The A - Z Guide: Veterans VA Disability Benefits
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Rather go to bed with out dinner than to rise in debt.
Benjamin Franklin
Garnishment
Defined; A legal proceeding that takes money or property from a person to satisfy a debt.
www.peoples-law.org/finding/glossary/def-fam-law.htm
To be precise, garnishment is a legal process that requires 3 parties; the person who money is owed, the person who owes money and a person (usually an employer) who controls payments of money to the debtor.
As a working topic title, "garnishment" will satisfy the intent of this page. Most of us understand that to be garnished is to have our money taken from us to satisfy an alleged debt.
Debt
Arrearage
Red Ink
Any way you see it, it's bad news.
And when your only income is a Veterans Administration disability check or Social Security income, news of a debt you weren't suspecting can be devastating.
Arrearage
Red Ink
Any way you see it, it's bad news.
And when your only income is a Veterans Administration disability check or Social Security income, news of a debt you weren't suspecting can be devastating.
Most veterans believe that their VA disability compensation payment is protected and can never be garnished or otherwise ordered used in the payment of debts. Some of that is correct.
However, there are settings in which people to whom money is owed can collect.
The usual collector is the government. If you owe the government money, the government may propose to reduce your compensation benefit to repay the government. Compensation may be taken to repay a student loan or an overpayment.
You must know!
Most "garnishments" will begin with a letter that VA will send you. VA refers to this as a "Notice of Proposal of Adverse Action" or a similar terminology.
These notices will plainly tell you that unless you perform certain appeal actions within strict time limits, the proposed adverse action is going to proceed automatically.
It is always easier and simpler to halt the proposed action in the early stages than it is to recover any money or benefits once the action has occurred.
When you open the envelope the natural reaction for most of us is a feeling of panic and doom.
Then we begin to make mistakes. The first mistake is to delay doing anything and putting off any decisions. These proposals don't have the usual long periods of time that other appeal opportunities may have. Failure to act gives VA a green light to move ahead.
We compound the error by wasting time looking for help. We may try to contact a VSO or we may visit a "chat" room or "board" on the Internet to seek advice from others.
As a rule, you must act for yourself. The average VSO won't know what to do and the help you'll find on the Internet may be worse than no help at all.
The instructions for appeal are included in every proposal of adverse action. Your task is to follow those instructions to the letter. if you do just that, you can bring almost any collection effort to a grinding halt and that buys you time. During the time you just earned for yourself, your compensation money will continue as it normally would.
You can ask for hearings, seek waivers and reductions of an existing debt or argue that there is no debt.
Failure to act will result in the adverse decision being sent to the Debt Management Center for action and once that happens, your case will become so scattered you may never recover. The Finance Center has the authority to turn your debt over to a contracted debt collection agency where the penalties and late fees may add thousands of dollars to the original amount owed.
We'll begin by looking at one of the common issues and a discussion of whether or not the compensation payment is truly "protected".
From my VAWatchdog dot Org column:
VETERANS' ADVOCATE JIM STRICKLAND EXPLODES THE "5301" MYTH -- "State court jurisdiction is not preempted by any federal statute ... Courts can establish child support orders even if the non-custodial parent received veteran's disability benefits as his sole means of support."
Divorce is messy. Lawyers who practice family law see some of the ugliest confrontations between people possible. There's no way to predict what one spouse will do or say to extract revenge on the other.
That it will get down and dirty is a given. When children and money are involved, it's likely to become nastier by a country mile.
The veteran wrote to me about his child support obligation and how it will be seen by the family court system in the calculation of his child support obligation.
"Jim: I am currently service connected for multiple medical condition with a combined rating of 80%. I am drawing $1547 per month for self and spouse.
I retired (from work) 01/02/09 and had my annual income cut by approximately 32%. Prior to my retirement, I was paying child support for 1 kid in the amount of $826.15. Based on my new retirement income, I started working with the State Bureau of Child Support Enforcement to have my child support recalculated based on my retired pay. Before the they could help me, the mother had me served with court papers relevant to the modification of an existing 2002 Child Support Order. During a court hearing, the attorney for the child's mother raised the issue that my VA Compensation Monthly Check of $1547 was not included in calculating the new child support monthly payment.
My question is 'Can a State Family Court use my VA compensation as income to calculate a new monthly Child Support payment?' I have read USC Title 38 concerning VA compensation and it appears to me that my VA compensation can not be attached for Child Support. Do you have any information on VA compensation being used as income to calculate Child Support payment amounts? I really need help with this matter ASAP. Thank You."
