Disabled veterans are being forced to repay separation repayments that many received decades ago in order to receive disability pay. This has left many veterans without benefits and forced to spend years repaying debt to the VA.
New Federal Law for Veterans
Veterans who received special separation payments will have to repay these funds if they later become eligible for disability compensation, according to a new federal law.
What is Special Separation Pay?
Special separation pay was offered to service members a few times in the past. Typically this was offered as a one-time payment to incentivize members to leave the military when the forces needed to be reduced.
Disability Compensation
Disability compensation is a monthly payment for veterans who acquired injuries or illness during service. This is meant to help them handle the financial impact of these conditions.
Who the Law Affects
Now, this law is impacting veterans who accepted those lump-sum payments during these periods of force reduction and then later qualified for disability benefits.
High Number of Disabled Veterans
The number of veterans affected and the payouts required are staggering. Nearly 122,000 disabled veterans have had to return their payouts, which total to tens of thousands of dollars in some cases.
The PACT Act
The PACT Act increased the total number of cases requiring veterans to repay their money. This act was introduced to give more benefits to veterans who were exposed to toxic substances, but has instead exposed many veterans to this recuperation.
Potential Benefits
Officials from the U.S. Department of Veterans Affairs (VA) have claimed that the PACT Act is still a safe bet, because most veterans will receive more benefits rather than less as a result of applying.
Financial Hardships
On the other hand, many disabled veterans have been put in situations of extreme financial stress. Their repayment numbers may be high enough to put them in debt for many years and take away their regular disability payments.
Why the Law Exists
This law is meant to remove cases of double benefit, when veterans receive separation pay and disability compensation at the same time.
VA’s Role in Enforcement
The VA Department is responsible for enforcing this law. The organization must get back the separation payments before it can provide disability compensation in these cases.
VA Press Secretary Unsure About Numbers
Terrance Hayes, VA Press Secretary, says he is unsure why some years have more cases than others. He has claimed that he cannot speak on the changing figures and their impacts on veterans.
Trends in Recoupment
In fact, data has shown that each year, there are changes in the number of recoupments. The changes are likely tied to the number of disability claims and the creation of new laws like the PACT Act, which find targets who have received double benefits.
Increasing Numbers
The PACT ACT was signed into law in August 2022. Since then recoupment numbers grew nearly exponentially, from around 8,000 in 2022 to well over 9,000 in 2023.
“The Normal, Legally Required Process”
Hayes has said that the increases in recoupment haven’t been intentional, but rather “part of the normal, legally required process during completion of the initial claim application.”
Financial Consequences
Either way, many veterans are now in deep financial trouble trying to pay back large sums that they received many decades ago. This has caused veterans to be severely in debt for years trying to pay back these benefits, rather than living on the disability money they deserve.
Feeling Blindsided
Many veterans feel blindsided by the law, as they were unaware that both payments could result in a financial penalty many years later. This has left former service members feeling abandoned by a system meant to help them.
VA’s Error, Veterans’ Consequences
In some cases, the VA has admitted their own error in allowing veterans to receive both benefits. They’ve only corrected these mistakes after new claims were filed, meaning the consequences of their mistakes are now on veterans.
How the U.S. Cares for Its Veterans
This contentious law and its impact on veterans has brought back into light concerns about how we treat our veterans. Veterans currently face high rates of homelessness, unemployment and cases of untreated disability.
Limited Waivers and Exceptions
There have been limited waivers offered, but the number of passes given have been low because of strict standards and confusing processes.
Advocating Against the Law
Veteran advocacy groups believe that the law unfairly punishes veterans. The laws link unrelated benefits and end up hurting more than helping them with financial support.
Amending the Law
Legislation has been introduced to try to fix this recoupment law, but the progress has been slow. Legislators are concerned about the costs that could arise from any changes.
The Future of Veteran Care
The ongoing issues with this law expose broader concerns about how the U.S. treats its veterans. There is a clear need to reform so that veterans are not penalized unfairly and, instead, offered fair and equitable support.
Featured Image Credit: Shutterstock / Mangostar.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
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