Government forcing Navy retirees to pay back up to $70K after system glitch

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The federal government is looking to get back roughly $7 million from over a thousand Navy retirees after a system glitch resulted in them being overpaid for close to four years.

A system error that miscalculated service time created about a $6.8 billion loss by paying 1,283 Navy retirees larger monthly payments than they were owed from August 2019 until February 2023.

The government is trying to recoup its losses from retirees, who owe amounts ranging from $35 to $70,000, according to a report from NBC News.

The Defense Finance and Accounting Service, which is responsible for paying both active Defense Department personnel and retirees, said Monday it would send out notices to the affected retirees this week to inform them of the debt and guidance on how to repay or apply for a waiver.

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Members of the Navy Ceremonial Guard stand for the national anthem during a ceremony for National POW/MIA Recognition Day. (Kevin Dietsch)

Some of the affected retirees have already seen their monthly retirement incomes reduced as a result of the error, while others are expecting to have to pay large bills.

"It’s a double whammy," Devin Morrison, a 52-year-old former executive officer of the Naval Medical Center in San Diego who retired in 2021, told NBC News.

Morrison was one of those who already saw his monthly pay reduced, losing about $762 from March to April. While he has yet to see his notice of debt owed, he told the outlet he expects the bill to be around $30,000.

"Through no fault of my own, I’m going to be saddled with this pretty significant bill," he said. "That’s a hard pill to swallow."

The Pentagon, the headquarters of the United States Department of Defense  (Staff/AFP via Getty Images)

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The error happened as a result of the Navy sending incorrect data to DFAS that counted inactive reserve service time as active-duty service, resulting in inflated time in service counts that triggered the larger retirement checks.

"From there, the Navy thoroughly investigated the issue, determined the affected population and decided on corrective actions," a Navy spokesperson told NBC News. "This process took time and was important to ensure we did not negatively affect someone’s pay without understanding the scope of the issue."

While some retirees will face massive bills, DFAS says the average debt faced by those affected would be about $2,700. 

In this handout released by the U.S. Navy, the aircraft carrier USS Theodore Roosevelt leaves its San Diego home port. (U.S. Navy via Getty Images)

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Retirees will be forced to take action on their debt once they receive the official notification. If a retiree fails to take action within a certain time frame, pay will be automatically deducted from their monthly benefits up to a maximum of 15%. The notices will also include information on when interest charges would apply to the debt.

The Navy did not respond to a Fox News request for comment by time of publication.