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98–687 2016

EXPLORING VA’S ADMINISTRATION OF 

INDIVIDUAL UNEMPLOYABILITY BENEFITS 

HEARING 

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

WEDNESDAY, JULY 15, 2015 

Serial No. 114–32 

Printed for the use of the Committee on Veterans’ Affairs 

( 

Available via the World Wide Web: http://www.fdsys.gov 


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COMMITTEE ON VETERANS’ AFFAIRS 

JEFF MILLER, Florida, Chairman 

DOUG LAMBORN, Colorado 

GUS M. BILIRAKIS, Florida, Vice-Chairman 

DAVID P. ROE, Tennessee 

DAN BENISHEK, Michigan 

TIM HUELSKAMP, Kansas 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

JACKIE WALORSKI, Indiana 

RALPH ABRAHAM, Louisiana 

LEE ZELDIN, New York 

RYAN COSTELLO, Pennsylvania 

AMATA COLEMAN RADEWAGEN, American 

Samoa 

MIKE BOST, Illinois 

CORRINE BROWN, Florida, Ranking 

Minority Member 

MARK TAKANO, California 

JULIA BROWNLEY, California 

DINA TITUS, Nevada 

RAUL RUIZ, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

KATHLEEN RICE, New York 

TIMOTHY J. WALZ, Minnesota 

JERRY MCNERNEY, California 

JON TOWERS, Staff Director 

DON PHILLIPS, Democratic Staff Director 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Veterans’ Affairs are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to prepare 

both printed and electronic versions of the hearing record, the process of converting between 

various electronic formats may introduce unintentional errors or omissions. Such occurrences 

are inherent in the current publication process and should diminish as the process is further 

refined. 


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C O N T E N T S 

Wednesday, July 15, 2015 

Page 

Exploring VA’s Administration of Individual Unemployability Benefits ............ 1 

OPENING STATEMENTS 

Jeff Miller, Chairman .............................................................................................. 1 

Prepared Statement ......................................................................................... 23 

Corrine Brown, Ranking Member .......................................................................... 2 

WITNESSES 

Mr. Daniel Bertoni, Director Education, Workforce, and Income Security, 

U.S. Government Accountability Office .............................................................. 3 

Prepared Statement ......................................................................................... 25 

Mr. Brandley Flohr, Senior Advisor, Compensation Service, VBA ..................... 5 

Prepared Statement ......................................................................................... 39 

Mr. Paul R. Varela, Assistant National Legislative, Director Disabled American Veterans ........................................................................................................ 7 

Prepared Statement ......................................................................................... 45 

Mr. Ian de Planque, Legislative Director, The American Legion ........................ 8 

Prepared Statement ......................................................................................... 54 

FOR THE RECORD 

Question for the Record ........................................................................................... 58 


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EXPLORING VA’S ADMINISTRATION OF 

INDIVIDUAL UNEMPLOYABILITY BENEFITS 

Wednesday, July 15, 2015 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON VETERANS’ AFFAIRS, 

Washington, D.C. 

The committee met, pursuant to notice, at 11:30 a.m., in Room 

334, Cannon House Office Building, Hon. Jeff Miller [chairman of 

the committee] presiding. 

Present: Representatives Miller, Roe, Coffman, Wenstrup, 

Costello, Brown, Takano, Brownley, Ruiz, O’Rourke, and 

McNerney. 

OPENING STATEMENT OF CHAIRMAN JEFF MILLER 

The CHAIRMAN. I want to welcome our witnesses to the hearing 

this morning. 

The hearing is focused on how VA is administering 

unemployability benefits. This important benefit compensates disabled veterans at the 100-percent rate even though they are rated 

at less than 100 percent but, because of their service-connected disabilities, they are unable to find or keep substantially gainful employability. 

In June of 2015, GAO released a report that raised concerns 

about whether VA’s procedures for adjudicating IU claims are resulting in consistent and accurate decisions and whether Congress 

should review how VA applies the criteria used to determine eligibility for individual unemployability benefits. 

The cost of the IU benefit is growing at a fast pace. Disability 

compensation paid to veterans who qualify for IU benefits increased from $8.5 billion in 2009 to $11 billion in fiscal year 2013, 

which is a 30-percent increase. GAO estimates that in fiscal year 

2013 the cost of the IU benefit alone was $5.2 billion more than 

if the qualifying veteran had been paid based on their scheduler 

evaluation. 

Given the growing cost, I was very disappointed to learn that VA 

has not implemented procedures to ensure that only veterans who 

are rightfully entitled to the IU benefits are receiving those benefits. 

To qualify for the IU benefit, veterans are required to report 

their income, yet VA stopped verifying veterans’ self-reported income in 2012. As my good friend Ms. Brown says in many instances, ‘‘Let’s be clear.’’ We are not talking about an isolated problem in one or two regional offices. This is a systemic issue based 


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on a decision by VBA’s upper management to stop verifying veterans’ self-reported income. 

According to GAO, VA’s explanation for stopping the verification 

is that the Department planned to adopt a new electronic data system in fiscal year 2015, which, of course, is the year that we are 

currently in. The new system has not been implemented and will 

not be ready until next year, maybe. This begs the question of why 

did VA discontinue income checks before the new system was in 

place, and how much more time will lapse before VA resumes income verification. 

The GAO report also raises the question of whether VA should 

consider age as a factor when deciding if a veteran is eligible to receive IU benefits. According to the GAO, in fiscal year 2013, 

180,043 IU beneficiaries were at least 65 years old, which represents a 73-percent increase from 2009. GAO found that approximately half of all the new IU beneficiaries are age 65 and older. 

And even more surprising was that, according to GAO, 408 veterans age 90-years-old and older began receiving IU benefits for 

the first time in fiscal year 2013. 

Finally, this hearing will address other systemic problems within 

VA—the lack of consistency in the adjudication of disability claims. 

Although VA’s written testimony provides a detailed description 

of its training program for IU rating specialists, the GAO report 

found that VA has not issued clear guidance to help rating specialists determine if a veteran is eligible for individual unemployability 

benefits. GAO also found that VA has neglected to establish a quality review assurance approach that would allow VA to ensure that 

IU decisions are complete, that they are accurate, and that they 

are consistent. 

I expect VA to explain in detail the steps it is taking to implement GAO’s recommendations to improve its training programs 

and quality review procedures. 

Finally, in the recent past, each of our witnesses has praised 

VA’s vocational rehabilitation and employment programs designed 

to put disabled veterans back to work. So what I don’t understand 

is why an evaluation by that same program is not part of the process for awarding IU benefits. 

I look forward to hearing from our witnesses about VA’s plans to 

fix this program and to ensure that taxpayer dollars are used as 

they were intended, to compensate veterans who are unable to 

work because of a service-connected disability. 

I now yield to my distinguished ranking member, Ms. Brown, for 

her opening statement. 

[THE PREPARED STATEMENT OF JEFF MILLER APPEARS IN THE AP- PENDIX] 

OPENING STATEMENT OF RANKING MEMBER CORRINE 

BROWN 

Ms. BROWN. Thank you, Mr. Chairman, for having this hearing. 

We are here today to discuss some of our most disabled veterans 

who are receiving individual unemployability. 

I think it is important that during this hearing we not lose sight 

of what we are talking about here. We are not talking about costs 

or numbers, we are talking about people. Men and women who put 


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everything on the line, were injured greatly, and now receiving additional funds because of an injury that has left them unable to 

work. 

Why have these costs ballooned? As the DAV notes, we have 

higher numbers of seriously disabled veterans from the wars in 

Iraq and Afghanistan, VA is completing record numbers of disability claims, VA’s intense outreach effort to provide benefits to 

our veterans, and to the expansion of presumption related to Agent 

Orange and PTSD. 

With that said, there is still work to do. The GAO, in their review of the IU program, identified four areas for improvement. VA 

concurred with the GAO findings. I look forward to hearing from 

VA on their progress to complete GAO’s recommendations. 

Again, these are some of the most vulnerable disabled veterans. 

Mr. Chairman, I look forward to working with you in a bipartisan 

spirit of our committee. And I am committed to ensure that our Nation adequately compensates our veterans for their loss in defense 

of this great Nation. 

I want to add a little special note here. I know every member of 

Congress experience it. I met a veteran with five stars, and that 

veteran was 10 percent. When I spoke with that veteran VA had 

been working on his particular case for over 6 years. The veteran, 

couldn’t get adequate information from the Department of Defense. 

Six years! I worked on his case for 2 months, and this veteran was 

able to get 70 percent. That is a life-changing event going from 10 

percent to 70 percent. 

Each Member of Congress Office receives all kind of casework 

and staff work on it, and it is most satisfying when Members of 

Congress and their staff are able to help a veteran receive the benefit that they deserve. 

With that, Mr. Chairman, I yield back the balance of my time. 

Dr. ROE [presiding]. I thank the gentlelady for yielding. 

I ask that all members waive their opening remarks, as per this 

committee’s custom. 

