Citation Nr: 18160535
Decision Date: 12/28/18	Archive Date: 12/26/18

DOCKET NO. 16-11 272A
DATE:	December 28, 2018
ORDER
The overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $7,783.82 was not properly created as benefits were reduced prior to the 61st day of incarceration for a felony, and to that extent, the appeal is granted.
REMANDED
A waiver of the recovery of the overpayment of VA compensation benefits is remanded.
FINDINGS OF FACT
1. The Veteran was incarcerated for a felony in December 2011.
2. The Veteran entered a guilty plea to a felony at trial on December 20, 2012.
3. The final disposition date to the guilty plea for a felony at sentencing was June 27, 2013.
4. VA overpaid the Veteran at a rate than he was higher than he was entitled to receive due to his incarceration.
5. VA retroactively reduced the Veteran’s VA compensation benefits to reflect the lower rate from the 61st day from December 20, 2012, but the reduction should have been made from the 61st day from June 27, 2013.
CONCLUSION OF LAW
The overpayment of $7,783.82 in VA compensation benefits was not properly created as benefits were reduced prior to the 61st day of incarceration for a felony (on February 19, 2013) and should instead be reduced from the 61st day from June 27, 2013.  38 U.S.C. §§ 1114, 5112, 5313; 38 C.F.R. §§ 3500, 3.665.
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Creation
Any person incarcerated in a Federal, State, or local penal institution in excess of 60 days for conviction of a felony will not receive compensation in excess of specified amounts.  See 38 C.F.R. § 3.665 (a).  If a veteran is rated 20 percent disabled or more, then he or she will receive compensation payable under 38 U.S.C. § 1114 (a), or the equivalent of a 10 percent rating.  See 38 C.F.R. § 3.665 (d)(1).  If a veteran is rated at less than 20 percent, then he or she will receive one-half the rate of compensation payable under 38 U.S.C. § 1114 (a).  See 38 C.F.R. § 3.665 (d)(2).  When a veteran is incarcerated for a period in excess of 60 days for conviction of a felony, his or her compensation must be reduced, for the period beginning on the sixty-first day of such incarceration.  38 U.S.C. § 5313 (a)(1); see also 38 C.F.R. § 3.665 (a). 
In December 2011, the Veteran was incarcerated for a felony.  The penal institution information and court records reflect that the Veteran entered a guilty plea to a felony at trial on December 20, 2012.  The final disposition date to the guilty plea for the felony at sentencing was June 27, 2013.
The Regional Office (RO) reduced the Veteran’s benefits to the 10 percent rate from February 19, 2013, which was the 61st day from December 20, 2012, which was the date the Veteran entered his guilty plea at trial.  This action resulted in the creation of the overpayment in the amount of $7,783.82.  However, and as argued by the Veteran, the Board finds that this action was improper.  Rather, the Veteran’s benefits should have been reduced on the 61st day following the disposition date on June 27, 2013.  The earlier guilty plea at trial was not ipso facto the conviction.  
Thus, the creation of the overpayment in the amount of $7,783.82 in VA compensation benefits was not properly created as benefits were reduced prior to the 61st day of incarceration for a felony (on February 19, 2013) and should be reduced with a recalculation from the 61st day from June 27, 2013.
REASONS FOR REMAND
Waiver
In March 2015, the Veteran’s request for a waiver of the recovery of the overpayment was denied.  The Veteran has submitted a notice of disagreement.  As such, a statement of the case must be issued.  Further, the amount of the overpayment should be recalculated first, per the decision above.  Manlincon v. West 12 Vet. App. 238 (1999).  
The matter is REMANDED for the following action:
The Veteran should be sent a statement of the case as to the issue of entitlement to a waiver of the recovery of the overpayment of VA compensation benefits in the recalculated amount, in accordance with 38 U.S.C. § 7105 and 38 C.F.R. §§ 19.29, 19.30.  If the Veteran perfects the appeal by submitting a timely and adequate substantive appeal on this issue, then the claim should be returned to the Board.

 
S. L. Kennedy
Veterans Law Judge
Board of Veterans’ Appeals
ATTORNEY FOR THE BOARD	J. Connolly, Counsel 

For A Complete Guide To VA Disability Claims and to find out more about your potential VA disability case and how to obtain favorable VA Rating Decision! Visit: VA-Claims.org

For More Information on Veterans Disability Compensation Benefits! Visit: DisableVeteran.org ~ A Non-Profit Non Governmental Agency