A Veterans Affairs Department rule, developed over five years, is slated to take effect on Thursday, January 11th, 2024 to prevent overpayments of disability compensation benefits to active-duty personnel. The final rule modifies U.S. statutes governing the VA’s authority to reduce or terminate disability benefits for service members or veterans, shifting some responsibility from the veteran to the Defense Department.

Under the previous regulations, the VA had to notify a veteran of a proposed adverse action and provide 60 days for the submission of evidence before taking the adverse action. However, benefits continued to be paid during these 60 days. This posed challenges for veterans on active duty in remote locations, such as combat zones, with limited access to mail services and no practical means to handle financial matters, as highlighted in a December 12 Federal Register notice.

The existing method for the VA to prevent overpayments required the veteran to confirm a return to active or training service before receiving pay for it, enabling the department to suspend disability benefits. The recent rule grants the VA the authority to promptly halt benefits if the recipient is reentering active or training duty, regardless of the 60-day adjudication period, based on notification from the Defense Department regarding active service pay.

The purpose of the rule is to avoid possible overpayments to beneficiaries who are not eligible, which could necessitate recovery efforts by the VA, including “aggressive collection action” that might impact the veteran’s credit history, security clearance eligibility, or employment, as noted in a proposed rule from 2019.

In response to public comments, the VA made adjustments to ensure benefits are suspended upon the veteran receiving active service pay, instead of depending on the Defense Department’s notification of potential active service pay, which might undergo alterations.

Additionally, language has been added to the rule allowing for the resumption of benefits based on DOD notice that a veteran has been released from active duty or active duty for training. Veterans can also inform the VA through a claim to recommence payment. Should notification be received within a year from the release date of active duty or active duty for training, payments, if otherwise suitable, will recommence the day following release. In the absence of such notification, payments will resume one year before the date of receiving a new claim, as detailed in the notice dated December 12.