How To Appeal Or Request For Waiver: Overpayments of Benefits

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WARNING: Do not ignore a letter from the Department of Veterans Affair and/or Debt Management Center about being overpaid. They can and will begin the collection process no matter your circumstances.

A veteran has the right to dispute the amount of a debt and/or the right to request waiver of repayment. If the veteran is presently receiving benefits, and disputes the amount of the debt, they should notify the VA of the dispute, in writing within 30 days. They can also request a hearing. If the veteran does not dispute the overpayment amount, the VA will start withholding the veteran’s benefits and applying their benefit toward repayment of the debt in 60 days.

If the veteran does not dispute the overpayment amount, but does not believe they are at fault in creating the debt and believes they are unable to repay the debt without financial hardship, they can request a waiver of the debt. Waivers must be requested in writing within 180 days from when the Debt Management Center sent the veteran the initial notice the overpayment amount was due. This is a firm statute of limitations and will not be forgiven. A debt will become final and there will be no ability to seek a waiver if a waiver is not requested in 180 days. Remember, a veteran can seek a waiver even if they do not dispute the existence of the debt. However, the veteran should also complete VA Form 5655 – Financial Status Report showing their income and expenses.

VA regulations prohibit collection of an overpayment – if a waiver has been requested within 180 days – when “collection would be against equity and good conscience.” The Court applies a six-factor analysis in deciding collection. These factors are listed below. However, if a waiver is not timely requested, the VA can and will collect the overpayment if there is a hardship and you would otherwise have been granted a waiver, if it had been timely submitted. The VA should give the waiver request a full and sympathetic reading.

  • Equity means it would not be “fair” or “just” to collect the overpayment from the veteran’s benefits.
  • Good Conscience means that given all the facts and circumstances of the case, the veteran’s fault, the veteran’s financial situation, the veteran’s age of expenses, or all other factors such that collecting it would disturb or greatly upset or shock the conscience of a reasonable human being.

The Six-Factors:

  1. Fault of Veteran – did the veteran engage in fraud or misrepresent something to the VA that caused them to be overpaid?
  2. Fault of the VA – was the overpayment due to VA error such as a miscalculation by the VA?
  3. Hardship – would repayment cause “undue hardship” to veterans and family depriving them of basic necessities?
  4. Reason for Benefit Defeated – would recovery defeat the purpose for which benefit were rewarded? If the veteran receives pension benefits due to being poor, this safety net should not be taken away and cause them to be homeless.
  5. Unjust Enrichment – would the veteran experience an undeserving windfall if there was no collection?
  6. Reliance – has the veteran changed their position in justifiable reliance on the benefit such that collection would be unfair and the veteran would be made worse off? Would repayment result in the veteran having to relinquish a valuable right or incur a legal obligation (e.g. They purchased a home or car and incurred debt and would lose it and be sued if they defaulted on the debt).

So, if you received a collection or overpayment letter from the Department of Veteran Affairs or the Debt Management Center, Do Not Ignore It! Contact your VSO at the American Legion, VFW, or DAV and they will be able to help you out.

If you have already gone through this process, please let us know below how the process went so others can benefit from your experience.

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