< Back to Search

Department of Veterans Affairs

Income Withholding and Veteran's Benefits

Published: March 1, 2012
Information About:
State/Local Child Support Agencies, Military & Veterans
Topics:
Employer Responsibilities, Income/Wage Withholding, National Medical Support Notice
Types:
Guides/Publications/Reports
Tags:
Toolkit & Training

How to determine whether a noncustodial parent (NCP) is receiving benefits from the VA.

In order to determine whether a veteran/non custodial parent (NCP) is receiving benefits from the Department of Veteran Affairs (VA), state child support workers may need to obtain specific locate information not available through the National Directory of New Hires (NDNH) or the Federal Case Registry's (FCR) automatic data matching. However, by using the Federal Parent Locator Service's (FPLS) external locate service, state child support enforcement (CSE) agencies may request additional information to determine whether an NCP is receiving benefits from the VA.

The VA provides information about pensions, compensation and educational benefits as well as the address to which benefits are being sent.

Section 459 of the Social Security Act, as amended, provides for the garnishment (withholding of child support) of certain federal payments for the enforcement of child support and spousal support obligations. Benefits paid by the VA, however, are specifically excluded with one exception. The exception is when disability compensation is paid in lieu of waived military retired/retainer pay, as discussed in Example #1 below.

The Social Security Act and the statutes governing benefit payments by the VA do provide for processes by which dependents may obtain financial support from a veteran's benefits under certain circumstances. Below are three examples highlighting the laws or regulations under which benefits paid by the VA may be paid to dependents to fulfill child support obligations.

Example #1: VA monetary benefits, entitlement to which is based on either permanent and total disability and wartime service of a veteran with low income (pension) or a veteran's service-connected disability (compensation), are generally not considered remuneration for employment. However, the Social Security Act provides that if a veteran is eligible to receive military retired/retainer pay and has waived a portion of retired/retainer pay in order to receive disability compensation from the VA, that portion of the VA benefit received in lieu of retired/retainer pay is subject to garnishment. Thus, VA disability compensation received in lieu of waived military retirement pay may be garnished in order to satisfy ordered child support and alimony obligations. Only the portion of the VA compensation payment representing the amount of retired pay is subject to income withholding for child support. 42 U.S.C. 662(f)(2). The regulations clarify that where the former member has waived the entire amount of his or her military retirement pay, that individual's disability compensation is not subject to income withholding for child support. However, the individual's (waived) military retirement pay may still be attached for child support.

Aside from the attachment of VA benefits in the specific circumstance described above, statutes and regulations governing VA benefits also provide for the apportionment of VA benefits to provide spouses and dependents with financial support under certain circumstances:

Example #2: VA regulation 38 CFR 3.450 (a)(1)(ii) provides that if the veteran is not residing with his or her spouse or if the veteran's children are not residing with the veteran and the veteran is not reasonably discharging his or her responsibility for the spouse's or children's support, then the veteran's pension, compensation, or emergency officer's retirement pay may be apportioned. See 38 U.S.C. § 5307. An apportionment would not be made if it would cause undue hardship to the veteran or in certain other circumstances specified by statute or regulation. Determinations concerning apportionment of VA benefits are made by VA under 38 CFR 3.450-3.461.

Example #3: VA regulation 38 CFR 3.451 authorizes a special apportionment of a veteran's pension, compensation, emergency officer's retirement pay, or dependency and indemnity compensation between the primary beneficiary and his or her dependents when the dependents demonstrate a need for the benefit. The apportionment is based on the facts in the individual case, such as amount of VA benefits payable, other resources and income of the primary beneficiary and the dependents, and special needs of the primary beneficiary or the dependents. An apportionment would not be made if it would cause undue hardship to the primary beneficiary or in certain other specified circumstances.

Federal law does not prevent a state court from ordering a veteran to pay child support in an amount that necessarily would require the veteran to use VA disability benefits to satisfy the obligation.

For help in determining whether a veteran waived any portion of retired/retainer pay in order to receive VA benefits, contact the VA Regional Office Inquiry Line: 1-800-827-1000.

How to request a special apportionment

  1. The state CSE agency should write to the VA using agency letterhead to request an apportionment review. The letter should be signed by both the appropriate CSE agency official and the custodial parent (CP). The letter should be addressed to the VA Regional Office servicing that veteran's benefits. Use the Inquiry Line to determine which VA office is appropriate.
  2. After receiving an apportionment application, the VA usually requests a completed VA form 21-0788, "Information Regarding Apportionment of Beneficiary's Award." This is where the CSE agency provides information regarding the CP's income and net worth. A child support office can save time by submitting the form as part of the first step. Form VA 21-0788 may be found on the web at http://www.va.gov/vaforms/.
  3. Attach a copy of the current support order to assist VA in the development of the apportionment award.
  4. Attach a copy of the arrearage determination, payment ledger, payment records, etc.

Where to send an Income Withholding Order (IWO) to attach a VA benefit payment

Send the IWO to the VA regional office serving the veteran. Contact the VA Regional Office Inquiry Line: 1-800-827-1000 for help in determining the servicing regional office.

VA Financial Services Customer Service

The VA Financial Services Customer Service phone number is (877) 353-9791 (toll-free).

Case-specific inquiries: 1-800-827-1000

Where to send the National Medical Support Notice (NMSN) for a VA beneficiary

VA does not provide medical insurance for beneficiaries. Do not send the NMSN to the VA.

Where to send an IWO termination

Termination of the IWO should be sent to the VA regional office servicing the veteran. Contact the VA Regional Office Inquiry Line: 1-800-827-1000 for help in determining the servicing regional office.