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Department of Veterans Affairs (VA) Regional Office (RO)in Nashville, Tennessee

THE ISSUE

Entitlement to a waiver of recovery of an overpayment ofOffice of Workers' Compensation Programs (OWCP) benefits.

REPRESENTATION

Appellant represented by: James E. Foglesong, Attorneyat Law

WITNESS AT HEARING ON APPEAL

The veteran

ATTORNEY FOR THE BOARD

R. Giannecchini, Counsel

INTRODUCTION

The veteran had active military service from March 1976 toJanuary 1978.

This matter comes before the Board of Veterans' Appeals(Board) on appeal of a May 2002 decision by the RO'sCommittee on Waivers and Compromises that denied waiver ofrecovery of an overpayment of OWCP benefits in the amount of$195,011.26.

In July 2005, the veteran testified during a hearing beforethe undersigned Veterans Law Judge at the RO; a transcript ofthat hearing is of record.

REMAND

In this case, the evidence reflects that for the periodAugust 1, 1990, to October 9, 1999, the veteran was inreceipt of VA compensation benefits as well as OWCP benefitsthrough the Department of Labor. Concurrent payments of VAdisability compensation and OWCP benefits are prohibited whenbased on the same disability. See 38 C.F.R. §§ 3.708(b)(1),

3.958 (2005); see also 5 U.S.C. § 8116(b).

Here, the evidence reflects that effective July 31, 1990, theveteran's disability rating for a service-connected lumbarspine disability (characterized as lumbar laminectomy withfusion of L4, L5, S1, with residual chronic low back pain andspondylolisthesis) was increased from 10 percent to 40

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percent. In an April 1999 letter from a senior claimsexaminer at the Department of Labor, the RO was notifiedthat:

On 1/1/86, [the veteran] sustained a lumbarstrain and a precipitation of an [herniatednucleus pulposus] at L4-5 while pulling sacks ofmail off a slide and lifting heavy sacks of mailin the course of his employment as a mail clerk.At the time of his injury, he was receiving aveteran's service-connected disability award forhis back condition, L5-S1 spondylolisthesis. On 4/7/86, we authorized a lumbar laminectomy withspinal fusion at L4 to the sacrum for hiscompensable injury.

Thus, the evidence appears to reflect that the lumbar spinedisability under which OWCP benefits were predicated is alsothe same lumbar spine disability under which a higher ratingfor VA compensation benefits was predicated effectiveJuly 31, 1990. Thus, OWCP had determined that the veteranwas in receipt of prohibited concurrent payments of VAdisability compensation and OWCP benefits.

As a result of the OWCP determination that the veteran had been receiving concurrent benefits, the veteran was advisedin June 1999 by the Department of Labor that he needed tomake an election as to which benefits he wished to continue to receive. The record reflects that the veteran, whilefirst electing OWCP benefits, later revoked (through hisattorney) that election and chose VA compensation benefits inlieu of OWCP benefits. As a result, an overpayment of OWCPbenefits was created. The Department of Labor requested thatVA collect the overpayment of OWCP benefits paid to theveteran. Governing statutory and regulatory authority allowsfor agencies to cooperate with one another in their debtcollection activities. See 31 C.F.R. § 901.1(a), (c) (2005);see also 38 C.F.R. § 1.920(a) (2005) (when authorized VA mayrefer an uncollectible debt to another Federal or State agency for the purpose of collection action. Collection action may include the offsetting of the debt from anycurrent or future payment made by such Federal or Stateagency to the person indebted to VA).

In November 2001, the RO notified the veteran of theoverpayment of OWCP benefits in the amount of $195,011.26,and that the overpayment was to be collected by VA through areduction of his monthly benefits until the overpayment wasrecouped.

(Parenthetically, the Board notes that an October 1999 Officeof Workers' Compensation Program form (CA-25) reflectsvarious calculations which reflect that the veteran was overpaid OWCP benefits in the amount of $195,011.26 for theperiod August 1, 1990, to October 9, 1999 ($208,746.22 minusapparent life and health insurance premiums of $12,135.29 and$1,599.67). The Office of Workers' Compensation form (CA-25)also reflects a benefit weekly pay rate of $454.90.)

In a February 2002 letter to the RO, VA's Acting UnderSecretary for Benefits noted that,

While reviewing the claims folder, I noted [theveteran's] request, dated September 19, 2001, forwaiver of his overpayment. Your office began

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withholding without a response or referral of hisrequest to the Committee on Waivers andCompromises . . . . I am returning [theveteran's] claims folder for you to provide dueprocess and refer his request to the Committee onWaivers and Compromises.

A subsequent undated letter from the RO to the veteran notes,

We have adjusted your benefits based oninstructions from the Department of VeteransAffairs Acting Under Secretary for Benefits. An overpayment has been created because we areresponsible for collecting the overpayment withthe Department of Labor. By our office creatingthe overpayment, you are afforded the opportunityof requesting a waiver of the overpayment.

The RO did not indicate why it had thought that VA hadcreated the overpayment. Additionally, it did not indicateby what authority it had jurisdiction to decide whethercollection of an overpayment of OWCP benefits could be waivedby VA.

