Successive VA Errors Created a $210,000 Debt for a Veteran with a “Service-Connected Mental Illness”

In April 2021, the VA Office of Inspector General (OIG) discovered VBA had incorrectly created a debt of about $210,000 for a veteran. Because of the size of the debt and VA’s plan to withhold the veteran’s entire monthly compensation benefits (over $1,100), and given the veteran’s history of treatment for mental illness, a prior suicide attempt, and suicidal ideation, the review team promptly contacted VBA for corrective action. The debt was created when a VBA employee attempted to correct a disability rating error made more than two years before that had created the overpayment. Subsequently, the overpayment should have been considered an administrative error and the debt waived since veterans are not responsible for repaying overpayments that are found to be the result of administrative errors. However, VBA’s Compensation Service claimed the veteran knew he was not entitled to the payments as VBA had sent him a letter with the cut-off date. The veteran did contact VBA numerous times about the overpayment and was told he had a 100 percent evaluation, making it reasonable to believe he was entitled to the compensation. When VBA proposed reducing the 100 percent evaluation, staff from four offices assured the veteran he would not be responsible for any overpayment. The OIG review team contacted the director of quality assurance for VBA’s Compensation Service on April 22, 2021, and provided a detailed accounting of the case. The Compensation Service recorded a new decision on April 23, 2021, that attributed the debt to administrative error and approved waiving it. The debt was ultimately eliminated from VA’s electronic system on April 30, 2021. The OIG does not request any further action on this case, but VBA should consider steps to avoid this type of error in the future.