diff --git a/pay-api/src/pay_api/services/refund.py b/pay-api/src/pay_api/services/refund.py
index 0dd6fa5ef..fa003f202 100644
--- a/pay-api/src/pay_api/services/refund.py
+++ b/pay-api/src/pay_api/services/refund.py
@@ -301,6 +301,14 @@ def _validate_partial_refund_lines(refund_revenue: List[RefundPartialLine], invo
                 raise BusinessException(Error.REFUND_PAYMENT_LINE_ITEM_INVALID)
             RefundService._validate_refund_amount(refund_line, payment_line)
 
+    @classmethod
+    def _validate_allow_partial_refund(cls, refund_revenue, invoice: InvoiceModel):
+        if refund_revenue:
+            if not flags.is_on("enable-partial-refunds", default=False):
+                raise BusinessException(Error.INVALID_REQUEST)
+            if invoice.corp_type.has_partner_disbursements:
+                raise BusinessException(Error.PARTIAL_REFUND_DISBURSEMENTS_UNSUPPORTED)
+
     @classmethod
     @user_context
     def create_refund(cls, invoice_id: int, request: Dict[str, str], **kwargs) -> Dict[str, str]:
@@ -331,8 +339,7 @@ def create_refund(cls, invoice_id: int, request: Dict[str, str], **kwargs) -> Di
         )
         payment_account = PaymentAccount.find_by_id(invoice.payment_account_id)
         refund_revenue = (request or {}).get("refundRevenue", None)
-        if refund_revenue and not flags.is_on("enable-partial-refunds", default=False):
-            raise BusinessException(Error.INVALID_REQUEST)
+        cls._validate_allow_partial_refund(refund_revenue, invoice)
 
         refund_partial_lines = cls._get_partial_refund_lines(refund_revenue)
         cls._validate_partial_refund_lines(refund_partial_lines, invoice)
diff --git a/pay-api/src/pay_api/utils/errors.py b/pay-api/src/pay_api/utils/errors.py
index 87687ec98..c0f53d5ee 100644
--- a/pay-api/src/pay_api/utils/errors.py
+++ b/pay-api/src/pay_api/utils/errors.py
@@ -151,6 +151,7 @@ class Error(Enum):
     )
     REFUND_PAYMENT_LINE_ITEM_INVALID = "REFUND_PAYMENT_LINE_ITEM_INVALID", HTTPStatus.BAD_REQUEST
     REFUND_AMOUNT_INVALID = "REFUND_AMOUNT_INVALID", HTTPStatus.BAD_REQUEST
+    PARTIAL_REFUND_DISBURSEMENTS_UNSUPPORTED = "PARTIAL_REFUND_DISBURSEMENTS_UNSUPPORTED", HTTPStatus.BAD_REQUEST
 
     ROUTING_SLIP_REFUND = "ROUTING_SLIP_REFUND", HTTPStatus.BAD_REQUEST
     NO_FEE_REFUND = "NO_FEE_REFUND", HTTPStatus.BAD_REQUEST
diff --git a/pay-api/src/pay_api/version.py b/pay-api/src/pay_api/version.py
index 751976517..9c94c2b7d 100644
--- a/pay-api/src/pay_api/version.py
+++ b/pay-api/src/pay_api/version.py
@@ -22,4 +22,4 @@
 Development release segment: .devN
 """
 
-__version__ = "1.22.7"  # pylint: disable=invalid-name
+__version__ = "1.22.8"  # pylint: disable=invalid-name
diff --git a/pay-api/tests/unit/api/test_partial_refund.py b/pay-api/tests/unit/api/test_partial_refund.py
index 8c8c77e33..34b30d710 100644
--- a/pay-api/tests/unit/api/test_partial_refund.py
+++ b/pay-api/tests/unit/api/test_partial_refund.py
@@ -187,6 +187,45 @@ def test_create_refund_fails(session, client, jwt, app, monkeypatch):
         assert len(refunds_partial) == 0
 
 
+def test_refund_validation_for_disbursements(session, client, jwt, app, monkeypatch):
+    """Assert that the partial refund amount validation returns 400 when the invoice corp_type has disbursements."""
+    token = jwt.create_jwt(get_claims(app_request=app), token_header)
+    headers = {"Authorization": f"Bearer {token}", "content-type": "application/json"}
+
+    rv = client.post(
+        "/api/v1/payment-requests",
+        data=json.dumps(get_payment_request()),
+        headers=headers,
+    )
+    inv_id = rv.json.get("id")
+    invoice: InvoiceModel = InvoiceModel.find_by_id(inv_id)
+    invoice.invoice_status_code = InvoiceStatus.PAID.value
+    invoice.corp_type_code = 'VS'
+    invoice.save()
+
+    token = jwt.create_jwt(get_claims(app_request=app, role=Role.SYSTEM.value), token_header)
+    headers = {"Authorization": f"Bearer {token}", "content-type": "application/json"}
+
+    payment_line_items: List[PaymentLineItemModel] = invoice.payment_line_items
+    refund_revenue = [
+        {
+            "paymentLineItemId": payment_line_items[0].id,
+            "refundAmount": float(payment_line_items[0].filing_fees),
+            "refundType": RefundsPartialType.BASE_FEES.value,
+        }
+    ]
+
+    with patch("pay_api.services.payment_service.flags.is_on", return_value=True):
+        rv = client.post(
+            f"/api/v1/payment-requests/{inv_id}/refunds",
+            data=json.dumps({"reason": "Test", "refundRevenue": refund_revenue}),
+            headers=headers,
+        )
+        assert rv.status_code == 400
+        assert rv.json.get("type") == Error.PARTIAL_REFUND_DISBURSEMENTS_UNSUPPORTED.name
+        assert RefundModel.find_by_invoice_id(inv_id) is None
+
+
 @pytest.mark.parametrize(
     "fee_type",
     [