Citation Nr: 0006106 Decision Date: 03/07/00 Archive Date: 03/14/00 DOCKET NO. 97-12 920 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Roanoke, Virginia THE ISSUE Whether the overpayment of $97,866.67 in improved disability pension benefits was properly created. REPRESENTATION Appellant represented by: Virginia Department of Veterans Affairs WITNESS AT HEARINGS ON APPEAL Appellant ATTORNEY FOR THE BOARD Alberto H. Zapata, Counsel INTRODUCTION The veteran served on active duty from June 1964 to June 1966. This matter comes to the Board of Veterans' Appeals (Board) on appeal from a May 1996 decision of the Committee on Waivers and Compromises (COWC) in Roanoke, Virginia Regional Office (RO). This case was previously remanded by the Board for further development in December 1998. That development has been completed and the case is now ready for appellate review. FINDINGS OF FACT 1. All relevant evidence necessary for an equitable disposition of the veteran's appeal has been obtained by the RO. 2. The overpayment in question was created on the basis of a previously waived overpayment and on the improper inclusion of income of a woman to whom the veteran was not legally married. 3. During the period at issue, the veteran and his legal spouse were estranged. CONCLUSION OF LAW The overpayment of improved pension benefits in the calculated amount of $97,866.67 was not properly created. 38 U.S.C.A. §§ 5107, 103(c) (West 1991); 38 C.F.R. §§ 1.911(c), 3.1(j), 3.102, 3.205, 3.660(a) (1999). REASONS AND BASES FOR FINDINGS AND CONCLUSION Initially, the Board notes that the claim on appeal is well grounded under 38 U.S.C.A. § 5107(a). The Board is satisfied that all relevant facts have been properly developed and no further assistance to the veteran is required in order to comply with 38 U.S.C.A. § 5107 (a). Pertinent Facts The veteran's original claim for pension benefits was received at the RO in June 1973. In an October 1973 rating decision, the RO granted non-service-connected pension benefits effective from June 28, 1973. A divorce decree is of record showing that the veteran was legally divorced from his first wife in July 1978; the veteran informed the RO of the divorce in June 1979. In an August 1979 letter, the RO informed the veteran that his election to receive Improved Pension was made effective from January 1, 1979. A certificate of marriage is of record showing that the veteran married his second wife in September 1981. In Eligibility Verification Reports (EVRs) dated from January 1986 through February 1993, the veteran reported that he was not married and therefore there was no spousal contribution to family income. In an October 1992 letter, the RO informed the veteran that his payments were being terminated effective from February 1, 1989, because of $15,761 in unreported income earned in 1989. A notice of overpayment of $8,926.67 was mailed to the veteran in March 1993; he was provided with his appellate rights. In a March 1993 letter, the veteran petitioned for waiver of the indebtedness. COWC granted a waiver for that amount in a May 1993 decision. In March 1996, the RO received from the veteran a copy of a marriage certificate to his third "wife," showing a marriage date in December 1984. In an April 1996 letter, the RO informed the veteran that his benefits had been terminated effective from January 1, 1985, because he had been married since December 1984. In a February 1996 letter, the RO informed the veteran that it was proposing to terminate his benefits effective June 28, 1973, because of the failure to report that he was married. After again receiving a request for waiver, COWC determined in an April 1996 decision, from which this appeal was taken, that the veteran was not entitled to waiver of indebtedness in the amount of $97,866.67. In his October 1996 personal hearing at the RO and his August 1998 personal hearing before the undersigned Member of the Board, the veteran argued, essentially, that the indebtedness in question was not properly created given that he was not legally married to his third "wife," whose countable income constitutes the reason for the indebtedness. The veteran testified that he married his second wife in September 1981 and, to the best of his knowledge at the time, obtained a valid annulment of that marriage in 1982. He then remarried in December 1984. He asserted that he did not find out until November 1995, when he applied to purchase a condominium, his marriage to his second wife had never been properly legally annulled. As a result, he is of the opinion that the marriage to his third "wife" was not valid for VA benefits purposes and therefore the income attributable to his third wife should not be deemed countable for income verification purposes. The Board remanded this case in December 1998 to the RO for issuance of a statement of the case covering the issue of whether the indebtedness in question was properly created. In a January 1999 audit of the overpayment at issue, the RO informed the veteran that the first debt owed was $8,926.27 and the second debt due was $88,940.40; this equated to $97,866.67 in total debt. After issuance of the statement of the case, the veteran perfected his