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M21-1, Part III, Subpart v, Chapter 1, Section I – Correcting the Erroneous Payment of Benefits to a Beneficiary

Overview


In This Section

This section contains the following topics:

1.  Overview of Erroneous Payments


Introduction

This topic contains an overview of erroneous payments, including

Change Date

June 28, 2017

III.v.1.I.1.a.  Definition:  Erroneous Payments

Erroneous payments are payments the Department of Veterans Affairs (VA) made to a beneficiary that are not authorized by law.

III.v.1.I.1.b.  Definition: Duplicate Payment

duplicate payment is defined as a type of erroneous payment where VA concurrently made two or more payments to a beneficiary, one or more of which are not authorized by law.

III.v.1.I.1.c.  Examples of Duplicate Payments

Examples of duplicate payments include
  • a payment of compensation and a payment of pension, or
  • two or more concurrent payments of
    • disability compensation
    • Dependency and Indemnity Compensation (DIC), or
    • pension.
Important:  The payment of disability benefits to a Veteran based on his/her own service, and the concurrent payment of disability or survivors benefits to or for the same Veteran based on a different Veteran’s service,

III.v.1.I.1.d.  Examples of Erroneous Payments That Are Not Duplicate Payments

Examples of erroneous payments that are not duplicate payments include
  • assigning an incorrect effective date for the addition of a dependent to a Veteran’s award
  • payment of benefits in an amount exceeding a beneficiary’s entitlement that is due to claims-processing delays, or
  • a decision that resulted in payment but is later found to be clearly and unmistakably erroneous.

III.v.1.I.1.e.  Actions to Take for Erroneous Payments

The table below describes the next action to take after discovering VA erroneously paid benefits to a beneficiary.
If the erroneous payment …
Then …
meets the definition of a duplicate payment
follow the instructions in M21-1, Part III, Subpart v, 1.I.2 for adjusting the beneficiary’s award.
does not meet the definition of a duplicate payment
follow the instructions in M21-1, Part III, Subpart v, 1.I.3 for determining whether it is appropriate to treat the erroneous payment as an administrative error.

2.  Handling Cases That Involve the Duplicate Payment of Benefits


Introduction

This topic contains special instructions for for handling cases that involve the duplicate payment of benefits, including


