VETERANS’ DISABILITY

BENEFITS

Improvements Needed to 

Better Ensure VA 

Unemployability Decisions 

Are Well Supported

Statement of Daniel Bertoni, Director Education, 

Workforce, and Income Security

Testimony

Before the Committee on Veterans’ 

Affairs, House of Representatives

For Release on Delivery

Expected at 10:30 a.m. ET

Wednesday, July 15, 2015

GAO-15-735T

United States Government Accountability Office
Letter

Page 1 GAO-15-735T 

Chairman Miller, Ranking Member Brown, and Members of the 

Committee:

I am pleased to discuss our work on the Department of Veterans Affairs 

(VA) Total Disability Individual Unemployability (TDIU) benefits. The TDIU 

benefit is a supplemental benefit created by VA to allow veterans to be 

deemed totally disabled even if they do not meet the criteria for a 100 

percent rating.1

In fiscal year 2013, over 330,000 of the approximately 3.7 million veterans 

VA compensated for disabilities incurred during active military service 

received TDIU benefits. The number of older veterans receiving TDIU 

benefits has been increasing, as has the total amount of benefit 

payments. From 2009 to 2013, the disability payments to those receiving 

TDIU benefits—the base payment plus the supplement—increased by 30 

percent (to $11 billion in fiscal year 2013). For that year, we estimated 

$5.2 billion in payments for the supplement alone. These benefit trends 

have occurred alongside advances in medicine and technology and 

changes in the labor market and society. These trends have led to 

questions and suggested changes regarding TDIU benefits. My remarks 

today are based on our report issued on June 2, 2015, and like that report 

my statement (1) examines age-related trends in the population of 

Individual Unemployability beneficiaries and benefit payments; (2) 

assesses the procedures used for benefit decision-making; and (3) 

describes suggested options for revising the benefit.

To be eligible for TDIU benefits, a veteran must have a 

single service-connected disability rated at least 60 percent or multiple 

disabilities with a combined rating of at least 70 percent (with at least one 

disability rated at 40 percent or higher). In addition, the veteran must be 

unable to obtain or maintain “substantially gainful employment” as a result 

of these service-connected disabilities.

2

For our June report, we obtained and analyzed data from VA regarding 

new and continuing beneficiaries covering fiscal years 2009 through 2013 

 1

Veterans who are eligible for TDIU do not actually receive separate TDIU payments. 

Instead, TDIU serves as a method by which veterans can have their disability rating raised 

to 100 percent and receive larger disability payments. For ease of reporting, however, we 

refer to TDIU “benefits” and the TDIU “supplement” throughout the report and in this 

testimony.

2

See GAO, Veterans’ Disability Benefits: VA Can Better Ensure Unemployability 

Decisions Are Well Supported, GAO-15-464 (Washington, D.C.: June 2, 2015).

Letter
Page 2 GAO-15-735T 

(the most recently available data); examined relevant federal laws, 

regulations and procedures for new and continuing claim determination 

decisions; conducted interviews with VA and its Veterans Benefits 

Administration (VBA)3 officials in their central office and regional offices 

as well as disability experts familiar with TDIU benefits and 

representatives of veterans service organizations (VSO); and reviewed 

options presented for revising the TDIU eligibility and benefit structure. 

We conducted a total of 11 in-person discussion groups with rating 

specialists—the VA officials who review TDIU claims—across 5 of the 

regional offices; each discussion group consisted of 2 to 3 rating 

specialists, for a total of 29 rating specialists. In addition, we conducted a 

non-generalizable file review of 34 randomly-selected claims, including 

those resulting in granted and denied benefits that were decided between 

April 2012 and April 2014. A more detailed explanation of our 

methodology is available in our report.4

 3

Throughout this statement, we refer to VBA when discussing items that fall under their 

roles and responsibilities; otherwise we refer to VA. 

