Citation Nr: 0003684	
Decision Date: 02/11/00    Archive Date: 02/15/00

DOCKET NO.  97-08 821	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in St. 
Petersburg, Florida


THE ISSUE

Entitlement to waiver of recovery of an overpayment of 
disability compensation in the amount of $5,129.60.  


REPRESENTATION

Appellant represented by:	The American Legion


ATTORNEY FOR THE BOARD

C. L. Mason, Associate Counsel


INTRODUCTION

The veteran had active service from September 1967 to June 
1969.  This matter comes before the Board of Veterans' 
Appeals (Board) on appeal from an October 1996 decision of 
the Committee on Waivers and Compromises (Committee) of the 
Philadelphia, Pennsylvania, Regional Office which denied the 
veteran's request for waiver of recovery of an overpayment of 
Department of Veterans Affairs (VA) disability compensation 
in the amount of $5,129.60.  Subsequently, the veteran moved 
to Florida.  In January 1998, the veteran's claims folder was 
transferred to the St. Petersburg, Florida Regional Office 
(RO).  The veteran has been represented throughout this 
appeal by the American Legion.  


FINDINGS OF FACT

1.  The RO has obtained all relevant evidence necessary for 
an equitable disposition of the veteran's appeal.  

2.  The veteran was overpaid VA disability compensation in 
the amount of $5,129.60 as a result of his dependent 
children's receipt of Chapter 35 Dependents' Educational 
Assistance benefits.  

3.  It is not contrary to equity and good conscience to deny 
a waiver of recovery of the overpayment of VA disability 
compensation in the amount of $5,129.60.  


CONCLUSIONS OF LAW

1.  The overpayment of VA disability compensation benefits in 
the amount of $5,129.60 was not due to error solely on the 
part of the VA and was otherwise properly created.  38 
U.S.C.A. § 5107(a) (West 1991); 38 C.F.R.§§ 3.503(a)(8), 
3.707, 21.3023 (1999).  

2.  Recovery of an overpayment of VA disability compensation 
in the amount of $5,129.60 would not be against equity and 
good conscience.  38 U.S.C.A. §§ 5107, 5302 (West 1991); 38 
C.F.R. §§ 1.962, 1.965 (1999).  

REASONS AND BASES FOR FINDINGS AND CONCLUSIONS

I. Creation of the Debt

A child who is eligible for educational assistance and who is 
also eligible for pension, compensation or dependency and 
indemnity compensation based on school attendance must elect 
whether he or she will receive educational assistance or 
pension, compensation or dependency and indemnity 
compensation.  The effective date of discontinuance of 
pension, compensation, or dependency and indemnity 
compensation to or for a child, or to or for a veteran or 
surviving spouse on behalf of such child, will be the day 
preceding the beginning date of the child's educational 
assistance allowance.  38 C.F.R.§§ 3.503(a)(8), 3.707, 
21.3023 (1999).  

In March 1996, the Philadelphia, Pennsylvania, Regional 
Office notified the veteran that his dependents were eligible 
for Dependents' Educational Assistance under Chapter 35 and 
provided information concerning factors affecting his 
disability compensation and Chapter 35 Dependents' 
Educational benefits including VA Forms 21-8764 and 22-5490.  
In May 1996, the Philadelphia, Pennsylvania, Regional Office 
notified the veteran that his VA disability compensation 
payments had been amended to include payments for his son and 
daughter until May 5, 1997 and June 1, 1997, respectively, 
based on their school attendance.  The veteran was notified 
that he was required to inform the VA immediately of any 
change in the number or status of his dependents.  In May 
1996, the Philadelphia, Pennsylvania, Regional Office 
retroactively awarded Chapter 35 benefits to the veteran's 
son and daughter as of March 28, 1995.  The veteran was 
informed in writing of the award of Chapter 35 Dependents' 
Educational Assistance benefits.  

In June 1996, the Philadelphia, Pennsylvania, Regional Office 
proposed to reduce the veteran's VA disability compensation 
benefits retroactively from March 28, 1995 due to his 
children's receipt of Chapter 35 Dependents' Educational 
Assistance benefits.  The veteran was informed that the 
proposed action would create an overpayment of benefits paid 
to him.  In June 1996, the veteran authorized the VA to 
immediately adjust his award.  In July 1996, the 
Philadelphia, Pennsylvania, Regional Office effectuated the 
proposed reduction.  In August 1996, the veteran was informed 
in writing of the overpayment of VA disability compensation 
benefits in the amount of $5,129.60 and his waiver rights.  

