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View Full Version : Disability Payments Withheld - WTF



drc100882
03-31-2014, 04:02 AM
On Friday I received a VA letter stating that I was rated with 30% service-connected disability with a payment of around $450. The letter also stated that my payments would start in April 2016. My rating was approved on 3 March.

I spoke with the VA (TERRIBLE CUSTOMER SERVICE BTW) and they said that the law states that any severence pay (Separation pay) from the military for separating early is to be repaid to the Treasury Dept upon the approval of any disability.

I separated last June and received $19,000 in separation pay. Before I got my VA letter, I received a letter from the DAV that said what my rating was, so I was expecting to receive that payment, plus 9 months of backpay, on 1 April. The e-benefits website also had all my documentation about how much my payment would be, but no mention of having to repay my separation pay.

I spoke with a veteran's benefits attorney who told me that this is a closely guarded secret. She said that separation pay is a "loan" until the disability is approved, then the separation pay is taken out of the disability until it is paid back. When I attended the TAPS briefing at my base, the DAV representative that briefed us was extremely honest and up front about everything that can happen with the VA (the time spent waiting for medical evaluations, time spent waiting for rating approval, how to appeal the rating...). Not one person in that briefing mentioned this to us.

I just wanted to share my experience. I will be calling my DAV representative tomorrow to ask why this is not part of the briefing about SCD. Basically, if you get separation pay and don't file for any SCD, you're fine. If you get separation pay and you DO file for SCD, you will be repaying that separation pay through the VA. All of my disability packpay and my monthly payment will go to the Treasury Dept for the next two years.

sandsjames
03-31-2014, 10:28 AM
On Friday I received a VA letter stating that I was rated with 30% service-connected disability with a payment of around $450. The letter also stated that my payments would start in April 2016. My rating was approved on 3 March.

I spoke with the VA (TERRIBLE CUSTOMER SERVICE BTW) and they said that the law states that any severence pay (Separation pay) from the military for separating early is to be repaid to the Treasury Dept upon the approval of any disability.

I separated last June and received $19,000 in separation pay. Before I got my VA letter, I received a letter from the DAV that said what my rating was, so I was expecting to receive that payment, plus 9 months of backpay, on 1 April. The e-benefits website also had all my documentation about how much my payment would be, but no mention of having to repay my separation pay.

I spoke with a veteran's benefits attorney who told me that this is a closely guarded secret. She said that separation pay is a "loan" until the disability is approved, then the separation pay is taken out of the disability until it is paid back. When I attended the TAPS briefing at my base, the DAV representative that briefed us was extremely honest and up front about everything that can happen with the VA (the time spent waiting for medical evaluations, time spent waiting for rating approval, how to appeal the rating...). Not one person in that briefing mentioned this to us.

I just wanted to share my experience. I will be calling my DAV representative tomorrow to ask why this is not part of the briefing about SCD. Basically, if you get separation pay and don't file for any SCD, you're fine. If you get separation pay and you DO file for SCD, you will be repaying that separation pay through the VA. All of my disability packpay and my monthly payment will go to the Treasury Dept for the next two years.

WTF? Have never heard of that. If that's the case, that shit needs to be made public before all these people looking at volunteering to get out make the decision based on the amount of separation pay. Could change the mind of those who would be receiving Disability...

Chief_KO
03-31-2014, 12:22 PM
This sounds like an example of "offset". I know it effects retirement pay, but I did not know it also effected separation pay. To receive full retirement pay & VA disability, the overall rating must be 50% or higher (known as concurrent receipt). If your disability is 40% or less (VA is always in even 10%), the amount of disability is deducted from your retirement pay, and paid back to you by the VA (tax free).
So, lets say your monthly retirement check is $1000.00 (before taxes) and your VA disability is $450.00. Your new retirement pay will be $550.00 (before taxes) + $450.00 (tax free). So, you still end up slightly better than before with total "income" at $1000.00, but only $550.00 is taxable.
Yes, this sucks. But is was not too long ago that there was no concurrent receipt, all veterans had their retirement reduced.
Still unhappy? Are you a member of AFSA, VFW, American Legion, TREA, DAV? If the answer to any of those is NO, then you're voice is not being heard in D.C. Each of those orgs' legislative agendas include extending concurrent receipt for all disability ratings.

imported_MERC8401
04-01-2014, 12:25 AM
I just attended TAP two weeks ago and this was specifically mentioned during our VA briefing. If you are given a seperation payment....you will not receive any of your disability payments until that seperation pay is repaid. However, if you take VSP under the Force Management initiative, that will not be required to be paid back. Sorry your VA rep at your TAPS did not brief that.

Chief_KO
04-01-2014, 01:08 AM
Big thing to remember...no matter what branch you served (USA, USN, USMC, USCG, USAF), the service rules regarding various separation & retirement programs (other than the traditional 20yr+) do not mesh with VA policies and many other federal (and probably some state) policies.

Also, once you receive veteran status (DD-214 for retirement or separation), your service branch is basically finished with you. The VA is now your place to go, and the various sections of the VA (healthcare, disability & pension, burial) do not speak to each other. It is up to you to file the appropriate paperwork to update the other sections of the VA.

AF2017
04-01-2014, 07:28 AM
However, if you take VSP under the Force Management initiative, that will not be required to be paid back. Sorry your VA rep at your TAPS did not brief that.

I don't think that is true. The person in my office is having to pay back his VSP, to get his disability rating.

ihatenonners
04-01-2014, 09:17 AM
I specifically brought this up in TAPs and the pretty blonde VA rep said I was wrong, she had never heard that, and that "what the Air Force pays you has nothing to do with the VA. They are separate." Then I go to another source and I was told that its only taken out if your separation is related to the disability (like medical discharge or medical retirement). So WTF?

Chief_KO
04-01-2014, 11:56 AM
from benefits.va.gov website:
Disability Compensation
Disability compensation is a monthly tax-free benefit paid to Veterans who are at least 10% disabled because of injuries or diseases that were incurred in or aggravated during active duty, active duty for training, or inactive duty training. A disability can apply to physical conditions, such as a chronic knee condition, as well as a mental health conditions, such as post-traumatic stress disorder (PTSD).
Benefit
The benefit amount is graduated according to the degree of the Veteran's disability on a scale from 10 percent to 100 percent (in increments of 10 percent). Compensation may also be paid for disabilities that are considered related or secondary to disabilities occurring in service and for disabilities presumed to be related to circumstances of military service, even though they may arise after service. Generally, the degrees of disability specified are also designed to compensate for considerable loss of working time from exacerbations or illnesses.
If you have dependents, an additional allowance may be added if your combined disability is rated 30% or greater. Your compensation may be offset if you receive military retirement pay, disability severance pay, or separation incentive payments.More information about disability compensation benefit amounts can be found on the Compensation Rates page.

Measure Man
04-01-2014, 10:42 PM
So, lets say your monthly retirement check is $1000.00 (before taxes) and your VA disability is $450.00. Your new retirement pay will be $550.00 (before taxes) + $450.00 (tax free). So, you still end up slightly better than before with total "income" at $1000.00, but only $550.00 is taxable.

You will end up even more than slightly better if you have an ex-spouse that gets part of your retirement.

So, in the above example, if your spouse gets 50% of your retirement, she would get $275 instead of $500!

imported_MERC8401
04-02-2014, 01:13 AM
I don't think that is true. The person in my office is having to pay back his VSP, to get his disability rating.

I apologize if that is wrong. Some of the people in TAPS were saying they saw a change somewhere....they were probably full of it.