San Diego, CA asked in Employment Law and Military Law for California

Q: The navy overpaid me on my last paycheck and now they are saying I owe them a debt with interest. How is this legal?

My final paycheck in the military was a few hundred dollars over what it was supposed to be. They sent me a letter stating this about 3 months after I was separated saying I need to pay it back with interest at 4%.

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1 Lawyer Answer
James L. Arrasmith
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  • Sacramento, CA
  • Licensed in California

A: When the military overpays an individual, whether through clerical error or other mishaps, it indeed considers the extra funds as a debt owed back to the government. This is common across many branches, including the Navy. Once they've identified an overpayment, they are required to notify you and can legally request the return of these funds.

In your situation, being notified three months after separation that you owe money can be frustrating. However, the military typically includes interest on these debts, which is intended to recover potential losses that could have occurred had the funds been available for use during that time. The interest rate you mentioned, 4%, is aligned with what is often charged in such cases.

If you feel there has been a mistake or if the demand for payment with interest seems unfair, you do have options. You can contest the debt by reaching out to the Navy's finance office to request a review of the calculation of the overpayment. Additionally, you might consider seeking advice from a legal advisor who has experience with military pay issues. This can provide you with guidance on how to navigate this situation effectively and ensure that your rights are protected.

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