VA Testimony of John Thompson before Congress on August 5, 1998

STATEMENT OF JOHN THOMPSON
ACTING GENERAL COUNSEL
DEPARTMENT OF VETERANS AFFAIRS
BEFORE THE HOUSE COMMITTEE ON VETERANS' AFFAIRS

Mr. Chairman, and Members of the Committee, I am pleased to be here this morning to discuss the issue of garnishment of VA benefits for child support and other court-ordered family obligations.

Federal statutes generally prohibit the garnishment of VA benefits to satisfy debts owed to private individuals. The sole exception is that VA disability compensation received in lieu of waived military retired pay can be garnished in order to satisfy court-ordered child support and alimony obligations. In such cases, only a portion of a VA compensation award representing the amount of retired pay which has been waived can be garnished. Although I cannot tell you today in how many cases we are implementing a garnishment order, a VA survey in 1992 indicated only 93 garnishment orders were received during the preceding year.

VA benefits, including even disability compensation received in lieu of retired pay, are also protected by Federal law from court-ordered divisions of property upon veterans’ divorces. However, the U.S. Supreme Court ruled in Rose v. Rose, 481 U.S. 619 (1987), that state courts are not precluded from setting child support obligations at such levels that veterans would necessarily have to use some of their disability compensation to meet them.

Garnishment cases are handled by VA regional offices as a coordinated effort involving the Office of Regional Counsel, the Adjudication Division and the Finance Division in accordance with the following procedures:

Any court garnishment order received at a VA regional office involving a veteran who receives VA compensation in lieu of military retired pay must be promptly delivered to the Finance Officer who is responsible for establishing the initial withholding of benefits for a potential garnishment.
The Regional Counsel then prepares a brief memorandum to the Adjudication Officer explaining the legal basis for any further action to be taken and, if the garnishment is to be effected, specifying the dollar amount to be paid.
The Adjudication Officer notifies the Finance Officer that the veteran is receiving disability compensation as a result of waiving military retirement pay, the amount of such payments and whether the veteran is receiving additional benefits based on the dependency of the person to whom the garnishment is to be paid.

(4) Once the Regional Counsel approves the garnishment, the Adjudication Officer makes any adjustment that may be required to the withholding from the veteran’s award initially established by the Finance Officer.

The Finance Officer is responsible for paying and notifying the veteran if the garnishment orders a specific amount to be paid (delinquent payments) with no recurring payments. However, if the garnishment orders a specific amount to cover delinquent payments in addition to recurring payments and if the veteran is receiving additional benefits on the basis of dependency of the person to whom the garnishment is to be paid, the Finance Officer is responsible for payment of the delinquent amount and the Adjudication Officer takes action to award recurring payments. If the recurring payments are to be made to someone who is not a dependent (for example, an ex-spouse), then the Finance Officer is responsible for issuing payments.

In the event of any change in the amount of compensation or military retired pay, the Adjudication Officer is responsible for reviewing the claims folder to determine if action may be necessary to adjust the garnishment. In that event, the case is handled in the same way as for an original garnishment.

Although garnishment of VA benefits is largely precluded, the need for it in order to force veterans to meet their support obligations is greatly reduced by the availability of "apportionment." Under authority of 38 U.S.C. §5307, the Secretary has promulgated rules for apportioning awards to the beneficiaries’ estranged spouses and/or children not in their custody, upon application, where necessary to provide for their support. VA regulations, at 38 C.F.R. §§ 3.450 - 3.461, essentially are designed to ensure an equitable division of benefits where a VA beneficiary is failing to meet his or her support obligations.

Apportionment decisions are based on a balancing of needs between the veteran and the apportionment claimant. Income and expenses for both parties are carefully evaluated, and VA attempts to balance their respective needs. There are currently 22,808 cases in which an award of a veteran or surviving spouse is being apportioned by VA.