Change Date

July 13, 2018

III.v.1.I.2.a.  Action to Take Upon Discovering Duplicate Payments

Upon discovering that VA is making a duplicate payment to a beneficiary, follow the instructions in the table below.
Step
Action
1
Establish end product (EP) 960, using the date VA discovered the duplicate payment as the date of claim.
2
Does the duplicate payment consist of the payment of disability compensation to a Veteran for one or more service-connected (SC) disabilities and a separate payment of disability compensation to the same Veteran for one or more other SC disabilities?
  • If yes, proceed to Step 4.
  • If no, proceed to the next step.
Rationale:  It would be improper to take the action described in the next step without issuing notice of proposed adverse action if the Veteran is entitled to both payments (without regard to the disability ratings assigned to the several SC disabilities).
Examples:
  • Veteran is in receipt of disability compensation for amputation of the left leg at 30 percent and arthritis of the right knee at 10 percent under record “A.”  The same Veteran is in receipt of disability compensation for posttraumatic stress disorder (PTSD) at 50 percent and arthritis of the right knee at 10 percent under record “B.”  This should be considered an exception.  Skip Step 3 and follow the instructions in Step 4 since suspending either award would be taking adverse action without due process on an entitlement.
  • Veteran is in receipt of disability compensation for erectile dysfunction at 20 percent, diabetes mellitus at 10 percent, and special monthly compensation for loss of use of a creative organ under record “A.”  The same Veteran is in receipt of disability compensation for diabetes mellitus at 10 percent under record “B.”  Follow the instructions below in Step 3 as the Veteran is being paid for diabetes mellitus on record “A.”
3
Suspend the duplicate payment effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share per 38 U.S.C. 5112(b)(10).
Important:
  • When suspending a duplicate compensation payment that involves the same disability at different evaluations, suspend the award with the lower of the two evaluations.
  • When suspending a duplicate pension award, suspend the lower payment.
4
Establish EP 600 to control for due process and propose to stop the duplicate payments from the effective date of the award.  Include appropriate language in the notice of proposed adverse action that states if the proposed adjustment is made, it may result in an overpayment of benefits, and language about minimizing overpayments.
Important:
  • Due process is always required before the processing of an overpayment, even when the duplicate payment is suspended as described in Step 3.
  • Propose to stop the duplicate payment from the effective date of the award regardless of preliminary evidence that the duplicate payment was due to an administrative error.  Proposing to stop duplication of payment effective the date of the award allows VA the flexibility to evaluate all evidence of record after the due process period ends and make a final determination based on the evidence of record.
5
Review the guidance found in M21-1, Part III, Subpart v, 1.I.3, on administrative errors and in M21-1, Part III, Subpart v, 1.I.2.b and c on special considerations for duplicate payments found.  Then use the following table to determine next steps.
If in accordance with the references above a duplicate payment is based on …
Then …
a circumstance in which an administrative error should not be considered
  • do not complete an administrative decision, and
  • proceed to Step 6.
an administrative error on the part of VA
6
Upon expiration of the due process period
  • evaluate the evidence of record, and
  • take the appropriate action as shown in the table below.
If …
Then …
  • preparation of an administrative decision was not warranted, and
  • no additional evidence was received from the beneficiary, or the beneficiary agrees with the action
take the proposed action and notify the beneficiary.
  • preparation of an administrative decision was not warranted, but
  • additional evidence was received that resulted in the need to prepare an administrative decision
  • an administrative decision was completed, and
  • no additional evidence was received by the beneficiary, or the beneficiary agrees with the action
take the corrective action(s) prescribed by the final decision maker to include, if applicable,
  • Compensation Service’s Program Review Staff, or
  • Pension and Fiduciary (P&F) Service’s Quality, Training, and Site Visits Staff.
  • an administrative decision was completed, and
  • additional evidence was received that could potentially result in a change to the decision
Important:  If a debt is created, ensure that a debt is created on the correct record.
7
Clear the EP 960 established in Step 1.
8
Update the erroneous payment log according to the instructions  in M21-1, Part III, Subpart v, 1.I.5.a.
For pension and Parents DIC cases only:  Ensure documentation of calculations made to determine the rate of benefits (such as calculations of medical expenses, net worth, and waived overpayments) are included in the eFolder.
Reference:  For information on including documentation of pension and Parents DIC award calculations in the eFolder, see M21-1, Part III, Subpart v, 2.A.2.c.

III.v.1.I.2.b.  Consideration of Administrative Errors

Do not automatically consider duplicate payments as an administrative error.  In limited circumstances, a decision to waive the debt due to administrative error is appropriate.  In these situations, careful consideration is required and should include determining if the beneficiary could have had knowledge of any additional payments.

III.v.1.I.2.c.  Types of Duplicate Payments That May Not Be Treated as an Administrative Error

Do not treat the following types of duplicate payments as administrative errors:
  • a payment of disability compensation and a payment of Veterans Pension
  • a payment of DIC and a payment of Survivors Pension under the same Veteran
  • more than one compensation payment when payment is based on the same disability, regardless of the disability rating assigned to the disability
  • more than one payment of DIC, or
  • more than one payment of pension, including
    • one payment under Section 306 Pension and one payment under current-law pension
    • one payment under Old Law Pension and one payment under current-law pension, or
    • more than one payment under current-law pension, regardless of the maximum annual pension rate or income for VA purposes.