When he refers to "USC Title 38 concerning VA compensation" I know he's speaking of Title 38, Part IV, Chapter 53 § 5301, Nonassignability and exempt status of benefits. I've heard a lot about this "5301 rule" over the last two or three years.
This is a complex and lengthy piece of legislation, you can read it for yourself here
We'll refer to it as "5301" for the sake of brevity.
In plain English language, 5301 seems to tell us that there are almost no circumstances that anyone can collect a veterans disability payment for any debt he might owe. It does say that any federal debt may be exempted (IRS, school loans, etc.) but that all other creditors are forbidden to demand any amount of the disability compensation money. This applies whether before or after it is received by the veteran. In other words, it can't be garnished like a paycheck. Once it's in the veterans hands it can't be touched so long as it's identified as money from a Department of Veterans Affairs (DVA) disability compensation payment.
Before we travel farther down the path of 5301, we should talk briefly about how federal laws are made. In a nutshell, a bill is introduced by a Congressional Representative that proposes a law. It passes before committees in the House and in the Senate and eventually finds its way to the desk of the President.
Published in the Federal Register, it then becomes law.
As it becomes law, the courts then apply it to everyday circumstances of the citizens they serve. The judge presiding in the courtroom must carefully read the law and then interpret what he believes to be the intent of Congress when the law was formulated. If you've followed legal matters you've read of the expressions of "the letter of the law" as opposed to "the intent of the law".
To try to interpret law only by using the precise language or letter of the law is a mistake that far too many lay readers will make. Lawyers and judges understand that while the literal interpretation is important, the intent of the body of lawmakers is even more important.
In the examination of 5301 we must try to determine what the Congress intended at the moments the law was proposed and passed. Once a law is passed, the members of Congress will change, society at large will change and even the office of the president may see a new shift to the left or right. The law that was passed is still there, unchanged for years to come.
Language is a poor way to communicate. Words don't have the precision of numbers. If you add 2 + 2 it's going to equal 4 this year and on into the next century. Knowing that words have subtleties that can't be seen as clearly as a mathematical equation, enforcers of our laws must look deep between the lines to determine the intent of a particular statute.
I asked a learned friend, a lawyer who I trust to know these things, for his opinion. His reply was brief and to the point; "As I expected, there are a number of cases already on this point. In sum, the courts are consistent in finding that the statute protects veterans from 'creditors' and related 'process' and 'spouses' using 'marital property laws' are not 'creditors.' Whether you agree with it or not, that is how 5301 is interpreted."
In an article written by Attorney Zenell Brown
the author points out that the Supreme Court addressed the issue in Rose v. Rose 107 S.Ct. 2029 (1987)
Attorney Brown notes that, "The Court held that state courts can establish child support orders even if the non-custodial parent received veteran's disability benefits as his sole means of support." He goes on to tell us, "State court jurisdiction is not preempted by any federal statute."
Importantly, and I believe this is at the heart of the discussion about the obligations of a parent, Brown says, "It was the Court's position that Congress intended that these benefits provide for the veteran as well as his dependents."
It's not much of a reach to understand that when Congress enacted this 5301 law, the intent was to protect the veteran and his family from unscrupulous creditors if and when the veteran were to fall on hard times. In the eyes of Congress and the courts, the family unit remains just that even after divorce when children are involved. The veteran's obligations to the family aren't relieved because of divorce or disability.
The article goes on to say that in some few states there is considerable controversy about interpretation of the 5301 law and that overall it's, "ripe for litigation".
In the case of a child support order, arguing the 5301 rule seems to be moot. While the DVA will not support garnishment or attachment of a disability compensation payment (arguing that DVA doesn't want to become a collection agency for the children's and family services divisions of every state) DVA will easily allow "apportionment" of that same money. For a custodial parent to apportion a sum of the disability compensation payment is a simple matter of writing a letter to the Regional Office that controls the veterans file and providing a copy of an order for child support and some financial information.
The veteran is then notified of the apportionment request and given the usual opportunities for appeal. In my experience, VA quickly defaults to the needs of the child and the custodial parent and begins to assign the requested amount within a short time.
Once apportionment is established, that amount of money is forwarded directly to the custodial parent. This path of providing for the family of the veteran has a unique pitfall of its own that most veterans won't discover until it's far too late.
When a child support obligation is ordered in a state family court, the usual standard is that the money is delivered to the state agency of child support enforcement. Whether the money is to be withheld from paychecks or mailed in by the obligor, the money must be accounted for by the state agency responsible. Non-custodial parents are sometimes shocked to discover that cash given directly to children for special events, birthdays and the like, aren't counted toward the child support obligation. If the state doesn't track it officially, it didn't happen.
