GAO 

United States Government Accountability Office

Report to Congressional Committees

MILITARY AND 

VETERANS’ 

BENEFITS 

Analysis of VA 

Compensation Levels 

for Survivors of 

Veterans and 

Servicemembers 

November 2009 

GAO-10-62 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

November 2009

MILITARY AND VETERANS’ BENEFITS

Analysis of VA Compensation Levels for Survivors of 

Veterans and Servicemembers

Highlights of GAO-10-62, a report to 

congressional committees 

The Dependency and Indemnity 

Compensation (DIC) program 

provides monthly payments to the 

survivors of those who died as a 

result of a service-connected 

disability or while on active duty in 

the military. In fiscal year 2008, the 

Department of Veterans Affairs 

(VA) paid over $4.7 billion to about 

354,000 survivors, replacing a 

portion of income lost with the 

death of the veteran or 

servicemember. 

The Veterans’ Benefits 

Improvement Act of 2008 directed 

GAO to study the DIC program and 

the levels of payments it provides. 

This report addresses (1) the 

extent to which DIC replaces VA 

disability compensation or active 

duty military pay lost due to the 

death of a veteran or 

servicemember, and (2) how DIC 

benefits compare to benefits for 

survivors of civilian federal 

employees. 

GAO obtained and analyzed data 

on DIC payments, VA disability 

compensation, and military pay 

rates. GAO also obtained 

information on survivor benefits 

under federal employee retirement 

and workers’ compensation 

programs. GAO did not include in 

its analysis other sources of 

income survivors may receive, such 

as Social Security, private 

pensions, and life insurance. 

Lastly, GAO interviewed officials 

from VA and groups representing 

veterans, servicemembers, and 

their survivors. 

GAO is not making any 

recommendations in this report. 

For more than half of survivors who recently began collecting DIC, the benefit 

replaced between 35 and 55 percent of the VA disability compensation or 

estimated military pay lost due to the death of a veteran or servicemember. 

Because DIC provides generally flat payments, the rate at which it replaced 

lost income varied according to the amount of prior income, such as VA 

disability compensation. The most common survivor was an older female 

spouse of a totally disabled veteran who, in 2009, received $1,154 per month—

the base DIC payment—compared with $2,823 per month paid in VA disability 

compensation to the disabled veteran prior to death. In these cases, DIC 

replaced 41 percent of prior compensation. There were, however, DIC 

recipients at the far ends of the scale. For example, for surviving spouses of 

mid-ranked officers who died on active duty, the flat rate DIC payment 

represented 19 percent of prior military pay; for survivors of partially disabled 

veterans who had received relatively low VA disability compensation, the flat 

rate DIC payment sometimes represented more than 100 percent of prior 

compensation. 

Percentage of VA Compensation or Military Pay Replaced by DIC for Survivors of Veterans

and Servicemembers 

Note: This graphic illustrates recipients who began collecting DIC benefits in fiscal years 2004-2008. 

GAO estimated military pay based on the rank of the servicemember. 

When comparing survivor benefits for DIC with those for comparably paid 

civilian federal employees, DIC benefits are generally higher than survivor 

benefits paid by federal retirement programs, but lower than those paid by 

federal workers’ compensation. The DIC program’s flat payment structure 

differs from federal programs in which payment amounts are based on 

employee salaries and years of employment. We found that for most survivors, 

DIC provides higher benefits than the federal retirement programs because it 

gives more money to survivors of lower paid individuals, who comprise the 

majority of DIC recipients. In contrast, DIC payments are almost always less 

than workers’ compensation payments for survivors of federal employees who 

die as a result of job-related injuries. For comparable employees, the salary 

levels of nearly all servicemembers in 2009 would result in higher survivor 

View GAO-10-62 or key components. payments under workers’ compensation than under the DIC program. 

