Agencies Now Must Pay Interest for Service Deposit Mistakes

Jan 7, 2019

servicePresident Trump signed a new bill into law authorizing federal agencies that make a mistake in calculating military service deposits/pensions to pay the accrued interest on behalf of veteran federal employees.

Congressman Buddy Carter (R-GA) introduced the Correcting Miscalculation in Veterans’ Pensions Act (H.R. 4431).

Veterans working at a federal agency are required to pay a military service deposit to receive their military service pension while working in that agency. Because of misclassification in the type of the employees status, the federal agency will charge different interest rates on those military service deposits, leading to miscalculations in most cases.

When the agency becomes aware of this, they contact the veteran employee and notify them that they need to pay back the balance with accrued interest. Sometimes, that interest can be tens of thousands of dollars.

Congressman Carter said there was no remedy of that payment for veterans and there’s no authorization for the federal agency to wipe away the incorrectly accrued interest, but this new law will change that.

“I introduced this legislation because I have heard from veterans faced with this unacceptable problem,” Carter said. “Our current system requires these veterans to repay sometimes tens of thousands of dollars of 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 this miscalculation.”

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