BVA9503363 
DOCKET NO.  93-02 801     )       DATE
          )
          )

On appeal from the decision of the
Department of Veterans Affairs Regional Office in New York, New
York

THE ISSUE

Entitlement to waiver of recovery of the overpayment of
Department of Veterans Affairs (VA) compensation benefits.

REPRESENTATION

Appellant represented by: The American Legion

WITNESS AT HEARING ON APPEAL

Appellant

ATTORNEY FOR THE BOARD

J. Connolly, Associate Counsel

INTRODUCTION

The veteran had active service from July 1959 to October 1961.

This matter came before the Board of Veterans' Appeals (Board) on
appeal from a September 1992, decision of the Committee on
Waivers and Compromises (Committee) of the New York, New York,
Regional Office (RO) of the VA.  The notice of disagreement was
received in October 1992.  The statement of the case was sent to
the veteran in November 1992.  The substantive appeal was
received in December 1992.

REMAND

The Board after reviewing the record especially the April 1993
hearing transcript concludes that the veteran is disputing the
debt.  He wishes an explanation of how and why the overpayment
was created.  He wishes to have clarifications of the amount of
the overpayment with the beginning and ending dates of it set
forth.  He alleged at the hearing that he notified the VA in
White Plains when he got divorced in 1983.  He testified that he
spoke to a Mr. Miranda.  He is therefore alleging that the
overpayment was due to sole VA error.

The United States Court of Veterans Appeals has clearly stated
when a debtor requests a waiver and also asserts that the
underlying debt is invalid, VA must resolve both matters.
Schaper v. Derwinski, 1 Vet.App. 430 (1991).  Based on the
veteran's statements, the Board has determined that the veteran
has raised the issue of whether the overpayment in this case was
properly created.  Furthermore, the Board has also determined
that the creation issue is inextricably intertwined with the
issue of waiver of the recovery of the overpayment, currently
certified for appellate review.  Thus, the issue of the proper
creation of the overpayment of compensation benefits should be
adjudicated by the RO prior to return of the case to the Board.
Harris v. Derwinski, 1 Vet.App. 180 (1991).

Additionally, the veteran testified that his family income has
decreased since his last reported Financial Status Report in
April 1992.  Specifically, he related that his wife had no income
and that he was unemployed and that the repayment of the alleged
debt would cause hardship.  In light of those statements, the
veteran should be asked to complete a current financial status
report.

Under the circumstances of this case, additional development is
necessary in order to fulfill the VA's duty to assist.
Accordingly, this matter is REMANDED for the following action:

1.  The RO should develop and adjudicate
the issue of whether the creation of the
overpayment of VA compensation benefits was
proper.  The period covered for the
overpayment, i.e., beginning and ending
dates, the amount, and the reason for the
creation of the overpayment must be set
forth separately in the determination.  The
RO should also address the issue of sole VA
error in the creation of the overpayment.

2.  The RO should contact the veteran and
request a completed and current Financial
Status Report.

3.  If the issue of whether the creation of
the overpayment of VA compensation benefits
was proper is not resolved in the veteran's
favor, the Committee should again formally
consider the veteran's claim of entitlement
to a waiver of the recovery of an
overpayment of VA compensation benefits.
If the 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.  The supplemental statement of
the case should explain how the overpayment
was created with supporting 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.

No action is required of the veteran until further notice.  The
Board expresses no opinion, either factual or legal, as to the
ultimate determination warranted in this case pending completion
of the requested development.

          E. M. KRENZER
          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.

Under 38 U.S.C.A. § 7252 (West 1991), only a decision of the
Board of Veterans' Appeals is appealable to the United States
Court of Veterans Appeals.  This remand is in the nature of a
preliminary order and does not constitute a decision of the Board
on the merits of your appeal.  38 C.F.R. § 20.1100(b) (1994).