Veteran’s Dilemma: Repayment of Separation Pay
In 1992, Vernon Reffitt received a $30,000 special separation benefit after leaving the Army. Now, over 30 years later, the federal government is demanding that money back, citing a law that prohibits veterans from receiving both disability and special separation pay.
VA’s recoupment policy
In May, the Department of Veterans Affairs (VA) began withholding Reffitt’s monthly disability compensation until the $30,000 is repaid, a process that could take nearly 15 years. “That’s wrong,” said Reffitt, who resides in Twin City, Georgia. “You can’t just up and take it back.”
This situation arises from a little-known law requiring the VA to recoup special separation benefits before veterans can receive disability payments. A 2022 RAND Corporation study found that at least 79,000 veterans had to repay different types of separation benefits between 2013 and 2020.
Systemic oversight and errors
Reffitt’s case highlights a systemic oversight. The VA allowed him to receive both benefits for over three decades. The VA stated it was “unaware of the amount” of Reffitt’s separation benefit when he began receiving disability compensation in 1992 and acknowledged a failure to follow up on the recoupment.
Veterans like Daphne Young and Shane Collins have faced similar issues. Young, a 36-year-old Army veteran, was shocked when the VA began withholding her $3,700 monthly disability payment to recoup a $15,000 separation pay. “It was agonizing,” said Young, who is now fully disabled.
Collins, a former Marine, had to repay roughly $33,000, which took about 36 months. Despite his familiarity with Defense Department procedures, Collins was unaware that he would need to repay his separation benefit if granted disability.
Rep. Ruben Gallego introduced a bill in 2022 to change the recoupment law, but progress has been slow due to the high costs involved. Veterans can pursue a waiver of their recoupment responsibilities, but the standards are stringent. Young did not receive a waiver but managed to reduce her monthly withholding amount with the help of the Disabled American Veterans (DAV) advocacy group.
Financial strain and health impact
Reffitt, who served as a military policeman from 1979 to 1992, is now cutting back on medical appointments to manage his mental health, knee injury, and chronic obstructive pulmonary disease due to the financial strain. “I’ve already canceled a couple appointments,” he said.
Advocates argue that the law blindsides veterans and deprives them of earned benefits. “The two payments have nothing to do with each other,” said Marquis Barefield from the DAV. “They are two separate buckets of money.”
As the debate continues, veterans like Reffitt and Young navigate the financial and health impacts of this recoupment policy, highlighting the need for legislative change and greater awareness.
