Veterans across the country have been forced to repay billions of dollars in separation incentives before receiving disability benefits from the Department of Veterans Affairs (VA). The practice stems from a federal law enacted in 1949, which prevents veterans from receiving both separation pay and disability compensation. Over the past decade, veterans have collectively repaid at least $2.5 billion under this rule, according to NBC News.
The law affects veterans who accepted financial incentives to leave service during military downsizing efforts and later qualified for disability payments. The VA argues that it is legally obligated to recover these funds before providing disability compensation, leaving many veterans in financial distress.
One such veteran is Damon Bird, who left the Army with a $74,000 payout. Diagnosed with bladder cancer and post-traumatic stress disorder, Bird began receiving a $2,400 monthly disability check—until the VA halted payments in 2021 to recoup the separation pay. Bird described the situation as devastating, stating, “It was already bad enough as it was, but I had already been dealing with mental health issues prior to losing that income.”
Veterans’ advocates and lawmakers are now calling for reform. Rep. Ruben Gallego (D-AZ) introduced a bill in 2022 to eliminate the recoupment requirement, but the legislation has been slow to advance due to concerns over cost.
As the debate continues, veterans hope Congress will take action to update the outdated law and alleviate the financial burden it places on those who served their country.
