BVA9506336 
DOCKET NO.  93-11 044     )       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 parents'
dependency and indemnity compensation benefits in the amount of
$20,276.24.

ATTORNEY FOR THE BOARD

Susan S. Toth, Associate Counsel

INTRODUCTION

The veteran had active service from September 1979 to March 1983.
He died in March 1983.  The appellant is the veteran's dependent
mother.

This matter arises from an administrative decision of November
1992, whereby the Regional Office's Committee on Waivers and
Compromises (RO) denied the appellant's claim for waiver of
recovery of the indebtedness at issue.  An overpayment has also
been declared in the appellant's husband's account, which will be
the subject of a separate appellate decision.

CONTENTIONS OF APPELLANT ON APPEAL

The appellant contends that recovery of the overpayment should be
waived because collection would result in undue financial
hardship.  She asserts that she bears no fault with respect to
creation of the overpayment since a County Services Officer (CSO)
assisted her with the paperwork required to apply for parents'
dependency and indemnity compensation (DIC).  She reported her
income to the CSO, but the CSO informed her that income
information was not relevant to a claim for DIC benefits.  She
specifically sought assistance with the Department of Veterans'
Affairs (VA) paperwork because of her limited education and
inability to understand the income reporting requirements.
Moreover, the appellant reported that discovery of the
indebtedness caused her to have a nervous breakdown.

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 the preponderance of the evidence is against the
appellant's claim for waiver of recovery of an overpayment of DIC
in the amount of $20,276.24.

FINDINGS OF FACT

1.  Attempts to obtain all relevant evidence necessary for an
equitable disposition of the appeal have been made by the RO.

2.  The appellant is significantly and primarily at fault in the
creation of the overpayment by virtue of her failure to properly
report the amounts of income received by her family to the VA.

3.  Collection of the debt would not deprive the appellant of the
basic necessities.

4.  Failure to make restitution would result in unfair gain to
the debtor.

5.  The appellant has not changed her position to her detriment
in reliance upon VA DIC benefits; she is not currently in receipt
of benefits due to excessive income.

CONCLUSION OF LAW

Recovery of an overpayment of DIC benefits in the amount of
$20,276.24 would not be against the principles of equity and good
conscience.  38 U.S.C.A. §§ 5107, 5302 (West 1991); 38 C.F.R.
§§ 1.963(a), 1.965 (a) (1994).

REASONS AND BASES FOR FINDINGS AND CONCLUSION

The appellant satisfied the threshold requirement of presenting a
well-grounded claim within the meaning of 38 U.S.C.A. § 5107(a).
That is, she set forth a claim which was plausible.  The Board is
also satisfied that all relevant evidence has been properly
developed, and that no further assistance is required to comply
with the VA's duty to assist as mandated by 38 U.S.C.A.
§ 5107(a).

The appellant filed a joint application for DIC with her husband
in April 1983.  They reported either the receipt or expected
receipt of the following income: (1)  $880 in unemployment
compensation from January to March 1983; (2)  $1,760 in
unemployment compensation was expected from March to December
1983; (3)  $400 in dividends and interest was expected from March
to December 1983; (4)  $2,400 in dividends and interest was
expected in 1984 and; (5)  $17,500 in insurance benefits was
expected by each applicant from March to December 1983.  Based on
this information, the RO disallowed the appellant's claim due to
excess income in June 1983.

The appellant filed another application for DIC separately from
her husband in August 1983.  On that form, zeros were placed in
every space that requested the amount of income received from a
particular source.  Zeros were also placed in the spaces reserved
for the reporting of wages, unemployment compensation, dividends
and interest, and other income.

Based on the information provided, the RO awarded parents' DIC
benefits to her in October 1983, retroactive to May 1, 1983.  The
appellant was specifically informed that she and her husband were
considered to have no countable annual income for VA purposes
since they reported having zero income from each of the following
sources:  (1) Earned; (2) Social Security; (3) Retirement; (4)
Interest; (5) Insurance and; (6) Other Income.  Enclosed with the
award letter was VA Form 21-8765 which informed her that she was
required to promptly notify the VA if the combined income of
herself and her spouse increased or decreased, otherwise, an
overpayment might result.

