Army veteran says VA benefits error cut off disability pay, created $43,000 ‘overpayment’ debt

For veterans in Tucson and across Arizona, Nicholas Ocampo’s experience shows how a mistaken status entry in the Department of Veterans Affairs system can affect several parts of a person’s life at once. Ocampo, a retired Army staff sergeant living in Goodyear, says the VA twice treated him as though he had returned to active duty after he retired from the Army Reserve on Oct. 1, 2025. The error stopped his disability compensation, blocked his use of the Post-9/11 GI Bill and eventually produced a $43,000 overpayment notice.

Ocampo served as an Army mechanic and later worked as a reserve drill sergeant. He deployed to both Iraq and Afghanistan and is rated as 100% disabled. After leaving the Army Reserve, he planned to use his GI Bill benefits at a commercial dive school in Goodyear. About 20 days after his retirement, school officials told him the VA system showed he was on active duty and therefore did not qualify for the education benefits he expected to use.

The consequences extended beyond the school enrollment. Ocampo said the VA immediately halted his disability payments along with his education benefits, leaving him without more than $4,100 per month. He said he had not reenlisted, returned to active duty or received military pay. In his account, the problem was not limited to a delayed payment. It affected his ability to attend school, meet household expenses and rely on benefits he had already been awarded.

Ocampo spent months trying to correct the records. He contacted VA hotlines, his former Army unit and the Defense Enrollment Eligibility Reporting System, commonly called DEERS. He said DEERS and Army records correctly reflected his retirement, while the VA continued to identify him as being on active duty. VA representatives repeatedly directed him to send retirement documents, including his DD-214 and pay records, and then wait for the information to be processed.

Eventually, the VA restored his benefits, leading Ocampo to believe the problem had been resolved. But a VA letter dated July 22, 2026, said his compensation had again been stopped because of a supposed return to active duty. The letter used the same active-duty date associated with the earlier problem, Oct. 28, 2025. Ocampo said he explained that the same issue had already taken months to correct, but was told there was nothing the representative could do beyond asking him to submit the documents again.

The next discovery was more alarming. When Ocampo checked his VA account, he found a $43,000 overpayment debt connected to the same incorrect active-duty designation. Because the VA had treated him as ineligible for disability compensation since October 2025, the system apparently classified the benefits he received as money he was not entitled to keep. Ocampo said he was not serving in the military during that period and had no active-duty income replacing the lost compensation.

While the payments were stopped, Ocampo said he relied on credit cards to cover expenses while attending school. He described damage to his credit score and difficulty keeping up with mortgage payments. He also said the repeated uncertainty forced him to monitor his VA application constantly, worrying that a payment could disappear again without warning. For an Arizona veteran depending on regular compensation, the problem became both a financial crisis and a continuing source of anxiety.

Ocampo said VA customer service representatives acknowledged that the agency could see a similar issue had occurred previously, but still told him to resubmit his records. One representative eventually advised him to contact his member of Congress. Ocampo reached out to congressional offices in Arizona and Washington, D.C., before contacting ABC15 reporter Craig McKee, an Air Force veteran. He said he hoped someone with military experience would understand the difference between his actual retirement status and the VA’s incorrect record.

After McKee contacted the VA, the agency acknowledged that incorrect data had caused the latest termination. VA Press Secretary Quinn Slaven said the agency had restored Ocampo’s benefits and regretted the mistake. The VA also said the $43,000 debt had been cleared and removed from Ocampo’s file. The correction provided immediate relief, but Ocampo said the larger problem remains: an automated status error was able to stop essential benefits and generate a massive debt without a person resolving the discrepancy before it affected him. He wants human review built into such decisions and says he still fears that his next payment could again be reduced to nothing.