BVA9500790 
DOCKET NO.  93-05 358     )       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 an overpayment of improved
pension benefits.

REPRESENTATION

Appellant represented by: The American Legion

ATTORNEY FOR THE BOARD

J. Connolly, Associate Counsel

INTRODUCTION

The veteran had active service from August 1942 to November 1943.

This matter came before the Board of Veterans' Appeals (Board) on
appeal from an August 1992 rating decision by the Committee on
Waivers and Compromises (Committee) of the Nashville, Tennessee,
Regional Office (RO) of the Department of Veterans Affairs (VA).
The notice of disagreement was received in September 1992.  The
statement of the case was sent to the veteran in February 1993.
The substantive appeal was received in February 1993.

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.   It is contended that recovery and withholding of
the veteran's benefits is 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.  The veteran was granted entitlement to improved pension
benefits in August 1990.

2.  In an October 1991 Improved Pension Eligibility Verification
Report, the veteran indicated that his Social Security payments
increased; that he received wages from employment; and that he
had liquid assets in the bank.  Specifically, he reported monthly
Social Security payments of $186; total wages from employment of
$2,255 for the period of September 1, 1990 to August 31, 1991,
and the same anticipated from September 1, 1991 to August 31,
1992; a net worth of $5,414.49 liquid assets; and no medical
expense.

3.  In November 1991 correspondence, the veteran related that he
worked and was currently working as a farm helper for an annual
salary of $2,255.

4.  In a January 1992 decision letter, the RO adjusted the rate
of the veteran's pension benefits due to the newly reported
income which resulted in an overpayment of benefits.

5.  In a February 1992 correspondence completed by John L.
Sullivan on behalf of the veteran and signed by the veteran, it
was indicated that the veteran had ceased working as of January
1, 1992 due to health problems.

6.  The veteran was born in 1921, and he has a third grade
education; although the veteran was not prompt in reporting his
additional income in the amount of $2,255 per year, VA learned of
the income as a result of a report voluntarily filed by the
veteran; any fault on the part of the veteran is mitigated by the
fact that there is doubt as to whether he understood the income
reporting requirement and by the fact that he reported the income
voluntarily.

7.  In view of the veteran's current income and assets, recovery
of the overpayment by VA would result in undue hardship to the
veteran.

CONCLUSION OF LAW

The recovery of the overpayment of improved pension benefits
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) (1993).

REASONS AND BASES FOR FINDINGS AND CONCLUSION

The Board observes that the Committee made a specific
determination in August 1992 that there was no fraud,
misrepresentation, or bad faith on the veteran's part with
respect to the creation of the overpayment at issue.  This
decision stands, 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) (1993).

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) (1993).  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 VA benefits.

In this case the elements relating to fault and hardship are of
particular importance.  There is clearly some fault on the part
of the veteran in that he was late in reporting his income.  It
is noteworthy, however, that the veteran reports having attended
school only through the third grade level, and many of the
written statements in the file were prepared for the veteran's
signature by other persons.  Thus, it appears that the veteran
may have some difficulty in understanding the written notices
pertaining to his benefits.  It is also noteworthy that the
veteran's employment income came to the attention of VA as a
result of information voluntarily provided by the veteran.

With regard to the question of hardship, the veteran has only his
Social Security benefit payments in income, and his assets are
minimal.  He apparently has medical problems, as he terminated
his very marginal employment as a result of his health.  For
these reasons, recovery of the overpayment would result in undue
hardship to the veteran.

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

ORDER

The appeal is granted.

          G.H. SHUFELT
          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.