Revelers dressed in replica World War II-era US Army uniforms march along Utah Beach on June 6, 2024 as part of “D-Day” commemorations marking the 80th anniversary of the Allied landings of World War II War in Normandy.
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A federal law has forced nearly 122,000 disabled veterans over the past 12 years to return payments — some totaling tens of thousands of dollars — they received to leave the military when it needed to be downsized, according to new figures obtained by NBC News.
The statistics come amid renewed calls to change the little-known law, which bars veterans from receiving both disability and special separation pay, which are one-time, one-time incentives offered to service members when the U.S. had to reduce their active service. power.
“Nobody realizes they do this to so many people,” said Vernon Refitt, who was recently told to pay back the $30,000 he took to get out of the military more than 30 years ago.
Clawbacks have thrown many veterans into sudden difficulties. One said it would take him almost 15 years to pay back what he owes. Another said he has to cut back on non-essential expenses as his wife, who works full-time, is considering taking on another job to make ends meet.
The U.S. Department of Veterans Affairs said it had to recover special separation payments from more than 17,000 veterans in fiscal year 2018 — the highest annual amount so far. That total was up from about 12,400 the year before, though it’s unclear why.
The number of compensations fell almost every year until the PACT Act, a measure that extended benefits to millions of veterans exposed to burns and other toxic substances during their service, was signed into law in August 2022, according to statistics VA elements. Claims filed by vets in fiscal year 2023 rose to nearly 9,300, up from 7,940 in 2022.
VA Press Secretary Terrence Hayes said the agency cannot speculate on why the numbers are up or down. He said the VA is legally required to recover special severance benefits from veterans before beneficiaries begin receiving disability payments.
At least two veterans who were longtime recipients of both benefits said the VA only caught its own error after they filed PACT Act claims.
Sean Teller received a one-time gross payment of about $10,700 to leave the military in 1996 when the US had to reduce its active-duty force. Then in 2012, the veteran, who served about eight years, including operations Desert Storm and Desert Shield, began receiving monthly disability benefits for an old knee injury.
In the summer of 2023 he applied for PACT Act for asthma, which the VA granted, slightly increasing his disability. But the benefit was short-lived. Months later, the VA sent him a letter, saying he should not have received disability and severance pay without penalty for the past twelve years.
“It was something that somebody overlooked at the time, and then they caught on to it now,” said Teller, 55, who lives in Walnut Creek, California.
Starting in July, the VA wrote, it would begin withholding Teller’s monthly disability payment of about $586 until he repays his severance pay.
“I rely on that paycheck every month,” Teller said. “It is not right.”
Likewise, NBC News previously mentioned that Reffitt, the Army veteran, began receiving disability benefits in 1992, the same year he received special separation pay.
But after Reffitt filed a PACT Act claim for chronic obstructive pulmonary disease — which was denied — the VA began withholding his monthly disability pay in May until he paid back the $30,000. It would take the 62-year-old nearly 15 years to do so.
“This is wrong,” said the Twin Cities, Georgia, resident.
“No concerted effort”
In fiscal year 2013, the first year for which data is available, the VA said it had to recover separation pay from about 6,700 veterans — the lowest amount in a dozen years. The total rose slightly to about 7,500 in fiscal year 2014, the data show. It held steady at around 12,000 for the next three financial years before rising to more than 17,000 in the 2018 financial year.
The VA was required to recover separation pay from 8,130 veterans in fiscal year 2020 and 8,550 in 2021.
The number of benefits fell even lower in fiscal year 2022 before rising in 2023. As of late June, the VA said it had already started benefits for more than 8,920 veterans so far this fiscal year.
While Hayes said he could not speculate on the reasons for the dips and spikes in the annual tallies, the VA press secretary said there had been an increase in disability claims. In fiscal year 2023, when the VA had to recover separation pay from nearly 9,300 veterans, Hayes said the agency received a total of 2.3 million claims for compensation — a 42 percent increase over 2022.
“Fiscal year 2023 was a record year for BA,” he said. “There is no concerted effort to increase compensation. Instead, it is part of the normal, legally required process when completing the initial claim application, which asks claimants if they received a separation bonus and how much they received.”
Hayes said the number of claims processed by the VA over the past five years has consistently been less than 1 percent of all disability claimants or recipients. In 2023, more than 5.6 million veterans received compensation, he said.
Hayes said veterans applying for PACT Act benefits are far more likely to receive an increase in benefits than any reduction.
It’s unclear how many recovery errors like Teller’s and Reffitt’s have been identified since the PACT Act went into effect. The VA said it does not track those cases.
In Reffitt’s case, the VA said it wrongly allowed him to receive both benefits without penalty for more than 30 years because he was “ignorant of the amount” of his separation pay when he began receiving disability benefits in 1992.
The VA said it discovered the error when Reffitt filed a PACT Act claim and that it should have followed up on efforts to determine the amount of the separation and started reimbursement sooner.
The agency said Teller’s severance pay went undetected until 2023 because he had not previously reported on VA forms that he had received separation pay or continued to file a claim within a year of filing his intent to file.
In 2021, the Veterans Benefits Administration began scanning all veterans’ services and medical records into electronic records, which “reduces the likelihood of this situation occurring again,” Hayes said.
Unique exceptions to the law
Veterans have the opportunity to seek a waiver of their liability for compensation only for certain special separation benefits under the Act. Even then, the standards are high and confusing.
To obtain a waiver of voluntary severance pay, the VA said the secretary of the appropriate branch of service must determine that “recovery would be contrary to justice and good conscience or would be contrary to the best interests of the United States “.
At least six have been granted so far, officials said.
The Air Force said some of its members signed “incorrect” statements of understanding when they left active duty between 2007 and 2014. The paperwork incorrectly told them that compensation would be waived if they then became eligible for disability compensation benefits, a spokesman for the Air Force said. Air Force Lt. Col. Erika Yepsen said.
The Air Force said it has granted at least five waivers to veterans affected by the bug since fiscal year 2016 — the year the Air Force said it changed the way it tracks data.
It denied another 17 requests, but in those five cases, Yepsen said, “the waiver of recovery was found to be consistent with the standards of equity and good conscience.”
The Air Force also approved a waiver request for a sixth veteran “based on the individual’s disability preventing them from earning an income,” Yepsen said.
The Navy, Marine Corps and Coast Guard said they are not aware of anyone who has requested waivers for recovery. In 2023, the Navy approved a reduction in the amount of disability pay withheld while voluntary separation pay is recovered, Navy spokesman Charlie Spirtos said.
The military did not respond to requests for comment.
Advocates say the law not only blindsides veterans, but deprives them of earned benefits that should not be financially tied.
While special separation pay is based on an employee’s military career and is calculated based on years of active duty, disability pay is solely related to illnesses or injuries sustained during service, according to Marquis Barefield, assistant national legislative director at DAV, an advocacy group formerly known. as disabled American veterans.
“The two payments have nothing to do with each other,” Barefield said. “They are two separate buckets of money.”
Veterans have been withheld an average of $19,700 to $53,000 in compensation from 2013 to 2020, according to a study published in 2022 by the RAND Corporation, a nonprofit research group.
In 2022, Rep. Ruben Gallego, D-Ariz., introduced a bill that would change the compensation law, but legislative progress has been slow. “It’s expensive,” he said, “and that’s kind of been the biggest hurdle because I can’t get past it.”