We conducted the work on which 

this statement is based in accordance with generally accepted 

government auditing standards. Those standards require that we plan 

and perform the audit to obtain sufficient, appropriate evidence to provide 

a reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence we obtained provides a 

reasonable basis for our findings and conclusions based on our audit 

objectives. 

4

GAO-15-464.
Page 3 GAO-15-735T 

As we reported in June 2015, in fiscal year 2013, 332,934 veterans 

received TDIU benefits, an increase of 22 percent since fiscal year 2009.5

Overall, TDIU beneficiaries make up a substantial portion (45 percent) of 

the group of all veterans who receive benefit payments at the 100 percent 

disability compensation rate.6 This population of TDIU beneficiaries 

increased in each of the 4 years we compared to the following year.

Moreover, the number of older beneficiaries (aged 65 and older) 

increased for each of the years we examined and by fiscal year 2013, 

they represented the majority (54 percent) of the TDIU population—a 73 

percent increase from fiscal year 2009.7 Further, of these older 

beneficiaries, 56,578 were 75 years of age and older in fiscal year 2013 

while 10,567 were 90 years of age and older. The increase in 

beneficiaries over age 65 was mostly attributed to new beneficiaries who 

were receiving the benefit for the first time as shown in figure 1. Between 

2009 and 2013, the number of new older beneficiaries more than doubled 

to 13,259. Of these new older beneficiaries, 2,801 were aged 75 and over 

while 408 were 90 and over.8

 5

GAO-15-464.

6

In fiscal year 2013, 712,000 veterans received 100 percent disability compensation. 

7

We categorized veterans who were 65 years of age and above as “older” because age 

65 has been the traditional age at which individuals would be eligible to receive their full 

Social Security retirement payment. However, the full retirement age gradually increases 

from 65 (for 1937 and earlier birth cohorts) to 67 (for 1960 and later birth cohorts). 

8

According to data from the Census Bureau’s American Community Survey, only a small 

percentage of veterans work beyond age 65. Between 2011 and 2013, 17.5 percent of 

veterans aged 65 and older and 7.9 percent of veterans aged 75 and older were 

employed. The American Community Survey 3-year Public Use Microdata Series 

percentage estimates are reported as having 95 percent confidence intervals of +/- 1 

percentage point of the estimate.

The TDIU Beneficiary 

Population and 

Benefit Costs Are 

Growing, Especially 

Among Older 

Veterans
Page 4 GAO-15-735T 

Figure 1: Sources of the Increase in the Older Total Disability Individual 

Unemployability (TDIU) Beneficiary Population, Fiscal Years 2009-2013

We estimated that, in fiscal year 2013, the TDIU benefit was a $5.2 billion 

supplemental payment above what beneficiaries would have received in 

the absence of TDIU benefits. Although VA does not track the overall 

costs of TDIU benefits, we used disability compensation payment rate 

information, data on the TDIU beneficiary population, and data on the 

population of all new beneficiaries to calculate this estimate.

In our June 2015 report, we found that VBA’s guidance, quality assurance 

approach, and income verification procedures do not ensure that TDIU 

decisions are well supported.9

• Incomplete guidance on how to determine unemployability: VBA 

provides guidance to rating specialists to help them determine if 

veterans meet the eligibility requirements for TDIU benefits. This 

guidance tasks rating specialists, based upon the evidence at hand, to 

determine veterans’ unemployability; it also recognizes that the 

process is subjective and involves professional interpretation. 

However, the guidance provided by VBA on which factors to consider 

when determining if a veteran is “unemployable” is incomplete in three 

ways, creating potential variation in TDIU claim decisions.

Specifically, we identified the following 

challenges in decision-making procedures:

 9

GAO-15-464.

VBA’s Benefit 

Decision-Making 

Procedures Do Not 

Ensure TDIU 

Decisions Are Well 

Supported
Page 5 GAO-15-735T 

• First, rating specialists in some (5 of 11) of the discussion groups 

we held at five regional offices disagreed on whether they are 

permitted to consider additional factors not specifically mentioned 

in VBA’s guidance such as, enrollment in school, education level, 

or prior work history when assessing an applicant’s employability. 