In the case of the custodial parent who writes to the DVA asking for an apportionment, if that parent prevails, the DVA sends a check directly to the parent obligee. That money thus bypasses the state agency and isn't accounted for. Then later, the state may notify the obligor parent to say that s/he hasn't met the requirements and enforcement actions will occur soon.
Once it's discovered that the apportionment money wasn't counted, I know of no cases where that money has been forgiven and credited to the obligated parent.
Recent efforts by some veterans groups to require states to reinterpret the 5301 law fall mostly on deaf ears.
In March of 2009, Iowa House File 170 was excluded from further consideration by the legislature. The bill would have excluded (per 5301) veterans disability compensation payments in calculations of the amount of the court ordered child support or alimony obligation.
By not giving House File 170 further consideration, the Iowa legislature reinforced the way the family courts are currently enforcing alimony and child support obligations. The veterans activists movement to revise law to help them avoid a child support or alimony obligations has backfired and led to a stronger support of the current decisions.
(Also DOA was Iowa House File 66, "Veterans organizations wouldn't have to pay anything for a class A liquor license, regardless of how much liquor they sell." Connected? Hmmm?)
Most of us who divorce when there are children in the mix want to do what we can to care for those kids. The great majority of non-custodial parents work hard to remain in the lives of their kids and to provide the financial support that the children often desperately need.
It isn't always that way though. The laws of the states have become harsh and unforgiving for the obligate parents because of the history of those who will stop at nothing to dodge their responsibilities. Over the last few years the pendulum has swung far over to the side of stiff requirements and rigid enforcement of family court orders. Magistrates and judges have almost no leeway in establishing the amounts of an obligation as they're only allowed to use the data from a financial report to establish the numbers of the dollars owed each month.
Even divorcing spouses who want to make their own agreements are often not allowed to do so. The courts know that in months or years, these sorts of arrangements have little chance of lasting. Today's family courts are overcrowded with couples who want to publicly argue the smallest details down to the nth degree. As the courts are becoming more crowded with shouting ex-spouses, they're more disinclined to hear it and so they simply set the orders and then pass it on to the appropriate enforcement bodies. Some states today will only hear pleas for modification of family court orders every two years.
The bottom line is that for the foreseeable future, a veteran who has a child support or alimony order should not depend on the remote possibility that the 5301 law will offer any relief. Any veteran entering into a divorce should be represented by an experienced lawyer who will guide the veteran to a reasonable conclusion and an order than will likely be based on the payment of a DVA disability compensation amount as income.
The best divorce agreement and subsequent alimony and/or child support order is one that has been carefully considered long before coming to face the judge.
Divorce and the financial burden that will come along with having children will be painful.
Just how painful it will be and how long the hurt lasts is largely up to you.
Apportionment
The VA Debt Management Center
However, there are settings in which people to whom money is owed can collect.
The usual collector is the government. If you owe the government money, the government may propose to reduce your compensation benefit to repay the government. Compensation may be taken to repay a student loan or an overpayment.
You must know!
Most "garnishments" will begin with a letter that VA will send you. VA refers to this as a "Notice of Proposal of Adverse Action" or a similar terminology.
These notices will plainly tell you that unless you perform certain appeal actions within strict time limits, the proposed adverse action is going to proceed automatically.
It is always easier and simpler to halt the proposed action in the early stages than it is to recover any money or benefits once the action has occurred.
When you open the envelope the natural reaction for most of us is a feeling of panic and doom.
Then we begin to make mistakes. The first mistake is to delay doing anything and putting off any decisions. These proposals don't have the usual long periods of time that other appeal opportunities may have. Failure to act gives VA a green light to move ahead.
We compound the error by wasting time looking for help. We may try to contact a VSO or we may visit a "chat" room or "board" on the Internet to seek advice from others.
As a rule, you must act for yourself. The average VSO won't know what to do and the help you'll find on the Internet may be worse than no help at all.
The instructions for appeal are included in every proposal of adverse action. Your task is to follow those instructions to the letter. if you do just that, you can bring almost any collection effort to a grinding halt and that buys you time. During the time you just earned for yourself, your compensation money will continue as it normally would.
You can ask for hearings, seek waivers and reductions of an existing debt or argue that there is no debt.
Failure to act will result in the adverse decision being sent to the Debt Management Center for action and once that happens, your case will become so scattered you may never recover. The Finance Center has the authority to turn your debt over to a contracted debt collection agency where the penalties and late fees may add thousands of dollars to the original amount owed.
