BVA9504696 
DOCKET NO.  93-19 990     )       DATE
          )
          )

On appeal from the decision of the
Department of Veterans Affairs Regional Office in Des Moines,
Iowa

THE ISSUE

Entitlement to waiver of recovery of an overpayment of improved
pension benefits in the amount of $2,705 for the period beginning
February 1, 1989.

REPRESENTATION

Appellant represented by: AMVETS

ATTORNEY FOR THE BOARD

J. Connolly, Associate Counsel

INTRODUCTION

The veteran had active service from April 1943 to March 1946.

This matter came before the Board of Veterans' Appeals (Board) on
appeal from an March 1993 decision by the Committee on Waivers
and Compromises (Committee) of the Des Moines, Iowa, Regional
Office (RO) of the Department of Veterans Affairs (VA).  The
notice of disagreement was received in May 1993.  The statement
of the case was sent to the veteran in May 1993.  The substantive
appeal was received in July 1993.  In a December 1993 letter, the
case was remanded for further development.

The Board notes that in a May 1994 letter, the veteran was
notified of the creation of another overpayment, of his
procedural and appellate rights with regard to that overpayment,
and that he would be notified of the amount of the overpayment in
subsequent correspondence.  It is unclear whether the veteran has
been notified of the amount of the overpayment.  However, since
he has not disputed the debt or requested waiver of that debt,
those issues are not before the Board at this time and the Board
will not review that overpayment at this time.

Additionally, in the September 1993 informal hearing
presentation, the representative raised the issue of entitlement
to service connection for a clavicle disorder and entitlement to
service connection for a low back disorder.  The Board notes that
entitlement to service connection for residuals of fracture of
the left clavicle was granted in a February 1985 rating action
and entitlement to service connection for a low back disorder was
denied in final April 1946 rating decision.  The Board refers the
issue of whether new and material evidence has been submitted to
reopen the claim for service connection for low back disorder to
the RO for appropriate development.

CONTENTIONS OF APPELLANT ON APPEAL

The veteran contends that he is entitled to a waiver of recovery
of the overpayment since he cannot afford to repay the
overpayment.   He contends that recovery and withholding of his
benefits would create a severe hardship.

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, with regard to the full amount of the overpayment,
recovery is waived.

FINDINGS OF FACT

1.  In November 1988 the veteran claimed pension and reported his
only expected income was from Social Security.

2.  The veteran was granted entitlement to improved pension
benefit effective December 1, 1988 based on Social Security
income of $4270 per year.  In February 1989 he was informed of
the award that he should immediately notify the VA of any changes
in his income.  He was further informed that failure to notify
the VA of any change might result in an overpayment.

3.  On the veteran's Improved Pension Eligibility Verification
Report (EVR) received in December 1991 he did not report any
earned or unearned income.

4.  According to the RO's documentation of record including the
May 1993 statement of the case, the veteran had earned and
unearned income for the period of overpayment which he did not
report in his Improved Pension Eligibility Verification Reports
(EVR's).

5.  The VA had no fault in the creation of the overpayment.

6.  The recovery of the overpayment would subject the veteran,
who was born in 1923 and has an eighth grade education, to undue
financial hardship in view of his current income, which is under
$5300 a year and lack of assets.

CONCLUSION OF LAW

The recovery of the overpayment of improved pension benefits in
the amount of $2,705, would be against equity and good conscience
and, therefore, recovery is waived.  38 U.S.C.A. § 5302(a) (West
1991); 38 C.F.R. §§ 1.963(a), 1.965(a) (1994).

REASONS AND BASES FOR FINDINGS AND CONCLUSION

The Board observes that the Committee made a specific
determination in March 1993 that there was no fraud,
misrepresentation, or bad faith on the veteran's part with
respect to the creation of the overpayment at issue.  The Board
agrees with this decision, and, therefore waiver is not precluded
pursuant to 38 U.S.C.A. § 5302(a) (West 1991).  However, to
dispose of the matter on appeal, the Board must determine whether
recovery of the indebtedness would be against equity and good
conscience, thereby permitting waiver under 38 U.S.C.A. §
5302(a) (West 1991) and 38 C.F.R. §§ 1.963(a), 1.965(a) (1994).

The applicable law states that the standard of "equity and good
conscience" will be applied when the facts and circumstances in a
particular case indicates a need for reasonableness and
moderation in the exercise of the Government's rights.  38 C.F.R.
§ 1.965(a) (1994).  The above cited regulation sets forth the
various elements to be considered in reaching such determination.
These elements include the degree of fault of the debtor,
balancing of the debtor's fault against any fault on the part of
VA, whether recovery would defeat the purpose for which the
benefits were intended, whether failure to make restitution would
result in unjust enrichment, and whether the debtor detrimentally
changed his position in reliance on the VA.

Historically, the veteran was granted entitlement to improved
pension benefits effective December 1, 1988 based on the Social
Security benefits he had claimed.  In February 1989 he was
informed of this and was also informed that he should immediately
notify the VA of any changes in his income.  He was further
informed that failure to notify the VA of any change might result
in an overpayment.

As to the first element, fault of the debtor, the Board finds
that the veteran was at fault in the creation of the indebtedness
at issue.  On EVR's received in December 1989, January 1991 and
December 1991 he did not report any earned or unearned income.
Subsequently the RO learned that he had earned and unearned
income which the veteran had not reported and created an
overpayment.  The veteran was notified by the VA of his
obligation to report changes in his income to the VA directly,
however, he failed to report to the VA a portion of his income.
Therefore, the Board finds that the veteran was at fault in the
creation of the debt.

The second element deals with the fault of the VA, and, the Board
finds that the overpayment was not due to fault on the part of
the VA.

In this case the element relating to undue hardship is of
particular importance.  According to the veteran's most recent
February 1993 Financial Status Report and December 1993 EVR, his
sole source of income is his Social Security benefit payments and
he has he has no liquid assets.  In his Financial Status Report,
he indicated that his total monthly expenses which consist of the
basic necessities exceed the income provided from Social Security
benefit payments.  The veteran related that he would be forced to
give up some basic necessities if he were to repay the
overpayment.  In addition, the veteran reported that medical
problems combined with his age and limited eighth grade education
preclude employment.  For these reasons, recovery of the
overpayment would result in undue hardship to the veteran.  His
annual income was reported in May 1993 to be less than $5300 a
year.

In view of the hardship resulting from recovery of the
overpayment, recovery would be against equity and good conscience
and waiver of recovery of the overpayment is warranted.

ORDER

The appeal is granted.

          E. M. KRENZER
          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.