For more information, contact Daniel Bertoni 

at (202) 512-7215 or bertonid@gao.gov. 
Page i GAO-10-62 

Contents 

Letter 1

Background 2 

For Most Recent Survivors, DIC Replaced Between 35 and 55 

Percent of the VA Disability Compensation or Military Pay 

Previously Paid to the Veteran or Servicemember 12 

DIC Benefits Are Generally Higher Than Survivor Benefits Paid by 

Federal Retirement Programs, but Are Usually Lower Than 

Federal Workers’ Compensation Survivor Benefits 16 

Agency Comments 21 

Appendix I Objectives, Scope, and Methodology 23 

Appendix II GAO Contact and Staff Acknowledgments 27 

Table 

Table 1: Monthly DIC Payments to Survivors, as of December 1, 

2008 4 

Figures 

Figure 1: Dependency and Indemnity Compensation Recipients by 

Type, September 2008 5 

Figure 2: Dependency and Indemnity Compensation Recipients, by 

Qualification for Benefits, September 2008 6 

Figure 3: Percentage of VA Disability Compensation or Military Pay 

Replaced by DIC for Survivors of Veterans and 

Servicemembers 13 

Figure 4: Examples Showing the Difference Between Disability 

Compensation or Military Pay and the DIC Benefits 

Received by Surviving Spouses 14 

Figure 5: Comparison of Survivor Payments Under DIC and CSRS 

for Veterans and Former Federal Employees Who Died in 

2009 After a Prolonged Disability (1983-2009) 17 

Figure 6: Comparison of Survivor Payments Under DIC and FERS 

for Veterans and Former Federal Employees Who Died in 

2009 after Being Disabled (2005-2009) 19 

 Military and Veterans' Benefits 
Figure 7: Comparison of Survivor Payments Under DIC and FECA 

for Servicemembers and Federal Employees Who Died in 

Service in 2009 20 

Abbreviations 

BDN Benefits Delivery Network 

CSRS Civil Service Retirement System 

FECA Federal Employees’ Compensation Act 

FERS Federal Employees’ Retirement System 

DIC Dependency and Indemnity Compensation 

DOD Department of Defense 

SBP Survivor Benefit Plan 

SSA Social Security Administration 

SGLI Servicemembers’ Group Life Insurance 

SSDI Social Security Disability Insurance 

SSI Supplemental Security Income 

TSGLI Servicemembers’ Group Life Insurance Traumatic Injury 

 Protection Program 

TSP Thrift Savings Plan 

VA Department of Veterans Affairs 

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Page ii GAO-10-62 Military and Veterans' Benefits
Page 1 GAO-10-62 

 

United States Government Accountability Office

Washington, DC 20548 

 

November 13, 2009 

Congressional Committees 

The Department of Veterans Affairs (VA) provides monthly Dependency 

and Indemnity Compensation (DIC) payments to the survivors of veterans 

who died as a result of a service-connected disability and servicemembers 

who died while on active military duty. In fiscal year 2008, VA paid over 

$4.7 billion to support about 354,000 survivors. Approximately 91 percent 

of these recipients were the surviving spouses of veterans and 

servicemembers; the remainder were children and parents. These 

payments replace a portion of previous income, including VA disability 

compensation for veterans and military pay for active duty 

servicemembers. 

Members of Congress and some veterans service organizations have raised 

questions over the extent to which DIC supports surviving spouses, 

children, and parents, and how it compares with benefits available to 

survivors of federal civilian employees. The Veterans’ Benefits 

Improvement Act of 20081

 directed GAO to study the DIC program and the 

levels of payments it provides. This report addresses (1) the extent to 

which DIC replaces VA disability compensation or active duty military pay 

lost due to the death of a veteran or servicemember, and (2) how DIC 

benefits compare to benefits for survivors of civilian federal employees. 

To address these objectives, we examined VA data on all survivors who 

received DIC payments in September 2008, the end of the last fiscal year at 

the time of our review.2

 In addition, we examined VA data on all survivors 

who began receiving DIC at some point during fiscal years 2004 through 

2008, the most recent 5 complete fiscal years for which data were 

available. For those who began receiving benefits recently, we were able 

to obtain information on the amount of monthly VA disability 

compensation paid to the disabled veterans prior to their deaths. We 

assessed the reliability of the VA data and judged them to be sufficiently 

reliable for our use. For the more recent survivors, we compared their 

monthly DIC payments to the payments made to the veterans or 

1

Pub. L. No. 110-389, § 223, 122 Stat. 4145, 4156-57. 