We'll begin by looking at one of the common issues and a discussion of whether or not the compensation payment is truly "protected".
From my VAWatchdog dot Org column:
VETERANS' ADVOCATE JIM STRICKLAND EXPLODES THE "5301" MYTH -- "State court jurisdiction is not preempted by any federal statute ... Courts can establish child support orders even if the non-custodial parent received veteran's disability benefits as his sole means of support."
Divorce is messy. Lawyers who practice family law see some of the ugliest confrontations between people possible. There's no way to predict what one spouse will do or say to extract revenge on the other.
That it will get down and dirty is a given. When children and money are involved, it's likely to become nastier by a country mile.
The veteran wrote to me about his child support obligation and how it will be seen by the family court system in the calculation of his child support obligation.
"Jim: I am currently service connected for multiple medical condition with a combined rating of 80%. I am drawing $1547 per month for self and spouse.
I retired (from work) 01/02/09 and had my annual income cut by approximately 32%. Prior to my retirement, I was paying child support for 1 kid in the amount of $826.15. Based on my new retirement income, I started working with the State Bureau of Child Support Enforcement to have my child support recalculated based on my retired pay. Before the they could help me, the mother had me served with court papers relevant to the modification of an existing 2002 Child Support Order. During a court hearing, the attorney for the child's mother raised the issue that my VA Compensation Monthly Check of $1547 was not included in calculating the new child support monthly payment.
My question is 'Can a State Family Court use my VA compensation as income to calculate a new monthly Child Support payment?' I have read USC Title 38 concerning VA compensation and it appears to me that my VA compensation can not be attached for Child Support. Do you have any information on VA compensation being used as income to calculate Child Support payment amounts? I really need help with this matter ASAP. Thank You."
When he refers to "USC Title 38 concerning VA compensation" I know he's speaking of Title 38, Part IV, Chapter 53 § 5301, Nonassignability and exempt status of benefits. I've heard a lot about this "5301 rule" over the last two or three years.
This is a complex and lengthy piece of legislation, you can read it for yourself here
We'll refer to it as "5301" for the sake of brevity.
In plain English language, 5301 seems to tell us that there are almost no circumstances that anyone can collect a veterans disability payment for any debt he might owe. It does say that any federal debt may be exempted (IRS, school loans, etc.) but that all other creditors are forbidden to demand any amount of the disability compensation money. This applies whether before or after it is received by the veteran. In other words, it can't be garnished like a paycheck. Once it's in the veterans hands it can't be touched so long as it's identified as money from a Department of Veterans Affairs (DVA) disability compensation payment.
Before we travel farther down the path of 5301, we should talk briefly about how federal laws are made. In a nutshell, a bill is introduced by a Congressional Representative that proposes a law. It passes before committees in the House and in the Senate and eventually finds its way to the desk of the President.
Published in the Federal Register, it then becomes law.
As it becomes law, the courts then apply it to everyday circumstances of the citizens they serve. The judge presiding in the courtroom must carefully read the law and then interpret what he believes to be the intent of Congress when the law was formulated. If you've followed legal matters you've read of the expressions of "the letter of the law" as opposed to "the intent of the law".
To try to interpret law only by using the precise language or letter of the law is a mistake that far too many lay readers will make. Lawyers and judges understand that while the literal interpretation is important, the intent of the body of lawmakers is even more important.
In the examination of 5301 we must try to determine what the Congress intended at the moments the law was proposed and passed. Once a law is passed, the members of Congress will change, society at large will change and even the office of the president may see a new shift to the left or right. The law that was passed is still there, unchanged for years to come.
Language is a poor way to communicate. Words don't have the precision of numbers. If you add 2 + 2 it's going to equal 4 this year and on into the next century. Knowing that words have subtleties that can't be seen as clearly as a mathematical equation, enforcers of our laws must look deep between the lines to determine the intent of a particular statute.
I asked a learned friend, a lawyer who I trust to know these things, for his opinion. His reply was brief and to the point; "As I expected, there are a number of cases already on this point. In sum, the courts are consistent in finding that the statute protects veterans from 'creditors' and related 'process' and 'spouses' using 'marital property laws' are not 'creditors.' Whether you agree with it or not, that is how 5301 is interpreted."
In an article written by Attorney Zenell Brown
the author points out that the Supreme Court addressed the issue in Rose v. Rose 107 S.Ct. 2029 (1987)
Attorney Brown notes that, "The Court held that state courts can establish child support orders even if the non-custodial parent received veteran's disability benefits as his sole means of support." He goes on to tell us, "State court jurisdiction is not preempted by any federal statute."
