For the first time, the U.S. Treasury Department will start deducting money from veterans' benefit checks to settle debts they owe to the Department of Veterans Affairs (VA).

According the agency's news release of March 23, 2001, the Treasury Department has started sending letters to some 243,000 veterans reminding them of debts they owe the U.S. government and informing them that money can be taken from their benefit checks to settle those debts.

Many of the veterans affected incurred debts when they were treated in VA medical facilities for health problems unrelated to their military service. Costs of treatment for such conditions and related prescriptions for medication require veterans to make a co-payment similar to those required by civilian health plans. In other cases, veterans receiving disability benefits and VA pensions may fall into the Treasury offset program because of debts, usually for overpayment of their benefits.

Treasury Department officials say the total debt owed amounts to over $75 million or an average of $300 for each of the 243,000 veterans affected.

Veterans affected will continue to receive the first $750 of their monthly Social Security payment. No more than 15 percent of the balance owed greater than $750 can be withheld from any check. Veterans who voluntarily settle their debt with the VA can avoid any future loss of Social Security, VA or any other federal payments.

Veterans are to be notified in writing by the Treasury Department at 60-day and 30-day intervals before the deductions actually begin. Veterans are to be informed of the anticipated amounts to be withheld, the VA agency that is owed and a point of contact assigned to answer question about the debt.

According to the Treasury Department press statement, all veterans with outstanding debts were notified in July 2000 by the VA and encouraged to make payment arrangements or request a hearing in order to avoid further action. Those who took no action or did not pay their debts were referred to the Treasury Department.

Veterans with questions about the withholdings or whether they have VA debts should contact the VA medical centers where they received care.

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The Treasury Department is responsible for collecting the debts from other income including income tax, federal retired pay and now Social Security (but not Supplemental Security Income). In the future, Treasury will begin docking federal retired pay, military pay or military retired pay, Railroad Retirement Board benefits (but not “Tier 2” benefits), Black Lung Program payments (Part B) and other federal payments made to individuals. Veterans will be notified before any new offsets.