recoupment of separation pay in VA Disability Claims (General) Forum

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recoupment of separation pay

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edren1	recoupment of separation pay		Lead	[-]
Rookie VBNer Posts: 1 Feb 24 08 11:01 PM	Tags : None I was trying to find out about paying back my separation pay. I was discharged in AUG 2006 for failure of PRTs is was still a honrable discharge. i served 9 years. after getting approved for 20% they say i have to pay back all of my separation pay even though it was not for a service connected disability.
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Spree610		#1	[url]	[-]
Posts: 169 Feb 25 08 2:27 AM	that should be incorrect. the only reason the VA recoups separation pay is because by law you cant receive monies twice for the same disability from the military and VA. I may be wrong but you should ask your VSO about it. Spree USAF '00-'07 "The secrecy of my job prevents me from knowing just what it is that I do."
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brianwl		#2	[url]	[-]
Posts: 11847 Feb 25 08 8:47 AM Does not play well With others.	edren1, Welcome to the VBN. You need to provide documentation to the VA that shows what the severance pay was for if it was not for a medical problem.
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dumjin	Well....	#3	[url]	[-]
Rookie VBNer Posts: 1 Mar 6 08 6:32 PM	I was discharged for retention. Couldn't make E-5 due to no fault of my own. I was paid to get out and the VA recouped all of it. I am 60% disabled due to PTSD and several other reasons. Since those two don't mix does that mean they should NOT have recouped it? I am Corn-Fussed.
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cruiser		#4	[url]	[-]
Posts: 17421 Mar 6 08 7:45 PM	Separation pay, like severance pay, must be recouped; however, the amount to be recouped differs somewhat. With severance pay it depends on the initial VA evaluation for the severance disability(ies) whereas for separation pay it depends on the period of service for which the separation pay was paid vs. the period of service in which the service connected disability(ies) were incurred. In those rare cases where the person is entitled to both separation pay AND military retired pay, the recoupment is done by the military rather than VA. Cruiser
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Spree610		#5	[url]	[-]
Posts: 169 Mar 8 08 1:49 AM	cruiser wrote: Separation pay, like severance pay, must be recouped; however, the amount to be recouped differs somewhat. With severance pay it depends on the initial VA evaluation for the severance disability(ies) whereas for separation pay it depends on the period of service for which the separation pay was paid vs. the period of service in which the service connected disability(ies) were incurred. In those rare cases where the person is entitled to both separation pay AND military retired pay, the recoupment is done by the military rather than VA. Cruiser So let me get this straight. Even though his discharge was not medically related his severance its recouped by the VA still? Kinda sounds like a screwjob to me especially if the severance was not disability related and hes not entitled to the recoupment of the withholding. Spree USAF '00-'07 "The secrecy of my job prevents me from knowing just what it is that I do."
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padre45		#6	[url]	[-]
Posts: 247 Apr 23 09 11:01 PM	Cruiser, Please clear this one up. The same thing happened to my son recently and we're both confused. He was denied re-enlistment after 10 years service due to an Article 15, and got a severance check in the amount of $14K. The severance check was NOT for medical issues. That was in Oct 07. He filed a disability app in Dec 07 and was awarded 60% for several non-mental health issues around July 08, - he received a lump sum back-pay check for $3-$4K, and has received the monthly payments since then. In 2008, he showed worsening signs of mental illness and ultimately attempted suicide with a firearm. He was in a VA psych ward for several months at the end of 2008, filed but never received the temp 100% for his period of hospitalization. VA doctors told me he would likely be rated 100% for PTSD, and last week he got a letter that sounds like it's about to happen. The kicker is they are telling him his $14K severance check will have to be recouped before he can receive VA disability compensation and he will receive no back pay due to receiving the severance pay when he separated. Does this sound right? Is it possible the severance check he got WAS medical related, and they didn't tell him or he wasn't paying attention? Sorry for so many questions, just trying to help a desperate kid out. Thanks. Marty
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Rougetet		#7	[url]	[-]
Posts: 751 Apr 24 09 3:45 AM legend in his own mind	edren1 wrote: I was trying to find out about paying back my separation pay. I was discharged in AUG 2006 for failure of PRTs is was still a honrable discharge. i served 9 years. after getting approved for 20% they say i have to pay back all of my separation pay even though it was not for a service connected disability. Recoupment of a lump-sum readjustment pay (which I think is the case being mentioned) is covered under 38 CFR § 3.700(a)(2)(iii) in your case I believe. See here for those applicable regulations and how they apply to you. If it was for a disability separation pay, the applicable provision would be 38 CFR § 3.700(a)(3). If you feel you have a solid case to forgive this debt for any reason, you MAY (this is a "stretch") be able to invoke the rights and remedies provisions of 38 CFR § 1.911 as outlined here but I doubt you would prevail unless there are more extenuating circumstances than you have mentioned. ---------------------------------------------------------------------- I believe in the latter half of the "Give the person a fish...teach a person to fish..." philosophy ---------------------------------------------------------------------- ...every day on this side of the "dirtnap" is a good day! ---------------------------------------------------------------------- "A man good enough to shed his blood for his country is good enough to be given a square deal afterwards. More than that no man is entitled, and less than that no man shall have." - Theodore "Teddy" Roosevelt, 1903 ---------------------------------------------------------------------- Before questioning my experience that determines the focus and tone of my replies on this board, you may want to at least click on my name to determine how my experience focuses my replies - We all contribute here in the way we are able... ---------------------------------------------------------------------- Edited 4 times by Rougetet Apr 24 09 4:24 AM.
