Citation Nr: 0007105 Decision Date: 03/16/00 Archive Date: 03/23/00 DOCKET NO. 93-14 579 ) DATE ) ) On appeal from the decision of the Department of Veterans Affairs Committee on Waivers and Compromises of the Regional Office in New Orleans, Louisiana THE ISSUE Entitlement to a waiver of recovery of an overpayment of Department of Veterans Affairs (VA) Section 306 pension benefits in the amount of $16,112, to include the question of the proper creation of the overpayment. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD J. Connolly Jevtich, Counsel INTRODUCTION The veteran had active service from July 1942 to October 1945. This matter came before the Board of Veterans' Appeals (Board) on appeal from a January 1993 decision of the Committee on Waivers and Compromises (Committee) of the Regional Office (RO) of the VA in New Orleans, Louisiana. In May 1995 and May 1996, the Board remanded this case to the RO for further development. FINDINGS OF FACT 1. The veteran was in receipt of Section 306 pension benefits from 1971 until the time they were retroactively terminated effective January 1986. 2. There is no supporting evidence in the claims file that the veteran's family income exceeded the statutory limitations for countable income in effect for 1985, 1986, 1987, and/or 1988. 3. The applicable statutory income limitation for a veteran with one dependent in 1989 was $9,885. 4. The evidence of record shows that the veteran's countable family income for 1989 was at least $13,116. CONCLUSIONS OF LAW 1. The evidence of record does not show that the countable income of the veteran was excessive for receipt of Section 306 pension benefits for 1985, 1986, 1987, and/or 1988; thus Section 306 pension benefits were improperly terminated, effective January 1, 1986. 38 C.F.R. §§ 3.26, 3.252, 3.262, 3.660 (1999). 2. The evidence of record shows that the countable income of the veteran was excessive for receipt of Section 306 pension benefits for 1989; thus Section 306 pension benefits were properly terminated, effective January 1, 1990. 38 C.F.R. §§ 3.26, 3.252, 3.262, 3.660 (1999). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The veteran's claim is well-grounded within the meaning of 38 U.S.C.A. § 5107 (West 1991). That is, the Board finds that he has presented a plausible claim. The Board is also satisfied that all relevant facts have been properly developed and that no further assistance to the veteran is required to comply with the duty to assist mandated by 38 U.S.C.A. § 5107 (West 1991). In a February 1971 rating decision, entitlement to nonservice-connected pension benefits was granted. Thereafter, the veteran was notified that he was eligible to received Section 306 pension in an April 1971 letter. In addition, the veteran was provided a VA Form 21-6896, which informed him of the necessity of informing the RO immediately of any change in income, net worth, or other change in his family status. In June 1971, the veteran was further informed that any of his wife's income other than wages was for consideration in determining his pension entitlement. In October 1985, an Eligibility Verification Report (EVR) was received from the veteran in which he reported that his family income was derived from his Social Security income of $304.50 monthly as well as his wife's income of $20,000 annually. In addition, he reported unreimbursed medical expenses in the amount of $2,530. In November 1986, an EVR was received from the veteran in which he reported that his family income was derived from his Social Security income of $313 monthly as well as his wife's income of $20,000 annually. In addition, he reported unreimbursed medical expenses in the amount of $3,556. In October 1987, an EVR was received from the veteran in which he reported that his family income was derived from his Social Security income of $319 monthly as well as his wife's income of $20,000 annually. In addition, he reported unreimbursed medical expenses in the amount of $3,564.80. In October 1988, an EVR was received from the veteran in which he reported that his family income was derived from his Social Security income of $314.80 monthly as well as his wife's income of $20,000 annually. In addition, he reported unreimbursed medical expenses in the amount of $3947.60. In November 1989, an EVR was received from the veteran in which he reported that his family income was derived from his Social Security income of $327.90 monthly as well as his wife's income of $20,000 annually. In addition, he reported unreimbursed medical expenses in the amount of $4,182.80. In November 1990, an EVR was received from the veteran in which he reported that his family income was derived from his Social Security income of $342.60 monthly as well as his wife's income of $20,000 annually. In addition, he reported unreimbursed medical expenses in the amount of $4,209.70. In November 1991, an EVR was received from the veteran in which he reported that his family income was derived from his Social Security income of $360.90 monthly as well as his wife's income of $20,000 annually. In addition, he reported unreimbursed medical expenses in the amount of $3,711.20. The Board notes that the aforementioned EVR's included a category for "Other Retirement" income or for "All Other Annual Income," but the veteran never indicated that his wife