For example, one rating specialist recently reviewed a claim for 

TDIU that was submitted by a veteran suffering from traumatic 

brain injury. The rating specialist found that the veteran was 

enrolled in school part time and earning A’s in engineering 

classes, which the specialist felt clearly demonstrated 

employability. However, another rating specialist within the group 

stated that the veteran’s enrollment in classes would not be part of 

her decision-making.

• Second, rating specialists noted that for those factors that rating 

specialists can consider in their decision-making process, such as 

whether the veteran receives Social Security Disability Insurance 

benefits, the guidance is silent on which, if any, should be given 

greater priority or weight. We confirmed that this information was 

not in the manual or guidance provided by VBA. Rating specialists 

in the majority (7 of 11) of the discussion groups specifically noted 

that they could come to an opposite decision when reviewing the 

same evidence due to the fact that they weighted certain factors 

differently. For example, a rating specialist told us that a medical 

opinion was always weighted more heavily than all other evidence 

in the veteran’s file while another specialist expressed a hesitancy 

to rely too much on the examiner’s opinion.

• Third, the guidance does not provide instruction on how to 

separate extraneous factors from allowable ones. Findings from 

our case file review illustrates this issue: One file described a 77-

year-old veteran claiming TDIU benefits for blindness that was 

caused by (1) a service-connected disability, (2) glaucoma, and 

(3) macular degeneration. However, because all three conditions 

related to the veteran’s quality of vision, the rating specialist noted 

in the file her difficulty separating the effect of the serviceconnected disability from the non-service-connected glaucoma

and macular degeneration due to the man’s age.
Page 6 GAO-15-735T 

In light of these challenges, in our June 2015 report, we recommended 

that VA instruct VBA to update the guidance to clarify how rating 

specialists should determine unemployability when making TDIU benefit 

decisions.10

• Format and delivery of guidance is inefficient: Rating specialists in 

the majority (7 of 11) of our discussion groups at five regional offices 

reported that VBA’s guidance for reviewing TDIU claims is formatted 

and delivered in ways that make it difficult for them to efficiently 

complete their decision-making responsibilities. For example, TDIU 

guidance is delivered using multiple formats, including—but not 

limited to—manuals, policy and procedure letters, monthly bulletins, 

and e-mails. Thus, rating specialists lack a definitive source for TDIU 

benefit decision guidance. In addition, VBA officials acknowledged the 

manual for TDIU benefit decisions is outdated and stated they issue 

interim guidance in many forms between manual updates because 

such updates are time-consuming and difficult to do on a regular 

basis. VBA officials also told us they have completed two of the four 

stages for a web portal that will house all existing guidance and will 

subsequently consolidate the guidance into one processing manual, 

which they are in the process of rewriting. Officials told us they plan to 

complete the consolidation by the end of fiscal year 2015.

This update could clarify if factors such as enrollment in 

school, education level, and prior work history should be used and if so, 

how to consider them, and whether to assign more weight to certain 

factors than others. VA concurred with this recommendation and stated 

that VBA will review and identify improvements to TDIU policies and 

procedures to provide clearer guidance including the extent to which age, 

education, work history, and enrollment in training programs are factors 

claims processors must address. VA anticipates that its Compensation 

Service will complete this review and provide options to VBA for a 

decision by the end of January 2016.

• Quality assurance approach may not be comprehensive: VBA’s 

quality assurance approach—accomplished mainly through its 

Systematic Technical Accuracy Review (STAR)—may not be 

 10GAO-15-464.
Page 7 GAO-15-735T 

providing a comprehensive assessment of TDIU claim decisions.11

While we recognize that TDIU benefit decisions have an inherently 

subjective component, in June 2015, we recommended that VA identify 

other quality assurance approaches to comprehensively assess TDIU 

benefit claim decisions.