In a March 2002 letter from the Debt Management Center, theveteran was notified that he owed the VA $195,011.26. An April 2002 decision by the Committee on Waivers andCompromises denied the veteran's request of waiver of$195,011.26. In its September 2002 statement of the case(SOC), the RO noted that an overpayment of OWCP benefits hadbeen made to the veteran for which VA was responsible forcollecting. The RO denied the veteran's claim for waiver,and in doing so considered the standard of "equity and goodconscience." See 38 C.F.R. § 1.965 (2005).

The Board notes that the governing regulation provides that,"There shall be no collection of an overpayment, or anyinterest thereon, which results from participation in abenefit program administered under any law by VA when it isdetermined by a regional office Committee on Waivers andCompromises that collection would be against "equity andgood conscience." See 38 C.F.R. § 1.962 (2005). In addition, the governing regulation provides jurisdictionalauthority for an RO Committee on Waivers and Compromises toconsider and determine settlement, compromise and/or waiver,of those enumerated debts and overpayments arising out ofoperations of the Veterans Benefits Administration. See 38 C.F.R. § 1.956 (2005).

The Board notes that in this case, the RO's recoupment of$195,011.26 is not a result of an overpayment of benefitsadministered by VA. Here, as noted above, the overpayment ofbenefits was made by the Department of Labor. Under the law,VA is authorized to recoup the overpayment on behalf of theDepartment of Labor. Otherwise, the Board can find noregulatory provision that would allow for a claimant torequest a waiver with VA for overpayment of benefits createdthrough another Federal Department or Agency. It does not appear from the Board's review of the regulatory authoritythat the RO's Committee on Waivers and Compromises hasjurisdictional authority to consider any waiver request by aveteran of an overpayment of benefits created through aFederal Department or Agency other than VA.

When there has been an overpayment of OWCP payments,

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Department of Labor regulations allow for a waiver of theoverpayment or for an accounting of the creation of theoverpayment. Such requests must be made through theoriginating agency, the Department of Labor. See e.g.,20 C.F.R. § 10.433-34 (2004).

As a result, the Board finds that the September 2002 SOC isconfusing. It refers to VA authority to waive theoverpayment and it does not provide the governing legalauthority under which VA has the power to act and recoup theoverpayment of benefits created through the Department ofLabor. Thus, due process concerns require that the veteranbe issued a supplemental statement of the case (SSOC)regarding his claim. (If the RO intended for its committeeto act with respect to an overpayment of VA benefits, thenthe issue has been mis-characterized and should be addressed within the jurisdictional limitations set by VA regulationsthat allow for consideration of a waiver of recovery ofoverpayment of VA benefits. If the RO intended to act merelyas a collection arm for the Department of Labor, itsauthority for doing so was not cited in the SOC and theveteran was apparently misled to believe that the overpaymentwas of VA benefits and was created by VA.) The facts of this case and the way in which the issue is addressed by the ROmight also affect the Board's jurisdiction to act. This is so because the Board has jurisdiction to act on "[a]llquestions of law and fact necessary to a decision by theSecretary of Veterans Affairs under a law that affects theprovision of benefits by the Secretary to veterans or theirdependents or survivors . . ." 38 C.F.R. § 20.101 (2005)(emphasis added). In other words, the Board's jurisdictionis limited to laws governing VA benefits, not those thataddress other agencies, such as entitlement to waiver of OWCPbenefits, for example. In order to clarify this matter,including the issue addressed by the RO, a remand isrequired.

Accordingly, this matter is hereby REMANDED for the followingaction:

The RO must furnish to the veteran and his attorney, a Supplemental SOC (SSOC)that addresses the correct nature of the action taken by the RO, whether underauthority to consider waiver of recoveryof overpayment of VA benefits or inconnection with an action to recoup anoverpayment of OWCP benefits in theamount of $195,011.26 on behalf of theDepartment of Labor. Clear reasons and bases for its determination, as well as arecitation of appropriate legalauthority, should be set forth. (If theRO determines that its action is in the nature of recovery of overpayment of VAbenefits, then the overpayment of the VAbenefit, not the OWCP benefit, should becalculated for the period in question andthe veteran should be given a fullaccounting. If the RO determines that its action is in the nature of recoupmenton behalf of the Department of Labor, theSSOC should include recitation of the provisions of law allowing for such anaction and the provisions of 38 C.F.R.

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§ 20.101 regarding the Board'sjurisdiction over VA issues.)Thereafter, the veteran and his attorneyshould be afforded the appropriate timeperiod for response.

Thereafter, the case should be returned to the Board forfurther appellate review, if in order. By this remand, theBoard intimates no opinion as to any final outcome warranted.No action is required of the veteran until he is notified bythe RO. The veteran has the right to submit additionalevidence and argument on the matter the Board has remanded tothe RO. Kutscherousky v. West, 12 Vet. App. 369 (1999).

This case must be afforded expeditious treatment. The lawrequires that all claims that are remanded by the Board or bythe United States Court of Appeals for Veterans Claims foradditional development or other appropriate action must behandled in an expeditious manner. See 38 U.S.C.A. §§ 5109B,7112 (West Supp. 2005).

MARK F. HALSEY Veterans Law Judge, Board of Veterans' Appeals

Under 38 U.S.C.A. § 7252 (West 2002), only a decision of theBoard is appealable to the United States Court of Appeals forVeterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of theBoard on the merits of your appeal. 38 C.F.R. § 20.1100(b)(2005).