Veteran Debt Fairness Act of 2018

To amend title 38, United States Code, to improve the processing of veterans benefits by the Department of Veterans Affairs, to limit the authority of the Secretary of Veterans Affairs to recover overpayments made by the Department and other amounts owed by veterans to the United States, to improve the due process accorded veterans with respect to such recovery, and for other purposes. 1. Short title This Act may be cited as the Veteran Debt Fairness Act of 2018 2. Limitations on authority of the Secretary of Veterans Affairs to recover amounts owed by veterans to the United States (a) Indebtedness offsets Section 5314 of title 38, United States Code, is amended as follows: (1) In subsection (a)— (A) by inserting Authority To offset; limitations.— (1) Subject to (B) by striking subsections (b) and (d) of this section and paragraphs (2) and (3) of this subsection, subsections (b) and (d) of this section, and (C) by adding at the end the following new paragraph: (2) The Secretary may make a deduction under paragraph (1) only if— (A) the indebtedness to the United States described in that paragraph— (i) is the result of an error, a misrepresentation, or fraud by the person described in that paragraph; (ii) in the case of an error by the person described in that paragraph, is less than five years old; (iii) is not in dispute under regulations prescribed pursuant to subsection (d)(2)(A); and (iv) exceeds $2,500; and (B) the Secretary determines that the amount of the indebtedness exceeds the cost to the Department to recover the indebtedness. (3) The Secretary may not make a deduction under paragraph (1) to a payment under chapter 11 or 15 of this title that exceeds the lesser of— (A) 25 percent of the payment; and (B) a percentage that the Secretary determines is the greatest percentage that would not cause a hardship to the recipient. . (2) In subsection (b)— (A) by striking Deductions may not be made Notice required.— (B) by striking unless the Secretary until after (C) by amending paragraph (1) to read as follows: (1) the Secretary has made reasonable efforts to notify the person of the person's right— (A) to dispute the existence or amount of such indebtedness under regulations prescribed pursuant to subsection (d)(2)(A); (B) to request a waiver of such indebtedness under section 5302 of this title; and (C) in the case of a payment under chapter 11 or 15 of this title, to request the Secretary make a determination under subsection (a)(3)(B); ; and (D) in paragraph (2), by inserting the Secretary has made (E) by amending paragraph (3) to read as follows: (3) the day that is 90 calendar days after the day the Secretary sends notice to the person of the indebtedness and of the proposed deduction. . (3) In subsection (c), by inserting Inapplicability of statutes of limitations to administrative actions.— Notwithstanding (4) In subsection (d)— (A) by inserting Regulations (1) The Secretary (B) by adding at the end the following new paragraph: (2) The regulations under paragraph (1) shall include administrative processes by which a person described in paragraph (1) of subsection (a) may— (A) dispute the existence or amount of indebtedness described in that paragraph; and (B) request that the Secretary make a determination under paragraph (3)(B) of such subsection. (3) The regulations under paragraph (1) shall direct the Secretary to ensure that each dispute under paragraph (2)(A) is adjudicated not later than 120 days after the initiation of such dispute. (4) The regulations under paragraph (1) may not permit the Secretary to submit to any debt collector (as defined in section 803 of the Fair Debt Collection Practices Act ( 15 U.S.C. 1692a (5) Nothing in this subsection shall be construed to prohibit a person from seeking relief from a court of competent jurisdiction. . (b) Limitations on interest and fees charged during period of dispute Section 5315 of such title is amended— (1) in subsection (b)(1), in the first sentence by striking or (B) (B) for any period during which the existence or amount of the indebtedness is being disputed under regulations prescribed pursuant to section 5314(d) of this title, or (C) (2) in subsection (c)— (A) by inserting (1) The administrative (B) by adding at the end the following new paragraph: (2) No administrative costs may be charged under this section with respect to indebtedness described in subsection (a) while the existence or amount of the indebtedness is being disputed under section 5314(d) of this title. . (c) Limitation on authority To sue To collect certain debts Section 5316(a) of title 38, United States, is amended— (1) in paragraph (1), by striking paragraphs (2) and (3) paragraphs (2), (3), and (4) (2) by redesignating paragraph (3) as paragraph (4); and (3) by inserting after paragraph (2) the following new paragraph (3): (3) No suit may be filed under this section to recover any indebtedness more than five years old. . (d) Repair of credit (1) In general Chapter 53 of such title is amended by adding at the end the following new section: 5320. Correction of erroneous information submitted