pension
entitlement.  While the Board can accept the veteran's
explanation that he didn't report the sale of his home, or the
proceeds derived therefrom, because he believed the transaction
and proceeds did not result in income for Federal tax purposes,
we cannot accept this explanation with respect to interest
ultimately earned on money received from the sale.  As we have
already noted, the veteran was clearly advised on several
occasions that he was to report all income to VA and he was put
on plain notice, through his completion and submission of several
EVR's, that any interest income was to be reported.

Therefore, the Board concludes that the veteran bears full
responsibility for the creation of the overpayment by failing to
report his full receipt of interest income in 1989 to the VA.
The VA was not responsible in any way for the overpayment that
was created in reliance on information provided by the veteran,
and took prompt action once the additional income was discovered.

The Board notes that while the veteran's monthly expenses
apparently exceed his monthly income, it is not shown that
collection of the overpayment would deprive him and his family of
food, clothing, shelter and other basic necessities.  The
November 1994 financial statement and the veteran's subsequent
correspondence indicate that the monthly imbalance between income
and expenses is sufficiently close that monthly needs can be met
by income and reliance on savings.  It is also noteworthy that
the veteran has considerable assets, and is evidently able to
meet his other payments of indebtedness.  We stress that
indebtedness to the government is entitled to the same
consideration by the veteran which is owed to his other financial
obligations.  Therefore, we find that recovery of the overpayment
would not deprive the veteran or his wife of the basic
necessities of living.

Moreover, to the extent that the veteran received the additional
interest income, resulting in excessive income for continued
pension entitlement, while he was receiving disability pension
benefits, unjust enrichment would arise were the debt to be
waived.  This is because VA pension is an income based program,
which requires that income be below specified limitations for
continued entitlement to Section 306 pension benefits.
Similarly, the Board finds that collection of the debt would not
defeat the purpose of the benefit, which is to provide a source
of income to those who qualify by virtue of having income from
other sources below specified levels.  There is also no
indication that the veteran relinquished a valuable right or
incurred a legal obligation in reliance on VA benefits.

Consequently, the Board must find that to demand payment of the
indebtedness in reasonable amounts would not be unfair,
unconscionable, or unjust, nor would it defeat the purpose for
which the benefit was intended.  The preponderance of the
evidence is against a finding that recovery of the overpayment
would be against equity and good conscience.  The request for
waiver of the recovery of the overpayment in question is denied.

ORDER

Entitlement to waiver of the recovery of the overpayment of
Section 306 disability pension benefits, in the calculated amount
of $4,240 is denied.

          D. C. SPICKLER
          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.