Joining us on our first and only panel this morning are: Mr. Daniel Bertoni, Director of Education, Workforce, and Income Security 

for the U.S. Government Accountability Office, GAO; Mr. Bradley 

Flohr, the Senior Advisor, Compensation Service, for the Veterans 

Benefits Administration; Mr. Paul Varela, the assistant national 

legislative director for the Disabled American Veterans; and Mr. 

Ian de Planque, the legislative director for the American Legion. 

Your complete written testimonies will be entered into the hearing record. 

Mr. Bertoni, you are recognized for 5 minutes. 

STATEMENT OF DANIEL BERTONI 

Mr. BERTONI. Mr. Chairman, Ranking Member Brown, members 

of the committee, good morning. I am pleased to discuss our work 

on the Department of Veterans Affairs individual unemployability 

benefit, which is a supplemental benefit that allows veterans to be 

deemed totally disabled even if they don’t meet the criteria for a 

100-percent rating. 

In fiscal year 2013, over 330,000 of 3.7 million veterans VA-compensated for service-connected disabilities received individual 


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unemployability, or IU, benefits. Moreover, over the last several 

years, the beneficiary population and program costs have increased 

steadily, especially among older veterans. And, in fiscal year 2013, 

disability payments to IU recipients totaled $11 billion. 

My testimony discusses age-related trends in the beneficiary population, VA’s procedures for benefit decisionmaking, and various 

options that have been proposed for revising this benefit. 

In summary, the number of veterans receiving individual 

unemployability benefits is increasing and now comprises nearly 

half of all veterans whose disabilities are rated at 100 percent. 

Moreover, the number of older beneficiaries, age 65 or older, has 

also steadily increased and by fiscal year 2013 comprised over half 

of the beneficiary population, a 73-percent increase over fiscal year 

2009 levels. Further, of these older veterans, 57,000 were 75 and 

older and 11,000 were 90 and older. 

The increase in older veterans is mostly driven by new beneficiaries receiving the benefit for the very first time, including over 

13,000 veterans age 65 to 90-plus years entering in fiscal year 

2013. For that year, we estimate that VA paid $5.2 billion above 

what veterans would have received in the absence of such a benefit. 

We also found that VA’s decisional guidance, quality assurance 

checks, and income verification procedures do not ensure individual 

employability decisions are well-supported. Specifically, VA’s guidance for assessing employability falls short in ensuring consistency, 

and VA rating specialists we interviewed frequently disagreed on 

key factors to consider, weighed the same factors differently, and 

had difficulty separating allowable from nonallowable factors in deciding IU claims. Such challenges create a risk that two raters 

could examine the same claim and the same evidence and reach opposite decisions to award or deny the claim. 

Also, as designed and implemented, VA’s quality assurance 

framework primarily focuses on processing errors and does not ensure a comprehensive assessment of whether award or denial decisions are accurate, complete, and consistent. 

In addition, VA does not independently verify self-reported earnings information supplied by applicants and current beneficiaries 

although the agency has ready access to IRS wage data for this 

purpose. As a result, the agency risks paying taxpayer dollars to 

those who may be working in excess of current program earnings 

limits and are thus ineligible for these benefits. 

In our June 2015 report, we identified a number of options proposed by others for revising the IU eligibility requirements and the 

benefits structure. More specifically, several options proposed 

changes such as imposing age limits, lowering the disability rating 

requirement, or increasing income thresholds, while another option 

would lower but not immediately eliminate benefit payments as 

beneficiaries earn more income beyond program limits. 

Based on our discussions with various experts and stakeholders, 

we identified a range of strengths and challenges associated with 

each, such as improved beneficiary targeting and reduced benefit 

outlays in some instances and potential additional administrative 

costs and beneficiary equity concerns for others. 


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VA is currently at a juncture where it is revising its complex, 

multifaceted disability compensation programs. Concurrent with 

this effort, VA has the opportunity during its deliberations to benefit from the attention that the IU benefit has received from various experts. Accordingly, these proposed options and the potential 

strengths and challenges they present warrant thoughtful consideration in any broader benefit refinement analyses and efforts to improve IU benefit design and eligibility criteria going forward. 

Mr. Chairman, this concludes my statement. I am happy to answer any questions that you or other members of the committee 

may have. Thank you. 

[THE PREPARED STATEMENT OF DANIEL BERTONI APPEARS IN THE

APPENDIX] 

Dr. ROE. Thank you, Mr. Bertoni. 

Mr. Flohr, you are now recognized for 5 minutes. 

STATEMENT OF BRADLEY FLOHR 

Mr. FLOHR. Mr. Chairman, Ranking Member Brown, and members of the committee, thank you for the opportunity to review with 

you the issue of individual unemployability. 

I will discuss with you what IU is, the criteria and standards 

used to determine eligibility, VA’s quality assurance and training 

programs, and VA’s process to verify earnings and employment information. 

IU is the regulatory basis upon which the Department of Veterans Affairs grants entitlement to service-connected disability 

compensation at the 100-percent rate when a veteran’s disabilities 

do not meet the schedular criteria for a 100-percent rate under 

VA’s schedule for rating disabilities. VA’s intent is to ensure that 

veterans with service-connected disabilities that are not rateable at 

100 percent are provided compensation at that rate if it is determined they are precluded from obtaining or maintaining gainful 

employment as a result of their disabilities. 

Authorization for IU was added to the 1933 rating schedule by 

regulation in 1934. While there is no specific statutory authority 

for this benefit, there is implicit authority under section 1155 of 

title 38, U.S.C., which authorizes VA’s rating schedule. 

The minimum evaluation requirements for consideration of entitlement to IU are a single disability rated at 60 percent or more, 

and, if there are two or more service-connected disabilities, there 

must be at least one disability rateable at 40 percent or more and 

additional disability, resulting in a combined 70-percent evaluation. 

Where the rating schedule is found to be inadequate to fairly 

compensate a veteran for the inability to be gainfully employed, 

VBA’s regional offices may refer cases that fail to meet the minimum combined evaluation criteria to the Director of the Compensation Service for consideration of an IU rating on an 

extrascheduler basis. 

VA determines eligibility for this benefit through development for 

all evidence that may weigh on the decision in a veteran’s claim. 

The application for IU requires the veteran to furnish an employment history for the 5-year period preceding the date on which the 

veteran last worked. VA contacts these employers and asks them 

to provide information concerning the veteran’s employment, the 


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reasons for termination of the employment, the type of work performed, and the dates of employment. 

VA will also request records from the Social Security Administration if the veteran is under age 65 and there is an indication that 

he or she is in receipt of Social Security Disability Insurance and 

from VA’s Vocational Rehabilitation and Employment Service if 

there is an indication that the veteran has applied for or participated in that program. In addition, if the decisionmaker determines current medical information is necessary, a VA examination 

will be ordered. 

VBA requires all veteran service representatives and rating veteran service representatives to complete Web-based training on IU 

following completion of their initial Challenge training. The Challenge program consists of a national technical training curriculum 

that provides new veterans service center employees with the skills 

they need to function effectively as VSRs and RVSRs. 

Upon successful completion of Challenge, VSRs have 90 days to 

complete the training and RVSRs have 60 days to complete the 

training. The 5-hour Web-based VSR-IU course enables the students to learn about the benefit, the eligibility requirements, and 

the evidence needed to process a claim. The RVSR Web-based 

course is 2 hours of training, covering the definition of IU, eligibility criteria, evidence requirements, effective dates, and preparing the rating decision. 

Additional IU training was provided to RVSRs in 2014. As a result, during the first two quarters of fiscal year 2015, VA’s accuracy 

rate for IU decisions based on our national Systematic Technical 

Accuracy Review is 94 percent. The most common errors are the 

failure to properly consider earlier effective dates and to infer IU 

in appropriate cases. 

Once a veteran is awarded IU benefits, he or she is required to 

submit an annual employment certification until the age of 70. The 

veteran must list all employment for the preceding 12-month period. VA uses the certification to verify continued entitlement to 

IU. Failure to return the form will cause VA to send the veteran 

a due-process notice of the potential reduction of the monthly benefit payment to the rate for the actual combined disability evaluation. 

Currently, Compensation Service is developing a method to review all IU recipients’ wage income annually to ensure the integrity of the program. Under the revised post-award audit process, 

VA will conduct a data match of IU recipients with SSA. Once SSA 

runs the data file against the records in their system, VA will exclude veterans whose earned income is below the poverty threshold. 

The poverty threshold is based on the Census Bureau poverty level, 

currently $11,655 for one person. 

The IU benefit fills a critical gap when the ratings schedule fails 

to fully address the impact of disability in a specific veteran’s circumstances. VA is responsible for ensuring that those who served 

this Nation and have been disabled during that service are fully 

compensated for their disabilities. 

VA continues to review the IU program for potential improvements, including a current review of the program from both the 


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compensation and vocational rehabilitation and employment perspective. 

Thank you for this opportunity to be here today. 

[THE PREPARED STATEMENT OF BRADLEY FLOHR APPEARS IN THE

APPENDIX] 

Dr. ROE. Thank you, Mr. Flohr. 

Mr. Varela, you are recognized for 5 minutes. 

STATEMENT OF PAUL R. VARELA 

Mr. VARELA. Chairman Miller, Ranking Member Brown, and 

members of the committee, thank you for inviting DAV to testify 

at today’s hearing. 

