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M21-1, Part III, Subpart v, Chapter 3, Section D – Garnishment of Disability Compensation in Lieu of Military Retired Pay (MRP) to Pay Alimony or Child Support

Overview

In This Section
This section contains the following topics:
Topic
Topic Name
1
2

1.  General Information About Garnishments

Introduction

 This topic contains general information about garnishments, including

Change Date

 April 10, 2015

III.v.3.D.1.a.  Definition:  Garnishment
A garnishment is a legal procedure, authorized by a court order, by which a creditor can collect what a debtor owes by reaching the debtor’s property when the debtor does not possess the property.

III.v.3.D.1.b.  Legal Authority for Garnishing VA Benefits
There is no statutory prohibition against the garnishment of military retired pay (MRP) when the Veteran is in receipt of Department of Veterans Affairs (VA) disability compensation.
Under Public Law 95-30, a Veteran’s disability compensation may be garnished in order to pay alimony or child support pursuant to a court order only if the Veteran receives disability compensation in lieu of an equal amount of MRP, in accordance with a total or partial MRP waiver.  In these cases, under 5 CFR 581.103, finance activity and the Veterans Service Center (VSC)
  • withhold disability compensation, and
  • make a payment in compliance with the garnishment order for certain categories of payees.
Reference:  For more information on the responsibilities of finance activity and the VSC see, M21-1, Part III, Subpart v, 3.D.2.

2.  Processing a Garnishment Order

Introduction
This topic contains instructions for processing a garnishment order that involves a Veteran who is receiving diability compensation in lieu of MRP, including

Change Date

 April 18, 2018

III.v.3.D.2.a.  Actions to Take Upon Receipt of a Garnishment Order
Upon receipt of any court garnishment order involving a Veteran who receives VA disability compensation in lieu of MRP, deliver a copy of the court order to the local Finance Officer (FO).
Take the additional steps described in the table below if the Veteran resides within the jurisdiction of another regional office (RO).
Step
Action
1
Download a copy of the garnishment order from the Veteran’s eletronic claims folder (eFolder).
2
E-mail the garnishment order to the FO at the RO with jurisdiction over the Veteran’s place of residence.
3
Input a note into the claims-processing system indicating that the garnishment order has been received and forwarded to the FO referenced in Step 2.
Note:  The RO that initially received the garnishment order should not request a transfer of the claims folder unless it is located at
  • the Records Management Center, or
  • a Federal records center.

III.v.3.D.2.b. Finance Activity Responsibilities With Regard to Garnishment Orders
The table below describes the actions an FO takes when processing a garnishment order.
Stage
Description

1
The FO reviews the claims folder to determine initial withholding activity under 5 CFR 581.301.
2
The FO
  • notifies the Veteran of the pending garnishment action, and
  • provides the Veteran with
    • a copy of the garnishment order
    • a description of the garnishment process, and
    • information about
      • monthly garnishment limitations, and
      • decision review rights.
3
Under either of the following circumstances, the FO refers the garnishment order to local regional counsel:
  • the garnishment order
    • is not from State Child Enforcement Agency, and
    • was not submitted on OMB Form 0970-0154,Income Withholding for Support, or
  • the Veteran is subject to more than one garnishment order at a time (not including amendments).
4
The FO takes the actions described in the table below and works with local regional counsel to resolve any questions that arise.
Important:  If the FO referred the garnishment order to local regional counsel in Stage 3, the FO takes the actions described in the table below after regional counsel has completed its review of the order and provided guidance to the FO.
If the garnishment order …
Then the FO …
involves a dependent on the Veteran’s award
forwards the order to the VSC.
does not involve a dependent on the Veteran’s award
arranges withholding and payment from the Veteran’s award via the Veterans Service Network (VETSNET) Financial and Accounting System (FAS).

III.v.3.D.2.c.  VSC Responsibilities With Regard to Garnishment Orders
When a VSC receives a garnishment order from an FO because the order involves a dependent on a Veteran’s award, the Veterans Service Center Manager (VSCM) or a designee processes the garnishment as an apportionment.
References:  For more information on processing apportionments in

III.v.3.D.2.d.  Responsibility for Making Delinquent and Recurring Payments and Notifying the Veteran

 If the garnishment order mandates a specific amount be paid (a delinquent payment) with

  • no recurring payments, the FO
    • makes the delinquent payment, and
    • notifies the Veteran, or
  • recurring payments, the FO
    • makes the delinquent payment
    • awards recurring payments via VETSNET FAS, and
    • notifies the Veteran.

III.v.3.D.2.e.  Handling Changes in the Amount of Disability Compensation or MRP
If VA is garnishing a Veteran’s disability compensation, and the amount of disability compensation or MRP to which the Veteran is entitled changes (for reasons other than a cost-of-living adjustment), the VSCM or a designee reviews the claims folder to determine if action to adjust the garnishment may be necessary.
If adjustment of the garnishment is necessary,
  • download relevant documentation from the Veteran’s eFolder, and
  • e-mail the documentation to the local FO.
 Note:  Complete all actions locally even if the garnishment order was originally processed elsewhere.
Historical_M21-1III_v_3_SecD_4-10-15.doc May 16, 2019 88 KB
2-8-17_Key-Changes_M21-1III_v_3_SecD.docx May 16, 2019 54 KB
Change-April-10-2015-Transmittal-Sheet-M21-1III_v_3_SecD_TS.docx May 16, 2019 40 KB
4-18-18_Key-Changes_M21-1III_v_3_SecD.docx May 16, 2019 51 KB
2-19-19_Key-Changes_M21-1III_v_3_SecD.docx May 16, 2019 42 KB
in Chapter 3 Apportionments, Part III General Claims Process, Subpart v General Authorization Issues and Claimant Notification
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