Recoupment scenario

M

monkeyboat

PEB Forum Regular Member
Registered Member
TIA brothers and sisters
Med boarded out of the Navy in 97 for anxiety rated at 10% DOD. Desert storm veteran, 8 yrs 6 mos and 15 days. Received $28k severance, filed taxes the next year with a CPA with copy of court ruling stating it was not taxable, got the paid tax back in the return. Filed for VA disability through DAV right after discharge. I was rated at 30% from the VA for anxiety. In 2018 I submitted multiple claims including increase for anxiety. Was granted 50% for anxiety. Submitted additional claims in 2022, I am now at 100% (anxiety still at 50%). I am totally confused about the recoupment of severance pay, am I going to be one of the lucky bastards that is next in line to "pay back"?
 
Hello @monkeyboat

Recoupment is required ONLY when the DoD and the VA BOTH provide a rating or ratings for the same disability or disabilities. This explains the rate of collection/recoupment.


From VA Regulation M21-1 :

III.v.4.B.3.b. General Policies Regarding Withholdings to Recoup Disability Severance PayGenerally, if a Veteran received disability severance pay, VA must withhold from his/her monthly compensation an amount equal to the monthly compensation payable for the disability(ies) for which the Veteran received disability severance pay. VA continues to withhold this amount until it has recouped the amount specified in M21-1, Part III, Subpart v, 4.B.2.d.
The VA is required by law to withhold disability compensation payments for servicemembers who received a disability severance payment when they separated from the military (Chapter 61), if the VA disability compensation is for the same disability. This is to prevent a veteran from receiving duplicate benefits.

Exception: The VA will not deduct compensation pay if the military disability severance pay was received for disabilities incurred in line of duty in a combat zone or incurred during performance of duty in combat-related operations as designated by the Department of Defense (DoD).

Ron
 
The DOD rated me at 10%, the VA rated me at 30% for the same disability. I can't comprehend the regulation. Do I have to pay back my severance?
 
monkeyboat said:
The DOD rated me at 10%, the VA rated me at 30% for the same disability. I can't comprehend the regulation. Do I have to pay back my severance?
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Hello @monkeyboat ,

My interpretation is that you will have to pay back the disability severance pay at the 30% VA rate. *changed from 10%*

Unless — Exception: The VA will not deduct compensation pay if the military disability severance pay was received for disabilities incurred in line of duty in a combat zone or incurred during performance of duty in combat-related operations as designated by the Department of Defense (DoD).

Have you been notified that a recoupment will begin? It seems this would have been resolved long ago if a recoupment was required.

Ron
 
Hello,

I found the following on a non-government site:

“A bigger question Veterans may have is when will this recoupment of separation pay occur? Unfortunately, there is no set time for this type of action to occur. The VA and DFAS go through a certain number of cases each year to process for Separation Payment Recoupment so it is all dependent on when your file comes to the top, it could 3 years, 5 years, 15 years, there is no set time or time limit for such an action to be taken.”

Ron
 
I have not been notified about recoupment. My Dad sent me an article yesterday from ABC news about veterans in the 90s that took an early out with pay which was voluntary and they were rated by the VA for a disability. Now almost 30 years later they are receiving recoupment letters. That is what raised my interest, so I googled recoupment and here I am. I'm definitely not going to contact the DOD on this matter.
 
monkeyboat said:
I have not been notified about recoupment. My Dad sent me an article yesterday from ABC news about veterans in the 90s that took an early out with pay which was voluntary and they were rated by the VA for a disability. Now almost 30 years later they are receiving recoupment letters. That is what raised my interest, so I googled recoupment and here I am. I'm definitely not going to contact the DOD on this matter.
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Yep! Don't poke the bear! Its also possible the PEB designated the anxiety to be caused by combat related activities that would make recoupment exempt.
 
monkeyboat said:
I have not been notified about recoupment. My Dad sent me an article yesterday from ABC news about veterans in the 90s that took an early out with pay which was voluntary and they were rated by the VA for a disability. Now almost 30 years later they are receiving recoupment letters. That is what raised my interest, so I googled recoupment and here I am. I'm definitely not going to contact the DOD on this matter.
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That info (from article) is similar to what I found on the web page of an attorney (not affiliated with the government).

Ron
 
Wow, this is unbelievable, all the VSOs that I have seen, and disability forums that I have been on all these years, this is the first that I've heard about recoupment. So if I do have to pay it, it would only be based on a 10% award from the VA?
 
