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October 27, 2023

VA Overpayment Statute of Limitations

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In this post, we’ll explore the VA Overpayment Statute of Limitations, reasons why a VA overpayment occurs, and how to handle the overpayment. 

Extra money is nice, but what happens when the VA overpays by mistake?

There are cases where the VA may overpay you, but it doesn’t mean it can stay in your pocket. 

Simply put, if the VA overpays you, you must pay it back (with a few exceptions). 

Let’s dive in. 


What is the VA Overpayment Statute of Limitations?

The VA overpayment statute of limitations has a set time from which the VA can legally recover overpaid funds from veterans and/or their beneficiaries. 

While there is no deadline for disputing a debt, the VA overpayment statute of limitations says you must request a waiver of a VA overpayment within 180 days from the date of the notice. 

If the VA determines you were overpaid, they will deduct money from your monthly benefit amount until it is repaid. 

Keep in mind that the statute of limitations applies to the VA’s ability to recover overpayments and not the beneficiary’s obligation to repay them. 

If the VA Overpayment Statute of Limitations Expires

In addition, even if the VA overpayment statute of limitations has expired, beneficiaries are still legally obligated to repay any overpaid funds. 

Regardless of whether you are a veteran or beneficiary receiving benefits, it’s essential to understand your rights and responsibilities when handling VA overpayments.


Requesting a Waiver for Overpayment 

If you presume you received an overpayment notice in error, you may request a waiver to terminate the VA’s collection action on the debt. 

You can contact the VA’s Debt Management Center for additional information or work with an accredited Veterans Service Organization representative to assist with submitting a waiver. 

In addition, you must request a waiver within 180 days of the overpayment notice, although doing so within 30 days is ideal.

When waivers are sent within 30 days of the overpayment notice, you will continue to receive your full monthly VA benefits until you receive a decision regarding your waiver. 

Also, when you submit the waiver within 30 days, the VA will only collect debt once the situation is resolved. 

You can manage your VA debt for benefit overpayments online or by calling 1-800-827-0648. 

Note: In addition to submitting VA Form 5655, you should submit a Statement in Support of Claim form and explain how repaying the overpayment would pose a hardship in your daily life. 


How to Handle VA Overpayments 

You should always contact the VA with any changes that could impact your benefits, preventing an overpayment. 

You can make necessary changes online or by calling 1-800-827-1000. 

However, if you find yourself in a situation where the VA overpaid your monthly benefits, you should follow the below steps. 

  1. Carefully review the notice you received from the VA, which should include the reason for the overpayment, including how much you owe. 
  2. Contact the VA to discuss the issue and seek resolution, especially if you feel the overpayment was in error.
  3. Understand your repayment options with the VA if the overpayment is valid
  4. Request an appeal if you disagree with the overpayment determination  

If it’s determined you must repay the VA, you can make an offer of compromise where you agree to pay less than the initial total overpayment amount in one lump sum payment. 

In addition, if your overpayment debt is less than $100,000, the VA can settle for less than you owe. 

10 Common Reasons Why You Received a VA Overpayment 

Overpayments typically occur because you delayed submitting paperwork or forgot to update your records. 

Here are ten common reasons you could receive a VA overpayment.

  1. VA pension recipients not reporting income
  2. Not reporting a period of incarceration to the VA
  3. Not reporting the death of a dependent to the VA 
  4. Receiving care at a VA medical facility and not paying the required copay 
  5. The Vocational Rehabilitation program purchased a service or tools for the veteran, but then they leave the program without a valid reason 
  6. Changes in dependency status, including divorce 
  7. Educational enrollment changes, including not completing the course requirements 
  8. If a veteran in the Reserves is called up for active duty and still receiving VA benefits
  9. Not reporting that a school-age child has gotten married 
  10. A mistake by the VA where they believe an overpayment occurred 

If there was a VA overpayment administrative error, you must dispute the claim. 


VA Overpayment Accountability Act 

The VA Overpayment Accountability Act of 2021 aims to reduce the chance of overpayments with an improvement to VA IT systems. 

In addition, it also hopes to provide better credit protection for veterans receiving overpayments. 

Improvements from the VA Overpayment Accountability Act include:

  • Providing electronic notifications to veterans who have experienced debts
  • Allowing veterans to review their information regarding any eligible dependents 
  • Tracking metrics related to debts, overpayments, and the outcome of waiver applications regarding the recovery of debts 

The VA is required to conduct an audit within 180 days to determine the frequency of errors and whether staffing problems and vacancies at the Veterans Benefits Administration (VBA) contributed to the overpayments. 


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