2

For purposes of this analysis, when referring to survivors, we mean one or more persons 

(family members) surviving a single veteran or servicemember. 

 Military and Veterans' Benefits 
 

servicemembers before their deaths, either from VA disability 

compensation or estimated Department of Defense (DOD) active duty 

pay.3

 We focused on more recent recipients due to limitations with VA’s 

historical data on disability compensation payments to veterans. We also 

compared DIC benefits to programs that provide recurring payments to 

the survivors of federal employees who die while on the job or after a 

period of disability. These benefits are provided under the Civil Service 

Retirement System (CSRS) and Federal Employees’ Retirement System 

(FERS); and the federal workers’ compensation system under the Federal 

Employees’ Compensation Act (FECA). We did not include in our analysis 

other sources of income survivors may receive, such as Social Security, 

private pensions, or life insurance. For additional context, we reviewed 

past evaluations of DIC benefits and interviewed officials at VA and 

several organizations representing veterans, servicemembers, and their 

survivors. We also reviewed relevant federal laws and regulations. 

Additional information on the objectives, scope, and methodology of our 

work can be found in Appendix I. 

We conducted this performance audit from February 2009 to November 

2009, 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 based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings based on our audit 

objectives. 

Background 

VA DIC 

VA pays Dependency and Indemnity Compensation to surviving spouses, 

children, and parents. The surviving spouse of a veteran may qualify for 

this compensation if the veteran died on or after January 1, 1957, (1) from 

a service-connected disability, or (2) after being rated as totally disabled 

due to service-connected conditions for a continuous period of 10 years, 

Eligibility

 

3

To estimate the amounts DOD paid to servicemembers, we used the midpoint of military 

pay for the servicemember’s rank, including basic pay and allowances for housing and 

subsistence. 

Page 2 GAO-10-62 Military and Veterans' Benefits
 

or for at least 5 continuous years after discharge from military service.4

The surviving spouse of a servicemember qualifies for this compensation if 

the servicemember died while on active duty.5

 Some children aged 18 and 

older may receive separate DIC payments if they are in school or are 

unable to care for themselves.6

 Parents may receive these benefits if they 

were dependent on the veteran or servicemember for financial support. 

Surviving spouses receive basic DIC payments at a flat rate, currently 

$1,154 per month, regardless of their spouse’s military rank or degree of 

disability.7

 In addition to the set basic monthly payment, surviving spouses 

may qualify for additional payments: for example, if they have children 

under age 18, or have disabilities themselves. This compensation is paid to 

other surviving children at a flat rate, while surviving parents’ payments 

are based on the parents’ income. These monthly DIC payments are set by 

law, are consistent across the country, and generally subject to annual 

cost-of-living adjustments.8

 The payments are not subject to federal 

income taxes. (See table 1.) 

Payment Rates 

 

4

38 U.S.C. §§ 1310 and 1318(a) and (b). Additionally, a surviving spouse is entitled to this 

compensation if the veteran was a prisoner of war who was totally disabled for at least one 

year preceding death, and died on or after January 1, 1999. 

5

38 U.S.C. § 1301. 

6

38 U.S.C. § 1314(a) and (b). Children unable to care for themselves can receive DIC 

benefits if they became permanently incapable of self-support before reaching age 18. 

7

38 U.S.C. §1311(a)(1). The surviving spouse rate structure has changed over the years. 

When the current DIC program was established, effective in 1957, DIC provided surviving 

spouses with a flat-rate payment supplemented by 12 percent of the veteran’s basic military 

pay, adjusted for military pay increases. Servicemen’s and Veterans’ Survivor Benefit Act, 

Pub. L. No. 84-881, §§ 201-210, 70 Stat. 857, 862-68. In 1969, the law was amended to base 

DIC benefits solely on military pay grade, with survivors of higher-ranked veterans and 

servicemembers receiving higher payments. Act of Oct. 27, 1969, Pub. L. No. 91-96, 83 Stat. 

