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VA reverses course on GI Bill payments, will repay possibly short-changed veterans

Donovan Slack | USA Today

WASHINGTON – Department of Veterans Affairs Secretary Robert Wilkie overruled a top benefits official Thursday and said the VA won't ignore federal law and will now reimburse veterans who may have been underpaid GI Bill benefits.

The move came just hours after Paul Lawrence, the VA’s undersecretary for benefits, testified on Capitol Hill that the amount of work it would take to figure out how many were shortchanged and by how much wouldn't be worth it.

The VA was supposed to begin granting expanded benefits in August under a law passed last year known as the Forever GI Bill. The law required the VA to change the way it calculated housing stipends, among other changes.

But the agency blew through that deadline because it couldn’t get software in place to make the calculations and said this week it wouldn’t be up and runningfor another year.

In the meantime, Lawrence told lawmakers that veterans are being paid the old way while the VA focuses on getting it right by next December, when veterans will be planning for the following school semester.
“If you ask me, what should we spend an extra hour on – processing things that yield veterans nothing, putting at risk the spring 2020 semester, or saying, this doesn’t yield much and we’re going to move forward?” he said at a House VA Committee hearing.

Committee Chairman Rep. Phil Roe, R-Tenn., questioned Lawrence repeatedly on the issue after Lawrence at first kept repeating agency talking points that veterans will be “made whole” without acknowledging that it won’t be at the new rates under the law.

“Just for clarity, we stood up a system that didn’t work, and paid people what we had paid them in the past," Roe said. "And we don’t know what we should have paid them. Am I correct? That’s pretty much what we did, because our IT system didn’t work, that’s what happened?” “That’s correct,” Lawrence said.

The VA secretary later said in a statement that the agency now would do the extra work to make sure veterans are reimbursed the right amounts.    

“Once the VA is in a position to process education claims in accordance with the new law – each and every beneficiary will receive retroactively the exact benefits to which they are entitled under that law,” Wilkie said.

The reversal came amid criticism from lawmakers and veterans' groups and a confusing messaging strategy from the agency. Even as Lawrence testified, the VA issued a statement saying veterans would be "made whole" only at the current rates. 

And VA spokesman Curt Cashour earlier Thursday had tried to dispute reports that veterans who were underpaid would not be fully reimbursed. NBC News had reported that VA officials told congressional staff the VA would not be able to repay underpaid veterans without an audit of some 2 million past claims, which could hold up processing of future claims.

Cashour asserted the report was misleading and “gives the false impression" that some veterans will not be paid back in full.

“Nothing could be further from the truth,” he said in a statement. “Each and every Veteran on the post-9/11 GI Bill will be made 100 percent whole – retroactively if need be – for their housing benefits for this academic year.”
But, he noted at the time, that it would be based on current rates.

At Thursday’s hearing, Lawrence said the agency didn’t know if that would have resulted in underpaying veterans.

“Nobody has yet been paid under this system that doesn’t exist,” he said. “There isn’t a feeling of ‘I’m owed something,’ unless they’re able to calculate something we’ve been quite frankly unable to calculate.”

The technology glitches have not been limited to the housing stipend calculations. GI Bill payments to thousands of veterans across the country were delayed this fall because of the computer problems. Many reported they were forced into desperate financial situations.

The issues resulted in the reassignment this month of Robert Worley, the executive director of the VA's educational services. It also led to the VA's announcement on Wednesday of the one-year delay in the housing payment calculations.

Lawrence said he didn’t know how much the agency has spent on the failed software project. He said he would have to get back to lawmakers.

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