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Rougetet		#8	[url]	[-]
Posts: 751 Apr 24 09 3:54 AM legend in his own mind	Spree610 wrote: cruiser wrote: Separation pay, like severance pay, must be recouped; however, the amount to be recouped differs somewhat. With severance pay it depends on the initial VA evaluation for the severance disability(ies) whereas for separation pay it depends on the period of service for which the separation pay was paid vs. the period of service in which the service connected disability(ies) were incurred. In those rare cases where the person is entitled to both separation pay AND military retired pay, the recoupment is done by the military rather than VA. Cruiser So let me get this straight. Even though his discharge was not medically related his severance its recouped by the VA still? Kinda sounds like a screwjob to me especially if the severance was not disability related and hes not entitled to the recoupment of the withholding. See my reply in post # 7 for a link to the applicable regulation. IRS federal tax witholding is removed from the recoupment IF such lump-sum readjustment pay was paid AFTER September 30, 1996. ---------------------------------------------------------------------- I believe in the latter half of the "Give the person a fish...teach a person to fish..." philosophy ---------------------------------------------------------------------- ...every day on this side of the "dirtnap" is a good day! ---------------------------------------------------------------------- "A man good enough to shed his blood for his country is good enough to be given a square deal afterwards. More than that no man is entitled, and less than that no man shall have." - Theodore "Teddy" Roosevelt, 1903 ---------------------------------------------------------------------- Before questioning my experience that determines the focus and tone of my replies on this board, you may want to at least click on my name to determine how my experience focuses my replies - We all contribute here in the way we are able... ----------------------------------------------------------------------
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Rougetet		#9	[url]	[-]
Posts: 751 Apr 24 09 3:57 AM legend in his own mind	padre45 wrote: Cruiser, Please clear this one up. The same thing happened to my son recently and we're both confused. He was denied re-enlistment after 10 years service due to an Article 15, and got a severance check in the amount of $14K. The severance check was NOT for medical issues. That was in Oct 07. He filed a disability app in Dec 07 and was awarded 60% for several non-mental health issues around July 08, - he received a lump sum back-pay check for $3-$4K, and has received the monthly payments since then. In 2008, he showed worsening signs of mental illness and ultimately attempted suicide with a firearm. He was in a VA psych ward for several months at the end of 2008, filed but never received the temp 100% for his period of hospitalization. VA doctors told me he would likely be rated 100% for PTSD, and last week he got a letter that sounds like it's about to happen. The kicker is they are telling him his $14K severance check will have to be recouped before he can receive VA disability compensation and he will receive no back pay due to receiving the severance pay when he separated. Does this sound right? Is it possible the severance check he got WAS medical related, and they didn't tell him or he wasn't paying attention? Sorry for so many questions, just trying to help a desperate kid out. Thanks. Marty See my reply in post # 7 as to what I believe is the applicable regulation link in the case you mention above. ---------------------------------------------------------------------- I believe in the latter half of the "Give the person a fish...teach a person to fish..." philosophy ---------------------------------------------------------------------- ...every day on this side of the "dirtnap" is a good day! ---------------------------------------------------------------------- "A man good enough to shed his blood for his country is good enough to be given a square deal afterwards. More than that no man is entitled, and less than that no man shall have." - Theodore "Teddy" Roosevelt, 1903 ---------------------------------------------------------------------- Before questioning my experience that determines the focus and tone of my replies on this board, you may want to at least click on my name to determine how my experience focuses my replies - We all contribute here in the way we are able... ----------------------------------------------------------------------
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slphelan		#10	[url]	[-]
Posts: 112 Apr 24 09 5:00 AM	Does anyone remember the VSI, SSB program. These programs were established to award payment for service in the late 1990's to reduce the force. I got out of the army on the SSB and was told thatr if I retired from the military at a later date that the bonus would be recouped. I am now a gray area retired reservist. No payement until age 60. Once I was awarded my VA disability they never sent me any of the award they garnised that award until such a time that I pay back the SSB. I think that if you got any separation while leaving active duty the will re-collect it prior to paying your disability benefits. Please correct me if I am wrong.