DAV is comprised of 1.3 million wartime service-disabled veterans, and we are dedicated to a single purpose: empowering veterans to lead high-quality lives with respect and dignity. 

For veterans who aren’t able to work because of service-connected disabilities but do not meet the requirements for a 100-percent rating, VA has established special provisions for awarding 

total disability ratings based on individual unemployability, or IU. 

The main question at issue in IU claims is whether a veteran can 

engage in substantially gainful employment due to service-connected disabilities. Any subtle change in a veteran’s physical or 

mental capacity may cause poor performance in a work setting that 

an employer could find unacceptable, thus leading to loss of employment opportunities. 

Some veterans will become unemployable as their disabilities 

worsen with age. However, age is not a factor in IU determinations, nor should it be. Unlike VA pension benefits and Social Security Disability Insurance benefits, where age is appropriately considered in determining entitlement, consideration of age as a factor 

in IU claims would be inappropriate. 

The idea that Americans do not aspire for greater personal and 

economic prosperity beyond a certain age can easily be dispelled by 

the number of people working beyond normal retirement age. Just 

look in the House and the Senate, where many of your colleagues 

continue to work productively into their 70s and some into their 

80s. 

We realize that VA’s IU regulations and policies are imperfect 

but believe the current rules for the most part prescribe consideration of the appropriate factors. VA adjudicators must perform 

careful examination of the facts and exercise well-informed and 

well-reasoned judgments. 

We believe most veterans would prefer to work if capable to do 

so, and experience has shown that VA adjudicators are not particularly liberal in awarding IU benefits. 

DAV recognizes the growth in IU claims for fiscal years 2009 

through 2013 but believes this growth is consistent with the pattern of higher numbers of more seriously disabled veterans returning from the wars in Iraq and Afghanistan, increased claims processing, intense outreach efforts, expansions of presumptive disabilities, and new rules governing claims for post-traumatic stress disorder. Consider that in 2009 VA changed its policy relative to 

claims processing for PTSD cases and in 2010 VA added three new 

presumptive disabilities related to Agent Orange exposure. 


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For these reasons, increasing numbers of veterans receiving IU 

benefits, as reported by CBO in 2014 and by GAO in 2015, does 

not, in our view, signal a failure or fault in the administration of 

this benefit. 

In the August 2014 CBO report, it states, ‘‘VA reviews the employment history of IU applicants but does not require those veterans to have their employability assessed by the Department’s vocational rehabilitation program.’’ This suggests that a determination of IU could be made contingent upon a vocational rehabilitation evaluation and determination. This additional administrative 

step would add unnecessary delay and undoubtedly place a greater 

burden upon veterans seeking timely decisions for adequate compensation to maintain a basic standard of living. 

In the June 2015 GAO report on IU, several options were noted 

to revise IU eligibility requirements and restructure the administration of this benefit. These options consisted of discontinuing IU 

beyond retirement age, a vocational assessment prior to awarding 

IU, gradually reducing IU payments, increasing earning limits, 

lowering disability rating criteria, adding new IU criteria, and developing a new patient-centered work disability measure. 

DAV would strongly oppose any legislation or recommendation 

that would restrict IU entitlement on the basis of age, delay processing of IU claims due to increased administrative requirements, 

or reduce IU payments prior to a veteran demonstrating sustained 

and gainful employment. 

We would strongly oppose any measure that proposes to offset 

the payment of any other Federal benefit or other earned benefit 

entitlement by VA compensation payments. Reducing a benefit provided to a veteran in receipt of IU due to receipt of a different benefit offered through a separate benefit program would be viewed as 

an unjust penalty. 

DAV supports lowering the rating criteria for IU for veterans 

with multiple disabilities to a combined disability rating of 60 percent, rather than the 70 percent, and eliminating the requirement 

that one of the disabilities have a minimum rating of 40 percent. 

In closing, DAV appreciates the opportunity to discuss the merits 

and our concerns regarding the administration of VA’s IU benefit. 

IU provides payments at the 100-percent rate that affords considerable financial relief for veterans when employment opportunities 

diminish because of the wounds, injuries, and illnesses sustained 

as a consequence of active military service. 

This concludes my testimony, Mr. Chairman. I am prepared to 

answer any questions from you or other members of the committee. 

Thank you. 

[THE PREPARED STATEMENT OF PAUL VARELA APPEARS IN THE APPENDIX] 

Dr. ROE. Thank you, Mr. Varela. 

Mr. de Planque you are recognized for 5 minutes. 

STATEMENT OF IAN DE PLANQUE 

Mr. de PLANQUE. Good morning, Dr. Roe, Mr. Takano, and members of the committee. Thank you for having me here today to 

speak on behalf of the American Legion; our national commander, 

Mike Helm; and the more than 2 million members in over 14,000 


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posts across the country that make up the backbone of the Nation’s 

largest wartime service organization. 

One of the tragic consequences of putting your life on the line to 

defend this Nation is that the men and women who do so do not 

always return home whole. There are many ways your service can 

impact your life in the civilian world. It can happen immediately, 

as an IED blast forever and irrevocably changes your world. It can 

happen over time, as the slow and insidious effects of exposure to 

dioxin and the herbicide Agent Orange destroys the functions of 

various bodily systems. 

Some of these disabilities can result in a 100-percent disability 

rating. Sometimes the numbers don’t add up, but the overall effect 

of the toll of war on your body leaves you in a state where you can’t 

really go to work like the rest of the world. This is a hard place 

to be for a veteran. 

To account for this, VA has the rating of total disability due to 

individual unemployability, TDIU. TDIU is available when the veteran doesn’t meet the 100-percent criteria but their disabilities prevent them from regular work. 

There are ways the TDIU program can be improved, but the 

American Legion wants to ensure that improvement does not come 

at the cost of unintended consequences to the veterans who rely on 

this benefit, particularly some of the very vulnerable veterans who 

need this to survive. 

There is a proposal in the recent GAO report on TDIU that 

would look at reducing or removing the benefit for veterans over 

the working age of 65. There are three good reasons the American 

Legion believes this is a bad idea: 

First of all, it is clear in the law age is not to be considered as 

a factor in these decisions. This law has existed for decades; there 

has never been a problem with it. You want to be very, very careful 

when you give serious consideration to changing the United States 

Code to diminish a benefit intended to serve disabled veterans. 

Second, age isn’t even reflective of the modern workforce. According to the Bureau of Labor Statistics, Americans over the age of 65 

still in the workforce have doubled over the past 30 years. Well 

more than half of those workers are working full-time. Those workers can collect their work income; they can collect other benefits. 

Why should veterans be put into a disadvantaged category, especially veterans who have been injured and disabled in service to 

their country? 

Third, most workers build a retirement portfolio of some kind 

over the course of their lives. For a veteran disabled during the 

course of their service, often a lengthy career to build retirement 

is taken away from them. The TDIU benefit they receive may be 

the most substantial piece of income to support them in their old 

age. We need to think long and hard about depriving veterans of 

that benefit. 

Which is not to say there isn’t room for improvement in the program. One of the areas where delays can occur in the adjudication 

of TDIU is the verification of income and employment. Indeed, it 

is absent. 

In this area, the American Legion would point VA in the direction of one of their recent moves to improve the pension program. 


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In 2012, VA announced a more automated process for eligibility 

verification by forming partnerships with the Social Security Administration and the IRS. There is no reason to believe such partnerships can’t be expanded to include this program as well. 

Rapid communication between government agencies needs to become an assumed standard. It needs to be the baseline, something 

the public can take for granted. Until we can reach that point, VA 

should certainly build on existing partnerships and relationships to 

help other programs. 

TDIU is a difficult benefit to discuss. We don’t think about the 

toll it takes on veterans. We don’t think about what it means to 

be told you can’t work anymore. We don’t think about how it feels 

to struggle with finding your place in the world when your injuries 

leave you unable to be productive. There is a tremendous cost to 

these veterans. 

It is easy to look at veterans benefits in terms of dollars and 

cents. I know there are concerns about a benefit like TDIU and 

how it will be driven by how much it costs. That is a question we, 

as a moral Nation, can’t afford to ask. 

In the past, we have seen veterans programs slashed when the 

focus of war disappeared from the front page. In 1933, FDR passed 

the Economy Act. It gutted a lot of veterans benefits as the country 

struggled through the Great Depression. Taking from veterans was 

wrong then. The American Legion wants to make it clear that 

walking back compensation from those who have been injured in 

service is always wrong. 

There can be savings to be found in the Department of Veterans 

Affairs, but an earned benefit that a veteran is entitled to is never 

a waste of money. 

We look forward to working with this committee to find ways to 

improve and strengthen TDIU benefits to make it do what it is 

supposed to do: to help serve the veterans who paid a great price 

for their country. 

I am happy to answer any questions. 

[THE PREPARED STATEMENT OF IAN DE PLANQUE APPEARS IN THE

APPENDIX] 

Dr. ROE. Thank you, Mr. de Planque. 

And I will start the questioning. 

Mr. Bertoni, you know, we obviously want to ensure that veterans are compensated for their service-related disabilities and conditions. And that is a given. 

