Frequently Asked Questions about VA Disability Overpayments
It can be shocking to get a letter from the VA that says they overpaid you on your VA benefits and now you owe that money back. It is common to wonder what that means and how it will affect your benefits. We have answered some of the most frequently asked questions regarding VA disability overpayments to help you understand the process and the options you have moving forward.
Table of Contents:
What is a VA disability overpayment?
How will I be notified of an overpayment of VA Benefits?
What will happen to my benefits if there is an overpayment?
How much will the VA take of my benefit per month to recoup the overpayment?
What are my options for dealing with the overpayment?
How long will I have to request a waiver?
How do I request a waiver?
What are the 6 factors that the VA will consider when deciding on a waiver?
FREQUENTLY ASKED QUESTIONS (FAQs)
A VA overpayment occurs when the VA pays you more than you were entitled to of either Service-Connected Compensation, Non-Service Connected Pension, or Survivor Benefits.
The VA will send you two letters:
- The first will notify you that they believe an overpayment has happened and explain why.
- The second letter will tell you how much the VA believes you owe. This letter will come from the VA Debt Management Center
The VA will begin garnishing (keeping) your monthly Service-Connected Compensation or Non-Service Connected Pension benefits to recoup the overpaid amount.
By law, the VA can take 100% of your monthly benefit until the overpayment is completely repaid. However, there are steps you can take to make sure this does not happen to you.
You have three options when dealing with an overpayment:
- If you think the VA is wrong or has calculated the amount incorrectly - Dispute it!
If you believe the VA is wrong about the overpayment (or believe that they have the wrong amount) you can dispute the debt. This can be as simple as writing a letter to the VA Debt Management Center explaining why they are incorrect. If you have proof they are wrong (for example: paperwork that shows you told them of a change in income or documents that show you were supposed to get the amount you received), include it with your letter. You can write to the VA Debt Management Center in two ways:
- Online through Ask VA, or
- By mail at:
U.S. Department of Veterans Affairs
Debt Management Center
PO Box 11930
St. Paul, MN 55111
- Online through Ask VA, or
- If you know you were overpaid, but it is not your fault or there is a good reason for the overpayment - File a Waiver!
If you believe or know you were overpaid, but the overpayment was not your fault or there is a good reason that you were overpaid you can file a waiver. The VA considers 6 factors when deciding whether to grant a waiver.
- If you do not want to dispute or waive the debt (or were unsuccessful in doing either) you can request that the VA set up a repayment plan.
If you do not want to dispute or waive the overpayment, you can request a repayment plan. A repayment plan is a monthly amount you agree that the VA can withhold to re-coup the overpaid amount. As mentioned above, the VA can withhold 100% of your benefit, but a repayment plan can be a much smaller percentage of your monthly benefits.
You have 180 days to request a waiver from the date of the letter from the VA Debt Management Center. However, if you request a waiver within 90 days of the date on the second letter, the VA will not start garnishing your benefit while they consider your waiver request.
You will need to submit these 2 items:
A Financial Status Report (VA Form 5655)
A personal statement that explains why you feel you should not have to repay the debt. In your statement, share information to support your waiver request. Make sure you speak to the 6 factors the VA uses to determine if you should have to pay the money back. You can also ask for an oral hearing.
The VA will consider each of the following 6 factors when deciding whether to grant your waiver. Try to talk about each of them in your personal statement, showing why you should not have to repay the overpayment amount.
- Fault of debtor.
This means the VA will look to see if the overpayment was your "fault" in any way. Did you do something you weren't supposed to? Did you not do something that was expected of you? Note: Intention does not matter. You could have simply forgotten to notify the VA of a change and the VA can still find you "at fault."
A veteran starts to receive Social Security benefits that should have resulted in their monthly VA benefits going down. But the veteran forgot to notify the VA immediately of this additional income and so continued to get the same amount from the VA as they always did. In this example, the VA could find that the veteran is at fault because they did not notify the VA immediately.
- Balancing of faults. Weighing fault of debtor against Department of Veterans Affairs fault.
The VA will weigh your fault against theirs.
The VA sent you a letter stating that you were overpaid benefits for 14 months and now owe that money back to them. You acknowledge that you waited 2 months to tell the VA you were getting Social Security benefits that should have reduced your monthly VA benefits, but after you told the VA, they continued to pay you the wrong amount for a year. In this case, the VA can weigh your 2 months against their year of fault.
- Undue hardship. Whether collection would deprive debtor or family of basic necessities.
The VA can look at whether taking all or a large portion of your benefits would create an undue hardship on you or your family. When looking at "undue hardship" they often look at whether this means you cannot afford basic necessities like rent, food, etc.
- Defeat the purpose. Whether withholding of benefits or recovery would nullify the objective for which benefits were intended.
The VA will look at whether withholding benefits defeats the purpose of you getting benefits in the first place.
A veteran receives VA disability compensation for a service-connected leg injury and uses that money for services and medicine that ensure the veteran can continue to walk. The VA now says they overpaid the veteran, and they are going to take 100% of that veteran's VA disability compensation to recoup the money. If the VA takes 100% of the veteran's disability compensation, the veteran will not be able to afford the medicine and services needed to walk and therefore will no longer be mobile. This would defeat the purpose of the benefits the veteran received.
- Unjust enrichment. Failure to make restitution would result in unfair gain to the debtor.
The VA will look to see if the veteran will unfairly benefit from not having to pay the overpayment back.
Example: A veteran would have a large sum of money - beyond what they need to take care of themselves.
- Changing position to one's detriment. Reliance on Department of Veterans Affairs benefits results in relinquishment of a valuable right or incurrence of a legal obligation.
This means that you put yourself in a worse financial situation because you thought the amount you were receiving from benefits was the right amount.
Example: A veteran was renting but decided they could buy a house based on their benefit amount. The veteran buys a house, and their mortgage is more than their rent. The VA may determine it is now unfair for them to take or reduce the veteran's benefits to pay back the overpayment since the veteran is now in a worse financial situation.