144, 144-45. In 1992, the rate structure was changed once again to a flat monthly payment. 

Veterans’ Benefits Act of 1992, Pub. L. No. 102-568, § 102, 106 Stat. 4321, 4321-22. Survivors 

of veterans and servicemembers who died prior to January 1, 1993, continue to receive 

payments determined by military rank. 

8

For example, the current rates, reflecting a 5.8 percent increase over the previous year, 

became effective December 1, 2008. 

Page 3 GAO-10-62 Military and Veterans' Benefits
 

Table 1: Monthly DIC Payments to Survivors, as of December 1, 2008 

Type of payment 

Monthly 

amount

For surviving spouses 

Basic surviving spouse rate $1,154

For each dependent child under age 18, add 286

For 8-year allowance, adda246

If the spouse is in need of aid and attendance, addb286

If the spouse is housebound, add 135

If the spouse has at least one child under age 18, addc250

For other surviving children (payments vary by situation of child) 

If the child is under age 18 and there is no surviving spoused488

If the child is between ages 18 and 22 and is in school 243

If the child is age 18 or older and became incapable of self-support 

before age 18 

488 

For surviving parents (payments vary by income) 

Maximum payment 569

Minimum payment, if income is under maximum allowed 5

If parent is in need of aid and attendance, add 308

Source: VA. 

a

Paid if, for a continuous period of at least 8 years immediately preceding the veteran’s death, (1) the 

veteran was in receipt of or entitled to VA disability compensation, and was rated as totally (100 

percent) service-connected disabled (including a rating based on individual unemployability); and (2) 

the surviving spouse was married to the veteran for the same 8 years. 

b

This allowance applies to a surviving spouse who is (1) a patient in a nursing home; (2) blind; or (3) 

so nearly blind or significantly disabled as to need regular assistance. 

c

This allowance is paid during a surviving spouse’s first 2 years of DIC entitlement, or until all 

dependent children reach age 18. 

d

If there is more than one surviving child, the overall rate is higher, but the rate per child is lower than 

$488 and the total payment is evenly split. For example, the rate for two children is $701 per month, 

with each child receiving $350.50. 

Page 4 GAO-10-62 Military and Veterans' Benefits
 

In September 2008, most DIC recipients (91 percent) were the surviving 

spouses of veterans and servicemembers.9

 The remainder were children 

and dependent parents. (See fig. 1.) Few of the surviving spouses had 

children supported by these benefits. Of the approximately 321,000 

surviving spouses receiving benefits, only about 13,000 had children 

supported by DIC. 

Recipients 

Figure 1: Dependency and Indemnity Compensation Recipients by Type, September 

2008 

Percentage of recipients by type

91%

8%

1%

Parents

Children

Spouses

Source: GAO analysis of VA data.

Meanwhile, the most common reason survivors qualified for this benefit 

was the death of a veteran from a service-connected disability. This 

accounted for 87 percent of the individuals whose survivors received these 

payments in September 2008. The remainder were survivors of other 

veterans, such as those found by VA to be totally disabled due to serviceconnected conditions for a continuous period of at least 10 years, and 

survivors of servicemembers who died on active duty. (See fig. 2.) 

 

9

We use the term “recipient” to refer to any survivor who is supported by DIC payments. In 

some cases, more than one survivor is supported by a single DIC payment, such as a 

surviving spouse with a child. 

Page 5 GAO-10-62 Military and Veterans' Benefits
 

Figure 2: Dependency and Indemnity Compensation Recipients, by Qualification for 

Benefits, September 2008 

87%

4%

Servicemembers who died in active duty

Veterans who died from

a service-connected injury 

8%

Other veterans, such as those who 

had been found by VA to be totally 

disabled due to service-connected 

conditions for a continuous period of 

at least 10 yearsa

Source: GAO analysis of VA data.

