Bill Would Require Agencies to Pay Accrued Interest Resulting from Veterans’ Pension Payment Errors

Recently introduced legislation would protect veterans from having to pay back interest resulting from agency mistakes in the calculation of certain benefits.

Legislation introduced in the House this week would protect veterans from having to pay any interest that arises from mistakes made by federal agencies in calculating their military service deposits and pensions.

The Correcting Miscalculations in Veterans’ Pensions Act (H.R. 4431) was introduced by Congressman Buddy Carter (R-GA). It authorizes federal agencies that make a mistake in calculating military service deposits and pensions to pay the incorrectly accrued interest on behalf of veteran employees.

According to information provided by Carter, American veterans working at a federal agency are required to pay a military service deposit in order to receive their military service pension while working for the federal agency. Due to a misclassification in the type of the employee’s status, the federal agency will therefore charge different interest rates on those military service deposits, often leading to miscalculations.

Once the federal agency becomes aware of the miscalculation, they will contact the veteran/employee and notify him or her of the need to pay back the balance with accrued interest. In some scenarios, that interest can be tens of thousands of dollars that the veteran would be required to pay.

Currently, Carter says, there is no recourse for veterans to mediate that payment and there is no authority for the federal agency to wipe away the incorrectly accrued interest. His bill would change that by authorizing agencies that make a mistake with these payments to pay the incorrectly accrued interest on behalf of the veterans.

Carter said in a statement about the bill:

I introduced this legislation because I have heard from veterans faced with this unacceptable problem.

After serving our nation, veterans are moving on to work for federal agencies and these agencies are miscalculating their pensions, accruing thousands of dollars in interest without the veteran ever even knowing about it.

Our current system requires these veterans to repay sometimes tens of thousands of dollars in interest due to no fault of their own. My legislation says federal agencies, not our brave veterans, should pay the interest payments when the federal government is responsible for the miscalculation. This is not how our veterans should be treated when they return home and it should not be allowed to continue.

About the Author

Ian Smith is one of the co-founders of He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.