Veteran told to repay tens of thousands of dollars to Department - WMBFNews.com, Myrtle Beach/Florence SC, Weather

Veteran told to repay tens of thousands of dollars to Department of Defense

A military veteran is told he has to repay more than $46,000 to the federal government. (Source: WMBF News) A military veteran is told he has to repay more than $46,000 to the federal government. (Source: WMBF News)

MYRTLE BEACH, SC (WMBF) - A local veteran reached out to WMBF News after he said he felt he had nowhere else to turn.

The federal government says Sgt. Thomas Swann owes thousands of dollars to the Department of Defense because he received more retirement pay than he should have.

Now, he has to pay that money back.

Swann enlisted in the military right out of high school.

“I loved what I did. I was meant to do it,” he said.

Swann first served in the Navy and then the Army National Guard. However, it was while on a tour in Afghanistan in 2010 that his military career came to a screeching halt.

“It’s a daily thing I have to deal with. I take meds morning and night,” he said.

His bathroom counter has become his own personal pharmacy since the military vehicle he was in was hit by a roadside IED.

Swann received the Purple Heart for his service, and he said he was forced to medically retire soon after his injuries in October 2014.

Instead of being able to use the time since then to heal, Swann said the last few years have been filled with stress.

“I served 14 years and everything, and this is what they do to me?” Swann said. “It’s heartbreaking.”

He said his frustration started soon after he got out of the service. Swann began receiving retirement pay from the Defense Finance and Accounting Service, more commonly known as DFAS. It’s an agency of the Department of Defense.

Early on, Swann questioned if the amount he was getting was too much because he was also receiving disability pay from the Department of Veterans Affairs.

“There was numerous occasions, I don’t know for how many months, we tried to explain that we didn’t think we were supposed to get it,” Swann said.

On Jan. 24, 2015, he even received a letter from the Retired Pay Department of DFAS that said he was entitled to the $2,125 he was being paid each month.

Swann said a back and forth with DFAS and Veterans Affairs went on for months. Then, in August 2016, he was notified he owed the DOD $37,920.39.

An account statement said Swann’s VA compensation was greater than the deduction from his retired pay. However, that was the exact thing Sgt. Swann says he had been trying to notify DFAS of for months.

He doesn’t have any proof of the dozens of phone calls he said he made to DFAS and VA representatives though.

“When you are clearly being, I feel like, set up for failure now - pretty much is what I feel like I am - where it wasn’t even my fault, That I should be able to get the help, they should be able to do something to help me one way or another,” Swann said.

According to DFAS, it was Swann who was at fault.

Swann requested to have his debt waived, but that request was denied in August.

In a letter, DFAS said Sgt. Swann should have been aware of the stipulations of VA compensation. It also detailed several documents DFAS says spelled that out.

One form also included a box that DFAS said Swann did not check.

The letter went on to say, “Fault, in this context, does not indicate an ethical lapse, or that an overt act by the member caused the debt to occur. It merely indicates that the member is not without fault in the accrual of the debt or that he should have been aware of the overpayment.”

DFAS said Swann should have continued to call the issue to their attention, and he should not have spent the money sent to him by mistake.

The letter went on to say, “The fact that an erroneous payment is solely the result of an administrative error or mistake on the part of the Government is not a sufficient basis in and of itself for granting a waiver. The recipient of the payment has a duty to notify an appropriate official and to set aside the funds for eventual repayment.”

However, what Swann was overpaid isn’t all he owes.

On top of a 1 percent interest, his debt has been turned over to a private collection agency and more than $10,000 in fees have been tacked onto what he owes, bringing the total to more than $46,000.

The Bureau of the Fiscal Service said in a statement:

Fiscal Service charges federal agencies fees to cover its costs for collections through cross-servicing. The fee is a percentage of all collections received from the debtor after the debt is referred for cross-servicing. Federal agencies are generally required to add this fee to the debt as an administrative cost of collection.

WMBF News reached out to DFAS about Swann’s case, and they said the Department of Veterans Affairs is also at fault for the overpayment.

The Defense Finance and Accounting Service (DFAS) is responsible for paying active duty, reserve, and retired service members and those individuals entitled to survivor annuities. DFAS executes payments and adjustments as prescribed by the law and in accordance with documentation received from the military services (“services”), the member and the Department of Veterans Affairs (DVA).  DFAS continues to monitor pay accounts after establishment.  If additional information becomes available that impacts a member’s military retired pay entitlements, the retired military pay records are updated and the payments are adjusted as warranted. 

