If you are a veteran receiving benefits and you have just received notice of an overpayment of those benefits, it is important that you are aware of your rights and duties regarding the overpayment. First and foremost however, do not freak out, because you may not necessarily be required to pay the overpayment. However, if you must repay it, remember to modify your spending accordingly so you are able to cover this new and possibly unexpected expense.
The majority of overpayments come into existence for veterans who were receiving additional compensation for dependents, and a major life event occurs which render the veteran no longer eligible to receive those benefits. This can include the death of a spouse or child, a divorce from a spouse, or a child reaching a certain age and no longer qualifying as a dependent for veterans benefits. Another common and unfortunate event which can cause an overpayment is for any veteran who is incarcerated for more than sixty days. If any of these events happen to you, the best way to minimize the risk for overpayment is to notify the VA as soon as possible. If you do this, the VA has been made aware of the change and should reduce your overall monthly compensation to reflect the proper compensation you should be receiving. Unfortunately, even when you do this the VA may not timely correct your compensation amount, and pay you as if no life change had occurred. If this occurs, once the VA does decide to change your compensation, it will date back to the date the event occurred, and this is where the overpayment will be created.
If this overpayment does occur, there are several steps a veteran can take to contest the overpayment, or be released from their burden to pay the money owed. Congress has passed laws that require the VA to allow a veteran to keep any excess payments when the VA realizes that it has been over paying a veteran, if the monetary amount was based solely on VA administrative error or error in judgment.
According to 28 C.F.R § 1.911(c), if there is a debt created by overpayment of benefits, a veteran who is subject to the overpayment may:
- Dispute the validity or amount of the debt
- Request waiver of collection of the debt
- Request a hearing on the waiver request; and
- Appeal the decision of the VA denying a waiver request or a challenge to the validity or underlying amount of the debt, including appealing to the U.S. Court of Appeals for Veterans Claims.
One step that a veteran can take in order to dispute the validity or amount of the debt is to file a notice of disagreement to the overpayment, providing the reasoning and evidence as to why he or she should not have to pay the overpayment. If a veteran chooses not to use this path, the veteran can and should apply for a waiver of overpayment of the debt, specifically stating the specific reasons why the waiver should be granted. This reasoning can include providing timely notice to the VA of changed circumstances; fault attributed directly to the VA, and/or why collection of the debt would be unfair and creates a financial hardship. A veteran is not limited to these grounds, and can request all of them or can state other unique reasons why the overpayment should be waived.
When the VA reviews a request for waiver or disagreement with an overpayment, the VA must take into account the following factors in determining its final decision:
- The fault of the veteran in the creation of the debt;
- The fault of the veteran versus the fault of the VA;
- Whether collection would cause undue hardship, by depriving the veteran and their family of basic necessities;
- Whether collection would defeat the purpose of the VA benefits involved;
- Whether failure to collect would result in the unjust enrichment of the veteran; and
- Whether the veteran has changed his or her position for the worse in reliance upon the VA benefits to be offset or collected.
An important point to remember is that the VA will not waive any debt if there is an indication of fraud, misrepresentation, or bad faith on the part of the person or persons seeking the waiver. If you are a veteran who has received notice of a debt due to the VA due to an overpayment, just remember, you may be able to utilize the above options to minimize the debt owed. Have a wonderful day and thank you for your service.