to consumer reporting agencies (a) Correcting errors by the Department In any case in which the Secretary finds that the Department has submitted erroneous information to a consumer reporting agency about the indebtedness of any person who has been determined by the Secretary to be indebted to the United States by virtue of the participation of that person in a benefits program administered by the Secretary, the Secretary shall— (1) instruct the consumer reporting agency to remove such erroneous information from the consumer report of such person or take such other action as may be required to ensure that such erroneous information is not included in the report of such person; and (2) transmit to the consumer reporting agency such information as the consumer reporting agency may require to take such appropriate actions. (b) Correcting errors by debt collectors In any case in which the Secretary finds that a debt collector acting on behalf of the Department has submitted erroneous information to a consumer reporting agency about the indebtedness of any person who has been determined by the Secretary to be indebted to the United States by virtue of the participation of that person in a benefits program administered by the Secretary, the Secretary shall instruct the debt collector to request the consumer reporting agency remove such erroneous information from the consumer report of such person or take such other action as may be required to ensure such erroneous information is not included in the report of such person. (c) Notice Not later than 60 days after the date on which the Secretary issues an instruction under subsection (a)(1) or (b) with respect to a person, the Secretary shall notify the person that the Secretary issued such instruction. (d) Definitions In this section: (1) The terms consumer report consumer reporting agency 15 U.S.C. 1681a (2) The term debt collector 15 U.S.C. 1692a . (2) Clerical amendment The table of sections at the beginning of chapter 53 of such title is amended by adding at the end the following new item: 5320. Correction of erroneous information submitted to consumer reporting agencies. . (e) Effective date The amendments made by this section shall take effect on the date of the enactment of this Act and shall apply with respect to deductions made under section 5314 of such title, administrative costs under section 5315 of such title, and suits filed under section 5316 of such title on or after such date. 3. Improved processing of benefits by Department of Veterans Affairs The Secretary of Veterans Affairs shall improve the information technology of the Department of Veterans Affairs (including the eBenefits system or successor system) as may be necessary to achieve the following: (1) Notification of debts incurred The Secretary shall provide a notification to a person who— (A) is entitled to a payment from the Secretary under a benefits program administered by the Secretary; (B) incurs a debt to the United States under that benefits program; and (C) elects to receive such notifications. (2) Review of information regarding dependents A person entitled to a payment from the Secretary under a benefits program administered by the Secretary may review information relating to dependents of that person. (3) Tracking metrics The Secretary shall be able to track— (A) the number and amount of payments made by the Secretary to a person entitled to a payment from the Secretary under a benefits program administered by the Secretary who incurs a debt to the United States under such program; (B) the average debt to the United States incurred by a person described in subparagraph (A); (C) how frequently the Secretary approves and denies applications for relief under section 5302(a) of title 38, United States Code; and (D) such other metrics the Secretary determines appropriate. 4. Audit of erroneous payments by Veterans Benefits Administration; plan of correction (a) Audit Not later than 180 days after the date of the enactment of this Act, the Secretary of Veterans Affairs shall complete an audit to determine the following: (1) The frequency by which the Department of Veterans Affairs makes an error that results in a payment to a person by virtue of such person's participation in a benefits program administered by the Secretary that such person is not entitled to or in an amount that exceeds the amount to which the person is entitled. (2) Whether and to what degree vacant positions in the Veterans Benefits Administration affect such frequency. (b) Plan Not later than 30 days after the completion of the audit under subsection (a), the Secretary of Veterans Affairs shall submit to the Committees on Veterans' Affairs of the Senate and House of Representatives a plan and description of resources necessary to align information technology systems to ensure that errors described in subsection (a)(1) are not the result of communication or absence of communication between information technology systems.

Summary: Veteran Debt Fairness Act of 2018 This bill limits the ability of the Department of Veterans Affair to recover overpayments of benefits from veterans.