Veterans Forced To Repay Separation Benefits After Decades

A federal law has forced thousands of veterans to repay separation benefits they received, causing financial strain for many. Vernon Reffitt, a 62-year-old Army veteran from Twin City, Georgia, is one such veteran now facing hardship.

Reffitt was given a $30,000 special separation benefit in 1992 when the military downsized. Now, over 30 years later, the Department of Veterans Affairs (VA) demands repayment by withholding his monthly disability compensation. This repayment process would take Reffitt nearly 15 years.

“You can’t just up and take it back,” said Reffitt, who served from 1979 to 1992, including deployments to Panama and Honduras.

The law in question prohibits veterans from receiving both disability and special separation benefits. The VA must recoup separation payments before allowing veterans to receive disability compensation. According to a 2022 RAND Corporation study, at least 79,000 veterans had to repay such benefits between 2013 and 2020.

In 2023 alone, nearly 9,300 veterans faced similar recoupment from the VA. Stephanie Rennane, the study’s lead author, believes the actual number of affected veterans is likely higher.

For over 30 years, Reffitt received both benefits without issue until the VA recently discovered the error. The VA claimed it was “unaware of the amount” of his separation benefit until he filed a claim under the PACT Act, a 2022 law expanding benefits for veterans exposed to toxic substances.

Daphne Young, another Army veteran, faced a similar shock. After leaving the military in 2016, she received a $15,000 separation benefit. In April, the VA began withholding her monthly disability payment of $3,700 to recoup the separation pay.

“It was agonizing,” said Young, who served as an ammunition specialist and combat medic. She, like Reffitt, was unaware of the law prohibiting dual benefits.

Advocates argue the law is unfair, as separation pay relates to military service, while disability pay addresses service-related injuries or illnesses. “They are two separate buckets of money,” said Marquis Barefield from the advocacy group Disabled American Veterans (DAV).

Veterans have had an average of $19,700 to $53,000 withheld for recoupment, according to the RAND study. Some, like Marine veteran Shane Collins, struggled significantly during repayment. Collins had to repay $33,000 over 36 months, disrupting his family’s financial stability.

Legislation introduced by Rep. Ruben Gallego (D-AZ) aims to change this recoupment law, but progress has been slow due to cost concerns. Veterans can pursue waivers, but the standards are high and not easily met.

Young managed to reduce her monthly withheld amount with the help of DAV, although it means a longer repayment period. Reffitt, still working out a plan, has had to cut back on medical appointments for his mental health and chronic conditions.

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