had any income from retirement benefits. Thereafter, the veteran's spouse indicated that she incurred a loss of $3,226 from self-employment during 1989, but also indicated that she received retirement income during that year of $14,371. As a result, the RO proposed to terminate the veteran's Section 306 benefits effective January 1, 1990. Thereafter, the veteran requested that his benefits be suspended. Accordingly, the veteran's benefits were suspended as of June 1992. Thereafter, in July 1992, the RO advised the veteran that information from the Louisiana State Employees Retirement System showed that his wife began receiving retirement benefits effective August 31, 1985. As such, the RO proposed to terminate the veteran's pension benefits effective January 1, 1986. The Board notes that this alleged information from the Louisiana State Employees Retirement System is not of record. According to a July 1992 Report of Contact, the veteran confirmed that his wife had retired on August 31, 1985. He indicated that she was receiving $1076 per month in Retirement benefits. Thereafter, the veteran submitted a detailed explanation of his past and current medical expenses. The Board notes, however, that the amount reported for 1989 was less than he had previously reported. As such, the Board will accept the higher amount. In November 1992, the veteran was notified that the retroactive termination of his Section 306 pension benefits resulted in an overpayment of $16,112. The veteran requested a waiver thereof. This request was denied by the Committee in January 1993. The veteran appealed that determination. In December 1992, a financial status report was received in which the veteran indicated that his monthly income exceeded his monthly expenses by $116.86. He listed two credit card creditors in his listed expenses. In May 1995, the Board remanded this case to the RO for the RO to contact the Louisiana State Employees Retirement System and request information as to the amount of monthly retirement benefits the veteran's wife had received annually. It was noted that although the veteran had furnished information regarding the current amount of benefits being received, there was no information of record regarding the amount(s) of past payments. In addition, the Board requested that current financial information be obtained from the veteran. Thereafter, the RO only contacted the veteran. In March 1996, the Board again remanded this case in order to determine the past amount(s) of retirement benefits that the veteran's wife received on an annual basis. In April 1996, a financial status report was received from the veteran in which he reported that his family's monthly income exceeded the monthly expenses by $242.77. The veteran listed that a monthly expense included a credit card creditor. The Board will initially review how the overpayment in question was created. As noted above, the veteran's wife verified that she received over $14,000 in retirement income in 1989. Thereafter, the veteran verified that she retired in 1985. The RO has indicated that the Louisiana State Employees Retirement System verified that the veteran's wife had received income from them since 1985. However, despite numerous Board requests to do so, concrete and supporting evidence from the Louisiana State Employees Retirement System was never received showing the income of the veteran's wife from 1985 forward. As such, there is no evidence that shows that the veteran's wife actually had retirement income prior to 1989 which caused the veteran's family income to exceed the applicable statutory limitations. As such, the Board finds that the termination of the veteran's Section 306 pension benefits prior to January 1, 1990 was not proper due to the lack of evidence of record. 38 C.F.R. §§ 3.26, 3.252, 3.262, 3.660 (1999). With regard to whether the termination of Section 306 benefits was proper as of January 1, 1990, the Board finds that this action was in fact proper. The eligibility of a veteran for Section 306 disability pension depends on countable income. Pertinent regulations provide that Section 306 pension benefits shall be terminated if countable annual income exceeds applicable income limitations. The applicable income limitation for a veteran with one dependent in 1989 was $9,885. In determining countable income for Section 306 pension, payments of any kind or from any source will be counted as income unless specifically excluded. Income will be counted for the calendar year in which it is received, and total income for the full calendar year will be considered. 38 C.F.R. § 3.252 (1999). Income derived from Social Security benefits is considered income as a retirement benefit. 38 C.F.R. § 3.262(f) (1999). Ten percent of the retirement payments are to be excluded in computing income received. 38 C.F.R. § 3.262(e)(2) (1999). Wages of the veteran's spouse, in this case, were excludable. 38 C.F.R. § 3.262(b)(2) (1999). A review of the income for 1989 shows that, in pertinent part and for countable income purposes, the veteran had annual Social Security income of $3,934.80 and his wife had retirement income of $14,371. Thus, the total income of Social Security benefits and retirement benefits was $18,305.80. That amount less 10 percent equals $16,475.22. As noted, the wages of the veteran's spouse from self- employment are not for consideration. In addition, for purposes of Section 306 disability pension, there will be excluded unreimbursed amounts paid for unusual medical expenses. Unreimbursed amounts which exceed 5 percent of the veteran's reported annual income are considered unusual. 