BVA9505777 DOCKET NO. 93-10 820 ) DATE ) ) On appeal from the decision of the Department of Veterans Affairs Regional Office in Cleveland, Ohio THE ISSUE Entitlement to waiver of recovery of an overpayment of improved pension benefits, in the calculated amount of $7,348.00. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD J.P. Reep, Associate Counsel INTRODUCTION The veteran had active honorable military service from August 1952 to August 1956. This appeal arises from a February 1993 determination of the Committee on Waivers and Compromises (Committee) of the Cleveland, Ohio Regional Office (RO), which denied the veteran's claim seeking waiver of recovery of an overpayment of improved pension benefits on the basis that recovery would not violate the standard of equity and good conscience. CONTENTIONS OF APPELLANT ON APPEAL The veteran maintains that he was not aware that Social Security benefits were counted as income in determining eligibility for VA pension benefits. Thus, he contends, waiver of recovery of his overpayment is in order. 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 preponderance of the evidence is against the veteran's claim for waiver of the recovery of the overpayment of improved disability pension benefits in the calculated amount of $7,348.00. FINDINGS OF FACT 1. All relevant evidence necessary for an equitable disposition of the appeal has been obtained. 2. The veteran is primarily at fault in creating the overpayment since he failed to promptly report Social Security benefits, which he had been receiving since September 1991, even though he had been notified at the time of his February 1992 award that the award was partly based upon zero Social Security income. 3. The latest detailed income and expense data, supplied by the veteran, indicate that his combined monthly income exceeds his total monthly net expenses by over $283.00 per month. 4. Recovery of the overpayment would not result in undue financial hardship. 5. Recovery of the overpayment would not defeat the purpose for which the VA benefits were intended. 6. The failure of the Government to insist on its right to repayment of the indebtedness would result in unfair gain to the veteran. 7. There are no other elements of equity and good conscience which support granting the requested waiver to the veteran. CONCLUSION OF LAW Recovery of the overpayment of improved pension benefits in the calculated amount of $7,348.00 would not be against equity and good conscience. 38 U.S.C.A. §§ 5107, 5302 (West 1991); 38 C.F.R. §§ 1.963(a), 1.965(a), 3.660(a)(1) (1994). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Board finds that the veteran's claim is well grounded within the meaning of 38 U.S.C.A. § 5107(a) (West 1991). That is, we find that he has presented a claim which is not implausible. We are satisfied that all relevant facts have been properly developed. No further assistance to the veteran is required to comply with the duty to assist mandated by 38 U.S.C.A. § 5107(a) (West 1991) and 38 C.F.R. §§ 3.103(a) and 3.159 (1994). An application for VA pension, (VA Form 21-526) signed and dated by the veteran in August 1991, indicates that his income for the previous 12 months consisted of $6,000.00 in nonrecurring wages. In addition, the veteran reported receipt of monthly general welfare payments of $121.00. He specifically indicated that he was not receiving Social Security benefits, but that he intended to apply for those benefits that month. In instructions attached to the application form, the veteran was advised that the rate of pension paid depended upon the amount of family income and that he must report the sources and amounts of all income and the VA would determine what income did not count. In February 1992, the veteran was found to be entitled to improved pension benefits, effective August 9, 1991. The veteran was notified of his pension award by February 1992 VA correspondence. He was notified that the award was based upon zero annual income, including zero Social Security benefits. That correspondence was accompanied by a VA Form 21-8768, which advised the veteran that the rate of pension payable was based on the amount of countable income and that it was his responsibility to notify the VA immediately upon any change in income. Eligibility verification reports, signed and dated by the veteran in August 1992 and October 1992, show that, in 1992, he received monthly Social Security benefits of $1,000.00. In response to a September 1992 VA request, the veteran submitted a Social Security Administration (SSA) document which indicates that the veteran received his first SSA check, in the amount of $969.00, in September 1991. Effective January 3, 1992, the veteran's check was to be increased to $1010.00, then reduced to $1000.00, effective May 3, 1992. In November 1992, the RO retroactively terminated the veteran's pension award, effective October 1, 1991, to reflect the additional income derived from Social Security benefits. This action created an overpayment in the calculated amount of $7,348.00. In February 1993, the Committee determined that, while there was no fraud, misrepresentation, or bad faith on the part of the veteran in the creation of the assessed overpayment, recovery was not against equity and good conscience. This was based