Veterans' Disability Benefits: VA Can Better Ensure Unemployability Decisions Are Well Supported
Highlights
What GAO Found
The number of older veterans receiving Individual Unemployability benefits, a disability supplement, has been increasing, as has the total amount of benefit payments. In fiscal year 2013, 330,000 veterans received this benefit, which the Department of Veterans Affairs (VA) provides to disabled veterans of any age who are unemployable because of service-connected disabilities. From fiscal years 2009 through 2013, the most recent data available, there was a 22 percent increase in the number of veterans receiving these benefits, and a 73 percent increase in the subgroup of beneficiaries aged 65 and older. Moreover, among new beneficiaries in 2013, about 2,800 veterans were 75 and older, of which more than 400 were 90 and older. These trends have given rise to questions about what constitutes “unemployability.” Only a small proportion, 4 to 6 percent, of beneficiaries had benefits discontinued during these years—about 70 percent of which were due to the death of the beneficiary. During the 5-year study period, disability payments to those receiving Individual Unemployability—the base payment plus the supplement—increased by 30 percent (to $11 billion in fiscal year 2013). For that year, GAO estimated $5.2 billion for the supplement alone.
VA's procedures do not ensure that Individual Unemployability benefit decisions are well-supported. For example, contrary to federal internal control standards, the guidance on determining unemployability is incomplete for ensuring consistency. In discussion groups with GAO, VA's rating specialists said they disagreed on the factors they need to consider when determining unemployability, weighed the same factors differently, and had difficulty separating allowable from non-allowable factors. Some specialists said these challenges create the risk that two raters could examine the same evidence and reach an opposite decision to approve or deny a claim. Also, VA's quality assurance approach primarily checks the procedural accuracy of decisions and does not ensure a comprehensive assessment of whether decisions are complete, accurate, and consistent. In addition, VA does not independently verify self-reported earnings information supplied by applicants and beneficiaries, although the agency has access to Internal Revenue Service data for this purpose. VA officials said they are waiting for a data system, expected in 2016, to conduct verifications. However, by postponing verification of self-reported earnings, the benefit is at risk of being awarded to ineligible veterans.
Based on a review of literature, GAO identified various options for revising eligibility requirements and the structure of the Individual Unemployability benefit. Six options focus on eligibility requirements, such as considering additional criteria when determining unemployability and applying an age cap of 65. The seventh option would change the benefit structure by reducing payments as beneficiaries earn income in excess of the poverty threshold. Experts and representatives of veterans service organizations (VSO) that GAO interviewed identified the potential strengths of each option (such as improved decision accuracy) and potential challenges (such as increased need for fiscal and administrative resources). In addition, VA's advisory committee recommended in 2012 that the agency study age and require vocational assessments when weighing veterans' unemployability; VA agreed to study both, but has not yet taken action.
Why GAO Did This Study
VA generally provides Individual Unemployability benefits to disabled veterans of any age who are unable to maintain employment with earnings above the federal poverty guidelines due to service-connected disabilities. Because the population of veterans who receive these supplemental benefits has been growing, GAO was asked to review VA's management of these benefits.
This report (1) examines age-related trends in the population of Individual Unemployability beneficiaries and benefit payments; (2) assesses the procedures used for benefit decision-making; and (3) describes suggested options for revising the benefit. GAO analyzed fiscal year 2009 through 2013 data provided by VA—the most recent years available; reviewed applicable federal laws, regulations, and program policies; visited six regional offices selected for their differing accuracy rates, workload, and geography; reviewed a non-generalizable sample of claims; and spoke with rating specialists, experts, and VSO representatives.
Recommendations
GAO recommends that VA issue updated guidance to determine eligibility; identify a comprehensive quality assurance approach to assess benefit decisions; verify veterans' self-reported income; and move forward on studies suggested by its advisory committee. VA concurred with all of GAO's recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Veterans Affairs | To help ensure that Total Disability Individual Unemployability (TDIU) decisions are well supported and TDIU benefits are provided only to veterans whose service-connected disabilities prevent them from obtaining or retaining substantially gainful employment, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to update the TDIU guidance to clarify how rating specialists should determine unemployability when making TDIU benefit decisions. This updated guidance could clarify whether factors such as enrollment in school, education level, and prior work history should be used and if so, how to consider them; and whether or not to assign more weight to certain factors than others. Updating the guidance would also give VBA the opportunity to re-examine the applicability, if at all, of other factors it has identified as extraneous. |
In September, 2018, VA published updated guidance for how rating specialists should determine unemployability when making TDIU benefit decisions. VA revised the presentation of information to more clearly instruct rating specialists to wholly consider all factors and clarified the guidance about how to assign weights for different factors of consideration and how to separate extraneous factors from allowable ones. Moving forward, this updated guidance should help rating specialists to apply eligibility criteria more clearly and consistently.
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| Department of Veterans Affairs |
Priority Rec.