The GAO report raised concerns about the growing number of 

beneficiaries who are beyond traditional retirement age when they 

first apply for IU benefits. And, just in the last quarter, there were 

33,046 65- to 69-year-olds and 97 over-90-year-olds that applied. 

Is that an issue or a problem now? 

Mr. BERTONI. We didn’t present it as a problem. We were asked 

to look at age-related trends. 

But, clearly, that cohort of beneficiaries fall within a group that 

you would expect, especially at the outer reaches, would not be employable or even seeking employment. We heard some statistics 

here today, but after 75, the number of folks working falls to about 

10 percent, and 90, it is probably pretty much nonexistent. 


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So that older cohort at the outer edges certainly falls out of most 

folks who would be seeking employment. 

Dr. ROE. Okay. 

Well, I guess a question that I would have—and to Mr. de 

Planque’s last point that he made—is, in many of these veterans, 

certainly the more senior veterans, if you are in your 90s, you certainly have come through a time when your earnings were much 

less than people today. And that may be a very significant part of 

their income. It probably is a significant part. 

I know from my own family, my mother is 92, will be 93—I have 

to stop that. I don’t want to tell how old my mother is. She was 

born in 1922. I have to stop saying that. 

But I think the point I am making is, should we label it something else? Because I am a little bit toward, if you have a serviceconnected disability, you were injured in the line of duty, and the 

raters say that you were, then you are due that compensation. I 

am kind of leaning in that camp. 

I realize that, over 90, probably no one is working at that age. 

But maybe we should label it something else. 

Again, if it is a service-connected disability—and all of these people at the dais were correct. We see in Vietnam—that is my generation that fought in the Vietnam war—long-term issues that 

show up. 

So anyone can comment on this that would like to. 

Mr. de PLANQUE. One of the things that I wanted to jump in on 

that—and I know my colleague from DAV mentioned the addition 

of the Agent Orange condition. Sometimes newly adjudicated conditions can change a veteran’s eligibility and cause that. 

I mean, think about it. Somebody who was 20 years old in 1965 

serving in Vietnam is 70 years old today. So, you know, that age 

cohort, we are certainly seeing a large influx of veterans, particularly from the early part of the Vietnam war, who are in that age 

cohort and who are looking at that. 

And so you are running into veterans who are looking at a new 

period of eligibility and maybe newly eligible for that benefit. And 

we want to be very careful about dialing back any benefit that you 

are eligible for, you know, changing the idea and saying, well, no, 

we are not going to compensate you for that anymore. And that is 

the one place that we want to be careful. 

And I think we can understand that, you know, maybe there is 

a point about, if you are over 90 years old, you are unlikely to be 

seeking employment at that point, and look at how, you know, the 

benefits can exist or how they can be structured for veterans to 

make sure that they are not having that taken away. 

But because it is a changing situation and because there are 

things, you know, in our understanding of how toxins like Agent 

Orange can affect people over time, it is important to still recognize 

that at later ages they may need access to these benefits. 

Dr. ROE. Well, Mr. de Planque, let me give you an example. I 

just had, not 6 weeks ago, one of the best friends I will ever have 

on this Earth, who was a Vietnam-era veteran, who died of a very 

rare lymphoma that very well may have been related to Agent Orange. And he was 68 years old and still working full-time. And he 

hadn’t planned to stop working either; he was going to continue. 


VACREP0180 with DISTILLER
12 

So I think you are right. And I don’t know whether these very 

senior veterans that are over 90 who are in need—there is no question they are in financial need. We may need to look at some different—call it something else or whatever, at that age. 

But, with that, I am going to—— 

Mr. BERTONI. If I could quickly jump in, I think you make a good 

point about, what it is called. I mean, with individual 

unemployability, what is inferred is that the person can’t work and 

we are going to compensate them for the inability to work. And, at 

the outer reaches of these ages, it strains the credibility of that 

program. 

I think you really need to be concerned when you are looking at 

these age cohorts, had these people worked in the 10, 12 years 

prior to coming in? If they had and tried and fell out of the workforce periodically, that shows an intent to work. So that is a factor 

that could be, you know, built into this process. 

With Social Security Administration—if you are out of the workforce for 10 years, so you retire or drop out for whatever reason, 

if you can’t show that you have worked at least 20 quarters in that 

10-year period, you don’t qualify for benefits. 

So the concern amongst many of the folks we interviewed in the 

field was folks who have been out of the workforce for many years, 

retired from long careers, no work activity, will come in, apply for 

the benefit, and there is some discomfort amongst VA staff in having to award those benefits. 

Dr. ROE. Certainly, because it is hard to put a straight-face test 

on that, is what you are saying? 

Mr. BERTONI. Yes. 

Dr. ROE. Mr. Takano, you are recognized. 

Mr. TAKANO. Dr. Roe, I understand your point about the 

straight-face test. I hadn’t been aware of applicants for this benefit. 

They were—so some of them were in the workforce, they stopped 

working, and then come in and apply for the benefit. 

But I would like to hear a response from Mr. Varela or Mr. de 

Planque about this, sort of, straight-face test situation. Are there 

alternative explanations for why people might be doing these sort 

of things? Applicants. 

Yes, go ahead. 

Mr. VARELA. Thank you, Congressman Takano. 

I have had the benefit of being with DAV nearly 13 years this 

October, and 10 of those years I spent in regional offices helping 

a wide range of veterans—younger veterans and older veterans. 

Whether it was helping an 80-year-old veteran file a claim for the 

first time for PTSD or a recently discharged servicemember from 

the wars in Iraq and Afghanistan, age was never an issue. We 

never took that issue. 

If somebody comes into our office to apply for a benefit, the first 

question that we ask is, how did this disability—in cases of IU— 

how did this disability or disabilities impact your ability to work? 

Historically, you know. What kind of limitations did you have over 

these periods of time? 

And I will give you an example. Mr. de Planque mentioned the 

70-year-old Vietnam veterans. Well, remember, many of them may 

not have been eligible up until 2009 and 2010. So they went decVerDate Aug 31 2005 13:55 Oct 12, 2016 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 Y:\98-687.TXT PAT

VACREP0180 with DISTILLER
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ades without receiving any benefits. How did those disabilities impact them over the years? 

So, when somebody comes in at age 90, it is not unreasonable for 

us to say, what limitations did your disabilities, your service-connected disabilities, impose on your ability to work? And would you 

still be working today? What do you think? Yes, I feel that if I 

didn’t have this diabetes or I didn’t have this Parkinson’s disease, 

I could be doing something above the poverty threshold, which is 

roughly $12,000 today. 

So age, for us, is not a factor. It is what did those service-connected disabilities do to that person over time and today. 

Mr. FLOHR. If I may add something, Mr. Chairman. It is not a 

requirement, for us to consider entitlement to IU, that a veteran 

specifically claim that benefit. The U.S. Court of Appeals for Veterans Claims and the Court of Appeals for the Federal Circuit, in 

a number of cases and precedent opinions, have held that, when we 

are reviewing a claim for increase—and that could be from a gentleman that is 75, 85, 90 years old—an increase in their serviceconnected disabilities, when reviewing that claim, if there is an indication in the claim and in the claims file of the veteran that they 

cannot work, and it is due to their service-connected disabilities, we 

are required to consider the issue of entitlement to IU. 

As my colleagues in the American Legion and DAV have pointed 

out and I did in my testimony, age is not a factor. We are prohibited under the rating schedule, section 4.19, from considering age, 

both in making disability determinations, including 

unemployability. 

And I agree also with the written testimony of my colleagues. It 

was my own testimony, I believe. We are working longer, as a Nation. We are living longer. We work because we are more healthy, 

sometimes. But even those who are not and have severe disabilities 

are working because of the economy over the last 10, 12 years. 

They can’t afford to retire anymore, so they continue to work until 

they can’t work anymore. 

And if, at some point, regardless of their age, when they no 

longer actually can work due to their disabilities, their service-connected disabilities, then we are required to take care of them and 

provide them with the benefits that they need to survive. 

Mr. TAKANO. Thank you very much for offering those comments. 

It helps me understand other scenarios under which we can justify—or it could be justified, this sort of benefit. 

Can you tell me what kind of mental health treatment an individual suffering from severe PTSD and using individual 

unemployability benefits receives? So they are, sort of, suffering 

from severe PTSD, but they are also receiving IU benefits. What 

sort of mental health treatment does that individual receive? 

Mr. Varela or anyone on the panel? Or Mr. de Planque? 

Mr. VARELA. They are open for the full range of mental health 

services provided by the VA, regardless of disability. Any service 

that is provided at VHA for mental health, PTSD, TBI, they can 

receive that concurrently with IU, or they would receive that concurrently with their disability evaluation. IU is not a determining 

factor in the level of services. 


VACREP0180 with DISTILLER
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Mr. TAKANO. Could I ask one more question, sir? Is that possible? 

Dr. ROE. Yes. 

Mr. TAKANO. Do you still believe there is sufficient motivation to 

find a positive outcome for their PTSD while receiving IU benefits? 

So, in other words, they are being successfully treated for PTS, but 

they are also receiving IU unemployment benefit. Can we justify 

that situation? 

