In terms of a VA loan, is the severance pay that I received considered a debt to the VA? I am trying to get a VA loan and we are trying to figure out if that disability severance that is recouped by the VA is considered a debt. I have no debts showing on my VA.gov and the VA hasn't began taking deductions from my VA disability payments, but I have sent them a copy of my LES 2 months ago.
Severance Pay Debt
- Thread starter Justanotherradarguy
- Start date
Hello @Justanotherradarguy
The recoupment is not considered a debt to the VA.
Keep in mind that the recoupment of severance pay is not a "debt" per se like other debts and the DebtManagement folks are not involved in any way with this. There is no waiver of the recoupment and the amount that is withheld is based strictly on the percentages assigned the severance disabilities and other non-severance disabilities.
Ron
10 U.S. Code § 1212 - Disability severance pay
Recoupment.(d)(1)The amount of disability severance pay received under this section shall be deducted from any compensation for the same disability to which the former member of the armed forces or his dependents become entitled under any law administered by the Department of Veterans Affairs.
(2)No deduction may be made under paragraph
(1) in the case of disability severance pay received by a member for a disability incurred in line of duty in a combat zone or incurred during performance of duty in combat-related operations as designated by the Secretary of Defense.3)No deduction may be made under paragraph (1) from any death compensation to which a member’s dependents become entitled after the member’s death.
Ron