VA to Automatically Stop Disability Payments to Veterans Receiving Active Pay

Starting January 11, 2024, the VA will automatically discontinue disability payments to veterans upon notification by the Department of Defense (DoD) that the veteran has started receiving active service pay. 

Currently, after being informed by the DoD, the VA is required to send notice to the veteran that allows them 60 days to provide evidence justifying why the VA should not stop the payments. During this period, the VA continues to issue disability payments to the veteran, resulting in months of overpaid benefits that the veteran must repay. 

By law, a veteran cannot receive disability pay from the VA and active service pay from the DoD at the same time. Instead, when a veteran re-enters active service, their disability pay must be suspended during the period they receive active pay, and then it can resume as soon as the active pay period ends. 

Under this new rule, the VA will automatically cease disability payments upon receiving notice from the DoD that a veteran is receiving active service pay. Similarly, the VA will resume disability payments after receiving notice from the DoD that a veteran has stopped receiving active duty pay. 

The goal of this change is to decrease the occurrences of veterans either receiving overpayments that must be repaid or not receiving benefits that must then be paid retroactively. In most instances, at least one overpayment will still have to be repaid, but the change will lessen the necessity to repay multiple months of payments. 

As for notifications, the veteran will receive a single notification at least 30 days prior to any action being taken. This notice will inform the veteran of the regulations in place for receiving both DoD and VA pay, the stopping of disability payments while receiving active pay, and instructions on how to remedy the situation if it is in error. 

If the veteran’s dates of active service change or they decide not to return to service, then they can notify the VA and the VA will continue payments without interruption if time permits. If there is not enough time to make the adjustments and a payment is missed, the VA will issue the payment for the missed period retroactively. 

To prevent any overlap or missed payments, the veteran does not have to wait for the DoD to inform the VA. Instead, they can inform the VA themselves in advance of upcoming active service. Upon release from service, the veteran can file a claim prior to discharge or within one year after discharge to restart their disability payments effective the day after discharge.

If the VA erroneously suspends benefits, the veteran can request a Higher-Level Review or submit a supplemental claim to have the issue resolved. 

The VA’s hope is for this change to make the transition between inactive and active duty easier on our veterans as they strive to continue to serve our country.