appeal, and the creation issue is properly before the Board. Analysis As the veteran clearly disputed the debt in this case, the threshold question before the Board in the present appeal is whether the overpayment of improved pension benefits, was properly created. See Schaper v. Derwinski, 1 Vet. App. 430 (1991); VAOPGCPREC 6-98 (April 24, 1998). A veteran, surviving spouse or child who is receiving pension, or a parent who is receiving compensation or dependency and indemnity compensation must notify the Department of Veterans Affairs (VA) of any material change or expected change in his or her income or other circumstances which would affect his or her entitlement to receive, or the rate of, the benefit being paid. Such notice must be furnished when the recipient acquires knowledge that he or she will begin to receive additional income or when his or her marital or dependency status changes. In pension claims subject to § 3.252(b) or § 3.274 and in compensation claims subject to § 3.250(a)(2), notice must be furnished of any material increase in corpus of the estate or net worth. 38 C.F.R. § 3.660(a)(1). Overpayments created by retroactive discontinuance of benefits will be subject to recovery if not waived. 38 C.F.R. § 3.660(a)(3). Subject to certain limitations, the debtor has the right to informally dispute the existence or amount of the debt, to request waiver of collection of the debt, to a hearing on the waiver request, and to appeal the VA decision underlying the debt. 38 C.F.R. § 1.911(c). As an initial matter, the Board notes that that the overpayment of $8,926.77, referred to by the RO in its January 1999 audit, stems from overpayment related to countable income that was not reported in conjunction with the veteran's employment in 1989. As noted above, COWC granted a waiver of overpayment with respect to the first debt in a June 1993 decision. The veteran was notified of that decision. Therefore, the first debt is no longer at issue given that recovery has been waived. Thus, the total amount of indebtedness still in controversy is the second debt of $88,940.40. This second debt relates to the veteran's failure to report to the RO that he was married over the period January 1985 through December 1995. As a result, the RO did not exclude the third wife's countable income from the veteran's pension benefits. The evidence shows that the veteran married his second wife in September 1981 and that divorce pleadings were not filed in the state of North Carolina until July 1998. The RO has correctly pointed out that a marriage certificate associated with the claims file shows that the veteran remarried in December 1984 and that EVRs submitted by the veteran from 1986 through 1994 state that he was not married. Moreover, the evidence shows that the veteran shared a joint bank account with the woman listed in the December 1984 marriage certificate from the state of Virginia. While such evidence is probative of the veteran's bad faith, the Board finds it need not reach that issue. For VA benefits purposes, a marriage means a marriage valid under the law of the place where the parties resided at the time of marriage, or the law of the place where the parties resided when the right to benefits accrued. 38 C.F.R. § 3.1(j). Marriage is established in any of several ways including by a copy or abstract of the public record of marriage containing sufficient data to identify the parties, the date and place of marriage, and the number of prior marriages if shown on the official record. 38 C.F.R. § 3.205(a)(1). Where, however, necessary to a determination because of conflicting information, proof of termination of a prior marriage will be shown by proof of death, or a certified copy or abstract of final decree of divorce specifically reciting the effects of the decree. 38 C.F.R. § 3.205(b). Such a final decree of divorce from the second wife was not obtained over the course of the accrued overpayment. For that reason, the woman mentioned in the December 1984 marriage certificate was not his legal spouse over the period in question, and thus her income should not have been deemed countable for improved pension eligibility verification purposes. At the time the overpayment was accrued, therefore, the veteran was still legally married to his second wife, despite his indications in EVRs to the contrary. However, the Board is of the opinion that given that the veteran and his second wife had not lived as husband and wife since their "annulment" in 1982, any reportable income she may have earned over the period in question should not serve to create an overpayment given that any funds earned were not available for the economic benefit of the veteran. Under these circumstances, the Board is of the opinion that the overpayment in question was not properly created. Having decided that the indebtedness was not properly created, the Board need not address the issue of waiver of overpayment discussed by the RO in adjudications below. ORDER An overpayment in improved pension disability benefits in the amount of $97,866.67 was not properly created, and to this extent, the benefit sought on appeal in granted. SHANE A. DURKIN Member, Board of Veterans' Appeals