Mr. de PLANQUE. Are you asking in the sense that is there a disincentive to get better—— 

Mr. TAKANO. Yes. 

Mr. de PLANQUE [continuing]. Basically? 

I think there is always—you know, this is something from having 

worked with and spent a lot of time talking to veterans who suffer 

not just from PTSD, but also keep in mind depression goes handin-hand with a lot of these debilitating injuries. 

Mr. TAKANO. Yes. 

Mr. de PLANQUE. Every single one of them that I have ever 

talked to would rather feel better than have a large amount of 

money attached to it. They would rather get better. They would 

rather not have to deal with the symptoms of the depression or the 

PTSD. 

So I don’t think it presents a particular obstacle to that. Those 

veterans will push towards getting better in treatment, because 

that is a far better goal than—you know, and to be able to return 

to the workforce, hopefully, or do something like that. That is 

where most of them are motivated. 

Mr. FLOHR. I would add that that has been a long-time perception, that veterans, once they get 100 percent or get IU at a 100- 

percent rate, they stop being treated for their PTSD, and that is 

just not the case. VHA has told us that they continue to be treated. 

They are treated; they want to get better. 

So, many years ago, I went to a 2-day conference where the question was, is disability compensation a disincentive to the treatment 

of PTSD? As I said, that has been around a long time. And, actually, it is not the case. 

If we were to—the 100-percent evaluation for mental disorders is 

total social and occupational impairment. And if we were to evaluate everyone at 100 percent rather than 70 percent and then give 

them IU at 100, we would decrease the numbers of people getting 

IU, but the compensation, the dollars spent, would not change. 

They would still be getting the same amount of compensation. 

Mr. TAKANO. Okay. 

I appreciate your generosity, sir. 

Dr. ROE. Thank you. 

Mr. O’Rourke you are recognized for 5 minutes. 

Mr. O’ROURKE. Thank you, Dr. Roe. 

Just following this line of questioning, for Mr. Flohr or Mr. 

Bertoni, if you have these numbers, in terms of the goal of returning veterans who are unemployable to employable status, what 

kind of numbers do we have on that? What has been the success 

rate? 

Mr. FLOHR. You are referring to veterans who may be going 

through a vocational rehabilitation? 


VACREP0180 with DISTILLER
15 

Mr. O’ROURKE. Yes. What kind of numbers do we have for veterans who have been classified as unemployable who are later classified as employable or find a job? 

And I agree with everything that has been said. Nobody, or very 

few people, don’t want to work. I mean, in terms of self-esteem, 

their ability to provide for themselves and their family, and moving 

forward in their careers, everyone wants to work. 

So what has our success been in helping veterans get back to 

work? 

Mr. FLOHR. I am sorry, but I don’t have that information today, 

but I would be glad to get it. 

Mr. O’ROURKE. Has GAO looked at that at all? 

Mr. BERTONI. I don’t know the actual percentages wise, but we 

did do some work in VR&E a couple years ago. 

The issue we had was the goals that they were using to demonstrate success were very short-term in nature. We felt they had 

to have, beyond the short term, a more extended goal for actual 

success. Because people can come in and out, you know, in the 

short term and in the long term not be successful. But, really, over 

time you would want to see a broader metric that gauges success. 

I don’t have the number, but—— 

Mr. O’ROURKE. Okay. Could you share with me and the other 

members of the committee what you do have? 

Mr. BERTONI. Sure. 

Mr. O’ROURKE. I will ask that question for the record and would 

love to hear back from you. 

And then for Mr. Flohr, I am reading the staff summary of the 

GAO findings. VBA guidance on how to determine a veteran’s 

unemployability is incomplete. Format and delivery of TDIU guidance does not support efficient claims decisionmaking. VBA quality 

assurance approach does not provide comprehensive assessment of 

TDIU decisions. And VBA does not verify self-reported income eligibility information. 

Do you agree with all of those findings, Mr. Flohr. 

Mr. FLOHR. Yes, sir. We have concurred in all the recommendations of GAO. 

And I would take this opportunity to personally thank Mr. 

Bertoni and his staff for doing this report. It will allow us to 

strengthen our process going forward in the next several months. 

And so we appreciate it. 

Mr. O’ROURKE. Okay. 

And for Mr. Varela and Mr. de Planque, beyond those GAO findings—and if you disagree with them, let me know—but, beyond 

those, do you see a significant problem to be solved within TDIU? 

Mr. de PLANQUE. you said there are ways this can be improved, 

and you talked about partnerships and better communication. But, 

other than that, do you see any necessary improvements to the program? 

Mr. de PLANQUE. Well, there are improvements there, obviously, 

with the communication between agencies. I think VA is going to 

win overall if they can get a more consistent adjudication. And I 

think they would agree on that. That is what I think they want; 

it is what we all want. And that is not unique to the IU, you know, 

part of the disability process. 


VACREP0180 with DISTILLER
16 

So I think, you know, those are two main areas that could definitely get a lot of focus. And I think if we can get consistent adjudication out of every RO, then that is a win for everyone. So I think 

those would be two of the largest areas to look at. 

Mr. O’ROURKE. Mr. Varela, anything to add? 

Mr. VARELA. Yes, Congressman O’Rourke. Thank you. A couple 

of improvements. 

Hopefully, when VBA moves to this electronic income verification 

process, that they would discontinue requiring veterans to send the 

4140 form back to them to verify whether or not they are working. 

If you looked at the GAO report, you saw a certain percentage 

of veterans that no longer qualified for IU because they failed to 

return the questionnaire. 

You know, there are a lot of veterans that receive that questionnaire, they don’t know what it is for, they don’t return it, their benefits get reduced. Whether or not they come in to have them, you 

know, reevaluated and their benefits reinstated—it happens, okay, 

that they are not going to come back to the VA; they think that 

their benefits have been reduced properly. Then you get some veterans that submit it late, they have been reduced; then you have 

got to go through a whole other process to get their benefits reinstated. 

So, hopefully, when they move to that electronic verification, we 

can get rid of that. You go online, this person is working; if they 

are not working, they continue into the program. 

In terms of other improvements within IU, we all want quality 

decisions. Quality is number one. I mean, that is what we are all 

shooting for. But what I would say is, no matter the case, I have 

never come across somebody that had an identical IU case. So what 

I say to that is, I may present a Member of Congress with this 

body of evidence, this body of information, this work history, but 

we still may arrive at a different decision. 

So the administrative procedures that VA has to perform, infer 

the IU claims, send the 4140, did you schedule an examination, 

that is great, but, at the end of the day, we want to make sure that 

we understand that we are not all going to reach the same conclusion 100 percent of the time. 

Mr. O’ROURKE. And just very quickly in 10 seconds, Mr. Flohr, 

on that point, is the 94-percent accuracy rate that you talked 

about, is that independently verified or determined, or is that determined within VBA? 

Mr. FLOHR. That is determined within VA through our technical 

accuracy staff that reviews them. 

Mr. O’ROURKE. Okay. 

And has GAO looked at that to confirm that? 

Mr. BERTONI. We have confirmed the percentage. We don’t agree 

that that is likely representative of the quality of the cases. 

Mr. O’ROURKE. Okay. 

Thank you, Mr. Chair. I yield back. 

Dr. ROE. Mr. McNerney, you are recognized for 5 minutes. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

And thanks for testifying this morning. 


VACREP0180 with DISTILLER
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Mr. Bertoni, you mentioned the inconsistency in awarding, and 

that has sort of been echoed. Mr. de Planque said that was one of 

the big problems. 

Are your recommendations aimed at improving the consistency in 

awarding IU? 

Mr. BERTONI. Yes. I mean, it goes back to the guidance. I have 

been, you know, living with the guidance for a couple days, looking 

at this, really trying to learn the guidance or to familiarize myself 

with it. And guidance is very weak in several areas. 

I mean, there is information on evidence that they should consider, evidence they could exclude. But there is a middle area of 

very valuable information, such as whether they are in school, 

what their work history looks like, other aspects of the veteran’s 

life, that they are silent on. And it claims the examiners are using 

them, you know, unevenly. 

Mr. MCNERNEY. So is it going to be up to the committee to improve the guidance? Or is it going to be up to—— 

Mr. BERTONI. I think it is up to the agency to take a first crack 

at, sort of, clarifying what is in, what is out, the hierarchy of evidence. 

I mean, an example. In the Social Security Administration, the 

primary physician’s report, that has the most weight. There are no 

references in the VA guidance around that issue. 

So I think the agency can, based on their experience, help staff, 

sort of, gradate, or gradate for staff, the importance of information. 

That will help them, I think, make better decisions and more consistent decisions. 

Mr. MCNERNEY. So, in terms of abuse, in your opinion, is the 

abuse unintentional because of poor guidance, or is it due to intentional factors? 

Mr. BERTONI. I don’t see this as abuse. I believe these veterans, 

they see this benefit out there. A single veteran at 60 percent is 

going to get $1,000 a month. If that veteran gets their rate increased to 100 percent, that is a $2,800-a-month benefit. So there 

is an incentive to go for that, and I understand why they would. 