Specifically, the agency’s current approach does not allow it to identify 

variations in these decisions or ascertain the root causes of variation 

that may exist. VBA’s quality assurance standards indicate that for the 

quality assurance officer to decide that the rating specialist made an 

error, it must be clear and undebatable; the officer cannot substitute 

his or her professional opinion with the opinion of the rating specialist 

who made the original decision. Because of this high standard, a 

STAR review of a sample of claims finalized during the first three 

quarters of fiscal year 2014 determined that nearly 95 percent of TDIU 

claims (872 of 920) were error-free. Of the 48 claims found to contain 

an error, all the errors were found to be “procedural,” such as an 

incorrect date for the onset of unemployability. No “decisional”

errors—that is, an error on the decision to grant or deny the benefit—

were found. According to VBA officials, it is unlikely that they will find 

many decisional errors because there is so much individual judgment 

allowed in TDIU claim decisions, and VBA’s quality assurance 

standards do not allow for the reevaluation of the professional opinion 

of the original rating specialist.

12 The approach should assess the completeness, 

accuracy and consistency of decisions and ascertain the root causes of 

any significant variation so that VBA can take corrective actions as 

appropriate. This effort could be informed by the approaches VBA uses to 

assess non-TDIU claims. For example, as we reported in 2014, VBA 

conducted a targeted review of military sexual trauma claims using a 

consistency questionnaire to test rating specialists’ understanding and 

interpretation of policies in response to concerns that related posttraumatic stress disorder claims were not being accurately decided.13

 11VBA measures the accuracy of disability compensation claims decisions through the 

STAR process in which certified reviewers use a checklist to assess a random sample of 

completed claims for each of the 57 regional offices. VA reports national estimates of 

accuracy through its annual performance and accountability report and annual budget 

submission.

VA 

12GAO-15-464.

13GAO, Military Sexual Trauma: Improvements Made, but VA Can Do More to Track and 

Improve the Consistency of Disability Claim Decisions, GAO-14-477 (Washington, D.C.: 

June 9, 2014).
Page 8 GAO-15-735T 

concurred with this recommendation and stated that quality assurance 

staff would add TDIU-specific questions to the In-Process Review 

checklist at the regional offices by September 2015. Based on the results 

of the reviews, VA stated that VBA will determine the most effective 

approach for assessing the accuracy and consistency of TDIU decisions.

• Self-Reported income eligibility information is not verified: VBA 

requires TDIU claimants and beneficiaries to provide information on 

their employment earnings, but it places the benefits at risk of being 

awarded to ineligible veterans by not using third-party data sources to 

independently verify self-reported earnings. To begin receiving and 

remain eligible for TDIU benefits, veterans must meet certain income 

eligibility requirements.14

To better ensure beneficiaries’ eligibility, in June 2015, we recommended 

VA instruct VBA to verify the self-reported income provided by veterans 

(1) applying for TDIU benefits and (2) undergoing the annual eligibility 

review process by comparing such information against IRS earnings 

data.

Rating specialists use information provided 

by claimants to request additional information from employers and, 

when possible, verify the claimant’s reported income, especially for 

the year prior to applying for the benefit. However, VBA officials and 

our file review indicated that employers provide the requested 

information only about 50 percent of the time. If VBA does not receive 

verification from a veteran’s employer after multiple attempts, it 

accepts the veteran’s claimed earnings. VBA previously conducted 

audits of existing beneficiaries’ reported income by obtaining income 

verification matches from Internal Revenue Service (IRS) earnings 

data through an agreement with the Social Security Administration 

(SSA). However, the agency is no longer doing so despite having 

standing agreements with the IRS and SSA to do so. In 2012, VBA 

suspended income verification matches to allow for the development 

of a new system that would allow for more frequent, electronic 

information sharing. However, that system was never developed.

15

 14If a veteran is employed, to be eligible for TDIU benefits such employment must be 

marginal, which under VA regulations is generally deemed to exist when annual earned 

income does not exceed the poverty threshold established by the Census Bureau of the 

U.S. Department of Commerce.