The veteran has not contested the amount of the overpayment.  
In light of this fact and given the veteran's acceptance of 
excessive VA disability compensation benefits, the Board 
finds that the overpayment of VA disability compensation 
benefits in the amount of $5,129.60 was properly created.  


II. Waiver of Recovery

Recovery of an overpayment of VA disability compensation 
benefits may be waived if recovery of the indebtedness from 
the payee who received the benefit would be against equity 
and good conscience.  38 U.S.C.A. § 5302 (West 1991 & Supp. 
1999); 38 C.F.R. § 1.963(a) (1999).  The equity and good 
conscience standard means arriving at a fair decision between 
the obligor and the Government.  In making this decision, 
consideration is to be given to factors such as: the fault of 
the debtor; a balancing of the fault of the debtor against 
any fault of the VA; whether collection would deprive the 
debtor of basic necessities; whether recovery would nullify 
the objective for which the benefits were intended; whether a 
failure to make restitution would result in unfair gain to 
the debtor; and whether reliance on the benefits would result 
in relinquishment of a valuable right or incurrence of a 
legal obligation.  38 C.F.R. § 1.965(a) (1999).  

A February 1996 Social Security Administration (SSA) 
statement submitted by the veteran in March 1996 indicates 
that the veteran had monthly payable SSA benefits in the 
amount of $1,070.00.  In an August 1996 Financial Status 
Report (VA Form 20-5655), the veteran reported that: his and 
his spouse's total monthly income was $3,356.00; their total 
monthly expenses were $3,310.00; and their assets included 
$2,500.00 cash in the bank; $80.00 cash on hand; a $100.00 
U.S. savings bond; and a 1993 car.  The veteran did not 
reported receipt of SSA benefits.  

In his August 1996 request for waiver, the veteran stated 
that his family was barely meeting their financial 
obligations as his wife had been unable to work "much" due 
to her recent breast surgery.  He advanced that repayment of 
the overpayment would render his family "close to 
homeless."  In his February 1997 substantive appeal, the 
veteran clarified that he had omitted the SSA benefits from 
his August 1996 Financial Status Report (VA Form 20-5655) as 
the funds were paid for a dependent child and expended to pay 
his college age children's expenses.  Additionally, the 
veteran contended that he "must have left off some expenses 
as I am broke each month."  

The Board has reviewed the probative evidence of record 
including the veteran's statements on appeal.  As noted 
above, the reported overpayment was created as the result of 
an improper duplication in payment of VA educational benefits 
for the veteran's children and the veteran's acceptance of 
such benefits.  Therefore, the debt arose as the result of 
fault on the part of both the veteran and the VA.  The most 
recent financial status report of record dated in August 1996 
reflects that the veteran's reported monthly family income 
was $3,356.00 and their reported monthly expenses were 
$3,310.00.  Additionally, the veteran's family had payable 
monthly SSA benefits of $1,070.00.  While the veteran 
asserted that he must have omitted some monthly expenses, he 
did not subsequently amend his August 1996 financial status 
report.  With an apparent monthly surplus of family income in 
the amount of approximately $1,116.00, the Board finds that 
there would be no undue financial hardship as a result of 
recovery of the overpayment.  

Given that the veteran's children are or were being paid 
Chapter 35 Dependents' Educational Assistance benefits 
directly, the recovery of the overpayment would not defeat 
the purpose of paying benefits by nullifying the objective 
for which the benefits were intended, namely, payment of 
additional compensation on the basis that the veteran's 
children's education pursuits.  Waiver of recovery of the 
overpayment would constitute an unjust enrichment to the 
veteran by essentially paying the same benefit twice.  The 
evidence does not show that the veteran incurred a legal 
obligation or changed his position to his detriment in 
reliance upon the receipt of VA benefits.  Therefore, the 
Board concludes that the record does not establish that 
recovery of the overpayment of VA disability compensation 
benefits would be contrary to equity and good conscience.  
Accordingly, waiver of recovery of the overpayment of VA 
disability compensation benefits in the amount of $5,129.60 
is denied.  


ORDER

Waiver of recovery of an overpayment of VA disability 
compensation benefits in the amount of $5,129.60 is denied. 



		
	J. T. HUTCHESON
	Acting Member, Board of Veterans' Appeals