Nearly 25,000 veterans were “hit” by Department of Veterans Affairs (VA) financial penalties from 2010 to 2015 stemming from a federal law enacted by Congress over forty (40) years ago.
The law, simply stated, bans the duplication of benefits (or double dipping”) by service members. If service members accept voluntary or involuntary military separation pay, they will have that money recouped by the VA if they later apply for disability compensation.
Because of a reduction in personnel effort in the early 1990s to reduce the number of active-duty service members, certain types of separation payments were offered, such as the Special Separation Benefit (SSB) Program.
According to a 2022 Rand Corporation Report, from 2013 through 2020, 2,651 veterans had their SSB recouped by the VA because they were receiving other VA disability benefits. On average, each veteran had $25,700 recouped.
Many of the service members, who entered the SSB Program, claimed they were not aware that they would have to re-pay the separation pay benefit if they applied for VA disability compensation.
Also, 72,206 veterans had their voluntary or involuntary separation pay, which are different types of separation benefits, recouped in this time frame. Of this group of veterans, an average of $19,700 was recouped per person.
After the voluntary or involuntary separation pay is recouped by the VA, usually through monthly installment payments, then a veteran can collect the entire amount of their disability compensation pay that they are due.
The VA recouped separation pay from 9,298 veterans in the 2023 fiscal year, according to the department.
Veterans are notified of the recoupment process when they fill out a form known as the Veteran’s Application for Compensation and/or Pension during the application process for VA disability compensation.
According to the VA, there is language on the Veteran’s Application for Compensation form stating that separation pay may be recouped from VA benefits. Also, this form includes a block that is to be completed to report receipt of separation pay.
Additionally, when the VA awards disability compensation to a veteran, the notification letter includes a paragraph explaining that separation pay must be recouped from VA compensation, when applicable.
My Opinion: Congress established the law that service members must pay back their separation compensation to the VA if they apply for disability compensation benefits. Unfortunately, many veterans were not made aware of this ruling when they willfully accepted the separation benefits.
Some veterans first became aware of this law when they filed their claim paperwork for the Sergeant First Class Heath Robinson Honoring Our Promise to Address Comprehensive Toxics (PACT) Act.
It appears that if the veteran accepted separation pay but never filed a claim for disability benefits they earned from the VA, the veteran would not be penalized by the law.
My main concern is: Why did Congress establish this law in the first place? Separation pay is provided by the Department of Defense (DoD), while disability compensation benefits are provided by the Department of Veterans Affairs. They are two (2) distinctive and separate Departments within the federal government.
Apparently, there are times when the military is downsizing, such as in the early 1990s after the Persian Gulf War, and certain skilled service members are no longer mission-required.
It is certainly unjust to release them into the civilian workforce and force them to make an immediate decision between accepting separation pay now or VA benefits sometime in the future.
I believe that it is up to the Veteran Service Organizations (VSOs) like the American Legion, the Disabled American Veterans (DAV), and the Veterans of Foreign Wars (VFW) to seek justification from Congress for why this law is still in effect.
Congress’ argument may be that this law is needed because of the prohibition on multiple payments from multiple federal agencies (DoD and VA) based upon a single period of service.
This viewpoint really doesn’t “hold water” because in 2003 Congress changed the federal codes to remove the prohibition on “concurrent receipt” just with DoD retirement pay.
This leads me to recommend that Congress should clarify to the VSOs and the veterans the value of recouping separation compensation from service members or change the law.
On May 13, 2023, Representatives Ruben Gallego and Gus Bilirakis sponsored H.R. 3489 the Restore Veterans Compensation Act, a bill that would have eliminated the requirement for VA to recoup separation pay and incentive payments for veterans who receive disability compensation.
“VA disability compensation can often be the difference between making ends meet and homelessness for many of our nation’s disabled veterans, which is why the practice of withholding a veteran’s VA disability compensation due to a non-related military separation benefit must end,” said Jim Marszalek, Disabled American Veterans (DAV) National Service Director.
“The Restore Veterans’ Compensation Act would afford justice for veterans and allow them to keep their separation payments,” said the DAV National Service Director Jim Marszalek, “which are based on their military service and differ from VA disability compensation.
I totally agree with the comments made by Director Marszalek.
BioSketch: John Plahovinsak is a retired 32-year Army veteran who served from 1967 to 1999. He is the current Disabled American Veterans (DAV) Department of Ohio’s Hospital Chairman and Adjutant of Chapter #63 (Clermont County). He can be reached at: plahovinsak@msn.com.