III.v.1.I.2.d.  Example 1: Duplicate Payment That May Not Be Treated as an Administrative Error

Situation:
  • A surviving spouse is in receipt of Survivors Pension and her benefits were converted into a new electronic record without a Social Security number (SSN).
  • On May 1, 2012, during a record update, a new participant identification (PID) number is created by adding the spouse’s SSN.
  • On June 1, 2015, a Veterans Service Representative (VSR) processing a medical expense report discovers the surviving spouse is receiving two payments of Survivors Pension each month.
Actions:
  • Suspend the duplicate payment effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share.
  • Send the surviving spouse notice of VA’s proposal to discontinue the duplicate payment effective May 1, 2012.
  • Unless the surviving spouse submits evidence within 65 days that shows the proposed action should not be taken,
    • discontinue the duplicate payment effective May 1, 2012, and
    • notify the surviving spouse of the action taken.
Notes:
  • Do not treat the duplicate payment of benefits in this case as an administrative error.
  • The surviving spouse is responsible for repaying the overpayment.

III.v.1.I.2.e.  Example 2: Duplicate Payment That May Not Be Treated as an Administrative Error

Situation:

  • A Veteran is in receipt of disability compensation for residuals of a shoulder injury that VA rated 10-percent disabling.
  • On December 1, 2013, the Veteran submits a new claim for an increased disability rating for his shoulder.
  • A Claims Assistant (CA) establishes the Veteran’s claim under a new PID.
  • VA increases the disability rating for the shoulder to 20 percent and begins paying the Veteran benefits under the new PID.  (The Veteran is now receiving two benefit payments:  one under the old PID and another under the new PID.)
  • While updating the Veteran’s address on June 1, 2015, a VSR discovers the Veteran is receiving two benefit payments from VA each month.
Actions:
  • Suspend the lower of the two benefit payments effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share.
  • Send the Veteran notice of VA’s proposal to discontinue the duplicate payment effective the date VA began paying it.
  • Unless the Veteran submits evidence within 65 days that shows the proposed action should not be taken,
    • discontinue the duplicate payment effective the date VA began paying it, and
    • notify the Veteran of the action taken.
Notes:
  • Do not treat the duplicate payment of benefits in this case as an administrative error.
  • The Veteran is responsible for repaying the overpayment.

III.v.1.I.2.f.  Example 3: Duplicate Payment That May Not Be Treated as an Administrative Error

Situation:
  • On December 1, 2013, a Veteran in receipt of Section 306 Pension submits a claim for current-law pension, including additional benefits for aid and attendance.
  • A CA establishes the claim under an incorrect PID.
  • On January 1, 2014, VA grants the Veteran’s claim for current-law pension.  (The Veteran is now receiving two benefit payments each month:  one for current-law pension and one for Section 306 Pension.)
  • On March 1, 2015, a VSR discovers the Veteran has been receiving two pension payments when the Veteran notifies VA that he has changed medical facilities.
Actions:
  • Suspend the duplicate payment effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share.
  • Send the Veteran notice of VA’s proposal to discontinue the duplicate payment effective the date VA began paying it.
  • Unless the Veteran submits evidence within 65 days that shows the proposed action should not be taken,
    • discontinue the duplicate payment effective the date VA began paying it, and
    • notify the Veteran of the action taken.
Notes:
  • Do not treat the duplicate payment of benefits in this case as an administrative error.
  • The Veteran is responsible for repaying the overpayment.

III.v.1.I.2.g.  Example 4: Duplicate Payment That May Not Be Treated as an Administrative Error

Situation:

  • On September 1, 2014, a surviving spouse in receipt of Survivors Pension applies for DIC.
  • A CA establishes the DIC claim under an incorrect PID.
  • On January 1, 2015, VA grants the surviving spouse’s claim for DIC and she begins receiving payments for DIC in addition to the payments she receives for Survivors Pension.
  • On March 1, 2015, a VSR discovers that the surviving spouse has been receiving both Survivors Pension and DIC when the surviving spouse contacts VA to confirm her new address.
Actions:
  • Suspend the duplicate payment effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share.
  • Send the surviving spouse notice of VA’s proposal to discontinue the duplicate payment effective the date VA began paying it.
  • Unless the surviving spouse submits evidence within 65 days that shows the proposed action should not be taken,
    • discontinue the duplicate payment effective the date VA began paying it, and
    • notify the surviving spouse of the action taken.
Notes:
  • Do not treat the duplicate payment of benefits in this case as an administrative error.
  • The surviving spouse is responsible for repaying the overpayment.

