Overpayment of VA Benefits

Updated: January 3, 2021

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    What happens if a veteran is overpaid when the VA sends out benefit checks or electronic payments? It can and does happen and if you receive or are about to start receiving VA benefit payments, it helps to know what your rights and responsibilities are to make sure you get the amount you are entitled to receive from the Department of Veterans Affairs.

    Overpayment of VA Benefits

    Overpayment of VA Benefits You may be overpaid for VA benefits for a variety of reasons, and those reasons can vary depending on the nature of your benefits. Some immediately think of the GI Bill when contemplating overpayment but there are a variety of scenarios that could result in a veteran getting more money than they were supposed to. They include:

    • Failure of the veteran to make a required co-pay for VA care
    • Failing to report to the VA that a school-age dependent child has married
    • Dropping out of school while receiving VA education benefits
    • Being incarcerated
    • The Veteran Rehabilitation program spent funds to help a Veteran, who later drops out of the program “without good reason”
    • Those receiving a VA income-based pension who fail to report a change in income
    • A Veteran has a change in marital status and fails to notify the VA
    • Death of a dependent that is not reported to the VA

    And yes, there are specific scenarios associated with the GI Bill that can result in overpayment. They include:

    • Lowering the number of classes
    • Quitting school
    • Otherwise lowering the time spent in classes after payments have already been processed

    Changes in a student’s credit hours can affect a variety of VA payments including the housing stipend offered under the Post 9/11 GI Bill and the books/supplies stipend.

    In normal cases the school’s certifying official will notify the VA of any changes to the schedule or student status of the veteran. In such cases, the VA notes the overpayment and sends a message to the student to inform them of the debt created against their VA account.

    The VA official site reminds that even when a school issues refunds in accordance with their written policies, if the amount paid by the school does not cover the student’s indebtedness with the VA, the student is responsible for paying the difference. In cases where the school refunds money directly to the student, the VA official site advises, “you must clear the debt with us.”

    How Does The VA Know?

    We’ve already mentioned that in the case of GI Bill overpayments, the school notifies the Department of Veterans Affairs. But what about in other cases? How does the VA know that a veteran’s school-age dependent child has married? Or any of the other causes of potential overpayments?

    In some cases it’s because the VA has had information shared with it from other federal agencies.

    There are other methods, but the bottom line is that when there is change to legal status that is placed on file with a federal agency (tax information, name changes, etc.) it may eventually make its way to the Department of Veterans Affairs.

    In cases where the veteran simply fails to report changes that could affect benefit payments, when the official records begin to catch up to the VA, it’s likely that a VA debt management letter could be on the way soon.

    What To Do If You Get A Debt Management Letter From The VA

    Those who receive VA benefits and receive a debt management letter should contact the VA Debt Management Center as soon as possible to resolve the issue. The Department of Veterans Affairs relies on this center as the main source of VA debt collection and management help.

    Call 1-800 827-0648 or e-mail the Debt Management Center at [email protected].

    What Happens If I Don’t Respond To A VA Debt Management Letter?

    If you were overpaid or thought to have been overpaid by the VA, you have sixty days to respond to the Debt Management Letter. After 60 days, the debt is sent to the VA Debt Management Center and the veteran is notified of how the VA intends to collect the debt.

    How The VA Collects Debts

    You may have your benefits reduced as a consequence of the debt until the money is fully repaid. You have the option of contacting the VA Debt Management Center to arrange a payment plan, but in cases where no response from the veteran happens the VA warns that delinquent VA debt is turned over to the U.S. Treasury Department for what the VA terms, “forced collection.”

    Some VA debt may be forgiven if the borrower applies for a waiver. This is not always possible, but don’t assume you cannot qualify for such a waiver. Contact the VA Debt Management Center or use a Veterans Service Organization to help you. The VA advises that in cases of “intentional fraud,” waivers are not possible.

    What If I Need To Dispute A VA Debt?

    As mentioned above, once you have received a debt letter from the VA you have 60 days to respond. In cases where you feel the debt is inaccurate or you otherwise disagree with the VA decision to collect, you have 60 days to file a Notice Of Disagreement with the Department of Veterans Affairs.

    Be prepared to file this notice with supporting evidence or documentation of your claim. It’s best to submit the most complete notice you can. Don’t try to file the disagreement without submitting evidence to back up your claim. Call 1-800 727-1000 to get help on what specific information may be required for your specific VA debt as no two cases are the same.

    Using Other Benefits

    VA rules state that you are not blocked from using other VA benefit programs you may qualify for even if you have a debt in one current benefit program. The Department of Veterans Affairs says in cases where a repayment plan is active, that payment plan only applies for the debt under that specific benefit.

    The VA official site states, “Once you elect to receive benefits under another program, the debt will be recouped from your last payment under your current benefit program, up to the full amount of your last payment.”

    That means the last payment is completely recouped, “unless an amount lesser than the amount of the last payment pays the debt in full.”

    In situations where the VA indebtedness is not fully repaid, “we will transfer the remaining amount of the debt to the new benefit program and the payments under the new benefit program will be reduced until the debt is paid in full.”


    About The AuthorJoe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News


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