Veterans across the country have been forced to repay billions of dollars in separation incentives before receiving disability benefits, according to a report from NBC News. The repayments stem from a federal law dating back to 1949 that prohibits veterans from receiving both a separation payout and disability compensation, creating financial hardships for those who served.
The law has affected veterans who accepted payouts to leave the military during times of downsizing and later qualified for disability benefits. Over the past decade, veterans have collectively repaid at least $2.5 billion due to this policy, with many struggling to make ends meet while dealing with service-related injuries.
Damon Bird, a former Army soldier, was one such veteran. After receiving a $74,000 separation payout, Bird was diagnosed with bladder cancer and post-traumatic stress disorder. He initially received $2,400 in monthly disability payments, but the VA halted those payments in 2021 to recover the incentive. Bird described the financial and emotional toll, saying, “We were barely keeping up with our day-to-day cost of living.”
The VA insists that it is legally required to recoup these payouts before disbursing disability benefits. There is still around $364 million left to be repaid. Advocates and lawmakers have called for change, with Rep. Ruben Gallego (D-AZ) introducing legislation in 2022 to end the recoupments. While the bill has bipartisan support, its passage has been delayed due to concerns over its cost.
As the debate continues, veterans are left grappling with the financial burden imposed by a decades-old law that many argue is outdated and unfair to those who served.