Wow, this is unbelievable, all the VSOs that I have seen, and disability forums that I have been on all these years, this is the first that I've heard about recoupment.
 
monkeyboat said:
Wow, this is unbelievable, all the VSOs that I have seen, and disability forums that I have been on all these years, this is the first that I've heard about recoupment. So if I do have to pay it, it would only be based on a 10% award from the VA?
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Basically its for whatever you get for that condition. If you are 50% for anxiety now then that amount for 50% would be recouped. BY law you can't get money for severance and then collect a monthly benefit for the same condition. It's double dipping so that's why it needs to repaid.
 
Provis said:
Basically its for whatever you get for that condition. If you are 50% for anxiety now then that amount for 50% would be recouped. BY law you can't get money for severance and then collect a monthly benefit for the same condition. It's double dipping so that's why it needs to repaid.
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I have not seen an actual recoupment, but the DFAS made the payment based on 10% DoD and since the VA also rated the disability...at 30%, further research suggests the recoupment will be at 30% and not increased. However, I suspect COLA increases will make 30% recoupment rate higher.



M21-1, Part VI, Subpart ii, 2.2.d.

Important:
  • The monthly withholding may never exceed the monthly amount of compensation payable based on the initial, compensable rating, as defined in M21-1, Part VI, Subpart ii, 2.3.c, that VA assigns the severance-pay disability(ies).
  • If a Veteran has multiple, severance-pay disabilities, each rated 0-percent disabling, and VA assigns a 10-percent disability rating to them under 38 CFR 3.324, no withholding is necessary for these disabilities until VA assigns a compensable rating to one or more of them, individually.
  • Withhold the additional benefits payable because of application of the bilateral factor if
    • the initial, compensable rating included application of the bilateral factor, and
    • entitlement to the bilateral factor was based exclusively on severance-pay disabilities.

If VA initially rated the severance-pay disability …​
And VA subsequently …​
Then VA continues to withhold from the Veteran’s monthly compensation …​
20-percent disablingrates the same disability 30-percent disablingthe amount payable for a disability rated 20-percent disabling.
50-percent disablingassigns a temporary 100-percent rating to the same disability under 38 CFR 4.28, 4.29, or 4.30the amount payable for a disability rated 50-percent disabling.
0-percent disablingassigns a temporary 100-percent rating to the same disability under 38 CFR 4.28, 4.29, or 4.30nothing, until it assigns the disability a compensable rating.
 
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RonG said:
I have not seen an actual recoupment, but the DFAS made the payment based on 10% DoD and since the VA also rated the disability...at 30%, further research suggests the recoupment will be at 30% and not increased. However, I suspect COLA increases will make 30% recoupment rate higher.



M21-1, Part VI, Subpart ii, 2.2.d.

Important:
  • The monthly withholding may never exceed the monthly amount of compensation payable based on the initial, compensable rating, as defined in M21-1, Part VI, Subpart ii, 2.3.c, that VA assigns the severance-pay disability(ies).
  • If a Veteran has multiple, severance-pay disabilities, each rated 0-percent disabling, and VA assigns a 10-percent disability rating to them under 38 CFR 3.324, no withholding is necessary for these disabilities until VA assigns a compensable rating to one or more of them, individually.
  • Withhold the additional benefits payable because of application of the bilateral factor if
    • the initial, compensable rating included application of the bilateral factor, and
    • entitlement to the bilateral factor was based exclusively on severance-pay disabilities.

If VA initially rated the severance-pay disability …​
And VA subsequently …​
Then VA continues to withhold from the Veteran’s monthly compensation …​
20-percent disablingrates the same disability 30-percent disablingthe amount payable for a disability rated 20-percent disabling.
50-percent disablingassigns a temporary 100-percent rating to the same disability under 38 CFR 4.28, 4.29, or 4.30the amount payable for a disability rated 50-percent disabling.
0-percent disablingassigns a temporary 100-percent rating to the same disability under 38 CFR 4.28, 4.29, or 4.30nothing, until it assigns the disability a compensable rating.
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That is wild. Wouldn't technically the Soldier be paid for the condition as severance if recoupment wasn't the full amount of compensation?
 
It is difficult to understand much of this puzzle.

Ron
 
My brother-in-law took the SSB package in 1997 and got out of the Army. He recently filed for disability and was rated at 50%. His current disability compensation is $1075 (or close to it). At what percentage will the VA recoup his SSB? I have seen various references of up to 40 percent of his total compensation. M21-1 is not helpful.
 
wallacedg said:
My brother-in-law took the SSB package in 1997 and got out of the Army. He recently filed for disability and was rated at 50%. His current disability compensation is $1075 (or close to it). At what percentage will the VA recoup his SSB? I have seen various references of up to 40 percent of his total compensation. M21-1 is not helpful.
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Hello,

He received a DoD disability rating associated with his separation. It was likely 10% or 20%. It is the foundation of the the recoupment amount. Your info does not include that percentage.