What we are talking about here is having better guidance to 

make better decisions on that $1,000-versus-$2,800-a-month decision. 

Mr. MCNERNEY. Do you agree with that, Mr. de Planque? 

Mr. de PLANQUE. That seems relatively consistent, yeah. 

Mr. MCNERNEY. So, I mean, then the consensus might be that 

there is not that much intentional abuse; it is just poorly administered. 

Mr. de PLANQUE. I don’t think there is really intentional abuse, 

I mean, to any extent. I think these are veterans who see that 

there is a benefit and that believe that they are entitled to it and, 

by law, you know, seem to fit within the entitlement of it, and so 

they seek the benefit. And that is not an abuse of the system. That 

is getting a benefit that they are entitled to. 

Mr. BERTONI. Yeah. We did not hear, you know, abuse mentioned. People were just concerned that, given what was in front 

of them in terms of the guidance, it was difficult making, in their 

view, sometimes, accurate and consistent decisions. 


VACREP0180 with DISTILLER
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Mr. MCNERNEY. So, then, Mr. Flohr, what is the prognosis in 

terms of when we are going to see a better guidance implemented? 

Mr. FLOHR. As I said, we have concurred with GAO’s recommendations. We have already started to implement some of 

them. We have groups that are working on each of the four recommendations, one of which is to improve the consistency and accuracy. 

We have a national program in our 56 regional offices called an 

in-process review. And that is where the rating veteran service representative completes a one-page summary of the decision they 

made, what they looked at. And that is reviewed by our quality review teams in our regional offices. If there is any issue as to maybe 

not looking at all the evidence properly or needing to have a better 

discussion, that goes back to them. 

And we have captured all that data, and we have added to that 

individual unemployability and we are looking at that. 

Mr. MCNERNEY. Well—— 

Mr. FLOHR. Once we get all that information together, then we 

will know how to better shape our guidance and our training. 

Mr. MCNERNEY. In terms of developing what you might call rules 

in many Federal agencies, is this a transparent process that will 

develop these guidance or the rules? 

Mr. FLOHR. Transparent in terms of? 

Mr. MCNERNEY. Asking for outside inputs, putting proposed 

rules on the Internet for people to comment on, those kind of 

things. 

Mr. FLOHR. If we have to make changes to our regulations, of 

course, that is—publication for notice and comment, followed by a 

final rulemaking. We get input from anyone who wants to comment. Of course, we get the GAO and we get CBO and others who 

provide us with guidance, as well. 

Mr. MCNERNEY. So you mentioned the word ‘‘regulation.’’ Are we 

talking about the guidance becoming regulations? 

Mr. FLOHR. Well, if we wanted—for example, if we decided for 

some reason that we wanted to change or do away with the age 

issue, we would have to publish that for notice and comment. That 

is in the regulations. To change that, we would have to go through 

rulemaking. 

Mr. MCNERNEY. So is there a distinction, then, between guidance 

and regulations? 

Mr. FLOHR. Absolutely. Guidance is like internal guidance, just, 

okay, here is how you process a claim, here is how you develop the 

claim, you have to get this evidence. 

Of course, we are grounded in statute. We have a statutory duty 

to assist, which tells us that we have to get all the evidence that 

we are aware of, or at least to try to get all that, before we make 

a decision, unless at some point we can grant the claim. Once we 

grant the claim, the duty to assist ends. But, until that point, we 

have to get all the evidence that we are aware of. That is evidence 

from the veteran, from private physicians perhaps, from VHA if we 

need an exam, whatever is necessary. 

Mr. MCNERNEY. So the guidance, are those publicly available, 

what the guidance criteria are? 


VACREP0180 with DISTILLER
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Mr. FLOHR. I don’t know. I would have to—if our procedures 

manual, the M21-1—I think it is available. Yes. 

Mr. MCNERNEY. Okay. All right. 

Thank you, Mr. Chairman. 

Mr. FLOHR. And the rating schedule, as well. Yes. 

Dr. ROE. I thank the gentleman for yielding. 

I am going to do just a brief second round right quick. And if any 

of you all want to stick around for this, that will be fine. 

But, Mr. Flohr, according to the VA testimony, once a veteran is 

awarded an IU benefit, he or she is required to submit an annual 

unemployment certification until attaining the age of 70. 

Why does the VA stop asking for this information after a veteran 

who is age 70 or older when you don’t ask the question—it doesn’t 

matter the other direction, if you are getting the IU benefit? 

So that is question number one. 

Mr. FLOHR. That is a very good point. And I hadn’t thought 

about it until I started preparing for this hearing. 

I think that is an old—it comes from way back, a long time ago, 

before we were working longer and living longer, and 70 seemed 

like a good point in which not to require the employment questionnaire anymore. I think, as we grant more and more benefits to 

more elderly veterans, that we may have to look at that. 

Dr. ROE. Yes. Thank you, Mr. Flohr. 

And the veterans must meet certain income restrictions in order 

to receive IU benefits, of course. However, 3 years ago, in 2012, the 

VBA suspended income verification matches, and, according to the 

GAO, this decision may have resulted in ineligible veterans receiving IU benefits. 

One, explain why the VBA decided to suspend income 

verifications in 2012. 

Mr. FLOHR. Sir, we suspended that when we started developing 

a new process, the secure encrypted portal with SSA and IRS, with 

which we could get income information rather than going through 

our old process, which was a paper-based process. 

At the same time, we were going through converting to VBMS 

and electronic claims processing. And I am amazed to say that, 

right now, we are 95-percent electronic in claims processing. I 

never thought I would see that in my tenure at VA, but we have 

gone about that quickly. 

Part of that is working with the IT, both on VA’s side and on 

SSA’s side, and getting it to communicate. And it has been a long 

time. I understand that it has not been perfected yet, but hopefully 

by January next year it will be. 

Dr. ROE. Let me point out something obvious. The new IT system—this is 2012. The new IT system is not scheduled to be operational until 2015, and it is still not operational. Why didn’t you 

continue just to use the old system until the new system came up 

in place and had its scrub-down? 

Mr. FLOHR. I don’t know the answer to that, to be quite honest, 

sir. 

Dr. ROE. I think I know the answer. I think the answer was they 

thought—and I will just answer this for you—that that system 

would be up and running very quickly. It turned out it was a little 

harder to implement. That would be my guess. 


VACREP0180 with DISTILLER
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Mr. FLOHR. That is quite possible. 

Dr. ROE. According to the GAO, the VBA has not provided a plan 

or a timeline for implementing the new verification system. Did 

you just say January of 2016? 

Mr. FLOHR. Yes, sir. 

Dr. ROE. So that is when it will be implemented? 

Mr. FLOHR. That is what we expect, yes. 

Dr. ROE. Five months from now. Okay. Very good. And it will go 

live then. 

I guess the last couple of questions I want to ask is—obviously, 

everybody in this room agrees that, veterans receiving disability 

and IU would prefer to get better. I think anybody wants to get 

better. As a doctor, I saw patients; almost everybody I talked to 

wanted to improve when they came to you. That is why they were 

there. 

And VA has a lot of tools in its toolbox. They have voc rehab, 

PTSD treatment, healthcare, all those things to help achieve that. 

Does the VA track how many of the IU recipients utilize these 

benefits—in other words, utilize all these incredible resources that 

the VA supplies? Is there any way to track that? 

Mr. FLOHR. In terms of voc rehab? I would have to ask—— 

Dr. ROE. Or just all those things. If you are in IU and you are 

trying to get back to work, how many people actually access themselves to all the benefits that VA supplies? 

Mr. FLOHR. Well, they do receive treatment. We know that. VHA 

has told us they do not discontinue treatment once they get at a 

certain level of compensation. They continue to be treated, in an effort to get back to employment. VR&E works with veterans with 

PTSD and all disabilities to try and return them to the workforce. 

The numbers I don’t know off the top of my head. 

Dr. ROE. I think that Mr. Takano asked this question a minute 

ago, and I will just re-ask the same question. His question was, I 

think when veterans access themselves to these benefits that they 

have earned, how many actually come off of IU rolls because they 

have been helped? 

It is like what voc rehab does in the private sector. And we look 

at that in Tennessee and see how many people use voc rehabilitation and get education benefits and so forth and actually return to 

the workforce. 

Do you all have that number? 

Mr. FLOHR. Yes, sir. I do, actually. 

At the end of fiscal year 2014, during that year, we proposed to 

terminate almost 6,800 veterans who were on IU. That is due to 

them having returned to work, having exceeded the income at a 

point where we found them to be gainfully employed, or where 

their disability got worse to the point that they could get a schedular 100-percent evaluation, so they got an increase. And, additionally, 12,000 in that year died, so they were taken off the rolls too. 

So approximately 18,000 were removed from the IU rolls over fiscal year 2014. 

Dr. ROE. But you said 6,800 went back to work or—— 

Mr. FLOHR. Either went back to work or else got an increase to 

100 percent. 


VACREP0180 with DISTILLER
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Dr. ROE. Got it increased. I am not sure I quite understand that, 

so, after we get through, I would like to ask you to put that in writing for me, if you would. 

Mr. FLOHR. Okay. 

Dr. ROE. I certainly appreciate you all being here today. 

