This issue came to light in a Stars and Stripes article published on May 14, 2025, which outlines how VA claims processors, overwhelmed and undertrained in the wake of the PACT Act, made widespread errors in calculating benefits.

Why Are Veterans Owing Money?

According to a federal watchdog report presented to lawmakers, claims processors at the VA were not adequately trained to handle the complexities introduced by the PACT Act (Sergeant First Class Heath Robinson Honoring Our PACT Act of 2022). This lack of preparation led to both underpayments and overpayments—though the overwhelming majority were overpayments.

Brent Arnaut, Deputy Assistant Inspector General for the Office of Audits and Evaluations, told Congress that the misapplication of effective dates and inconsistent guidance contributed heavily to the problem. In simple terms, many veterans were paid too much, and now the VA wants its money back.

Magnitude of the Overpayments

The VA calculated approximately $1 billion in compensation overpayments for fiscal year 2024 alone. While this represents only a fraction of the VA’s total compensation outlay of $161 billion, the impact on individual veterans can be severe. Janine Gillson, acting Chief Financial Officer at the VA, emphasized that the overpayment amount was statistically small, but for the veterans affected, the consequences are anything but.

Veterans Caught Off Guard

Most veterans receiving overpayments were unaware of the mistake at the time. The extra funds—often in the form of back pay—were spent on necessities, bills, or personal expenses. Now, these veterans face reduced future payments as the VA seeks to reclaim those funds.

Representative Luttrell, Chairman of the House Veterans Affairs Committee’s subpanel on disability assistance, stressed the need for the VA to prevent such overpayments in the first place. “Overpayments can result in the VA creating debts that veterans owe back to the agency, which can create a paperwork nightmare for them and their families,” he said.

What Can Veterans Do?

Veterans who find themselves facing VA debt have options. The VA can cancel debts or offer repayment plans in cases of financial hardship. However, veterans must act quickly. Ignoring VA debt notices can lead to the agency garnishing an entire benefit check.

Furthermore, the VA has stated that veterans and their families must report any changes that may impact their benefits, such as income changes, marital status, or the death of a dependent. Critics argue this deflects blame from the VA’s internal failures and places too much responsibility on beneficiaries to catch the agency’s mistakes.

Extent of the Problem

Between fiscal years 2021 and 2024, the VA issued at least $5.1 billion in overpayments related to compensation and pension benefits. During the same period, only a portion of that debt was recovered.

Representative McGarvey emphasized the complexity of the VA system and the need for better communication and training. “We haven’t fixed the problems so veterans have the training and understanding about what they need to do,” he said.

Error Rates and Impact

A statistical audit found that approximately 25% of PACT Act-related claims processed between August 2022 and August 2023 were incorrectly calculated. That margin of error is considered unacceptable, particularly given the financial consequences for affected veterans.

From May 2022 through April 2023, claims related to Total Disability based on Individual Unemployability (TDIU) saw $85 million in underpayments and $10 million in overpayments.

Call for Action

The Inspector General’s report recommended improved training for claims processors, particularly for complex claims involving toxic exposure, military sexual trauma, or ALS. Inaccurate determination of effective dates continues to be one of the most costly and problematic issues. Although the VA has automated tools to calculate these dates, they have not been updated since the passage of the PACT Act in 2022.

Nina Tan, Executive Director of the VA’s Compensation Service, acknowledged the shortcomings and stated the VA is implementing refresher training sessions and system improvements to reduce future errors.