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When and If VA Can Stop a Veteran’s Benefits

When and If VA Can Stop a Veteran’s Benefits

There are a few situations in which VA can stop a veteran’s disability benefits, and veterans should be aware of whether VA is properly withholding or ending their monthly disability check. We discuss a few common reasons why veterans may not be receiving all of their VA disability compensation, or why they are suddenly not receiving any.

 

Severance of Disability

VA can stop a veteran’s disability benefits if it severs service connection for the veteran’s disability. Veterans do have certain due process rights when VA proposes to sever their service-connected disability, such as VA must give them notice that they are proposing to sever service connection and give the veteran an opportunity to argue against the proposal. However, if VA does find that severance of service connection is warranted, it will discontinue the veteran’s disability payments as the veteran will no longer be service connected for that condition.

VA can only properly sever service connection for a veteran’s disability if there is finding of fraud or if a clear and unmistakable error was made in the decision that granted service connection. In cases where the veteran has been service connected for the condition for ten years or more, VA can only sever when there is a finding of fraud.

 

VA Overpayments

VA overpayments occur when VA finds that a veteran owes them money. Essentially, an overpayment is a debt that the veteran owes VA when they are paid more than they were supposed to be. Common causes of an overpayment are that a veteran did not notify VA of the death of a dependent or a divorce, and thus the veteran continued to receive dependency benefits, or, a veteran did not notify VA that they were incarcerated (see section on incarcerations below). When an overpayment has been created, there are a number of ways veterans and VA can settle the debt.

In most cases, if the debt is valid, VA will garnish a portion of the veteran’s monthly disability compensation as a way of slowly recouping the debt. Usually VA will only take a portion of the veteran’s check, but there are instances in which VA will withhold all of the veteran’s benefit in order to repay the overpayment.

However, if a veteran believes the overpayment was a mistake or they are not able to repay the overpayment, they may be able to fight it or request a waiver.

 

Recouping Severance or Separation Pay

If a veteran received severance pay or separation pay upon their separation from military service, and is later granted VA disability benefits, the veteran will have to pay back their severance or separation pay. Essentially, veterans cannot receive one of the benefits listed below AND disability compensation from VA. So if they receive VA disability compensation, they must pay back the amount of their separation pay, severance pay, etc.

According to VA’s M-21 Manual, VA prohibits the payment of disability compensation if the veteran received the following:

  • Readjustment pay
  • Non-disability severance pay
  • Disability severance pay (under 10 U.S.C. 1212(c))
  • Separation pay
  • Special Separation Benefit (SSB)
  • Voluntary Separation Pay (VSP)
  • Reservists’ Involuntary Separation Pay (RISP)

VA’s M-21 Manual gives VA employees instructions for how much to withhold from a veteran’s monthly compensation when recouping the benefits above. When VA withholds the veteran’s disability compensation to recoup the benefit, they can withhold some or all of the veteran’s monthly amount.

However…

VA cannot recoup separation benefits from a veteran’s disability compensation if the condition they are receiving disability benefits for occurred AFTER the period of service for which they received separation benefits.

For more information for when VA can recoup separation and severance pay, and how much they can withhold, read our blog “FAQ Friday: Separation Pay & VA Disability Compensation.”

 

Run-Ins with the Law

VA can reduce a veteran’s benefits if they are incarcerated or are found to be a fugitive felon. While VA will not exactly stop a veteran’s disability benefits if they are incarcerated, they will reduce it. However, the rules are slightly different for veterans who are found to be fugitive felons.

Incarceration

For veterans who are incarcerated for a felony, VA will reduce their benefits down to the 10% rate on the 61st day of their incarceration. In the event that a veteran was receiving the 10% disability rate before they were incarcerated, their benefits will be reduced by half on their 61st day of imprisonment.

VA is supposed to reinstate the veteran’s full benefits on the day they are released from prison. However, the veteran is responsible for notifying VA when they are scheduled to be released or if they have already been released.

VA will not reduce monthly benefits for veterans who are imprisoned for a misdemeanor.

Fugitive Felon

According to VA’s M-21 Manual, a fugitive felon can be defined as a person who is “fleeing to avoid prosecution, custody or confinement for a felony” or someone is “considered a fugitive because he/she violated a condition of probation or parole improved for commission of a felony.” If a veteran is found to be a fugitive felon while they receive VA disability benefits, VA will discontinue all disability payments. They will usually discontinue the payments from the date of the warrant for the veteran. According to the M-21 Manual, in the event that a veteran is no longer considered a fugitive felon, VA will resume the veteran’s benefits at their previous rate at either:

  • “the date of arrest for the particular warrant that is the subject of the referral from OIG [Office of Inspector General]; or
  • the date the warrant is determined to be invalid by the warrant agency, a court, or OIG.”

For any issues regarding the warrant, including disputing a warrant, must be done with the agency that issued with warrant, not VA.

Category: Veterans Law

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