If you receive an overpayment letter from the Department of Veterans Affairs (VA) stating that you owe them money, you are probably concerned. You fought hard to get the benefits you have, and you need the money that has been awarded to you.

This letter won’t even say how much the VA claims they overpaid you. A few weeks later you’ll receive a notice from the VA Debt Management Center (DMC), which will tell you how much the VA believes was overpaid to you and notifies you that your forthcoming benefits will be withheld until the overpayment is paid back. This notice will also tell you when your first benefit check will be withheld.

Request a Waiver

After you receive the DMC notice, you will want to submit a waiver request to the VA as soon as possible. A waiver is basically a cancellation of any overpayment the VA says you owe them, so that your future benefits will not be withheld. You have 180 days from the date your receive your first DMC notice to ask for a waiver, but you should file it within the 30 days after the date on notice.

If you submit a written request for a waiver within 30 days, you will continue to receive your full VA benefits while the request is being processed. This will normally take many months.

If, however, you wait to submit your waiver request until after 30 days from the date on the first Debt Management Center (DMC) notice, the VA will begin withholding your benefits on the scheduled date indicated. In that case, until the VA makes a decision on your waiver request, your benefits will be withheld. If the waiver is granted, you will receive a retroactive payment to restore to you all of the withheld monies.

What a Waiver Request Should Say

In your written waiver request you should tell the VA that you need the overpayment to be canceled. Tell the VA that if the agency withholds your benefits, you won’t be able to pay housing expenses or buy food or other basic living essentials. See below "How Will the VA Decide Whether to Grant my Waiver Request" for more information about what to include.

This request should be submitted on the VA form, Statement in Support of Claim. You will also need to submit a Financial Status Report to show that you need the income from your VA benefits to pay for your basic living expenses. If possible, submit both forms together. If you do not submit the Financial Status Report at all, your request for a waiver will be denied.

Dispute the Amount of the Overpayment

In addition to asking for a waiver, you also have the right to tell the VA you do not agree that you do not agree with the amount of the overpayment or that you do not agree that there was any overpayment at all. It is best to do this in writing. You can submit this at the same time as the waiver request. Just like with the waiver request, do this within 30 days of receiving your first Debt Management Center (DMC) notice to avoid your benefits' being withheld until a decision is made on the dispute.

Request a Hearing

You have the right to request a hearing where you can explain why you need the waiver (the cancellation of the debt) and/or why you disagree that there was an overpayment. If you request a hearing within 30 days from the date of the first DMC notice, the VA will not issue a decision on the waiver request until after a hearing is held.

How Will the VA Decide Whether to Grant My Waiver Request?

The VA is prohibited from granting a waiver request where there was fraud, bad faith, or misrepresentation on your part. At the same time, the VA is prohibited from collecting a debt if doing so would be against "equity" (meaning fairness) and "good conscience" (doing what is right).

Six factors are considered to determine whether it would be against equity and good conscience to collect the debt from you.

• Were you at fault? (For example, did you fail to report an increase in income that would have disqualified you from receiving a VA pension?)
• Was the VA at fault? (For example, you reported an increase in income and the VA didn't reduce your benefits for several months.)
• Would it cause you “undue hardship” to have the benefits withheld (meaning, would you be homeless or unable to buy food and clothing)?
• Were you given the benefits to help provide for your basic needs, such that withholding the benefits would defeat the purpose for which benefits were awarded?
• Would you be "unjustly enriched" if the VA didn't collect the overpayment (meaning, would you have a big sum of money in excess of what you need to take care of yourself)?
• Is it unfair to collect the money because, in reliance on the benefits, you "changed your position for the worse"? (For example, you bought a home.)

Address the above factors in as much detail as you can in your waiver request. If the 30 day deadline is fast approaching, just send in a quick statement saying you disagree with the overpayment and want a waiver. Then write a more complete statement and submit it soon.

What if My Request for a Waiver Is Denied?

If you were receiving benefits while the waiver was being processed (because you submitted a written request for a waiver within 30 days), the amount of these benefits will be added to the amount of the overpayment.

You can ask the Debt Management Center (DMC) for a payment plan. Basically, this would mean the VA would withhold a smaller amount from your monthly check so you can still meet your basic needs.

You can also file an appeal by submitting a notice of disagreement. If you win the appeal, benefits withheld during the appeal will be restored to you in a retroactive payment.

If the amount of the overpayment is large, consult with a disability lawyer or VA lawyer.

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