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M21-1, Part III, Subpart vi, Chapter 2, Section C – Debt Collection

Overview


In This Section

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

1.  General Information About Requests for Waiver of a Debt


Change Date

June 18, 2015

III.vi.2.C.1.a.General Information About Requests for Waiver of a Debt

A retroactive reduction of a beneficiary’s award usually results in the creation of an overpayment or debt in the beneficiary’s account.
When this occurs, beneficiaries have the right to request a waiver of the debt.  The Department of Veterans Affairs’ (VA’s) Committee on Waivers and Compromises (COWC) is responsible for deciding whether to
  • deny the request, or
  • waive all or a part of the debt.
Reference:  For more information on processing an award after VA grants a request for a waiver, see M21-1, Part III, Subpart vi, 2.C.2.

2.  Processing an Award After VA Grants a Request for Waiver of a Debt


Introduction

This topic contains information on processing an award, including

Change Date

March 14, 2017

III.vi.2.C.2.a.  Processing an Award After VA Grants a Request for Waiver of a Debt

If VA retroactively awards benefits over a range of dates that includes a time period over which VA previously created and later waived all or part of a debt, the claimant is entitled to any lump-sum retroactive payments covering that period minus the amount of the debt VA previously waived.
Explanation:  The retroactive payment of benefits for a time period over which VA had previously created and waived a debt would represent a duplicate payment of benefits.
The table below contains instructions for processing an award that will result in the payment of retroactive benefits for a period of time during which VA previously created and later waived all or part of a debt.
Note:  If the COWC has waived all or part of a debt, documentation of the waiver will exist in the beneficiary’s electronic claims folder in Legacy Content Manager.

Step

Action

1
Use the Veterans Service Network (VETSNET) Financial and Accounting System (FAS) to determine the amount of the overpayment that the COWC waived for any time period that overlaps the time period the pending award will affect.
2
On the OTHER ADJUSTMENTS tab in the awards-processing system,
  • select Debt Waiver in the ADJUSTMENT REASON field
  • enter the amount that must be withheld each month in the ADJUSTMENT AMOUNT field, and
  • enter the time period for the withholding in the FROM DATE and TO DATE fields.
3
Make any other necessary adjustments to the beneficiary’s award.
4
Follow the instructions in M21-1, Part III, Subpart v, 2.B for notifying the beneficiary of the actions taken.
References:  For more information on

III.vi.2.C.2.b.  Example of an Award Action Taken After VA Waived a Beneficiary’s Debt

Situation:
  • A Veteran received pension based on income of $2,400.00 for the period December 1, 2000, through November 30, 2001.  (This income consisted of a monthly Social Security benefit of $200.00.)
  • In May 2002, the Veteran reports that her Social Security income was actually $215.00 per month (or $2,580.00 per year) for the same period of time.
  • VA adjusts the Veteran’s award to reflect the increased income, thereby creating an overpayment (debt) of $180.00.
  • The Veteran subsequently requests a waiver of the debt.
  • VA waives the entire amount of the debt.
  • The Veteran later submits to VA a letter from the Social Security Administration showing her correct gross monthly rate was $200.00 from December 1, 2000, through November 30, 2001.
Actions:
  • The subsequent award adjustment reflecting the lower rate of Social Security income must include a withholding of $15.00 per month.
  • The corresponding decision notice must inform the Veteran that the purpose of the withholding is to prevent duplicate payment of benefits following VA’s waiver of a prior debt.
Historical_M21-1III_vi_2_SecC_6-18-15.doc May 18, 2019 70 KB
Historical_M21-1III_vi_2_SecC_3-14-17.docx May 18, 2019 43 KB
4-25-19_Key-Changes_M21-1III_vi_2_SecC.docx May 18, 2019 42 KB
3-14-17_Key-Changes_M21-1III_vi_2_SecC.docx May 18, 2019 46 KB
Transmittal-08_14_06.doc May 18, 2019 35 KB
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