Federal law prohibits a military retiree from receiving both military retired pay and VA disability compensation unless a military retiree waives a his or her gross retired pay, dollar for dollar, by the amount of his or her entitlement to DVA disability compensation.  Title 38, U.S. Code Section 5304, 5305.  The law allows certain qualified retirees to receive both DVA disability compensation and full retirement payments without being required to waive their military retired pay.  This is known as Concurrent Retirement and Disability Payments (CRDP) and is only authorized for military retirees with over 20 years of service, who have at 50% or more disability rated by the DVA.  If a retiree is not CRDP eligible and a retiree has waived his/her military retired pay, DFAS must reduce the member’s retired pay by the amount of the VA disability compensation.  To effectuate this offset, DFAS currently receives an electronic file from the DVA identifying members receiving DVA disability compensation.  The member is also required to disclose receipt of DVA compensation to DFAS.

SGT Thomas Swann (SGT Swann) was medically retired from the National Guard in October, 2014.  DFAS did not receive any information that indicated SGT Swann was receiving DVA disability compensation. As a result, when DFAS calculated and initiated his retirement payments in October 2014, no DVA offset was applied to his military retired pay. 

In June of 2016, it was discovered that DFAS had not received accurate information concerning SGT Swann’s receipt of VA disability compensation.  At that point, an audit of SGT Swann’s records were undertaken.  It was determined that SGT Swann was not eligible for CRDP and that his retired pay should have been offset by the amount of his DVA payments since the date of his retirement. Once DFAS discovered these facts, DFAS was required to correct SGT Swann’s monthly entitlement and indebt him for amounts he received erroneously.

DFAS is required by law to collect the debt.  SGT Swann was informed of the options for repayment and the ability to seek a waiver of the requirement to pay the indebtedness.  He was also provided information on how to apply for Combat-Related Special Compensation (CRSC). 

CRSC is a special compensation paid to combat-injured retirees.  The service (Army) CRSC Board determines eligibility for CRSC under prescribed law and regulations.  If a retiree is granted CRSC it has the effect of replacing some of the military retired pay that is offset due a member’s receipt of VA disability compensation.  If a CRSC is granted, DFAS is notified directly by the service CRSC Board that an application has been granted.  DFAS has not received information that SGT Swann has been granted CRSC.

WMBF News took DFAS’s claim to the Department of Veterans Affairs. Here is their statement:

The Department of Veterans Affairs wants to ensure that all Veterans receive the benefits they are entitled to under the law.  We are presently working with DFAS and our VA Regional Office in Columbia to determine how best to resolve this issue for the Swann family.  We regret any frustration this situation may have caused.

Swann was given the option to appeal his debt waiver denial, but did not do so within 30 days, according to the DFAS.

Swann said that’s because he was trying to get U.S. Sen. Tim Scott’s office to help with the process.

In a letter he sent to Scott’s office on Sept. 2, Swann wrote, “I only have 30 days and no one is willing or able to help me until speaking with you. Please respond ASAP.”

It wasn’t until nine days later that Swann got a reply from Harrelson.

“I am sorry you are going through this,” Harrelson replied. “Unfortunately, our office is not able to file the appeal for you. I am simply not trained to properly handle such matters.”

Swann said he didn’t file the appeal at that time because he had lost hope, that everywhere he turned for help seemed to be a dead end. That email, he added, was his last correspondence with Scott’s office until he got a letter more than a month later.

It didn’t contain good news either.

The letter was from the DFAS and addressed to Scott. It said, “We did not receive a request for an appeal or extension within the allotted period. Consequently, our determination is final and no further action can be taken on this matter.”

WMBF News reached out to Scott’s office about Swann’s case and got this response from his press secretary, Michele Exner.

The Senator is eternally grateful to the selfless service of all of our veterans and service members, and takes pride in being a resource to these great Americans whenever possible. Our office regularly receives calls from constituents who have been overpaid by various federal agencies, and our staff members work with the respective constituent to review all potential options.

While their letter to Scott stated their determination was final in regards to Swann’s appeal, the response WMBF got from DFAS on Nov. 7, 2017, was this:

Sgt. Swann has appealed the decision to deny his waiver. DFAS is reviewing the appeal and will provide the results of the review to Sgt. Swann when complete.

Congressman Tom Rice’s office has also been involved in this case. After WMBF reached out to representatives there, the Swanns received an email from district director Andrew Mims.

He wrote that he was assisting Swann in getting an appeal filed, despite it being past the deadline.

“All I can promise at this point is that we will advocate hard that they consider accepting it late,” Mims said on Oct. 23.

Swann said that’s the last time he has heard from Rice’s office. Members of the congressman’s staff released the following statement:

Sgt. Swann reached out to our office and we’ve been attempting to help him get answers just as we do with any constituent who comes to us with a federal agency problem. It’s our policy to not get into details of ongoing cases but we are still doing everything we can to help…We actually do not get many inquiries of this nature. That being said, Congressman Rice is always looking for legislation that makes the federal government run more efficiently and makes the process easier on our veterans. 

Below is a timeline of Swann's case. To view it at full size, click here.

Copyright 2017 WMBF News. All rights reserved. 

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