Mr. O’Rourke. Do you have further questions? 

Mr. O’ROURKE. I may have just a couple, if you don’t mind. 

Dr. ROE. Okay. You are recognized. 

Mr. O’ROURKE. Thank you, Mr. Chairman. 

You know, following up on the question that Dr. Roe just asked, 

I would also like to see more information about the 6,800 and how 

many of those were deemed employable again versus 100 percent. 

And, of those who were deemed employable, how many actually 

found employment? I think that is important for us to know. 

And my second request or question is the four findings that the 

GAO has made, Mr. Flohr, that you have acknowledged and are 

working on, what is your deadline to complete the work necessary 

to come into compliance or to resolve the concerns in those? 

And if you have already given us that, I apologize. I didn’t hear 

it. 

Mr. FLOHR. We did give that information to Mr. Bertoni when we 

responded to their recommendations. 

We have a group that has been put together that includes people 

from the Vocational Rehabilitation and Employment Service, our 

Compensation Service, our general counsel, and we are looking at 

specific actions that we can take to improve the process. We have 

a number identified right now that have not yet been briefed, however, to our leadership. We expect to do that by the end of this 

month. 

In terms of the recommendation about updating IU guidance, we 

expect to do that within—or at least by the end of January 2016 

after we do some consistency reviews and determine really how can 

we better improve the process using both GAO’s recommendations 

and what we find during our studies. 

Recommendation number two, to improve the quality assurance 

approaches, we have started doing that already. We expect to have 

that completed by October of this year. 

Recommendation three was verify self-reported income. We have 

talked about that. That is 2016, January. 

And recommendation four, develop a plan to study IU in terms 

of age or voc rehab assessments. We expect to have some either 

legislative proposals or regulation changes which would be required 

by the end of July, of this month. 

Mr. O’ROURKE. Of this month. And do you feel confident in meeting all of those proposed deadlines? 

Mr. FLOHR. At this point, from what I know, yes, sir, I do. 

Mr. O’ROURKE. Okay. 

And then my last question, Mr. Chairman, is for Mr. Bertoni. 

When I had asked questions during the previous round about the 

94-percent accuracy rating, Mr. Flohr said that that is done internally by the VA. You said you don’t disagree with the 94 percent, 

but you may disagree with what that represents. I would like to 

give you a chance to expand on that answer. 

Mr. BERTONI. Sure. Thank you. 


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In terms of IU, the STAR reviews sample a very small proportion 

of the IU claims. So we have some concerns there about their ability to project for that subpopulation. 

Also, I think there is a very high standard within STAR and 

even within the in-process reviews that my colleague just mentioned, that the error has to be clear and undebatable. And it is 

very difficult for an examiner, even if they feel that there was a 

mistake made, to substitute their judgment in a particular instance. 

So it is almost impossible, to find an error in STAR and in inprocess reviews. And I am a bit concerned, as they move forward, 

that they are not taking a different approach. 

I think there are other vehicles. They do special targeted studies, 

they do greater reliability reviews, they do these comparable questionnaires to try to get at, sort of, consistency that we believe may 

be better tools for getting at the inconsistencies, the root causes for 

inconsistencies, and ultimately building their training around those 

areas. 

Mr. O’ROURKE. As with all VA measurements, I would like to see 

more independent assessments and verifications of anything that 

the VA reports because of past concerns—or, current concerns 

based upon past problems that we have had with VA self-reporting. 

So any further recommendations that you have or that the VSOs 

have, I think we are very open to hear those. 

Mr. BERTONI. For what it is, like I said, it is an accurate figure. 

But for what it is supposed to be doing, we don’t believe it hits the 

mark. 

Mr. de PLANQUE. One thing that we would additionally note on 

that, the STAR reviews—and their reviews tend to be things—did 

they make a particular evaluation, as opposed to what was the 

quality of that evaluation. And so they may get a check for they 

made the evaluation, but if you look further at it, the evaluation 

was done in an improper fashion or it didn’t take the right things 

into account. 

And so you don’t get any notion of the quality within that step. 

And so, at a 94-percent rate, yes, 94 percent of the steps may be 

being done, but it is a qualitative versus quantitative kind of measure in it, which sometimes leads to—you know, that is where we 

would like to see more investigation, from an American Legion 

standpoint. 

Mr. O’ROURKE. Great. 

And, again, if there is a specific proposal from American Legion 

or anyone else about how to more accurately assess how VBA is 

doing, I am very open to seeing that, and either VA adopts that or 

we can introduce that as legislation. So thank you. 

Thank you, Mr. Chair. 

Dr. ROE. Thank you, Mr. O’Rourke. 

And full disclosure, I just sent my American Legion dues in Monday. So I wanted to get that on the record. The check is in the 

mail. 

Thank all of you. You have been a terrific panel. I thank you for 

taking your time, preparing. 


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This, obviously, is an important issue. I am sure there are many 

veterans out there watching this expectantly, and it is good to have 

this information. 

And if there are no further questions, and there are not, you all 

are now excused. 

Mr. O’Rourke. Do you have any closing comments? 

Mr. O’ROURKE. I do not. Thank you. 

Dr. ROE. Okay. 

I would ask unanimous consent that all members have 5 legislative days to revise and extend their remarks and include extraneous material. 

Hearing no objection, so ordered. 

Dr. ROE. I thank all the members who were here for being here 

today. 

Without any further comments, this meeting is adjourned. 

[Whereupon, at 12:35 p.m. the committee was adjourned.] 

APPENDIX 

PREPARED STATEMENT OF CHAIRMAN JEFF MILLER

I want to welcome our witnesses this morning. 

Today’s hearing will focus on how VA is administering unemployability benefits. 

This important benefit compensates disabled veterans at the 100% rate, even 

though they are rated as less than 100% but, because of their service-connected disabilities, are unable to find or keep substantially gainful employment. 

In June 2015, GAO released a report that raises concerns about whether VA’s procedures for adjudicating IU claims are resulting in consistent and accurate decisions, and whether Congress should review how VA applies the criteria used to determine eligibility for IU benefits. 

The cost of the IU benefit is growing at a fast pace. 

Disability compensation paid to veterans who qualify for IU benefits increased 

from $8.5 billion in FY 2009 to $11 billion in FY 2013, which is a 30% increase. 

GAO estimates that in FY 2013, the cost of the IU benefit alone was $5.2 billion 

more than if the qualifying veterans had been paid based on their schedular evaluation. 

Given the growing cost, I was very disappointed to learn that VA has not implemented procedures to ensure that only veterans who are rightfully entitled to IU 

benefits are receiving those benefits. 

To qualify for IU benefits, veterans are required to report their income, yet VA 

stopped verifying veterans’ self-reported income in 2012. 

Let’s be clear: we’re not talking about an isolated problem in one or two regional 

offices. 

This is a systemic issue based on a decision by VBA’s upper management to stop 

verifying veterans’ self-reported income. 

According to GAO, VA’s explanation for stopping the verification is that the Department planned to adopt a new electronic data system in FY 2015, which, of 

course, is this year. 

The new system has still not been implemented, and will not be ready until next 

year—maybe. 

This begs the question of why did VA discontinue income checks before the new 

system was in place, and how much more time will elapse before VA resumes income verifications. 

The GAO report also raises the question of whether VA should consider age as 

a factor when deciding if a veteran is eligible to receive IU benefits. 

According to the GAO, in FY 2013, 180,043 IU beneficiaries were at least 65 years 

old—which represents a 73% increase from FY 2009. 

GAO found that approximately half of all new IU beneficiaries are age 65 and 

older. 

Even more surprising was that according to GAO, 408 veterans age 90 and older 

began receiving IU benefits for the first time in FY 2013. 

Finally, this hearing will address another systemic problem within VA: the lack 

of consistency in the adjudication of disability claims. 


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Although VA’s written testimony provides a detailed description of its training 

program for IU rating specialists, the GAO report found that VA has not issued 

clear guidance to help rating specialists determine if a veteran is eligible for IU benefits. 

GAO also found that VA has neglected to establish a quality review assurance approach that would allow VA to ensure that IU decisions are complete, accurate, and 

consistent. 

I expect VA to explain in detail, the steps it is taking to implement GAO’s recommendations to improve its training programs and quality review procedures. 

Finally, in the recent past, each of our witnesses has praised VA’s vocational rehabilitation and employment program designed to put disabled veterans back to 

work. So what I don’t understand is why an evaluation by that same program is 

not a part of the process for awarding IU benefits. 

I look forward to hearing from our witnesses about VA’s plans to fix this program 

and ensure taxpayer dollars are used as intended: to compensate veterans who are 

unable to work because of a service-connected disability. 


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1GAO Report-15–464–June 2015. 

2http://www.benefits.va.gov/COMPENSATION/claims-special-individual— 

unemployability.asp. 3GAO Report-15–464–June 2015. 

4 38 CFR § 4.19. 