III.v.1.I.2.h.  Example: Duplicate Payment That Should Be Treated as an Administrative Error

Situation:

  • On May 1, 2012, VA begins paying disability compensation to a Veteran for her SC PTSD, based on a disability rating of 30 percent.
  • On August 12, 2014, a CA establishes a new claim under a new PID, based on the Veteran’s submission of a claim for service connection (SC) for coronary artery disease.
  • On October 1, 2014, VA grants SC for coronary artery disease and assigns a disability rating of 30 percent.  (The Veteran now begins receiving two benefit payments, one under each PID).
  • While updating the Veteran’s address on August 1, 2016, a VSR discovers the Veteran is receiving two benefit payments from VA each month.

Actions:

  • Send the Veteran notice of VA’s proposal to consolidate the two awards into one.
  • Unless the Veteran submits evidence within 65 days that shows the proposed action should not be taken,
    • consolidate the two awards into one, and
    • notify the Veteran of the action taken.

Notes:

  • The duplicate payments referenced in this example should be treated as an administrative error.
  • The Veteran is not responsible for repaying any overpayment resulting from consolidation of the two awards.

3.  Handling Cases Involving Administrative Error


Introduction

This topic contains special instructions for handling cases involving administrative error, including


Change Date

October 24, 2018

III.v.1.I.3.a.  Definition:  Administrative Error

An administrative error occurs when VA pays benefits to a beneficiary in an amount that exceeds his/her entitlement due to actions VA took that usually, but not always, stem from misapplication of the law.
Administrative errors include errors in judgment on the part of VA employees.

III.v.1.I.3.b. Determining Whether to Attribute the Erroneous Payment of Benefits to Administrative Error

Before attributing the erroneous payment of benefits to administrative error, it is necessary to rule out the existence of the conditions described in the table below.  When taking this action, consider all the available evidence of record, such as

  • correspondence VA sent to the beneficiary, including
    • cost-of-living adjustment letters
    • decision notices, and
    • development letters, and
  • statements the beneficiary and others made to VA.
Condition
Description
The beneficiary is at fault for the error.
VA erroneously paid benefits because the beneficiary
  • knowingly took a wrongful action (an act of commission), or
  • failed to take an action or held something back from VA (an act of omission).
The beneficiary had knowledge of the error.
The beneficiary knew or should have known (based on, for example, VA correspondence of the type referenced in the opening paragraph of this block) that he/she was not entitled to the benefits VA erroneously paid.
The beneficiary acted with fraudulent intent.
The beneficiary attempted to wrongfully deceive VA (through an act of commission or omission) with the intent of achieving financial or personal gain.
References:  If careful consideration of the evidence of record results in a finding that the beneficiary

III.v.1.I.3.c.  Payment of Erroneous Benefits Due to a System Malfunction or Programming Error

The erroneous payment of benefits because of a system malfunction or programming error is not considered an administrative error under 38 CFR 3.500(b)(2) and should not be treated as such.
Exceptions:  The following system-related errors are considered administrative errors under 38 CFR 3.500(b)(2).  They require the preparation of an administrative decision and adjustment of the beneficiary’s award according to the instructions in this topic.
  • The automated processing of a legislative increase in benefits results in the payment of a higher rate of pension than the rate to which a beneficiary is entitled.
  • The Rules-Based Processing System generates an incorrect rate of payment.

III.v.1.I.3.d.  Payment of Erroneous Benefits Due to Claims-Processing Delays

The payment of benefits in an amount exceeding a beneficiary’s entitlement that is due to claims-processing delays is not considered administrative error.
Example:
  • A Veteran notifies VA that he divorced his spouse three months ago.
  • Almost one year passes before VA adjusts the Veteran’s award to remove the spouse.
Result:  The payment of additional benefits for the spouse beyond the date the Veteran notified VA of the divorce is not considered administrative error.  The Veteran remains responsible for repaying the overpayment that resulted from the delay in adjusting his award.