Note: Numbers do not add to 100 due to rounding. 

a

Includes recipients who qualified as survivors of veterans who were found by VA to be totally 

disabled due to service-connected conditions for a continuous period of at least 5 years after 

discharge from military service, and survivors of veterans who were former prisoners of war. 

Most recipients were older widows who survived veterans and 

servicemembers who served in the enlisted ranks, as opposed to military 

officers. About 81 percent were aged 60 or older, and about 86 percent 

survived veterans and servicemembers who served in the enlisted ranks. 

Several previous studies have reported on the level of benefits provided by 

this program. In 1995, we reported on the income and benefits received by 

surviving spouses who were receiving DIC benefits in 1993.10 We found 

that the DIC benefit represented a significant portion of surviving spouses’ 

income and that many spouses also received other benefits such as Social 

Security. In 2001, a VA-commissioned study reported that the DIC program 

provided surviving spouses with incomes higher than the incomes of their 

Past Evaluations of DIC 

Benefits 

 

10GAO, Veterans’ Benefits: Basing Survivors’ Compensation on Veterans’ Disability Is a 

Viable Option. GAO/HEHS-95-30, (Washington, D.C.: Mar. 6, 1995.) 

Page 6 GAO-10-62 Military and Veterans' Benefits
 

counterparts in the general population.11 The CNA Corporation, a 

consulting firm, reported in August 2007 to the Veterans’ Disability 

Benefits Commission that DIC beneficiaries were at least as well off as 

widows and widowers in the general population.12 It found that although 

DIC beneficiaries had lower employment rates and earned incomes than 

the general population, DIC benefits offset this economic loss in every age 

group.13

Disability Benefits Veterans, servicemembers, and federal employees may receive disability 

benefits from various sources including VA, DOD, and the Social Security 

Administration. These disability benefits terminate upon the death of the 

disabled person. 

Veterans may receive disability compensation payments through VA.14 A 

veteran’s qualification for, and amount of, disability compensation is not 

dependent on the veteran’s military rank or current income. If a veteran 

has one or more service-connected disabilities—conditions incurred or 

aggravated by military service—VA assigns a disability rating. This rating 

is intended to represent the average earnings loss the veteran would 

experience in civilian occupations due to the disabling conditions. Ratings 

range from 0 to 100 percent, in 10 percent increments. Basic monthly 

payments for a veteran with a spouse range from $123 for a 10 percent 

rating to $2,823 for a 100 percent rating (i.e., totally disabled or 

unemployable).15 A veteran rated at 60 to 90 percent also can receive VA 

compensation at the 100 percent level if also determined to be unable to 

Veterans and Servicemembers 

 

11System Flow Inc., Economic Systems Inc., Macro International Inc., and Hay Group, 

Program Evaluation of Benefits for Survivors of Veterans With Service-Connected 

Disabilities, Final Report, Volume II - Evaluation of the Dependency and Indemnity 

Compensation (DIC) Program, May 2001. 

12The CNA Corporation, Final Report for the Veterans’ Disability Benefits Commission: 

Compensation, Survey Results, and Selected Topics (Alexandria, VA, Aug. 2007). 

13The CNA Corporation study compared the earned income of DIC recipient groups with 

the earned income of widows and widowers in the general population and did not compare 

individual-level incomes. When aggregated information, such as group-level data is used, it 

can mask individual situations. 

1438 U.S.C. §§ 1101-1163. 

15In general, veterans rated at 0 percent do not receive disability compensation. A veteran 

with a rating of 30 percent or higher may receive additional compensation for a spouse, 

dependent children, and dependent parents. 

Page 7 GAO-10-62 Military and Veterans' Benefits
 

work.16 The veteran may receive additional compensation if he or she 

meets certain other criteria; for example, loss of a limb or requiring 

assistance in performing the functions of everyday living. For a veteran 

with a spouse, total compensation may be as much as $7,800 per month. 

DOD also provides disability retirement payments to servicemembers who 

are separated from service because they are unfit to continue to serve, 

provided that their disabilities were incurred in the line of duty.17 Some 

veterans may receive disability retirement pay and VA disability 

compensation simultaneously; for example, if their VA disability rating is 

50 percent or higher. 

