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VA Extends COVID-19 Debt Relief to Veterans Through 2020

Veterans indebted to the Department of Veterans Affairs won a partial payment reprieve this summer that will last at least through the end of 2020.

The VA action extends a moratorium on debt collection that President Trump enacted in April, a measure aimed at helping veterans impacted by the coronavirus pandemic. The action also gives veterans an option to extend repayment terms on existing VA debts.

“Veterans and their families should be focused on their health and safety during the pandemic,” VA Secretary Robert Wilkie said in announcing the suspension. “VA is taking action to give those with pending debts greater flexibility during these challenging times.”

The decision suspends all actions on veterans’ debts collected by the U.S. Treasury Department.

Veterans owe money to the VA for a variety of reasons. For example, a married veteran receiving disability payments is no longer entitled to spousal dependency benefits after a divorce. Often the VA fails to catch the change in marital status and continues making oversize payments. When the error is caught, it demands repayment of the excess distributions.

Overpayment of VA benefits is widespread. Excess disability payments, accounting errors and eligibility changes are major causes. Veterans affected by the coronavirus who want debt payments suspended or terms revised should contact the VA Debt Management Center at (800) 827-0648.

Congress is considering legislation that would alter the way VA debt collection is handled.

U.S. Rep. Chris Pappas (D-NH), a House Veterans Affairs committee member, introduced a bill last year to protect veterans from debt collections that result from processing delays at the VA. It would also require that the VA notify veterans of an intent to collect overpayments 90 days before collection begins. The bill unanimously passed the Veterans Affairs committee in July following the VA’s decision to suspend collections.

Pappas’ office said the VA collected $1.6 billion from veterans in fiscal year 2019 related to overpayments. The congressman said hundreds of thousands of veterans have suffered financial hardship as a result.

Margaret Matthews, president and CEO of Veterans Advocacy Association in Groton, Mass., said the VA’s debt collection suspension will make a big difference to veterans, especially those on fixed incomes or unemployed due to the pandemic.

“Veterans are very excited about this,” Matthews said. “Almost everyone affected is taking advantage of the suspension. It means every month they will have more money for important things.”

Matthews said the veterans usually aren’t aware that they were receiving overpayments until the VA docks their distributions. She also said the VA tries to avoid overpayments but often doesn’t learn about a change of marital status or improper payments made to a veteran in National Guard while the person is on duty.

Matthews said the law requires the VA to collect overpayments, and she said many veterans have a hard time adjusting to reduced income when that happens. She doesn’t fault the VA.

“This is Congress’ law,” Matthews said. “The VA is a compassionate organization. Their credo is grant if you can, deny only if you must.”

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].

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Sources:

  1. N.A. (2020, July 16) VA Suspends Collection of Benefit, Healthcare Debt. Retrieved from https://www.fedweek.com/armed-forces-news/veterans-eligible-for-debt-relief/
  2. Sisk, R. (2020, July 14) VA Partially Suspends Debt Collections on Veterans Through End of Year. Retrieved from https://www.military.com/daily-news/2020/07/14/va-partially-suspends-debt-collections-veterans-through-end-of-year.html
  3. N.A. (2020, July 9) VA Offers Debt Relief to Veterans Through Year’s End. Retrieved from https://www.va.gov/opa/pressrel/pressrelease.cfm?id=5485
  4. N.A. (2020, July 30) Pappas Bill to Reform VA Debt Collection Passes Committee with Unanimous, Bipartisan Vote. Retrieved from https://pappas.house.gov/media/press-releases/pappas-bill-reform-va-debt-collection-passes-committee-unanimous-bipartisan