VA Overpayment and What it Means for You

VA Overpayment and What it Means for You

An overpayment from the VA can be created when the VA determines that a veteran has been overpaid for benefits that they were entitled to. Usually, the veteran will then be responsible to repay the debt. The veteran will be notified of the debt and the VA will collect the money owed to them by either withholding current or future disability benefits paid or by a payment plan.

Common causes of overpayments 

1. A failure to report a period of incarceration to the VA
2. When veterans who are receiving VA pension benefits fail to report income or a change in dependency status. A prime example of this is when a veteran fails to report a divorce to the VA and continues to collect the benefits for their spouse.
3. When a veteran changes status in educational programs and does not notify the VA.

Once there is an overpayment that has been created by the VA, the veteran will then be notified. The VA will request that the overpayment be repaid. Sometimes the VA can create an overpayment by mistake and if the veteran believes this to be true or is unable to repay the overpayment, the veteran then has options.

What are my options?

The veteran can either dispute the overpayment amount or existence of the debt or the veteran can request a waiver of overpayment for cases of financial hardship. If a veteran decides to dispute the amount of the overpayment or the existence of the overpayment, the VA will review the accuracy of the debt determination. The veteran must dispute the overpayment within 30 days of receiving the notice of overpayment to delay the collection of the debt.

If the VA decides that the debt is actually correct, the veteran is still able to request a waiver of the overpayment. The veteran has 180 days from the date of the notice to request a waiver of the VA overpayment. The collection of the debt can also be delayed until the issue is resolved if the request for the waiver of overpayment is requested within the first 30 days from the date of the notice of the overpayment. Sometimes the VA will request a financial status report to show proof of how the collection of the debt could cause the veteran a financial hardship.

It is very important to note that the VA is unable to waive the overpayment if there is fraud, misrepresentation or bad faith on the part of the veteran. If the VA finds that the debt is accurate, the veteran can contact the VA’s Debt Management Center to try an set up a payment plan. The Debt Management Center is responsible for collecting VA overpayments from the veteran. For more information regarding the Debt Management Center, please click this link.