Do I have a legal claim to a lump sum payment of over $40k I received from my former employer for a canceled overseas deployment? Can I keep the money if no one reaches out to collect it? How can I ensure I am not in legal trouble? #DepartmentofDefense #overseasdeployment #COVIDcancellation #legalclaim #lumpsumpayment
One suggestion: contact your Member of Congress/Senator, this is the type of things constituent services folks live for, they can help you speed up the process.
Check the fine print on the contract, if you still have it.
Some DoD contracts still pay out if the cancellation is too short notice.
Source, my employer received a nice lump sum for work I (and other colleagues) never did, as that part of the project was cancelled with about 3 weeks notice.
Unfortunately I never saw any of it!
I have experience with the military side of DOD and from my experience when they overpay you they will eventually figure it out and want it back. You won’t get in any trouble for earning interest on it, but once they ask for it back they will want it all at once. Just let it sit somewhere safe making some extra money.
Find yourself a high yield savings account like Ally to park it in until the bean counters determine if they want it back or not. You would think that the timing of the deposit vs the timing for the reason for payment being about four years apart means that it’s your money. Until you are 100% I’d put it to work at 4-5% interest.
I would make sure that it was not owed to you before I tried to give it back. I got paid for a couple job assignments that were canceled during Covid. I was surprised because I did not know it was coming. After I got it, I made some calls and found out that they ended up paying us anyway.
Were these actual wages, or are you a contractor?
If they were wages, did you contact the DFAS? They have a phone number you can call here: https://www.dfas.mil/civilianemployees/debt/overpaymentofwages/
If you were a contractor, the government most likely has six years to try to claw it back under 41 U.S.C. §7103(a)(4)(A). If they were wages, there does not appear to be a statute of limitations on clawbacks.
You can contact an employment lawyer (wages) or civil litigator (contractor) to verify these. If you can’t find anyone in your state with experience dealing with the federal government, try calling around in Washington, DC. Either way, make sure you keep a written record of all of your attempts in several safe places.
Send an e-mail to dfas.indianapolis-in.zpr.mbx.ffmiarequirementsmailbox@mail.mil
and
dfas.rome.jft.mbx.civrelo-advances@mail.mil
and also file out the same questions here…
https://corpweb1.dfas.mil/askDFAS/custCategories.action?tsm=1674483729687¤tUser.currentRequestNonce=349599be-0898-4c39-9efb-eff7ddf80a98&pgModId=5100
Be short and to the point. You want verification the money you received is correct and not a over payment. It can take 6-12 months for them to catch it, sometimes longer. So keep the money in a interest bearing account and wait to hear back.
DFAS does not make it easy to contact them. So I have found you have to call and then e-mail every address they have if you want to hear from them.
Do you have an LES, does it say what it is for? Do you still have access to Mypay?
Make sure DFAS has your latest contact information on file if you have moved since the original obligation was created. You want to make sure that you catch the debt letter before they send it to collections. I would suggest doing this ASAP.
Will you be owing taxes on it in case they take more than a year to get back?
While you’re holding onto this money, you should move it somewhere like a high yield savings account so that you’re earning off of it. At least then, if you have to give it back, you’ll be getting paid for this inconvenience.
They will ask for it back EVENTUALLY. Better just hold on to it.
As someone who works in Military finance field. You need to make an effort to return the funds and keep that documentation. You have 10 years at the time the debt incurred, per DoD FMR 7000.14 Vol 16 Ch 2 2.2.2.2.1. But more than likely it will be caught, DFAS will send you a letter, you will need to contact them right away. You have 30 days or it goes to a collection agency. You can either pay it all off at once or you can set up a payment plan. If you if you contact them right away, it is like an interest free loan. They don’t charge fees but if you wait you will be hammered with fees. You can call DFAS now and tell them and update your address so they don’t mistakenly sent the debt letter somewhere else.