VA concurred with this recommendation and stated that VBA is 

developing an upfront verification process including expanding the data 

15GAO-15-464.
Page 9 GAO-15-735T 

sharing agreement with SSA, which enables VBA to receive federal tax 

information via an encrypted electronic transmission through a secure 

portal. VBA expects to implement this new process for TDIU claimants by 

January 2016.

With regard to the options for revising TDIU eligibility requirements and 

the benefit structure, in our June 2015 report, we identified a number of 

options proposed by others as described in table 1.16

Table 1: Seven Options Proposed by Others for Revising Total Disability Individual Unemployability (TDIU) Requirements and 

Benefit Structure

More specifically, 

six options focused on revising eligibility such as changing existing 

requirements in various ways, for example, setting age limits, lowering the 

disability rating requirement, or increasing the income threshold. A 

seventh option would affect the benefit structure by lowering—but not 

immediately eliminating—the TDIU benefit payments as beneficiaries 

earn income beyond the eligibility limit.

Option Description

1. Discontinue benefits beyond retirement 

 age*

Discontinue the TDIU payment when the veteran reaches Social Security’s full 

retirement age (65 to 67, depending on birth year). This option was proposed by the 

Congressional Budget Office (CBO) in 2013, as part of a broader examination to 

reduce the federal deficit, and estimated that restricting TDIU benefits to veterans 

younger than their full Social Security retirement age would reduce costs by $15 

billion between 2015 and 2023.

2. Consider vocational assessment in eligibility 

 decision

a

Consider the results of a mandatory vocational assessment before granting TDIU 

benefits. The vocational assessment would address whether the veteran could be 

rehabilitated in order to maintain employment.

3. Increase earnings limit Increase the maximum earnings limit for TDIU eligibility to match that used in the 

SSDI, which was $12,480 per year (for a non-blind individual) in fiscal year 2013. 

4, Lower disability rating criteria Lower the TDIU eligibility criteria for veterans with multiple disabilities to a combined 

scheduled disability rating of 60 percent in place of the existing regulation which 

states that a veteran with multiple disabilities is eligible for TDIU if the combined 

rating is at least 70 percent so long as one of the multiple disabilities is rated at least 

40 percent.b

 16In our report, and in this statement, we do not recommend or endorse the adoption of 

any particular policy option or package of options. Rather, we identify them from the 

literature review as potential options that could be considered. The options presented here 

are listed in no particular order. 

The change in the multiple disability ratings threshold would also 

eliminate the requirement that one of the disabilities have a minimum rating of 40 

percent.

Options for Revising 

TDIU Eligibility 

Requirements
Page 10 GAO-15-735T 

Option Description

5. Add new unemployability criteria* Amend the criteria for assessing “unemployability” to include the veteran’s 

education, work history, and the medical effects of an individual’s age on his or her 

potential employability. 

6. Use patient-centered work disability 

 measure

Adopt a “patient-centered work disability measure” to evaluate TDIU eligibility. In 

addition to assessing the veteran’s work history, as currently performed, VA would 

consider other factors, including motivation and interests. VA staff would measure 

multiple factors—impairments, functional limitations, and disability—relevant to 

health-related work disability.

7. Gradually reduce benefit payments Implement a gradual reduction in the TDIU payment as the veteran, in returning to 

work, exceeds the maximum income that determines eligibility for TDIU, which was 

$11,888 per year for an individual in fiscal year 2013. The existing TDIU regulations 

call for a discontinuation of a TDIU benefit once a veteran has income above the 

maximum after having worked for more than a year.

Source: GAO review of selected reports on the TDIU benefit. | GAO-15-735T

Note: Options marked with a * have been implemented (or a similar approach has been) in the federal 

Social Security Disability Insurance (SSDI) program.

a

Congressional Budget Office, Options for Reducing the Deficit: 2014 to 2023 (Washington, D.C.: 

November 2013), 48.

b

VA regulations also state that veterans with a single disability rating at 60 percent and who meet the 

other criteria are eligible.

