The Department of Veterans Affairs (VA) has demanded that veterans repay billions of dollars received as separation incentives before they can access disability benefits, invoking a federal law from 1949. The law prevents veterans from collecting both a separation payout and VA disability compensation, creating significant financial challenges for those who served.
The policy has particularly affected veterans who took incentives to leave the military when it downsized, only to later qualify for disability benefits. According to NBC News, at least $2.5 billion has been repaid by veterans over the past decade due to this rule.
One of the veterans impacted, Damon Bird, left the Army with a $74,000 payout. He was later diagnosed with service-related bladder cancer and post-traumatic stress disorder. Bird initially received a monthly disability check of $2,400, but in 2021, the VA stopped his payments, citing the need to recover the separation payout. Bird described the financial strain as overwhelming, adding, “It felt like I would never see the light at the end of the tunnel.”
The VA argues that it is legally bound to recoup these funds before providing disability payments. Currently, approximately $364 million remains outstanding. Veteran advocates and lawmakers are now pushing for reform. Rep. Ruben Gallego (D-AZ) introduced legislation in 2022 to eliminate these recoupments, noting that bipartisan support exists but progress has been slow due to concerns over the cost.
As veterans continue to face financial difficulties, pressure is mounting to change the law and provide fairer treatment for those who have already sacrificed for their country.
