Subcommittee on Disability Assistance and Memorial Affairs Oversight Hearing

House Veterans' Affairs Subcommittee on Disability Assistance and Memorial Affairs

2025-05-14

Loading video...

Source: Congress.gov

Summary

The meeting focused on the Department of Veterans Affairs' efforts to reduce improper payments in compensation and pension benefits, emphasizing the need for financial stewardship and accurate, timely payments to veterans. Participants discussed the significant financial impact of overpayments and underpayments, explored their root causes, and outlined strategies and ongoing initiatives to address these issues. The discussion underscored the importance of robust internal controls, effective training, and improved communication with veterans to prevent future errors.

Themes

Scope and Impact of Improper Payments

The VA has issued at least $5.1 billion in compensation and pension overpayments from fiscal year 2021 to 2024, with only a portion collected, resulting in $677 million in taxpayer dollars wasted due to uncollected overpayments. [ 00:28:52 ] The Office of Inspector General (OIG) estimated an additional $100 million in improper compensation payments stemming from inaccurate effective dates. [ 00:30:21 ]

Citation requires full transcript

Sign in to continue

Sign in
 In fiscal year 2024, compensation overpayment debts totaled $1.14 billion, while pension overpayment debts reached $227.4 million, combining for a total of $1.366 billion in overpayment debts, which represents 0.85% of total outlays. The OIG also found that 24% of PACT Act claims reviewed had incorrect effective dates, causing $6.8 million in improper payments, projected to increase to $20 million by August 2025. [ 00:43:37-00:43:52 ]

Citation requires full transcript

Sign in to continue

Sign in
 Additionally, the OIG identified $836.8 million in underpayments to Vietnam veterans and $33.1 million in underpayments to survivors.

Causes of Payment Errors

A significant cause of improper payments includes delayed updates to dependent status, which leads to overpayments and subsequent debt for veterans. [ 00:29:07-00:29:43 ]

Citation requires full transcript

Sign in to continue

Sign in
 The OIG pointed to ineffective policy guidance, job aids, and training regarding the assignment of effective dates as a major factor for errors. [ 00:30:25 ]

Citation requires full transcript

Sign in to continue

Sign in
 The PACT Act further complicated effective date determinations by introducing new locations, dates, and presumptive conditions for claims. [ 00:43:12 ]

Citation requires full transcript

Sign in to continue

Sign in
 The VA's initial rollout of PACT Act training was accelerated and lacked specificity, with IT tools proving unreliable. [ 00:43:58-00:44:01 ]

Citation requires full transcript

Sign in to continue

Sign in
 The sheer scale of the compensation program, with its large number of beneficiaries and dollar amounts, makes it inherently susceptible to a higher risk of improper payments.

Corrective Actions and Proposed Solutions

The VA is implementing various strategies to mitigate improper payments, including leveraging data sharing agreements with federal agencies like the Social Security Administration for death matches and income verification. Efforts are underway to improve communication with veterans about the timely reporting of changes in marital status, income, or dependency. The VA is enhancing training and oversight for effective dates through quality stand-downs, refresher courses, and job aids, and has updated its effective date builder tool. A monthly matching program between Compensation Service and Education Service has been implemented to prevent overpayments in Chapter 35 Education Benefits. [ 00:56:56-00:57:18 ]

Citation requires full transcript

Sign in to continue

Sign in
 Additionally, the VA is working to implement Cleland-Dole Section 252, which will allow the cancellation of overpayments resulting from administrative delays. [ 01:16:51-01:16:58 ]

Citation requires full transcript

Sign in to continue

Sign in

Tone of the Meeting

The tone of the meeting was one of concerned collaboration, with all parties expressing a shared commitment to improving the system. [ 00:31:18 ]

Citation requires full transcript

Sign in to continue

Sign in
 There was a clear sense of urgency regarding the need to fix the growing problem of improper payments and ensure better stewardship of taxpayer dollars. Multiple speakers emphasized the profound human impact of these errors on veterans, highlighting the stress and financial burden caused by overpayments and debt. [ 00:29:23-00:29:43 ]

Citation requires full transcript

Sign in to continue

Sign in
 While critical of past shortcomings, the OIG and committee members offered constructive criticism aimed at driving specific, actionable improvements within the VA. [ 00:42:31-00:42:35 ]