To help ensure that TDIU decisions are well supported and TDIU benefits are provided only to veterans whose service-connected disabilities prevent them from obtaining or retaining substantially gainful employment, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to verify the self-reported income provided by veterans (a) applying for TDIU benefits and (b) undergoing the annual eligibility review process by comparing such information against IRS earnings data, which VBA currently has access to for this purpose. VA could also explore options to obtain more timely earnings data from other sources to ensure that claimants are working within allowable eligibility limits |
According to VA, an upfront verification process yields no information upon which denial of TDIU entitlement can be made immediately because prior earnings are not a basis for denying TDIU benefits. Rather, in September 2018, VA deployed a new annual post award audit process for the TDIU certification process. Under the new process, VA completed a data match with SSA of the Internal Revenue Service wages earned and found that of the 329,861 Veterans in receipt of TDIU benefits as of September 2018, approximately 3,251 had income above the poverty threshold in calendar year 2017. Pursuant to 38 CFR 3.103, VA sent due process letters to the Veterans above the poverty threshold for calendar year 2017 and will review new evidence received and make final determinations regarding the continuation of TDIU benefits for these veterans. VA also finalized guidance for a new annual post-award audit and states it will continue to ensure VA computer systems, employee training, and quality measurements are aligned.
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| Department of Veterans Affairs | To help ensure that TDIU decisions are well supported and TDIU benefits are provided only to veterans whose service-connected disabilities prevent them from obtaining or retaining substantially gainful employment, in light of VA's agreement with the recommendations made by the Advisory Committee on Disability Compensation, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to develop a plan to study the complex TDIU policy questions on (1) whether age should be considered when deciding if veterans are unemployable and (2) whether it is possible to disallow TDIU benefits for veterans whose vocational assessment indicated they would be employable after rehabilitation. |
In October 2017, VA completed a study to determine if age should be a factor in deciding Total Disability Individual Unemployability (TDIU) and whether to use positive vocational assessments to disallow TDIU claims, as we recommended. VA also briefed senior VA leadership on the study. The study first compared two potential age-specific TDIU eligibility policies: (1) placing a cap on the age at which veterans can begin receiving benefits; and (2) placing restrictions on the age for both initial claimants and existing beneficiaries. VA concluded that both alternative eligibility policies would reduce the number of veterans receiving TDIU benefits. With regard to reviewing whether VA can use positive vocational assessments to disallow TDIU benefits for veterans whose assessments indicated they would be employable after rehabilitation, VA determined that the small number of TDIU recipients that had received vocational assessments did not allow them to study the effect of disallowing benefits on such a population. Upon reviewing the results of both parts of the study, VA decided not to make policy changes for the TDIU benefit. VA has addressed this recommendation by completing the study. GAO recognizes that an age cap would reduce the number of veterans receiving benefits, however, it is also important that TDIU eligibility policies are consistent with the program's purpose and ensure that individual veterans are compensated appropriately based on their particular circumstances.
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| Department of Veterans Affairs | To help ensure that TDIU decisions are well supported and TDIU benefits are provided only to veterans whose service-connected disabilities prevent them from obtaining or retaining substantially gainful employment, the Secretary of Veterans Affairs should direct the Under Secretary for Benefits to identify other quality assurance approaches that will allow the agency to conduct a comprehensive assessment of TDIU benefit claim decisions. The approach should allow VBA to assess if decisions are complete, accurate, and consistent, and ascertain the root causes of any significant variation so that the Veterans Benefits Administration (VBA) can take corrective actions as appropriate. This effort could be informed by the approaches VBA uses to assess non-TDIU claims. |
The Department of Veterans Affairs (VA) conducted in-process reviews to determine if Total Disability Individual Unemployability (TDIU) claims were warranted and consistency studies on the determined effective dates of TDIU benefit. For the in-process reviews, VA added two new questions that will allow the agency to identify which claim decisions have errors associated with TDIU benefits. In addition, a December 2015 consistency study focused on the effective date determinations and identified and remediated a substantial knowledge gap in determining such dates. VA will continue to use in-process reviews and consistency studies to assess TDIU decisions and will take corrective action when warranted. Nevertheless, GAO continues to believe that the integrity of the TDIU benefit decision-making process remains at risk and that VA can position itself to better manage the TDIU benefit. As VA addresses the other report recommendations concerning the eligibility criteria, guidance, and management of this benefit, comprehensive quality assurance approaches remain vital. It is imperative that VA conduct assessments that consider the completeness, accuracy and consistency of TDIU benefit decisions. GAO's report noted that rating specialists may be using and interpreting evidence differently to determine a veteran's unemployability, and thus eligibility, and that little is known about the consistency of TDIU decisions across individuals in the same regional office as well as across regional offices. Such concerns remain and GAO encourages VA to continue to explore other options that will allow the agency to more fully obtain adequate assurance of the overall soundness of the TDIU benefit decision-making process.
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