BVA9501250 
DOCKET NO.  93-08 023     )       DATE
          )
          )

On appeal from the decision of the
Department of Veterans Affairs Regional Office in Wichita, Kansas

THE ISSUE

Entitlement to waiver of recovery of an overpayment of improved
disability benefits, including whether the overpayment was
properly created.

REPRESENTATION

Appellant represented by: Disabled American Veterans

ATTORNEY FOR THE BOARD

Milo H. Hawley, Counsel

REMAND

The veteran had active service from June 1942 to October 1945.

This matter comes before the Board of Veterans' Appeals (Board)
on appeal from an April 1992 notification of a decision by the
Department of Veterans Affairs (VA) Wichita, Kansas, Regional
Office Committee on Waivers and Compromises (RO) which denied
waiver of recovery of an overpayment in the calculated amount of
$9,633.

A September 1991 VA letter to the veteran indicates that it was
proposed that his improved disability pension be reduced on the
basis that the VA had received evidence, consisting of the
veteran's certification, that he had unearned income for 1989 in
the amount of $5,876.  On that basis it was proposed that the
veteran's improved pension award be reduced effective February 1,
1989.  The veteran subsequently submitted information concerning
family net worth and interest income in 1990 and 1991.
Thereafter, the veteran's award was amended on the basis of the
$5,876 received in 1989 and on the basis of interest income
reported by the veteran for 1990 and 1991.  On the basis of this
information, the veteran's pension award was amended for the
periods from February 1989 through 1991.  This resulted in
creation of the current overpayment.

The actual certification from the veteran with respect to the
unearned income of $5,876 for 1989 does not appear to be of
record.  The RO has presumably been exercising the appropriate
caution in excluding confidential income documentation from the
claims file.  While the Board understands and commends the
concerns of the originating agency in this regard, the precepts
of due process require that documentation of the material
evidence which forms the basis of the originating agency's
determination be included in the claims folder.  To this end,
M21-I, Part IV, Chapter 31, Subchapter IX, now provides ways for
extracting "sanitized" documentation for inclusion in the claims
folder.

It is also noted that in his September 1991 statement, the
veteran stated that his two sons got half of the interest from
the certificates of deposit as they had contributed to the
accounts.  In July 1992, the regional office requested that the
veteran provide statements from all co-owners of the certificates
of deposit specifying the value of their portions of the deposits
and the amounts of interest their portions earned.  In his July
1992 response, the veteran stated merely that the certificates
were in his and his wife's names and that they paid the tax
attributable to the certificates.  He did not specify the
period(s) to which this applied.

Also, the veteran has indicated that he does not believe that the
overpayment has been properly created.  Therefore, the case is
REMANDED to the RO for the following:

1.  The RO should consult M21-I, Part IV,
Chapter 31, Subchapter IX, formerly set out
in VBA Circular 20-91-11 (February 22,
1993), and extract sanitized documentation
for inclusion in the claims folder which
supports the finding that the veteran
received unearned income in 1989 in the
amount of $5,876.

2.  The veteran should again be requested
to clarify whether any portion of the
interest income for the period of the
overpayment was actually income of persons
other than himself or his wife.

3.  Thereafter, a complete audit of the
veteran's overpayment for the period of any
overpayment should be performed and
provided to him.

When the above has been completed, the claims should be reviewed
by the RO, including the issue of whether the overpayment was
properly created.  If the benefit sought is denied, a
supplemental statement of the case should be furnished the
veteran and his representative, and they should be given the
appropriate opportunity to respond thereto.  The appeal should
then be returned to the Board, if in order.  No action is
required by the veteran unless he receives further notice.

The purposes of this REMAND are to procure clarifying data and
accord due process.  The Board intimates no opinion, either legal
or factual, as to the ultimate disposition of this appeal.

          JAMES R. ANTHONY
          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) (1993).