Disabled Veterans Struggle As VA Demands Repayment Of Separation Benefits

Many veterans are facing financial hardship as the Department of Veterans Affairs (VA) demands repayment of special separation benefits received decades ago. One such veteran, Vernon Reffitt, 62, from Twin City, Georgia, is now in a difficult position.

Reffitt received a $30,000 special separation benefit in 1992 when he left the Army. However, over three decades later, the VA has started withholding his monthly disability compensation to recover the amount. This repayment process would take nearly 15 years.

“That’s wrong,” said Reffitt, who served as a military policeman from 1979 to 1992, including tours in Panama and Honduras.

Thousands of veterans like Reffitt are affected by a little-known law that prohibits receiving both disability and separation benefits. The VA must recoup separation payments before veterans can receive disability compensation. According to a 2022 RAND Corporation study, at least 79,000 veterans faced this issue between 2013 and 2020.

In 2023 alone, nearly 9,300 veterans had to repay such benefits. Stephanie Rennane, the study’s lead author, believes many more were affected but not recorded due to VA system changes.

Reffitt’s case highlights the VA’s error in not recouping the separation pay earlier. The VA recently discovered the mistake when Reffitt filed a claim under the PACT Act, which expanded benefits for veterans exposed to toxic substances.

Army veteran Daphne Young, 36, from Columbus, Georgia, also faced a similar situation. After leaving the military in 2016, she received a $15,000 separation benefit. In April, the VA began withholding her $3,700 monthly disability payment to recover the amount.

“It was agonizing,” said Young, a former ammunition specialist and combat medic who served in Iraq and Afghanistan. She was unaware of the law prohibiting both benefits when she took the payout.

Advocates argue that separation pay relates to service time, while disability pay addresses injuries or illnesses from service. “They are two separate buckets of money,” said Marquis Barefield from Disabled American Veterans (DAV).

The RAND study found veterans had an average of $19,700 to $53,000 withheld for recoupment. Marine veteran Shane Collins, 41, from Twin Falls, Idaho, repaid $33,000 over 36 months, severely impacting his family’s finances.

Rep. Ruben Gallego (D-AZ) introduced legislation to change this law, but progress has been slow due to cost concerns. Veterans can pursue waivers, but they are difficult to obtain.

Young managed to reduce her monthly withheld amount with DAV’s help, though it extends her repayment period. Reffitt is still figuring out a plan and has cut back on medical appointments for his health conditions.

“There has to be a better way,” said Young, expressing the frustration of many veterans caught in this situation.

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