Vet Groups Warn Hill Not to Act on Aging of 'IU' Claimants


By Tom Philpott

Representatives of The American Legion and Disabled American Veterans have warned lawmakers to reject calls to impose an age ceiling or other new cost control on VA compensation payments to veterans whose service-connected disabilities leave them unemployable.

An age ceiling is perhaps the most tempting cost-control option discussed in a new Government Accountability Office report that examines weaknesses and inefficiencies in the way the Department of Veterans Affairs administers Individual Unemployability (IU) benefits for 318,000 recipients.

Bradley Flohr, a senior advisor on VA compensation for the Veterans Benefits Administration, told the House Veterans Affairs Committee Wednesday that VA is adopting more measured GAO recommendations to improve its process of monitoring IU pay and deciding future IU recipients.

These steps include fielding improved guidance for VA claim reviewers on determining IU eligibility, and better quality assurance screens so that IU claim decisions are more consistent across VA regions.

VA also promises to launch by January long-delayed software that will allow electronic verification of income reported by IU recipients, by matching it with earnings on file at IRS and the Social Security Administration. VA also promises to study whether VA should use age, or to employ vocational assessments, to tighten eligibility for new IU claimants.

More than 316,000 veterans today see their monthly VA disability compensation enhanced by IU eligibility. These are veterans with service-connected disabilities rated below 100 percent by the VA rating schedule. But VA verifies that the same disabilities prevent these veterans from working, at least in jobs that pay wages above federal poverty guidelines.

Given IU status, they draw VA compensation at the 100 percent level despite having lower-rated disabilities. To qualify they must have at least one service-connected disability rated at least 60 percent, or two or more disabilities with a combined rating of 70 percent with at least one disability rated 40 percent. They also must be “unable to maintain substantially gainful employment” as a result of their disabilities.

The gain in VA compensation from IU status is significant. A 60-percent disabled veteran with no dependents draws monthly compensation under IU of $2907 instead of $1059, a difference of more than $22,000 a year. A 70-percent disabled vet with a spouse and a child and IU status will receive $3188 a month instead of $1531 for their rated disability alone.

The GAO reports concludes that in recent years lax VA procedures have resulted in IU benefit decisions that are not “well supported.” The report notes that IU payments increased 30 percent from 2009 to 2013. The compensation gain for veterans from IU status totaled $5.2 billion in 2013.

Rep. Jeff Miller (R-Fla.) chaired the hearing only long enough to make an opening statement, but he turned a spotlight on concerns raised in the GAO report that, he said, “question of whether VA should consider age as a factor when deciding that a veteran is eligible to receive IU benefits.”

Miller noted that 180,000 veterans, more than half of those receiving IU benefits, are at least 65 years old. And at ages when many Americans have left the workforce, many vets are filing first claims for IU compensation due to disabilities that prevent them from holding down decent jobs.

Even “more surprising,” Miller said, “408 veterans age 90 and older began receiving IU benefits for the first time in fiscal year 2013.”

The rising number of IU claims and age of claimants are not the result of “a failure or fault in the administration of this benefit,” said Paul R. Varela, assistant national legislative director of Disabled American Veterans.

Factors truly responsible, Varela said, include increases in the number of VA claims being processed, due in part to an intense outreach to veterans with disabilities; a 2009 easing of rules on rating post-traumatic stress disorders, and a 2010 expansion of the list of diseases presumed caused by Agent Orange exposure during the Vietnam War.

Ian de Planque, legislative director for The American Legion, joined Varela in cautioning the committee against reducing or eliminating IU benefits based on age. First, he said, current law is clear that a veteran’s age shouldn’t be considered in eligibility for any VA compensation.

Second, the rising age of veterans who find they want to work and can’t is “reflective of the modern workforce” with the number of Americans over age 65 who are still working having doubled over the past 30 years.

Third, de Planque said, most U.S. workers can build a retirement nest egg over the course of their working lives to support them in old age. That isn’t true for many veterans with service-connected disabilities.

Flohr, testifying for VA, agreed with the veteran service organizations that the notion of using an age threshold, whether set at 65, 75 or 90, as a cutoff for IU benefits is not supported by VA regulation or recent case law involving VA compensation claims.

Daniel Bertoni, director of income security audits at GAO, said when veterans “at the outer reaches of these ages” are found eligible for IU, it “strains the credibility” of the program. He suggested that an intent-to-work factor could be built to require new elderly IU claimant to show they “at least tried and fell out of the work force periodically” in, say, the past decade.

Rep. Phil Roe (R-Tenn.) agreed that boosting VA compensation of veterans 90 and older due to “unemployability” seems to fail a “straight face test.” Roe said he also is sympathetic to arguments that these disabled vets deserve and, most likely, depend today on IU. But because “probably no one is working at that age, we may wish to label it something else.”

Interviewed after the hearing, Flohr said that no veterans currently eligible for IU benefits need to worry that the ideas floated by the GAO or debated in Congress will result in their own compensation being cut.

“They should have no concern,” Flohr said. “The rating schedule specifically states that any time there is a change in the schedule, people are grandfathered at their current evaluation, regardless of whether it would be lowered under the new schedule.”

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