Research - Rehabilitation - Re-Employment

Sgt. Shaft 11/14/2005

Readjustment pay now hurts disabled veteran

Dear Sgt. Shaft:
    Recently, I received a 30 percent rating for combat-related post-traumatic stress disorder. The process took more than 14 months.

    Back in 1984, I was released from active duty after serving more than six years, and I was given $15,000 as a readjustment non-disability payment. I did not know why or how they came up with the amount of readjustment pay. When I asked, all that I was told was: "That's the regulation and a flat income tax would be withheld." That was fine, so I used the money.

    I suffered many years with anger problems, depression, feelings of worthlessness, the loss of my first marriage and not holding down jobs for more than a few months at a time in most cases.

    In 2003, I learned that I might have PTSD, a condition which I had never heard of before. I was later diagnosed with PTSD by the Veterans Affairs Department. I filed for service-connected disability compensation and recently received the notice that I was given a 30 percent rating.

    Along with the notice, I was told that I would have to pay back the $15,000 readjustment pay from 21 years ago. I was totally devastated. I have had no income, as I haven't been able to work in more than two years. At 58 years old, I didn't know what to do, so I called the VA for clarification. I was told politely that this is the law and that I would have to pay back the whole amount of $15,000 with no exceptions and with no credit for the taxes that were withheld.

    Twenty-one years ago, I did not know that I had PTSD and one day would get disability compensation for that. Also, I was not told 21 years ago that if I accepted the readjustment pay, I would have to pay it back later. I was given absolutely no choice -- period.

    If I had been told that I would have to pay it back before I could get my retirement pay or in the future I might get a disability pay, I would have said "no" to the readjustment pay based solely on the fact that at age 60 I would get my reserve retirement. At the time I separated and received the money, I planned to continue with my reserve career and retire one day at age 60.

    The law requires that a person suspected of a crime have the right to an attorney and if you can't afford to pay for your defense, the government will pay for it. Regardless of whether they are acquitted or convicted, they don't have to pay back the attorney fees paid by the government or ever have it withheld from any government retirement or disability pay. Also, the law requires under the Fair Credit Reporting Act that you be advised of the repayment and interest on any loan you might get. Also, the law has several statues of limitations for collections of debts or crimes committed. In light of these facts, why isn't the government required to advise the people who served their country honorably in time of war or for service?

    I gave my all, and now they still want more. I feel deserted by my country in a time of need.

You can call me Sgt. Shafted.
Carl R.
Via the Internet

    Dear Carl:

    According to the powers that be at Veterans Affairs, while they understand your frustrations, they have no alternative by law to withholding benefits equivalent to the readjustment payment you received upon release from active duty. The basic legal underpinnings are:

    The U.S. Code and VA regulations mandate such withholding. Specifically, 10 USC 1174(h)(2) covers your situation, and the associated VA regulation is 38 CFR 3.700(a)(2)(iii).

    The remainder of your issues concern what may have been bad or inadequate advice received from the military at the time of your separation. This is an area under the responsibility of the Department of Defense. If, as you state, your employment is adversely affected by PTSD, the rating you were given may not be commensurate with the severity of your condition. I suggest you contact one of the veterans' services organizations to review your case. A notice of disagreement to the VA may be in order.

    Shaft Notes

    The Sarge urges the Maryland General Assembly to support Gov. Robert L. Ehrlich Jr.'s military veterans tax-credit initiative.

    The governor recently was joined by more than 500 veterans from across the nation to formally announce the administration's important legislative initiative. In addition, Project Liberty Ship Inc. presented the governor with a certificate making him an honorary commodore.

    Mr. Ehrlich's campaign commitment to provide an income-tax credit for 46,000 military retirees in Maryland was defeated in the 2005 legislative session.

Send letters to Sgt. Shaft, c/o John Fales, P.O. Box 65900, Washington, D.C. 20035-5900; fax to 301-622-3330; call 202-257-5446 or email sgtshaft@bavf.org.

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