Citation requires full transcript

Sign in to continue

Sign in

Participants

Transcript

I am fine.  Good to see you.   Subcommittee will come to order.  Thank you to all the witnesses for being here today.  We're gonna take a closer look at the Department of Veterans Affairs efforts to decrease improper payments for compensation and pension benefits.  Congress has appropriated over $150 billion to the VA each year for the past few years.  We must ensure the VA is a responsible steward of the taxpayers' investments.  This means paying every veteran the correct amount of benefits they have earned the first time.   When the VA makes overpayments and they are not returned, taxpayer dollars are obviously wasted.  Overpayments can result in VA establishing debts that veterans owe back to the VA, which can obviously create a paperwork nightmare for them and their families.  Current law allows VA to either cancel these overpayment debts or waive collection of those debts.  From fiscal year 21 to 24, VA has issued at least $5.1 billion in compensation and pension overpayments.   VA collected only a portion of those overpayment debts.  This means that during the last administration, VA spent $677 million in taxpayer dollars, roughly.
For example, VSOs and some of my colleagues in Congress have told me that VA overpaid their constituents for dependents.   Those veterans correctly and immediately updated VA that they no longer had a dependent child or spouse.  VA did not update the benefit payment, obviously until months later.  As a result, many of those veterans owe VA debt and are dealing with the stress   of repaying that underneath a waiver of collection for that debt.  If the VA did not make these overpayments in the first place, obviously there would be fewer wasted taxpayer dollars resulting in fewer uncollected overpayments.  I look forward to hearing from the VA witnesses today on what the new administration plans to do to fix these bureaucratic headaches and prevent delays in processing dependent status updates.  We have to streamline these things in order to take the pressure off of our veterans.   There are other causes for VA improper payments of compensation and pensions.  For example, the VA Office of Inspector General issued several reports on how inaccurate and effective dates resulted in improper payments during the last administration.  The effective date for a grant of a claim determines the amount a veteran will receive in disability compensation back pay.  OIG has issued reports, including one in April, that VA incorrectly   assigned effective dates when it granted certain types of claims, such as PACDAC claims and claims for total ratings due to unemployability.  OIG estimated those incorrect effective dates resulted in at least $100 million in improper compensation payments.   OIG found that the cause was ineffective policy guidance, job aids and training when it comes to assigning effective dates of awards.  I understand that this can be very difficult to determine the correct, I understand that this can be very difficult to determine the effective date of the award.   I look forward to hearing from OIG today and how the VA should provide claims processors with effective training and guidance on how to assign correct effective dates for all types of compensation and pension claims.
Ultimately, when veterans owe VA a debt at no fault of their own, why should taxpayers have to foot the bill?   But we must ensure that VA makes every effort to prevent overpayments from happening in the first place.  And I look forward to hearing from our witnesses today on how we can cut down on wasteful spending from improper payments in compensation and pension.  And with that, I yield to the ranking member for his opening statement.
Thank you, Mr. Chairman, appreciate your comments and thank you all for being here today.  We have a responsibility to make sure that the VA uses taxpayer money in an efficient and correct way.  We also need to guarantee that the VA pays each and every beneficiary what they are due.  So today I wanna have a genuine conversation on what works and what doesn't.  I'm not here to chastise the VA over their supposed fiscal wrongdoing and then leave without ideas for making the VA work better for the veteran.   I'm also not here to just defend the status quo because at the end of the day, everything we do on this committee must be centered around the veteran.  It must make things better for the veteran.  So we're looking at massive programs here, complicated, imperfect programs.  I know we need to work to make them better.  And to do that, we're going to have to push for real efficiencies and improvements.  We absolutely need to make sure strong payment controls are in place.   Now that the VA is pushing out more money than ever, thanks to the PACT Act, we need to make sure that the VA remains a good steward of taxpayer dollars.  But we must be precise.  If we take an overly punitive and difficult approach to compensation and pension payments, we run the risk of leaving veterans out in the rain without the benefits they have earned.  I stress that they've earned.

Sign up for free to see the full transcript

Accounts help us prevent bots from abusing our site. Accounts are free and will allow you to access the full transcript.

Sign up