5 38 CFR § 3.341(a) 

PREPARED STATEMENT OF IAN DE PLANQUE

A recent report of the Government Accountability Office (GAO) examining the Department of Veterans Affairs (VA) Total Disability Individual Unemployability 

(TDIU) benefit recommends cutting the benefit for veterans over the age of 65.1 The 

American Legion strongly disagrees with this recommendation, as it is not only in 

direct contradiction to clear directions from the Code of Federal Regulations, but it 

also flies in the face of the current trends in employment statistics and represents 

a bad precedent—the cutting of veterans’ earned disability benefits because the 

costs of such benefits are increasing. The American Legion worked closely with the 

GAO in the preparation of the report, and does believe there are improvements that 

could help increase the efficiency of the program, but cuts to elderly veterans are 

not the way to begin. 

Chairman Miller, Ranking Member Brown and distinguished Members of the 

committee, on behalf of National Commander Michael D. Helm and the over 2 million members of The American Legion, we thank you for the opportunity to testify 

regarding The American Legion’s position on the Department of Veterans Affairs administration of individual unemployability benefits to our nations’ veterans. 

The Department of Veterans Affairs (VA) defines individual unemployability as 

being a part of the overall disability compensation program that allows VA to pay 

certain veterans disability compensation at the 100% rate even though the VA has 

not rated the overall veterans service connected disabilities at 100% by the statutory rating scale.2 It is a recognition that some disabilities, while not rated at 100% 

may cause serious problems for individual veterans seeking gainful employment. 

The Department of Veterans Affairs (VA) disability rating schedule is based upon 

the severity of chronic medical conditions, and the impact of those conditions upon 

earnings. For example, if a veteran receives a 50 percent disability rating, the medical condition could impact 50 percent of a veteran’s earnings in a labor-intensive 

work environment. Unfortunately, VA’s rating schedule does not always reflect the 

individual impact of disabilities on individual veterans. A service-connected condition or the combined effects of multiple service-connected conditions could be so severe that the veteran is unable to gain and sustain meaningful employment, even 

if the veteran’s disability rating is not fully 100 percent. As a result, VA provides 

TDIU benefit. 

According to the June 2015 GAO report—Veterans’ Disability Benefits: VA Can 

Better Ensure Unemployability Decisions are Well Supported—in Fiscal Year (FY) 

2013, there were approximately 333,000 veterans that were receiving TDIU benefits.3 The report also indicated there was a 22 percent increase in number of veterans receiving the benefits and a 73 percent increase in veterans that were 65 

years and older. This is likely reflective of an aging veteran population, and the increasing life expectancy of Americans. 

The GAO report suggests discontinuing TDIU benefits beyond the Social Security 

Administration’s full retirement age; the logic that was provided was that veterans 

older than the full retirement age would not be working due to age and would likely 

have income from other sources. However, The American Legion disagrees because 

this not only contradicts clearly stated law in the regulations, it also is not an accurate reflection of the changing statistics of the American workforce. 

VA benefits are codified in the Code of Federal Regulations, where it clearly 

states: 

Age may not be considered as a factor in evaluating service-connected disability; 

and unemployability, in service-connected claims, associated with advancing age or 

intercurrent disability, may not be used as a basis for a total disability rating. Age, 

as such, is a factor only in evaluations of disability not resulting from service, i.e., 

for the purposes of pension.4

Furthermore (emphasis added): 

. . . if the total rating is based on a disability or combination of disabilities for 

which the Schedule for Rating Disabilities provides an evaluation of less than 100 

percent, it must be determined that the service-connected disabilities are sufficient 

to produce unemployability without regard to advancing age.5


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6Social Security: June 2015: ‘‘How Work Affects Your Benefits’’ 

7 Resolution No.18-AUG 2014. 

8 HVAC Subcommittee on Disability Assistance and Memorial Affairs Hearing-Dec 4, 2013. 

The regulations are clear and have been enforced in this manner 

for decades without problems. It’s not just the way VA has implemented the program, it’s the law. 

In addition, the labor statistics show that Americans are working 

later and later into their 60’s and beyond, as health and lifespan 

have improved. From 1977–2007, Americans age 65 and older in 

the workforce has increased by 101 percent, according to the Bureau of Labor Statistics (BLS); of these individuals, 56 percent are 

working full-time. These Americans are eligible to collect Social Security retirement benefits concurrent with income received through 

their employment, according to Social Security’s regulations.6

When preparing this report, GAO worked closely with The American Legion to understand TDIU benefits. During the process, The 

American Legion indicated that veterans receiving TDIU are by 

definition unable to sustain employment. For the Americans discussed in the BLS report, they are able to receive both Social Security benefits and the financial gain of employment. If TDIU benefits were eliminated at retirement age, those veterans receiving 

TDIU prior to retirement would only be able to survive off of Social 

Security benefits. 

Furthermore, many veterans receive TDIU for decades prior to 

retirement. Due to this fact, they often do not receive an employer 

retirement package. Additionally, as the veterans would not have 

been contributing to Social Security during the period of receiving 

TDIU, their Social Security benefits would be greatly reduced. In 

the end, veterans that suffered severe medical conditions related to 

their military service to this nation that prevented an ability to 

work would ultimately suffer significant financial hardship once 

they reached 65 years old. The American Legion opposes ‘any administrative or legislative proposal to dilute or eliminate any provision of the disability compensation program’’ 7 and will always oppose such diminutions. 

Another significant area of concern highlighted in the report was 

the manner in which TDIU claims were being adjudicated. VA instructs its raters how to adjudicate the claims; however, the implementation of the instructions varies based upon the individual 

rater. As a result, a certain level of inconsistency in the delivery 

of the benefit occurs. The report also points to VA’s quality assurance approach and an inability to provide a comprehensive assessment of TDIU adjudications. 

The American Legion has testified before Congress on multiple 

occasions regarding VA’s inconsistencies in the adjudications of 

claims; these concerns extend beyond TDIU benefits to the types of 

VA disability claims that are being adjudicated. In December 2013, 

The American Legion testified regarding concerns pertaining to 

VA’s evaluation process. Within the testimony, we stated that VA 

fails to truly provide a comprehensive evaluation, instead opting 

for a checklist format to indicate that certain considerations have 

been offered.8 We continue to assert that a thorough evaluation is 

unable to occur if VA does not conduct a thorough evaluation of its 

own processes. The entire purpose of the TDIU rating is to reflect 


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9 VA eliminates Eligibility Verification Report-Dec. 20, 2012. 

10 Resolution No. 28: May 2015. 

a comprehensive understanding of the unique impact of the complete disability picture on an individual veteran. 

In December 2012, VA announced that individuals receiving VA 

pension benefits no longer are obligated to complete an annual Eligibility Verification Report (EVR). The EVR was designed to verify 

that beneficiaries were earning below the prescribed amount for 

eligibility. Within VA’s announcement, they indicated that they 

had formed a relationship with the Internal Revenue Service (IRS) 

and Social Security Administration (SSA) to verify income. The 

American Legion supported the VA’s announcement, recognizing 

that this would improve efficiency in the administration of the VA 

pension program.9

Similar to VA’s pension program, TDIU has income requirements. While the GAO report notes that VA has plans to release 

an electronic data system that it is compatible with SSA, it is frustrating that this has been unavailable to veterans receiving TDIU 

benefits; meanwhile, compatibility appears to exist for the pension 

program. 

Previous employer cooperation also appears to hinder the adjudication process. Had VA been utilizing the relationship created in 

2012 with SSA and the IRS, employer cooperation would not be required. Waiting for employers to report income likely takes significantly longer than reviewing an electronic database. The American 

Legion supports efforts to address all claims, to include its growing 

inventory of appeals, in an expeditious and accurate manner, provided that no program diminishes a veteran’s due process rights.10

If VA employs the process it efficiently uses with its pension beneficiaries, it would expedite the manner in which some claims are 

adjudicated. 

The American Legion believes efficiencies with TDIU can be 

achieved through better electronic communication between VA, 

SSA, and the IRS, much in the same way these efficiencies have 

been achieved in the pension program. It’s a way to improve the 

overall operation of the program. 

Conclusion 

The American Legion fully supports TDIU. We recognize that 

military service is inherently dangerous, and that service may have 

severe physical and psychological consequences. Quite simply the 

VA rating schedule does not address each symptom or condition, 

and the severity of a medical condition may prevent employment 

for some veterans while not impacting other veterans quite as severely. Through having a strong TDIU program, we are able to ensure that our nation’s veterans receive the necessary compensation 

awarded due to catastrophic medical conditions incurred by our 

veterans. 

There are ways to improve the TDIU program—better data efficiency by communication with other agencies and attention to most 

consistent adjudication would be two of them. Ensuring adjudicators understand the importance of looking at the entire disability 

picture of the veteran in question is essential to a well run program. 


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However, cutting benefits to elderly veterans is a non-starter, 

and The American Legion strongly urges the Committee to dismiss 

this GAO recommendation. It contradicts the law, it contradicts 

labor statistics, and it will directly hurt veterans who have been 

devastatingly injured in service to this country. 

As always, The American Legion thanks this committee for the 

opportunity to explain the position of the over 2 million members 

of this organization. Questions concerning this testimony can be directed to Warren J. Goldstein, Assistant Director in The American 

Legion’s Legislative Division at (202) 861–2700, or 

wgoldstein@legion.org. 


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Æ 


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