Defense Secretary Ash Carter on Wednesday ordered a suspension in efforts to seek repayment of thousands of enlistment bonuses and tuition assistance mistakenly paid to members of the California National Guard.
"While some soldiers knew or should have known they were ineligible for benefits they were claiming, many others did not," Carter, who is in Europe meeting with U.S. allies, said in a statement.
"This process has dragged on too long, for too many service members," he said. "Too many cases have languished without action. That's unfair to service members and to taxpayers."
Last week the Los Angeles Times reported that about 10,000 California National Guard troops had been ordered to repay enlistment bonuses - some of more than $15,000 - that were improperly given to them. The newspaper said audits revealed the California Guard had overpaid troops in order to entice them to join and meet enlistment targets more than a decade ago.
Senior Defense Department officials have been told to assess the bonus situation and establish a "streamlined, centralized process" by the start of next year, Carter said in the statement.
"The objective will be to complete the decision-making process on all cases as soon as possible - and no later than July 1," he said.
The issue has caused outrage in Congress. Members from both parties have called on the Pentagon to drop efforts to reclaim the bonuses.
House Majority Leader Kevin McCarthy said on Fox News on Tuesday that if the Pentagon did not drop the effort to reclaim re-enlistment bonuses, lawmakers would move legislation on the issue.
(Reporting by Phil Stewart; Additional reporting by Idrees Ali; Editing by Bill Trott)