Based on interviews with selected experts and representatives of 

veterans service organizations (VSO), we identified a range of potential 

strengths and challenges associated with each option. The experts and 

VSO representatives commonly mentioned the equity of the proposed 

change, an increase or decrease of VA’s management and administration 

efforts and cost, and the effect on veterans as potential strengths and 

challenges. For example, a couple of the options present possible 

opportunities for VA to better target TDIU benefits to veterans who are 

unemployable, but implementation of these options could pose 

challenges in ensuring that all veterans are treated equitably. Each of the 

seven options and the potential strengths and challenges identified by 

stakeholders that we interviewed are summarized in our report.

In addition to these options, in its 2012 report, the Advisory Committee on 

Disability Compensation made recommendations to VA regarding 

potential revisions to the TDIU benefit, and while VA concurred with those 
Page 11 GAO-15-735T 

recommendations, it has yet to take actions in response to them.17

Specifically, the committee recommended that the agency (1) study 

whether age should be considered when deciding if a veteran is 

unemployable and (2) require a vocational assessment for all TDIU 

applicants. Taking the committee’s advice into consideration could better 

position the agency to meet federal internal control standards. In its 

comments to the committee, VA noted that before it could proceed with 

the vocational assessment requirement, it needed to complete a study on 

whether it was possible to disallow TDIU benefits for veterans whose 

assessment indicated they would be employable after rehabilitation. In 

light of VA’s agreement with the committee’s recommendations, we 

subsequently recommended in our June 2015 report that VBA develop a 

plan to study (1) whether age should be considered when deciding if 

veterans are unemployable and (2) whether it is possible to disallow TDIU 

benefits for veterans whose vocational assessment indicated they would 

be employable after rehabilitation.18

In conclusion, the benefits veterans are entitled to, as well as VA’s 

decisions on what constitutes a work disability, are in need of constant 

refinement to keep pace with changes in medicine, technology, and the 

modern work environment. Within this broad context, VA can position 

itself to better manage the TDIU benefit and look for opportunities to 

strengthen the assessments of its eligibility decisions. Having a strong 

framework for program integrity is important for any federal program, and 

in light of the multi-billion dollar—and growing—TDIU benefit, taking steps 

to ensure payments are properly awarded to veterans is essential. 

Moreover, VA has the opportunity to benefit from the attention the TDIU 

benefit has received by various experts, including its own advisory 

committee. The options and potential strengths and challenges identified 

VA concurred with our 

recommendation and stated that Compensation Service initiated a review 

of TDIU policies and procedures in April 2015 including consideration of 

age and vocational assessments in claim decisions. VBA expects to 

complete an action plan to initiate any studies, legislative proposals, or 

proposed regulations deemed necessary, by July 2015.

 17The committee is required to issue reports no less than every 2 years on VA’s programs 

and activities related to the payment of disability compensation and include 

recommendations deemed necessary. The 2014 report contained no new 

recommendations regarding TDIU and noted the committee intends to issue new 

recommendations no later than 2016.

18GAO-15-464.
Page 12 GAO-15-735T 

by experts and VSO representatives may warrant consideration in any 

broader benefit refinement discussions and efforts to improve the TDIU 

benefit design and eligibility criteria going forward. VA generally agreed 

with our conclusions in our June 2015 report and concurred with all of our 

recommendations and made plans to address them.19

Chairman Miller, Ranking Member Brown, and Members of the 

Committee, this concludes my prepared remarks. I would be happy to 

answer any questions that you or other members of the committee may 

have.

For further information regarding this testimony, please contact Daniel 

Bertoni at (202) 512-7215 or bertonid@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this statement. Key contributors to this testimony include 

Brett Fallavollita (Assistant Director), Melissa Jaynes, Kurt Burgeson, 

David Chrisinger, Alexander Galuten, and Kirsten Lauber.

 19GAO-15-464.

(131370)
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