Please provide the rating or ratings for the DoD and and the rating or ratings for the same disability by the VA. Incidentally, the VA performs disability ratings for the VA and the DoD.

Examples of recoupment:
(Note: The first column is the DoD rating for the finding of unfit for continued service. The DoD rating is only for unfitting conditions. The VA rating is for all service connected disabilities, but the example in the chart addresses only the common “same disability feature.)

If VA initially rated the severance-pay disability …And VA subsequently …Then VA continues to withhold from the Veteran’s monthly compensation …
20-percent disablingrates the same disability 30-percent disablingthe amount payable for a disability rated 20-percent disabling.
50-percent disablingassigns a temporary 100-percent rating to the same disability under 38 CFR 4.28, 4.29, or 4.30the amount payable for a disability rated 50-percent disabling.
0-percent disablingassigns a temporary 100-percent rating to the same disability under 38 CFR 4.28, 4.29, or 4.30nothing, until it assigns th

Ron

NOTE; MY comments in this post pertain to disability severance pay, NOT SSB. My error.
 
RonG said:
Hello,

He received a DoD disability rating associated with his separation. It was likely 10% or 20%. It is the foundation of the the recoupment amount. Your info does not include that percentage.

Please provide the rating or ratings for the DoD and and the rating or ratings for the same disability by the VA.

Examples of recoupment:
(Note: The first column is the DoD rating for the finding of unfit for continued service. The DoD rating is only for unfitting conditions. The VA rating is for all service connected disabilities.)

If VA initially rated the severance-pay disability …And VA subsequently …Then VA continues to withhold from the Veteran’s monthly compensation …
20-percent disablingrates the same disability 30-percent disablingthe amount payable for a disability rated 20-percent disabling.
50-percent disablingassigns a temporary 100-percent rating to the same disability under 38 CFR 4.28, 4.29, or 4.30the amount payable for a disability rated 50-percent disabling.
0-percent disablingassigns a temporary 100-percent rating to the same disability under 38 CFR 4.28, 4.29, or 4.30nothing, until it assigns th

Ron added: NOTE; MY comments in this post pertain to disability severance pay, NOT SSB. My error.
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He did not receive a DoD disability rating, only a combined VA disability rating of 50%. His VA award letter shows how much his compensation is, and amount with held for recoupment. The amount the VA is recouping is greater than 40 percent of the amount of compensation. which we thought was the max that the VA would recoup.
 
wallacedg said:
He did not receive a DoD disability rating, only a combined VA disability rating of 50%. His VA award letter shows how much his compensation is, and amount with held for recoupment. The amount the VA is recouping is greater than 40 percent of the amount of compensation. which we thought was the max that the VA would recoup.
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Ahhh…I got stuck on disability severance pay—his case is SSB.

Change Date M21-1​

April 11, 2024

VI.ii.2.2.a. General Information About Recouping Separation Benefits​

After VA determines recoupment of separation benefits is necessary and the amount that is subject to recoupment, it must withhold some or all of the Veteran’s monthly compensation until recoupment is complete.

Except as noted in M21-1, Part VI, Subpart ii, 2.2.k, and M21-1, Part VI, Subpart ii, 2.3.g, the amount VA withholds each month includes any of the following to which the Veteran is entitled:
  • additional compensation for dependents, and
  • special monthly compensation (SMC).
Important: VA may not
  • recoup separation benefits from a Veteran’s compensation if the disability on which the compensation is based was incurred or aggravated during a period of service that follows the period(s) of service for which the Veteran received separation benefits
  • apportion any disability compensation it is withholding for the recoupment of separation benefits
  • withhold Medal of Honor pension to recoup separation benefits, or
  • withhold compensation (for the purpose of recouping separation benefits) to which a Veteran is not entitled because of receipt of military retired pay (MRP). (When processing an award that requires the establishment of a withholding for MRP and recoupment of separation benefits, withhold payment for MRP until the retired pay cutoff date referenced in M21-1, Part VI, Subpart ii, 4.B.2.b, then begin the withholding for separation benefits effective the retired pay cutoff date.)
References: For more information on

Ron
 
Hello,

It appears the recoupment could involve all his VA compensation each month, UNLESS one of the following is applicable:

References: For more information on
 
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