In December of each year from 1985 through 1989, the appellant
submitted DIC Parents' Eligibility Verification Reports.  She
placed zeros in each box which requested amounts of income
received in various forms.  She did, however, report the amounts
paid by herself and her husband during each applicable calendar
year for unreimbursed medical expenses.  In December 1985,
January 1987, January 1988 and December 1988, the RO notified the
appellant that the award of parents' DIC was continued with no
reductions for income.  The RO based the DIC award amounts on the
information provided in the EVRs.  Enclosed with each award
letter was VA Form 21-8765 which continued to inform the
appellant of the reporting requirements.

In December 1991, the appellant submitted an EVR wherein she
reported the receipt of interest and dividends in the amount of
$1,636.50.  She expected to receive the same amount the following
calendar year.  With respect to her husband, she reported that he
received wages of $35,214.91 in 1991 and that he expected to
receive $35,000 the following year.  He also had received
interest and dividends totaling $1, 636.50 in 1991 and expected
to receive the same amount the following year.

In February 1992, the RO contacted the appellant and her husband
to request further information concerning her income.
Specifically, the RO requested the date that wages were first
received, the amount of the first check and the gross monthly
amount.  The appellant's husband responded in March 1992.  He
reported that he received income in the form of wages and
interest during each year from 1983 to 1991.  In April 1992, the
RO amended the appellant's DIC account retroactive to May 1983 to
reflect this newly acquired income information.  The appellant
was notified of the overpayment amount later in April 1992; and
she requested waiver of recovery the following month.

Initially, it should be considered whether the overpayment of
benefits in this case was properly created.  In this regard, the
appellant was paid DIC as a dependent parent of the veteran under
the provisions of 38 U.S.C.A.§ 1315 which provides that benefits
will be paid at specified rates according to the amount of
countable income of the parent.  If income exceeds the prescribed
limits, benefits are not payable.  See 38 C.F.R.§ 3.25.  In this
case the appellant has not questioned the creation of the
overpayment.  She has neither disputed the amount of income
actually received nor the retroactive adjustment in benefits
required as a result of the income received.  The effective date
of a reduction or discontinuance of DIC by reason of a change in
countable income shall be the last day of the month in which the
change occurred.  38 U.S.C.A. § 5112(b)(4)(A).  Overpayments
caused by retroactive discontinuance of benefits will be subject
to recovery if not waived.  Where DIC was being paid to two
parents living together, an overpayment will be established on
the award to each parent.  38 C.F.R.§ 3.660.  The effective date
of a reduction or discontinuance of DIC by reason of an erroneous
award based on an act of commission or omission by the
beneficiary, or with the beneficiary's knowledge, shall be the
effective date of the award.  38 U.S.C.A. § 5112(b)(9).  The
effective date of a reduction or discontinuance of DIC by reason
of an erroneous award based solely on administrative error or
error in judgment shall be the date of last payment.  38 U.S.C.A.
§ 5112(b)(10).  Since the appellant failed to notify the RO after
August 1983 that her husband had received income in that year,
she continued to receive monetary DIC benefits as if the family
had no income.  Since she did not provide full disclosure
concerning her family's income until 1991, erroneous awards of
monetary benefits were made from 1983 to 1991.  Accordingly, the
RO properly reduced the appellant' s DIC award retroactive to the
effective date of the original award.

Pursuant to 38 U.S.C.A. § 5302(c), a finding of fraud,
misrepresentation or bad faith precludes a grant of a waiver of
recovery of the overpayment.  The RO has held that the appellant
is not precluded from waiver of recovery due to the presence of
any of the above mentioned factors.  The Board will not disturb
those findings of the RO.  As a result, the Board's decision will
be limited to the determination of whether or not waiver of
recovery of an overpayment of compensation benefits is warranted
on the basis of equity and good conscience.

In the absence of the aforementioned statutory bars to waiver,
recovery of an overpayment of improved pension 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; 38 C.F.R. § 1.963(a).  The equity and good
conscience standard means arriving at a fair decision between the
obligor and the Government.  In making this decision,
consideration is given to the fault of the debtor; balancing of
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 benefits were
intended; whether 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).

With regard to fault of the appellant and fault of the VA, the
Board concludes that the appellant was significantly at fault in
the creation of the overpayment.  Based on the questions asked in
the application forms and EVRs, the appellant either knew or
reasonably should have known that income had to be reported to
the VA.  Moreover, while she may not have filled out the forms
herself, she verified the incorrect information contained in
those forms by signing the documents.  Even if she did not
understand the forms or they were filled out inaccurately due to
errors on the CSO's part, the award letters sent to the appellant
informed her that she had reported the receipt of no income.  The
appellant, who obviously knew that her family did indeed receive
income, was obligated at that time to contact the RO and report
her income.  However, she did not do so.