III.v.1.I.3.e.  Example of an Administrative Error on the Part of VA

Situation:

  • On May 1, 2008, VA assigns a 50-percent disability rating to a Veteran for her SC disabilities.
  • On August 12, 2010, the Veteran gives birth to a child.
  • The Veteran doesn’t notify VA of her new dependent until November 10, 2013.
  • A VA employee erroneously adds the child to the Veteran’s award effective the date of the child’s birth.
Result:  This is considered an administrative error because VA should have added the child to the Veteran’s award effective November 10, 2013, as more than one year had passed since the birth of the child when the Veteran reported the birth to VA.
Reference:  For more information on determining the proper effective date for awarding additional compensation for dependents, see M21-1, Part III, Subpart iii, 5.L.2.

III.v.1.I.3.f.  Requirement for an Administrative Decision and Notice of Proposed Adverse Action

If an erroneous payment is believed to be due to an administrative error, and VA is paying benefits in an amount that exceeds entitlement, then

  • prepare an administrative decision according to the instructions in M21-1, Part III, Subpart v, 1.A that proposes to reduce or discontinue benefits under 38 CFR 3.500(b)(2)
  • send the beneficiary notice of the proposed adverse action according to instructions in M21-1, Part I, 2.B, and
  • do not take action to reduce or discontinue benefits until 65 days after the date of the notice of proposed adverse action, unless action is required under the instructions for duplicate payments found in M21-1, Part III, Subpart v, 1.I.2.

Important:

  • Upon discovery of an administrative error, establish EP 960, using the date VA discovered the error as the date of claim.  Leave the EP 960 running until final action is taken to correct the error.
  • If an administrative decision has not been approved by officials listed inM21-1, Part III, Subpart v, 1.I.3.g, include appropriate language in the notice of proposed adverse action, including language stating that the adjustment may result in an overpayment of benefits and language about minimizing any overpayments.

III.v.1.I.3.g.  Approval of Administrative Decisions Involving Administrative Error

Use the table below to determine who must approve administrative decisions involving an administrative error that resulted in the erroneous payment of benefits to a beneficiary.
If the total amount of benefits erroneously paid to the beneficiary is …
Then the decision must be approved by …
less than $2,000
a Coach.
between $2,000 and $24,999
a Veterans Service Center Manager (VSCM), Pension Management Center Manager (PMCM), or designee no lower than a Coach.
$25,000 or more
Compensation Service’s Program Review Staff or P&F Service’s Quality, Training, and Site Visits Staff.
Important:  Do not refer an administrative decision to Compensation Service or P&F Service until after a VSCM, PMCM, or designee no lower than a Coach has approved and signed it.
Reference:  For information about obtaining approval from Compensation Service’s Program Review Staff or P&F Service’s Quality, Training, and Site Visits Staff, see M21-1, Part III, Subpart v, 1.I.3.h.
Notes:
  • Calculate the total amount of benefits VA erroneously paid to a beneficiary by multiplying the amount of benefits VA erroneously paid each month by the number of months VA had erroneously paid benefits as of the end of the 60-day period VA gave the beneficiary to respond to the notice of proposed adverse action.
  • For compensation adjudication cases only:  Before referring a case to Compensation Service for approval of an administrative decision involving an erroneous payment of $25,000 or more, verify the amount of the overpayment using the Administrative Error Paid/Due Calculator Over $25K, and upload the calculator results to the Veterans Benefits Management System (VBMS).
  • For pension and Parents DIC cases only:  Ensure documentation of calculations made to determine the rate of benefits (such as calculations of medical expenses, net worth, and waived overpayments) are included in the eFolder.
Reference:  For information on including documentation of pension and Parents DIC award calculations in the eFolder, see M21-1, Part III, Subpart v, 2.A.2.c.