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Rougetet		#11	[url]	[-]
Posts: 751 Apr 24 09 5:15 AM legend in his own mind	slphelan wrote: Does anyone remember the VSI, SSB program. These programs were established to award payment for service in the late 1990's to reduce the force. I got out of the army on the SSB and was told thatr if I retired from the military at a later date that the bonus would be recouped. I am now a gray area retired reservist. No payement until age 60. Once I was awarded my VA disability they never sent me any of the award they garnised that award until such a time that I pay back the SSB. I think that if you got any separation while leaving active duty the will re-collect it prior to paying your disability benefits. Please correct me if I am wrong. That may/could also be classified as a "lump-sum readjustment pay" if I am reading what you are saying correctly and so fall under the regulation link provided in post # 7 and thus require recoupment. Probably the only good thing in your case is that since it is being already garnished by the VA, if you do subsequently retire (am a little confused by your terminology if that has already occurred), they will not recoup it again if the VA has already gotten it all back. However, not sure if you are talking about what I know as a variable reenlistment bonus (VRB) provided to encourage you to reenlist in the military and you are relating that you got out prior to completing the term of the reenlistment that the VRB covered. If so, the VRB was provided at the START of your reenlistment, not the END or time of your separation. If you are referring to VRB, further research would be necessary on how those recoupments occur (I thought, but could be wrong, that VRB recoupment actually took place upon your voluntary separation if you were allowed such - if separated involuntarily for or not for a disability though, other regulations may be controlling). ---------------------------------------------------------------------- I believe in the latter half of the "Give the person a fish...teach a person to fish..." philosophy ---------------------------------------------------------------------- ...every day on this side of the "dirtnap" is a good day! ---------------------------------------------------------------------- "A man good enough to shed his blood for his country is good enough to be given a square deal afterwards. More than that no man is entitled, and less than that no man shall have." - Theodore "Teddy" Roosevelt, 1903 ---------------------------------------------------------------------- Before questioning my experience that determines the focus and tone of my replies on this board, you may want to at least click on my name to determine how my experience focuses my replies - We all contribute here in the way we are able... ---------------------------------------------------------------------- Edited 5 times by Rougetet Apr 24 09 8:20 AM.
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cruiser		#12	[url]	[-]
Posts: 17421 Apr 24 09 8:12 AM	Rougetet wrote: If you feel you have a solid case to forgive this debt for any reason, you MAY (this is a "stretch") be able to invoke the rights and remedies provisions of 38 CFR § 1.911 as outlined here but I doubt you would prevail unless there are more extenuating circumstances than you have mentioned. Since this is not a "debt" in that there has been no erroneous payment of VA benefits, it is not a debt collection issue. The VA's Office of Debt Management (the waiver people) aren't involved. Unlike an overpayment of VA benefits, this is a situation where the law says that if you have received Severance Pay or Separation Pay from the military, this must be withheld from any award of VA Compensation. The Committee on Waivers and Compromises has no legal authority to step in and override that provision of law. One enterprising person tried to circumvent this and went back to the source of the payment that is being recouped, and tried to get a waiver on that end. The Army also noted that there was no provision for a waiver because there was no erroneous payment of anything. You can read about that here: http://74.125.93.132/search?q=cache:OqvP20iRZSYJ:archive.gao.gov/legald426p2/156340.pdf+waiver+of+repayment+disability+severance+pay&cd=1&hl=en&ct=clnk&gl=us&ie=UTF-8 Cruiser Cruiser
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slphelan		#13	[url]	[-]
Posts: 112 Apr 24 09 2:43 PM	Rougetet your correct since I am a gray area retiree from the Reserves once they collect the payment back from the garnishment of my VA Disability then I will not have to pay it back when I am 60 and apply for my retirement pay. Once it is paid back then I will start to receive my Disability payments. It was listed on my Award letter showing the date it would end and I would start to get my disability payment. Thanks
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Cav1Sgt		#14	[url]	[-]
Posts: 4029 Apr 25 09 1:24 AM	The issue of VSI/SSB has been discussed in the Finance Issue subsection of the board. As I understand it VA will not be "garnishing" anything. It will be handled by DFAS upon reaching the point of collecting retirement benefits based on your service after receiving the VSI/SSB. http://my.roa.org/Franklin/blog provides one person's perspective and not mine. The law, without commentary is published here: http://caselaw.lp.findlaw.com/casecode/uscodes/10/subtitles/a/parts/ii/chapters/59/sections/section_1175.html It also details the law as it applies to those who were sepearated and did not later retire. Cav
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slphelan		#15	[url]	[-]