38 C.F.R. § 3.262 (1999). Five percent of that total income figure for 1989 is $823.76. In this case, the medical expenses in 1989 totaled $4182.80. Thus, $3,359.04 in medical expenses may be excluded. Therefore, the amount of countable income for 1989 was $13,116,18. Thus, the veteran's family income well exceeded the statutory limitation of $9,885 for 1989. Where reduction or discontinuance of a running award of Section 306 pension is required because of an increase in income, the reduction or discontinuance shall be made effective the end of the year in which the increase occurred. 38 C.F.R. § 3.660(a)(2) (1999). A review of the calculated figures above shows that the veteran's income in 1989 exceeded the applicable statutory limits. Accordingly, Section 306 pension benefits were properly terminated effective January 1, 1990, since it was discontinued due to an increase in family income in 1989. 38 U.S.C.A. § 5107 (West 1991); 38 C.F.R. §§ 3.252, 3.262, 3.660 (1999). ORDER Section 306 pension benefits were improperly terminated, effective January 1, 1986. Section 306 pension benefits were properly terminated, effective January 1, 1990. REMAND In this case, the veteran has requested a waiver of the recovery of the debt at issue. As noted, the RO determined that the veteran's Section 306 benefits should have been terminated effective January 1, 1986. This action resulted in an overpayment in the amount of $16,112. In the decision above, the Board has found that the portion of the overpayment created by the termination of Section 306 benefits for the period of January 1, 1986 to December 31, 1989 was improper; thus that portion of the overpayment is moot and the veteran does not owe that portion of the originally calculated debt. The veteran's current debt consists of Section 306 benefits paid from January 1, 1990 until June 1992 when his benefits were suspended. The Board has thoroughly reviewed the record, but notes that it is incomplete. There is no record of award letters dated after January 1979 nor is there any other information showing what amounts of Section 306 pension the veteran were paid during the entire period of the original overpayment at issue. The information of record is insufficient to determine what monies were paid from January 1, 1990 until June 1992. Clearly, from the actions taken above, the overpayment has been significantly reduced. As such, the Board finds that the RO should perform a paid and due audit of the veteran's Section 306 pension account for the period from January 1, 1990 until June 1992. In addition, a current and complete financial status report should be requested from the veteran since he maintains that he has increasing medical care costs for him and his wife. Once this information is of record, the RO should refer to the Committee the newly calculated overpayment for the period from January 1, 1990 until June 1992 for consideration of waiver. The law requires full compliance with all orders in this remand. Stegall v. West, 11 Vet. App. 268 (1998). Although the instructions in this remand should be carried out in a logical chronological sequence, no instruction in this remand may be given a lower order of priority in terms of the necessity of carrying out the instructions completely. Accordingly, this matter is Remanded for the following action: 1. The RO should perform a paid and due audit of the veteran's Section 306 pension account for the period from January 1, 1990 until June 1992. The veteran should be furnished this information and provided an opportunity to respond. 2. The RO should request from the veteran a current and complete financial status report to include all medical expenses. 3. The RO should refer this matter to the Committee for review of the veteran's claim for entitlement to a waiver of recovery of an overpayment of Section 306 pension benefits in the newly calculated amount. If any action taken is adverse to the veteran, he and his representative should be furnished a supplemental statement of the case that contains a summary of the relevant evidence and a citation and discussion of the applicable laws and regulations. He should also be afforded the opportunity to respond to that supplemental statement of the case before the claim is returned to the Board. The appellant has the right to submit additional evidence and argument on the matter or matters the Board has remanded to the regional office. Kutscherousky v. West, 12 Vet. App. 369 (1999). This claim must be afforded expeditious treatment by the RO. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See The Veterans' Benefits Improvements Act of 1994, Pub. L. No. 103-446, § 302, 108 Stat. 4645, 4658 (1994), 38 U.S.C.A. § 5101 (West Supp. 1999) (Historical and Statutory Notes). In addition, VBA's Adjudication Procedure Manual, M21-1, Part IV, directs the ROs to provide expeditious handling of all cases that have been remanded by the Board and the Court. See M21-1, Part IV, paras. 8.44- 8.45 and 38.02-38.03. C.W. Symanski Member, Board of Veterans' Appeals