Senate Bill Would Stop VA From Withholding Disability Checks Over Separation Pay
For veterans who received a lump-sum separation payment because they left before completing 20 years of service, the Department of Veterans Affairs can withhold later disability checks until it recoups that money.
Federal law treats these two payments as a duplication, requiring the VA to recoup the earlier payment when a veteran who received separation pay is later awarded disability compensation, according to military.com.
A bill, the Restore Veterans’ Compensation Act, introduced Aug. 7 by Sen. Ruben Gallego, D-Ariz., would prevent the department from doing so.
“It is ridiculous to claw back money from a veteran who has put life and limb on the line, just because later in life they qualify for disability benefits,” Gallego said in a statement to Military Times.
Per military.com, since fiscal year 2013, more than 122,000 veterans paid back more than $2.5 billion in separation pay and bonuses, with roughly $364 million still outstanding. The clawbacks have left many veterans in financial hardship, according to NBC News.
The legislation reads, “The amount of disability compensation to which a member may be entitled under the laws administered by the Department of Veterans Affairs may not be reduced on account of the receipt of separation pay, severance pay, or readjustment pay.”
Background
Under current rules, when a veteran who received separation pay later becomes eligible for disability compensation, the VA seeks to recover the separation payment. This offset can result in the withholding of disability checks until the debt is repaid.
Supporters of the change argue that veterans should not be penalized for receiving both types of benefits, especially when their disabilities may have developed after their service ended.