Posts: 112 Apr 25 09 3:50 PM	Cav1Sgt wrote: The issue of VSI/SSB has been discussed in the Finance Issue subsection of the board. As I understand it VA will not be "garnishing" anything. It will be handled by DFAS upon reaching the point of collecting retirement benefits based on your service after receiving the VSI/SSB. http://my.roa.org/Franklin/blog provides one person's perspective and not mine. The law, without commentary is published here: http://caselaw.lp.findlaw.com/casecode/uscodes/10/subtitles/a/parts/ii/chapters/59/sections/section_1175.html It also details the law as it applies to those who were sepearated and did not later retire. Cav Thanks for the info but this is what I found when my VA Disability check did not show up: See reference below. I checked it out and they still withhold payments. S3.700-1 /concurrent Benefits and Elections regs/38CFR/BOOKB/PART3/S3_700.DOC (5) Separation pay and special separation benefits. (i) Where entitlement to disability compensation was established on or after September 15, 1981, a veteran who has received separation pay may receive disability compensation for disability incurred in or aggravated by service prior to the date of receipt of separation pay subject to recoupment of the separation pay. Where payment of separation pay or special separation benefits under section 1174a was made on or before September 30, 1996, VA will recoup from disability compensation an amount equal to the total amount of separation pay or special separation benefits. Where payment of separation pay or special separation benefits under section 1174a was made after September 30, 1996, VA will recoup from disability compensation an amount equal to the total amount of separation pay or special separation benefits less the amount of Federal income tax withheld from such pay.
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HUSKERS024		#16	[url]	[-]
Posts: 13 Apr 27 09 3:36 PM	Okay guys and gals I'll throw my 2 cents in since I am going through it rightnow and it has reached the DRO stage. Just when I think I'm getting it all figured out, I start reading all the above posts and it gets real confusing all over again. Anyways, I separated out of the AF in 2000 for High Year Tenure. I was a SSgt/E5 and got into a fight and was demoted to E4. I was a few months from my 10 year mark at the time and thought I was being punished too hard. So like a big dummy I said cya and separated under HYT since I was an E4 again and you must be E5 or higher by your 10 year mark. I think it's 12 years now. Anyways, I received separation pay, joined the AF Reserves IMA program and pursued a career in civilian Law Enforcement. I filed for disability and received a 0% rating for my achilles tendon repair that was done in 1999. All my other claims were denied. After the 9/11 attacks, I was immediately mobilized back to active duty. This mobilization lasted for 3 1/2 years. When I was finally released I submitted new claims for new injuries. I was granted service connection and began receiving disability for a couple of months. Then I received the letter stating that I had to pay back the separation pay from 2000 before I could receive my disability compensation. Without quoting all the regualtions, I believe that if you received any separation/severance pay for a peroid of service and the compensation that you are entitled to today is from that same peroid of service then recoupement must take place. Doesn't sound like there is any way around that even though I think it is a very shitty law! In my situation I believe I have a good case because my injuries and the 50% rating I am currently at is based off of injuries that incurred during a later peroid of service: 2001-2004. None of the 50% is for my achilles tendon which is the only service connection granted after my first peroid of service. Now should that 0% for my achilles ever be increased then any compensation for that SC will be used to payback the separation pay. I thought I also read that...... say my achilles SC does go up to 10% then that money is recouped. However, should that achilles SC increase to more than 10% then any percentage over 10% is NOT subject to recoupement. Not sure on this..... Anyways, hope this helps. My disability has been witheld since 2005. I am probably about 2 to 3 months away from the recoupement being finished. However, I am hoping that the VA has been incorrect in witholding my compensation in the first place and that I'll be receiving a fat check real soon. Either way, I just look forward to it all being done with. Good Luck! Title 38, § 3.700 General: (5) Separation pay and special separation benefits. (i) Where entitlement to disability compensation was established on or after September 15, 1981, a veteran who has received separation pay may receive disability compensation for disability incurred in or aggravated by service prior to the date of receipt of separation pay subject to recoupment of the separation pay. Where payment of separation pay or special separation benefits under section 1174a was made on or before September 30, 1996, VA will recoup from disability compensation an amount equal to the total amount of separation pay or special separation benefits. Where payment of separation pay or special separation benefits under section 1174a was made after September 30, 1996, VA will recoup from disability compensation an amount equal to the total amount of separation pay or special separation benefits less the amount of Federal income tax withheld from such pay. (ii) The receipt of separation pay does not affect the payment of disability compensation based on a subsequent period of service. Compensation payable for service-connected disability incurred or aggravated in a subsequent period of service will not be reduced for the purpose of offsetting separation pay based on a prior period of service. Edited 1 time by HUSKERS024 Apr 27 09 3:40 PM.