Importantly, and I believe this is at the heart of the discussion about the obligations of a parent, Brown says, "It was the Court's position that Congress intended that these benefits provide for the veteran as well as his dependents."
It's not much of a reach to understand that when Congress enacted this 5301 law, the intent was to protect the veteran and his family from unscrupulous creditors if and when the veteran were to fall on hard times. In the eyes of Congress and the courts, the family unit remains just that even after divorce when children are involved. The veteran's obligations to the family aren't relieved because of divorce or disability.
The article goes on to say that in some few states there is considerable controversy about interpretation of the 5301 law and that overall it's, "ripe for litigation".
In the case of a child support order, arguing the 5301 rule seems to be moot. While the DVA will not support garnishment or attachment of a disability compensation payment (arguing that DVA doesn't want to become a collection agency for the children's and family services divisions of every state) DVA will easily allow "apportionment" of that same money. For a custodial parent to apportion a sum of the disability compensation payment is a simple matter of writing a letter to the Regional Office that controls the veterans file and providing a copy of an order for child support and some financial information.
The veteran is then notified of the apportionment request and given the usual opportunities for appeal. In my experience, VA quickly defaults to the needs of the child and the custodial parent and begins to assign the requested amount within a short time.
Once apportionment is established, that amount of money is forwarded directly to the custodial parent. This path of providing for the family of the veteran has a unique pitfall of its own that most veterans won't discover until it's far too late.
When a child support obligation is ordered in a state family court, the usual standard is that the money is delivered to the state agency of child support enforcement. Whether the money is to be withheld from paychecks or mailed in by the obligor, the money must be accounted for by the state agency responsible. Non-custodial parents are sometimes shocked to discover that cash given directly to children for special events, birthdays and the like, aren't counted toward the child support obligation. If the state doesn't track it officially, it didn't happen.
In the case of the custodial parent who writes to the DVA asking for an apportionment, if that parent prevails, the DVA sends a check directly to the parent obligee. That money thus bypasses the state agency and isn't accounted for. Then later, the state may notify the obligor parent to say that s/he hasn't met the requirements and enforcement actions will occur soon.
Once it's discovered that the apportionment money wasn't counted, I know of no cases where that money has been forgiven and credited to the obligated parent.
Recent efforts by some veterans groups to require states to reinterpret the 5301 law fall mostly on deaf ears.
In March of 2009, Iowa House File 170 was excluded from further consideration by the legislature. The bill would have excluded (per 5301) veterans disability compensation payments in calculations of the amount of the court ordered child support or alimony obligation.
By not giving House File 170 further consideration, the Iowa legislature reinforced the way the family courts are currently enforcing alimony and child support obligations. The veterans activists movement to revise law to help them avoid a child support or alimony obligations has backfired and led to a stronger support of the current decisions.
(Also DOA was Iowa House File 66, "Veterans organizations wouldn't have to pay anything for a class A liquor license, regardless of how much liquor they sell." Connected? Hmmm?)
Most of us who divorce when there are children in the mix want to do what we can to care for those kids. The great majority of non-custodial parents work hard to remain in the lives of their kids and to provide the financial support that the children often desperately need.
It isn't always that way though. The laws of the states have become harsh and unforgiving for the obligate parents because of the history of those who will stop at nothing to dodge their responsibilities. Over the last few years the pendulum has swung far over to the side of stiff requirements and rigid enforcement of family court orders. Magistrates and judges have almost no leeway in establishing the amounts of an obligation as they're only allowed to use the data from a financial report to establish the numbers of the dollars owed each month.
Even divorcing spouses who want to make their own agreements are often not allowed to do so. The courts know that in months or years, these sorts of arrangements have little chance of lasting. Today's family courts are overcrowded with couples who want to publicly argue the smallest details down to the nth degree. As the courts are becoming more crowded with shouting ex-spouses, they're more disinclined to hear it and so they simply set the orders and then pass it on to the appropriate enforcement bodies. Some states today will only hear pleas for modification of family court orders every two years.
The bottom line is that for the foreseeable future, a veteran who has a child support or alimony order should not depend on the remote possibility that the 5301 law will offer any relief. Any veteran entering into a divorce should be represented by an experienced lawyer who will guide the veteran to a reasonable conclusion and an order than will likely be based on the payment of a DVA disability compensation amount as income.
The best divorce agreement and subsequent alimony and/or child support order is one that has been carefully considered long before coming to face the judge.
Divorce and the financial burden that will come along with having children will be painful.
Just how painful it will be and how long the hurt lasts is largely up to you.
Apportionment
The VA Debt Management Center