III.v.1.I.3.h.  Requesting Compensation  or P&F Service’s Approval of Administrative Decisions

Follow the instructions in the table below if approval of an administrative decision by Compensation or P&F Service is necessary according to the instructions inM21-1, Part III, Subpart v, 1.I.3.g.
Step
Action
1
Extend the suspense date of the EP that was established in connection with the administrative decision to a date that is 60 days in the future.
2
Is the beneficiary’s claims folder completely electronic?
  • If yes, proceed to Step 5.
  • If no, proceed to the next step.
3
Attach a paper flash to the front of the paper claims folder that briefly describes the reason for transferring the folder to Compensation or P&F Service.
4
Proceed to Step 6 after following the instructions in the table below.
If the administrative decision was prepared in a …
Then …
Veterans Service Center
temporarily transfer the paper claims folder to
Department of Veterans Affairs
Quality Assurance
Attn: Program Review Staff (214B)
3322 West End Ave, Ste 730
Nashville, TN 37203
pension management center
temporarily transfer the paper claims folder to
Pension and Fiduciary Service (21PF)
Attn: Quality, Training, and Site Visits Staff
810 Vermont Ave, NW
Washington, DC 20420
5
Notify the appropriate staff by e-mail that an administrative decision requiring approval is available in the beneficiary’s electronic claims folder.
6
Did Compensation Service’s Program Review Staff or P&F Service’s Quality, Training, and Site Visits Staff approve the administrative decision?
  • If yes, take final action to correct the error.
  • If no, take the corrective action(s) prescribed by
    • Compensation Service’s Program Review Staff, or
    • P&F Service’s Quality, Training, and Site Visits Staff.

III.v.1.I.3.iActions to Take If a Beneficiary Provides New Evidence or Requests a Hearing

If a beneficiary submits new evidence within 65 days of the date of the notice of proposed adverse action, or requests a hearing within 30 days of the same date, continue benefits at the same rate until a final decision is made.
Exception:  Do not continue duplicate payments as described in M21-1, Part III, Subpart v, 1.I.2.a.
Important:  If a beneficiary submits new evidence, preparation of a new administrative decision that considers the new evidence is required.

III.v.1.I.3.jSubstituting a Hearing Decision for a New Administrative Decision

If a beneficiary requests a hearing in connection with a proposal to reduce or discontinue his/her award to correct an administrative error, the employee that conducts the hearing will prepare a decision that satisfies the requirement in M21-1, Part III, Subpart v, 1.I.3.j for a new administrative decision.
Use the table below to determine whether approval of the hearing decision by a member of management is required.
If the administrative decision that preceded the hearing decision was approved by …
Then …
a Coach
approval of the hearing decision by a member of management is not necessary.
a VSCM, PMCM, or designee no lower than a Coach
the VSCM, PMCM, or a designee no lower than a Coach must approve the hearing decision.
  • Compensation Service’s Program Review Staff, or
  • P&F Service’s Quality, Training, and Site Visits Staff
the VSCM or PMCM must approve the hearing decision.

III.v.1.I.3.k.  Actions to Take When Adjusting an Award Due to Administrative Error 

Follow the instructions in the table below when
Step
Action
1
Adjust the beneficiary’s award effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share.
Rationale:  VA may not create an overpayment in a beneficiary’s account when adjusting his/her award to correct an administrative error.
2
Enter the following as an annotation in VBMS after generating the adjusted award:
  • brief description of the error
  • date the error occurred
  • name and title of the individual who made the error
  • the amount of erroneous benefits, and
  • the regulation under which the adjustment was made (38 CFR 3.500(b)(2)).
3
Prepare a memorandum for the claims folder or upload the memorandum into VBMS that states
  • the beneficiary submitted no new evidence, and
  • the proposed decision is final.
Important:  Preparation of a second, final administrative decision is unnecessary.
4
Follow the instructions in the table below.
If the administrative decision that preceded the final decision was approved by …
Then…
a Coach
ensure a Coach signs the memorandum.
a VSCM, PMCM, or designee no lower than a Coach
ensure the VSCM, PMCM, or a designee no lower than a Coach signs the memorandum.
  • Compensation Service’s Program Review Staff, or
  • P&F Service’s Quality, Training, and Site Visits Staff
ensure the VSCM or PMCM signs the memorandum.
5
File a copy of the memorandum and corresponding administrative decision in the VSCM or PMCM’s office for a period of one year from the date of the final decision.After one year, dispose of the documents.
Note:  In lieu of storing a paper copy of the memorandum and administrative decision in the VSCM or PMCM’s office, regional offices may maintain an electronic log on which they record the associated claim number, the date of decision, and any other pertinent information about the memorandum and administrative decision.