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cruiser		#17	[url]	[-]
Posts: 17421 Apr 27 09 9:52 PM	HUSKERS024 wrote: In my situation I believe I have a good case because my injuries and the 50% rating I am currently at is based off of injuries that incurred during a later peroid of service: 2001-2004. None of the 50% is for my achilles tendon which is the only service connection granted after my first peroid of service. Now should that 0% for my achilles ever be increased then any compensation for that SC will be used to payback the separation pay. Keep in mind that what is controlling is when the evidence shows that a disability was incurred or aggravated in service, not when it was claimed or service connection granted. Having said that, if the separation pay was for a period of service prior to the period of service in which the service connected condition(s) was incurred, then you are correct. There should be no withholding for that separation pay. say my achilles SC does go up to 10% then that money is recouped. However, should that achilles SC increase to more than 10% then any percentage over 10% is NOT subject to recoupement. Not sure on this..... You are correct on this point. It is the initial compensable evaluation that controls. Also keep in mind that if you have service connected disabilities that aren't involved in severance pay such as the 50 percent you mentioned above for a later period of service, VA is required to pay you the full amount of that 50 percent even if it means withholding less than the 10 percent for the severance pay disability. In other words, the 10 percent would be the MAXIMUM that VA could withhold, not the amount they are required to withhold. Cruiser
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Cav1Sgt		#18	[url]	[-]
Posts: 4029 Apr 27 09 10:17 PM	Slphelan - There are two issues that come into play with your case. Because you are drawing disability compensation prior to your retirement, VA has gone this route. Anyone who took an SSB/VSI and then goes on to retire via service in the Guard or Reserves must pay back the SSB/VSI. Quite simply, failure to do so results in being compensated twice for the same period of service as the prior service is used to compute your total retirement pay. As Husker points out there is an issue as to when the injury occurred and in which period of service. However, this does not apply to those receiving retirement as the monies that are recouped are applied to your retirement. In your case, I would make sure I kept the records where you have repaid that amount so DFAS does not nail you. Husker, if the case is solely based on disability and not retirement, as well as the facts presented, I would tend to agree. If you will go on and receive a retirement based on combined periods of service, DFAS will recoup the monies. Section ii only applies to disability compensation. Please see - Majeed v. Nicholson, U.S.Vet. App. No. 03-0747 (U.S.Vet. App.Mar. 9, 2006). Cav
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slphelan		#19	[url]	[-]
Posts: 112 Apr 28 09 2:56 AM	Thanks Cav1Sgt yes I plan on keeping good records as I now work for the Veterans Hospital and bought back my military time so that I could double dip as a reservist that way when I retire I would get both the Army retirement at age 60 and the VA at age 56 if I choose to leave federal service early.
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HUSKERS024		#20	[url]	[-]
Posts: 13 Apr 28 09 1:30 PM	Thanks Cruiser and Cav1Sgt. Cruiser, ya got me a little worried about what you said in regards to incurred and aggravated. It is documented in my records that I complained about back pain once in 1993 and twice in 1997. The VA stated this in my 2000 rating decision but they also stated that no further treatment findings or diagnosis of a chronic disease or disability was shown during service. Therefore, service connection is denied for low back strain as there is no evidence that a chronic disability existed. Soooo, even though I did complain on 3 separate occassions, they still denied service connection. Fast forward to 2003 and my back gets badly injured while on duty which resulted in 2 lumbar fusions. Cruiser, anyway you can pass along the regulation that explains that anything more than 10% should NOT be used towards recoupement? That is very important information for me to know. If for some reason the VA comes back with whatever and my compensation is subject to recoupement then I will want to counter with the regulation that states that anything over 10% is not to be witheld. Like I said before, I believe that I have a good case and recoupement should not be taking place in this situation and I am prepared to appeal as far as possible. I'll tell ya, it is upsetting that not only are they witholding my disability compensation but they should know that anything over 10% is NOT subject for recoupement if my intial ratings were rated at 10% or less. Crazy....anyways I will be sure to post back w/ the end results so that others may be better informed on this whole recoupement process. Thanks again!
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