on determinations that he was at fault and that undue financial hardship had not been shown. The overpayment at issue resulted from the veteran's failure to promptly provide information concerning his Social Security benefits when he was notified of his pension award in February 1992, despite notice that the award was based upon zero income and that all changes in income were to be reported immediately. The veteran did not report receipt of Social Security benefits until August 1992. Because he was receiving Social Security benefits, his annual countable income exceeded the maximum annual amount, thereby eliminating eligibility for the pension award. See generally 38 C.F.R. §§ 3.23, 3.271, 3.273 (1994). At this point, we note that neither the amount nor the propriety of the debt has been challenged. The sole issue before the Board is whether waiver of recovery of the debt is warranted. 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, or (3) bad faith. 38 U.S.C.A. § 5302(c) (West 1991). The Board's review of the record reflects that the Committee has resolved this question in favor of the appellant, 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. After resolving that matter in the appellant's favor, the only issue remaining is whether the evidence establishes that recoupment 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(a) (West 1991); 38 C.F.R. §§ 1.963, 1.965 (1994). The governing regulation provides the following: 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: 1. Fault of debtor. Where actions of the debtor contribute to creation of the debt. 2. Balancing of faults. Weighing fault of debtor against VA fault. 3. Undue hardship. Whether collection would deprive 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) (1994). As discussed above, the overpayment at issue resulted from the veteran's failure to provide prompt information concerning his Social Security benefits after he was notified of his VA pension award. We recognize that the veteran accurately represented his zero Social Security income on his August 1991 application for VA pension, and that he indicated that he intended to apply for Social Security benefits that month. It is perhaps understandable why he did not notify the VA when he began receiving SSA benefits in September 1991, as he had not yet been awarded VA pension. However, when the veteran was notified of his VA pension award by February 1992 VA correspondence, he was informed that his award was based upon zero income, including zero SSA income, and that any changes in income should be immediately reported to the VA. It was not until August 1992, or six months later, that he informed the VA that he was receiving monthly Social Security benefits of $1000.00. Information provided after six months cannot be considered "immediate." Thus, the veteran was clearly at fault in the creation of the overpayment. Moreover, he accepted and retained VA benefits to which he knew or should have known he was not entitled, in view of his unreported increase in income. His argument that he was unaware that Social Security benefits counted is given little credence in view of the award notices. In addition, the VA took prompt action to adjust his award, once it became aware of the additional income. Thus, there is no fault on the part of the VA. Regarding undue hardship, we note that the veteran's January 1993 financial status report shows that his combined monthly income exceeds his total monthly expenses by over $283.00 per month. Furthermore, the cost of food, shelter, and utilities have been factored into these monthly expenses, and it does not appear that collection of the debt will deprive the veteran of those things or of any other necessities of life. In addition, we note that the veteran reported having $349.00 cash in the bank. Thus, because it appears that the veteran's monthly income is more than adequate to meet the monthly expenses of basic necessities, the Board finds that recovery of the overpayment would not cause undue hardship. Nor would repayment defeat the purpose of the improved pension benefit program, which is intended to provide financial support and which is based on a calculation of countable income, with a reduction of benefits based on such income. In addition, the failure of the Government to insist upon its right to the repayment of this debt would result in the unjust enrichment of the veteran at the expense of the Government since he would be allowed to retain funds to which he is not legally entitled. Clearly the veteran was not entitled to the additional benefits which he received based on his failure to provide information concerning receipt of Social Security benefits. Further review of the evidence of record discloses no other element of equity and good conscience which would persuade the Board that the Government should forego its right to the collection of this debt. Consequently, the veteran is not entitled to a waiver of recovery of overpayment. In reaching this decision the Board has considered the doctrine of granting the benefit of the doubt to the veteran but does not find that the evidence is approximately balanced such as to warrant its application. The preponderance of the evidence is against the claim. 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.