One noteworthy article this week addresses consistent problems veterans face when attacked by VA debt collectors in its Debt Management Center.
Last month, the American Legion (Legion) provided testimony to Congress exposing problems in how the VA Debt Management Center (DMC) goes about collecting debts. In many instances, the debts owed are the result of agency failures or haphazard application of standards directly harming veterans’ finances.
The large majority of debts are in the form of overpayments. In 2016 alone, VA sent almost 187,000 overpayment notices for debts up to and beyond the tens of thousands of dollars.
Under the present legal framework, when VA says a veteran owes money, regardless of who was at fault, the agency can withhold the funds from disability compensation payouts or tax returns to recoup the funds. Veterans who contest the results are forced to jump through sometimes impossible hoops to resolve the matter.
And even when resolved, such as through granting of a waiver, VA computer software still allows the agency to withhold finances even though no money is truly owed.
Requesting a waiver from VA to resolve possible overpayment is one of the few ways veterans are able to avoid repayment or at least delay repayment pending adjudication at the DMC. But most veterans fail to file for a waiver much less understand the legal requirements to avoid repayment regardless of the reason.
VA Debt And Widow Cheri Lopez
Vice News published the story and provided numerous examples where veterans were economically injured as a result of the program. Here is one curious story to ponder:
Scott Oswell joined the military at age 17 and served for 16 years until he died in a helicopter crash during combat on July 4, 2007. He left behind a wife and three children. After his death, the VA told his widow, Cheri Lopez, that she would receive a monthly entitlement for the kids. When she remarried in 2008, she says, she informed the VA seven times in writing and over the phone and sent the U.S. Army a copy of the marriage certificate.
In December 2015, she opened her mail to find a notice from the VA saying she owed the agency $177, 655.05 for benefits she shouldn’t have received. The VA said she never told the military she had remarried.
Lopez appealed the debt and the agency admitted it had made a mistake. Now she owed $103,293.05. Lopez paid off the debt with the money she had set aside for expenses including her children’s college costs and their wedding funds. Lopez was five classes away from a bachelor’s degree but said she could not finish because the debt means she can no longer receive federal student aid.
While this one is perhaps not the most sympathetic, as she likely should have realized she was receiving an overpayment and not spent the money, some folk’s cases are less obvious.
I think of the countless examples where VA VocRehab forces veterans out of training. Or, the program fails to properly accommodate the veteran resulting in the person dropping out of school. Either way, that veteran will need to pay back any unearned subsistence payments if they fail to complete the term resulting in supposed overpayment of thousands.
In these instances, it seems unfair for VA to assert the veteran received the funds they did not earn since the agency’s failures resulted in the veteran dropping out of the program, to begin with.
Anyway, this topic is an interesting one, and I have no doubt VA is failing to do everything it can to help minimize the adverse effects on veterans when the DMC comes knocking.