4.  Correcting Errors That Neither Involve the Duplicate Payment of Benefits nor Are Administrative in Nature


Introduction

This topic contains instructions for correcting errors that neither involve the duplicate payment of benefits nor are administrative in nature, including


Change Date

June 28, 2017

III.v.1.I.4.a. Instructions for Correcting an Error in the Payment of Benefits

Follow the instructions in the table below upon identification of an error in the payment of benefits that neither involves the duplicate payment of benefits nor is administrative in nature.
Step
Action
1
Use the information contained in M21-4, Appendix B, to select and establish the appropriate EP.
Note:  Use the date VA identified the error as the date of claim.
2
Follow the instructions in the table below.
If …
Then …
the beneficiary notified VA of the error
  • correct the error under the EP established in Step 1, and
  • proceed to Step 9.
VA learned of the error from a source other than the beneficiary
proceed to the next step.
3
  • Clear the EP established in Step 1.
  • Establish EP 600.
4
Prepare a notice of proposed adverse action and send it to the beneficiary.  In the notice,
  • propose to retroactively adjust the beneficiary’s award to correct the error
  • provide the effective date of the proposed adjustment
  • include the standard paragraphs that discuss
    • the possibility that the proposed action, if taken, might create an overpayment which VA might require the beneficiary to repay, and
    • how to minimize an overpayment, and
  • inform the beneficiary that he/she has 60 days from the date of the notice to provide evidence showing VA should not take the proposed action.
Reference:  For more information on preparing and sending a notice of proposed adverse action, see M21-1, Part I, 2.B.
5
Did the beneficiary respond to the notice of proposed adverse action with 65 days?
  • If yes, proceed to the next step.
  • If no, proceed to Step 8.
6
Did the beneficiary request a hearing within 30 days of the date of the notice of proposed adverse action?
  • If yes, proceed to the next step after the hearing is held and any relevant evidence the beneficiary identified during the hearing has been obtained.
  • If no, proceed to the next step.
7
Did the beneficiary provide evidence showing there was no error in payment?
  • If yes,
    • notify the beneficiary that VA will not take the action it proposed, and
    • disregard the remaining steps in this table.
  • If no, proceed to the next step.
8
Take the proposed action to correct the error.
9
Notify the beneficiary of the action taken.
Reference:  M21-1, Part III, Subpart v, 1.I.4.b contains references to additional instructions for correcting an error in the payment of benefits that neither involves the duplicate payment of benefits nor is administrative in nature.

III.v.1.I.4.b. Additional Instructions for Correcting an Error in the Payment of Benefits

The table below contains references to additional instructions for correcting an error in the payment of benefits that neither involves the duplicate payment of benefits nor is administrative in nature.
If the error in payment involves or requires an award adjustment based on …
Then see …
incarceration
the additional benefits payable for a dependent
an income verification match
a notice of death

5.  Erroneous Payment Log


Change Date

June 28, 2017

III.v.1.I.5.a.   Erroneous Payment Log

VSCMs and PMCMs are responsible for maintaining a log of all erroneous payments.  The log must contain the following information:
  • beneficiary’s claim number
  • Beneficiary Identification and Records Locator Subsystem record number (if applicable)
  • duplicate payment information, if applicable, including
    • number of additional payments (outside of the adjusted award)
    • total amount of each additional payment (outside of the adjusted award)
  • the date each EP was established and cleared to control for
    • correction of the erroneous payment
    • due process, and
    • the potential overpayment
  • trouble ticket number
  • date the corporate record was corrected, and
  • amount of any overpayment waived as part of any administrative decision.
Important:  PMCMs are responsible for e-mailing a copy of the log to P&F Service (at VAVBAWAS/CO/PENSION POL & PROC) on a quarterly basis.  (Negative reports are required.)  The due date for submission of the log is 14 business days after
  • March 31
  • June 30
  • September 30, and
  • December 31.
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