By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Veterans Benefits Attorney

What happens when the VA decides that benefits were awarded and/or paid in error, resulting in an overpayment demand?  The VA will send you a decision letter explaining why a claimant’s entitlement has changed. This is done via a form letter containing a few personal details, such as the type of benefit to him, the amount of debt claimed, and the date on which the VA plans to start withholding benefits until the amount overpaid is recovered.

Overpayment demands occur for various reasons. The claimant’s income may have increased and/or there is a decrease in medical expenses, so he/she no longer qualifies for the same monthly benefit. Or the claimant may have received an inheritance that disqualifies him/her completely, based on the VA treating the inheritance as both income and a countable asset after a certain date, even though the claimant continues to receive a benefit. If there is indeed more income/less medical expenses than previously reported, consider submitting actual medical expenses for the same time period if sufficient to offset the discrepancy. However, just because the VA claims to have overpaid, does not necessarily mean that their claim is accurate. Sometimes an overpayment demand is simply the result of a clerical error or the VA incorrectly considering historical income and/or asset information that should be irrelevant post the effective date.

When you receive an overpayment notice, you must generally respond in some way within 30 days of the date of the letter. Responding within this time frame will also ensure that any scheduled withholding action does not occur until after your response is considered by the VA. How you respond depends on whether the overpayment demand has merit and/or whether or not the claimant can repay the debt. If the claimant does owe the debt, the back of the form letter gives you four different ways to pay. If you cannot afford to pay the entire debt at once, the VA is willing to make arrangements for repayment over time or even ultimately to grant a waiver of the debt, if the claimant does not have the means to repay at all.

Claimants may dispute a debt if it is not owed or dispute the amount of the debt if it is inaccurate. If you dispute the debt, you must explain in writing why you dispute the validity of the debt or the amount of the debt. If you request a waiver of part or all of the debt, you must explain in writing either why you are not responsible for the debt or how collection of the debt would cause undue hardship. Claims of hardship must be documented within 180 days, which the VA considers in deciding whether to waive the debt. Pursuant to 38 CFR §1.963, “Recovery of overpayments of any benefits made under laws administered by the VA shall be waived if there is no indication of fraud, misrepresentation, or bad faith on the part of the [claimant] and recovery of the indebtedness…would be against equity and good conscience.”

To discuss your NJ Veterans Benefits matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  Please ask us about our video conferencing consultations if you are unable to come to our office.