Along those same lines, it is important to note that the
appellant reported from August 1983 onward that she and her
husband had no income whatsoever.  It was not until 1991, eight
years later, that she reported the receipt of income from 1983
through 1991.  Under these circumstances, it is evident that the
appellant bears significant fault with respect to creation of the
overpayment.  While it would indeed be unfortunate if misleading
or erroneous information from a CSO (a non-VA employee)
contributed to the overpayment amount at issue, that does not
excuse the appellant from insuring that accurate information was
relayed to the VA.  The appellant received EVRs, award letters
and VA Form 21-8765, all of which made it clear that income
information was relevant to the award of DIC.  Instead of making
inquiry to the VA, the appellant chose to rely on information
provided by the CSO which was in direct conflict with every
document sent to her by the VA.  While her limited education and
reported inability to understand the reporting requirements are
mitigating factors, they do not exonerate her from blame.  Nor
does any fault on the part of the VA assist in exculpating the
appellant from blame.  The VA does not bear any blame in this
case since information provided above the appellant's signature
was promptly acted upon.

The Board must also consider the appellant's ability to make
restitution without seriously impairing her ability to provide
herself and her husband with life's basic necessities.  The
appellant has asserted that undue hardship would result if she
were called upon to repay the VA indebtedness.  In connection
with that assertion, she submitted a financial status report in
May 1992, which indicated that the family's combined monthly net
income was $2,033 and total monthly expenses were $1,940.  A
monthly balance of $93 remained following the payment of
necessary expenses.  The combined monthly income consisted of
monthly gross salary of $2,383 for the appellant's husband and
interest income of $97.50 which was received by both individuals.
The expenses included $400 for food, $180 for utilities and
heat, $45 for telephone, $240 for insurance, $150 for clothing,
$200 in unreimbursed medical expenses, $600 for work related
travel, $50 for homeowners' insurance, $25 for property taxes and
$50 for payments on installment contracts and other debts.  The
$50 debt was being paid to a hospital for a previous surgery.
Liquid assets consisted of $4,000 cash in the bank, $300 cash on
hand, $2,300 in U.S. Savings Bonds and $58,543 in savings
certificates.

Taken as a whole, the appellant's financial picture does not show
that hardship would result from repayment of the overpayment
amount.  She and her husband have a surplus of $93 following
payment of the listed expenses, in addition to significant liquid
assets.  Some of these expenses do not appear to be minimized.
For instance, the reported $600 in work related travel expenses
seems excessive and no explanation has been offered to account
for this amount.  Although the appellant has suffered a nervous
breakdown attributable to the overpayment at issue, her condition
is not a factor that would automatically call for waiver of
recovery of the debt.  It does not appear that the family's
income was compromised since the appellant's husband was the sole
wage earner in the family.  In sum, the family receives income
from several sources and their income exceeds expenditures to a
substantial degree.  Taking the above into consideration, the
Board finds that the appellant and her husband would not be
deprived of life's basic necessities if recovery of the debt is
not waived.

The Board further finds that failure to make restitution would
result in unfair gain to the appellant since she was paid
monetary benefits in a sum to which she was not entitled.  The VA
made erroneous payments of benefits based on incorrect
information which the appellant failed to rectify, and she, in
turn benefited.  As to the question of whether recovery of the
overpayment would defeat the purposes for which the benefits were
intended, the Board notes that the appellant is not receiving DIC
due to excess income.  Eligibility for monetary benefits may be
re-established if the appellant's income falls below the maximum
threshold.

Finally, the appellant has not alleged nor do the facts show that
reliance on VA benefits resulted in relinquishment of a valuable
right or incurrence of a legal obligation.  She has not reported
that she waived additional income from other income sources based
on her receipt of DIC benefits.

The Board concludes that the facts of this case, when weighed
against the various elements to be considered, demonstrate that a
recovery of the overpayment of benefits would not be against
equity and good conscience.  It is recognized that the elements
as discussed are not all inclusive; however, the appellant has
not advanced any other factor, nor does the record reflect any
other factor, which would be of any significance in applying the
equity and good conscience standard.  The preponderance of the
evidence is against waiver of recovery of the overpayment of
parents' DIC benefits in the amount of $20,276.24.

ORDER

Since recovery of the overpayment of parents' DIC benefits in the
amount of $20,276.24 would not be against the principles of
equity and good conscience, the appeal is denied.

          C. W. SYMANSKI
          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.