The Department of Veterans Affairs (VA) officials resumed debt collections for those who were overpaid for disability and education benefits or owing co-payments for medical appointments. The department halted debt collection due to reforms implemented in response to Covid-19.
On April 6, 2020, then-President Trump issued an executive order suspending all VA debt collection. President Joe Biden extended the prohibition until September 30, 2021.
In the coming days, veterans who owe the department money will begin receiving notifications, along with instructions on how to repay and whether they qualify for any financial aid programs.
However, VA officials have stated that they will not begin removing those debts from monthly benefits payments until January 2022, giving people time to plan for the financial consequences of the changes.
The move is estimated to affect some 600,000 veterans. VA has received payments from nearly half of those involved since the debt collection ceased in April 2020. The remaining borrowers have made partial payments or agreed to a repayment plan.
According to officials, all veterans who owe bills linked to compensation and pension benefits disbursements will be automatically enrolled in a 36-month payback plan beginning in January.
The American Rescue Plan Act of 2021 also exempted veterans from medical-care copayments for VA-provided medications and services from April 6, 2020, through September 30, 2021.
The debt collection moratorium and the medical-care copayment exemption, however, have both expired. Therefore, veterans will receive reimbursement for any medical costs incurred before April 6, 2020. Additionally, any debts for benefits such as compensation or GI Bill payments are now collectible.
Veterans can request to defer their debts until the end of the fiscal year 2022, which is Sept. 30, 2022. Veterans may be able to have their obligations lowered or entirely wiped in certain circumstances.
Individuals with issues concerning bills due to overpayments or errors in benefits can contact the VA Debt Management Center at 1-800-827-0648.