The Department of Veterans Affairs (VA) has demanded that veterans repay billions of dollars they received as separation incentives before granting disability payments, citing a little-known law from 1949. The rule, which prohibits veterans from collecting both separation pay and disability compensation, has placed a heavy financial burden on those who left service due to downsizing.
The law requires veterans who accepted a separation payout to return that money if they later qualify for VA disability benefits. According to a report from NBC News, over $2.5 billion has been reclaimed by the VA under this policy in the past decade.
Veterans like Damon Bird, who served in the Army and was later diagnosed with service-related health conditions, are among those impacted. Bird received a $74,000 separation payment when he left the service but saw his disability benefits suspended in 2021 as the VA sought to recoup the payout. “We were barely keeping up with our day-to-day cost of living,” Bird explained, detailing the financial hardship his family faced.
Veteran advocates are now pushing for a change. In 2022, Rep. Ruben Gallego (D-AZ) introduced legislation to end the recoupment requirement. While the bill has garnered bipartisan support, its passage has been slow due to concerns over its cost.
As the issue gains attention, veterans and their supporters hope Congress will address the outdated law and relieve the financial strain it imposes on those who have already sacrificed so much for their country.
