How to Fight a VA Overpayment Claim

What happens if the VA overpays a Veteran? As with most things involving the VA, it’s a little complicated.

Typically, when the VA perceives they have overpaid a Veteran, they send a letter detailing their plan to recoup the debt. Without any input from the Veteran, the VA will proceed to take the debt out of the Veteran’s monthly compensation benefits payments until the overpayment has been paid back. However, the Veteran has options for fighting the VA overpayment claim, which may result in not having to pay the debt back.

To determine how to dispute a VA overpayment, a Veteran has to know why the overpayment occurred. Common causes for overpayment include the following:

  • VA error (commonly known as administrative error)
  • Failure by the Veteran to notify the VA of changes in their status
  • Recoupment of compensation paid during drill days

Administrative Error

If the VA overpays a Veteran by committing administrative error, the law states that no debt may be created. In other words, if the VA awards benefits based solely on administrative error, the Veteran gets to keep those funds. That sounds simple, but the VA may still try to recoup overpayment in these instances. When this happens, a Veteran must take action to protect his or her rights.

Many times, the VA will try to recoup the debt because they do not believe it was created by administrative error. The VA General Counsel has clarified that any error created in whole or in part by the Veteran may be collected by the VA. In order to fight against the collection of overpaid benefits paid due to administrative error, Veterans must show they had no fault in the creation of the overpayment.

Waiver of Overpayment

Another way to dispute VA overpayment debt is to request a waiver of that overpayment. This would be a separate and distinct argument from disputing the debt. Unlike disputing the debt, a Veteran does not argue that the debt is not valid. They instead argue that the collection of the debt would be against equity and good conscience. In other words, the Veteran does not argue that the debt never should have been made, simply that it should not be collected because it would harm the Veteran.

Several considerations will be made when looking at a waiver of overpayment, including:

  • Weighing the Veteran’s fault in creation of the debt against the VA’s
  • Deciding whether collecting would cause “undue hardship” (i.e., depriving the Veteran of the ability to provide basic necessities to his or her family)
  • Determining whether collecting would defeat the purpose of the VA benefit involved

Imagine a Veteran’s spouse passes away but the VA isn’t informed for months. When the VA discovers this, they might try to recoup the debt created by them paying for the Veteran’s deceased dependent for a period of time. However, if the Veteran had already spent the money and was living paycheck to paycheck, he or she could argue it would create “undue hardship” to recoup the debt.

One steadfast exception to waivers involves bad faith on the part of the Veteran. The VA is not allowed to waive a debt in cases where there is an indication of fraud or misrepresentation on the part of the person seeking the waiver. Keep in mind that this is a rare occurrence. In order to qualify for creation of debt, a Veteran must set out to deceive the VA and receive an unfair advantage with the knowledge of the likely consequences.

How to Fight a VA Overpayment Claim

A Veteran may both dispute the debt (i.e., challenge whether the debt should have been created in the first place) and request a waiver of the overpayment at the same time. However, the deadlines are different for each. Dispute of a debt has no deadline, but the request of a waiver must be submitted 180 days from the date of the notice of debt.

The letter explaining the overpayment and plan to recoup will provide methods of response. One of those methods is requesting a hearing. In most instances, a hearing before the VA does not benefit the Veteran, but overpayment issues are an exception. The Veteran has a chance to explain why debt creation is unfair or would disadvantage them.

If a Veteran does not wish to have a hearing, they can instead write a letter to the VA explaining the situation. There is no specific form for requesting a waiver of overpayment, nor for disputing the debt.

Finally, if the overpayment is based on an erroneous drill pay for reservists or members of the National Guard, the best way to dispute the overpayment is to correct the number of days spent in receipt of drill pay. It is vital for those who receive VA benefits to keep good records of drill days for this purpose.

Veterans Serving Veterans

Berry Law Firm was founded by John Stevens Berry Sr., Vietnam War veteran and trial attorney. Today, we count many military veterans among our attorneys and staff. We know what it means to serve and we know firsthand the struggles many of our clients face every day.

Unfortunately, our team does not currently assist in the recovery of a VA overpayment. We wish you the best of luck in recovering your overpayment and hope our blog proves helpful.