There’s a lot of good advice, I would also offer you could try to reach out to an Inspector General’s office to try to get the right contact.
Look up statute of limitations on found money or property. Put that money in escrow in case you become legally required to pay it back until that time has past. Keep very good records of your good faith efforts to return the money.
Congressional staffer here and we’ve unfortunately had some cases where the DOD or VA overpaid and then asked for the money back and the constituent didn’t have the money.
You could try calling your congressman or Senators’ offices. Call the state or district based office, not DC, and ask for the caseworker who does VA and DOD casework. They’re usually the same person. That may speed it up a little or get you to a point you can give it back and not worry about it anymore. Say it takes years and something happens to you. The DOD will still come for that money and it could put your family in a tough spot if they didn’t know it was an overpayment.
Not your lawyer
Brilliant idea to segregate the funds. You can absolutely keep the interest. They won’t even ask about where it was kept or if in fact this is the same $44k.
Please consider the impact on your taxes. If you are taxed on this money more than what was withheld by the DOD, then you may have to find a way to reclaim that money back.
Finally, consider filing a whistleblower claim with the DOD. Then there is a record created that you tried to return the money, you contacted people whose job it is to prevent fraud on or waste of govt resources.
Put the money into a high-yield savings account and let it sit until they ask for it back or the time-limit other commenters mention passes. You get to keep the interest, and it will compound.
Write your congressman. They have staff that look into. After that I would let sit in account and spend the interest.
Put it in a hysa at least then you can make money off it in case they do come after it
Put it in something that gets interest.
Eventually, they will come asking about it, but any interest is yours.
P.S. if you put it in a CD or something, you may have to play shadow games with them until the term ends, and they will not be happy.
If this were me I’d throw it into my Ally HYSA. One reason I like ally is that you can create “buckets” within the savings account to segregate the money a bit from your other savings within the same account.
Did it appear on your W-2/1099???
Depends on how your contract was written. Could be you were due payment regardless of cancellation.
Good idea to keep it separate. As others have said I would review your contract, there may be a clause where you still get paid out depending on the timing of the cancellation and prep work you did.
I personally would stick it in something like a Vanguard money market or open a Robinhood gold account. Both are currently offering 5+% interest on it, and a robinhood gold account costs like 5 dollars a month and with that interest you will get about 180 bucks a month for free.
This is much better than a crappy savings account at your local mega bank offering <1% interest rates.
*edit* Other people are saying things like contact your congressperson, etc… I wouldn’t bother. You’ve made a couple attempts to reach out, make sure you have that documented, keep the money parked in a safe high yield account (not bonds, not stocks, just cash in a money market or HYSA and eventually they will come for it. At that point you may have made $$$$ on free interest).
I’d put it in a high-yeild savings account so you can make a lil money off it, and when they do eventually want it back, you can take it out
You may need to declare it as income when you do your taxes next April.
It may not be this year, or next, or this decade, but they will come for it.
You will want to reach out to get a reconciliation on the payment. If they owed you the money from 4 years ago, the difference may be the interest they owe for late payment. The feds normally have 30 days to pay an invoice once it’s submitted and approved. If you submitted an invoice and it didn’t get paid until now, there would be interest due. In the interim, keep the money separate and then you can pay it back if required.
Five years after I separated I got a notification that I had been overpaid by ~$50 and that I needed to pay them back. I did, and no it wasn’t a scam. I was still like, really, nearly a decade of service and you couldn’t just call it even?
My husband was d.o.d. and this happened to him. Wasn’t during covid, though. He worked off station and was paid twice for his room/board and per diem. He tried several times to return the funds. We stuck it in our savings and sat on it for 2 years. He tried again but was told basically that once the books are closed for that fiscal year, that was it. We ended up just using the funds. It was under $10k. It has been over 20 years and they never requested it back.
Put it in a high yield savings account and make interest on it. DONT SPEND IT. They will ask for it back, and you want to have it available when they do.