In addition, servicemembers who are enrolled in the military’s life 

insurance program, Servicemembers’ Group Life Insurance (SGLI), may 

also receive financial assistance for certain losses resulting from certain 

traumatic injuries.18 Disabled servicemembers receive lump-sum 

payments, ranging from $25,000 to $100,000, depending upon the nat

the qualifying lo

ure of 

ss. 

 

Disability benefits for federal employees are provided through their 

retirement and workers’ compensation programs, and payment amounts 

are generally tied to the employee’s salary. The Civil Service Retirement 

System (CSRS) generally covers employees who began federal 

employment prior to 1984.19 The Federal Employees’ Retirement System 

(FERS), established to eventually replace CSRS, generally covers federal 

employees who began their term of employment in 1984 or later.20 The 

Federal Employees’ Compensation Act (FECA) provides the workers’ 

compensation program for federal employees who suffer injuries or 

Federal Employees 

16This applies when a veteran has a single disability rated 60 percent or higher or a 

combined rating of at least 70 percent (with at least one disability rated at 40 percent or 

higher), and there is evidence that the veteran cannot work. 

17If DOD rates the disability at less than 30 percent, then the servicemember receives a 

lump-sum disability payment. If rated 30 percent or above, or if the member has at least 20 

years of service, DOD provides monthly disability retirement payments. 

18This assistance is provided by the Servicemembers’ Group Life Insurance Traumatic 

Injury Protection Program (TSGLI). All servicemembers paying SGLI premiums are 

automatically enrolled in TSGLI, and pay an additional $1 per month premium. 

195 U.S.C. §§ 8331-8351. 

205 U.S.C. §§ 8401-8480. In addition, FERS may cover those federal employees who began 

their careers under CSRS, but chose to switch to FERS. 

Page 8 GAO-10-62 Military and Veterans' Benefits
 

illnesses while on the job, or whose preexisting conditions are aggravated 

by their jobs.21 An eligible employee may elect to receive disability 

retirement benefits under CSRS or FERS instead of under FECA, but 

cannot receive both. 

Additionally, servicemembers and federal employees are eligible for Social 

Security disability benefits.22 As part of its Old Age, Survivors, and 

Disability Insurance program, the Social Security Administration pays 

Social Security Disability Insurance (SSDI) benefits to individuals who are 

unable to work. To be eligible for SSDI, an individual must have a 

condition that will last at least one year or will result in death, and meet 

certain age and work requirements, which may include military service. 

SSDI benefit amounts are calculated on average earnings indexed to 

national wage levels. SSA also pays Supplemental Security Income (SSI) to 

qualifying adults with limited income and resources who have disabilities 

or are blind, or are age 65 or older, and to children who have disabilities or 

are blind.23

Social Security Benefits for 

Servicemembers and Federal 

Employees 

Survivor Benefits 

In addition to DIC benefits, survivors of servicemembers and veterans can 

receive cash payments and other types of benefits. DOD provides a lump 

sum death gratuity of $100,000 to the survivors of a servicemember who 

dies on active duty or in training, or due to a service-related disability.24

DOD also provides up to $8,800 for burial expenses. The deceased may 

have had Servicemembers’ Group Life Insurance (SGLI) coverage,25 which 

can pay surviving family members a lump sum of up to $400,000. A 

surviving spouse and children may also receive monthly payments after 

the death of an active duty or retired servicemember through the Survivor 

Military

 

215 U.S.C. §§ 8101-8193. 

2242 U.S.C. §§ 401-434. Federal employees’ eligibility applies to those covered by FERS 

because they pay Social Security taxes. CSRS participants do not pay Social Security taxes 

and are not eligible for Social Security disability benefits based on their CSRS employment. 

2342 U.S.C. §§ 1381-1385. 

2410 U.S.C. § 1478. The death gratuity may be paid if the servicemember died of a servicerelated disability within 120 days after release from active duty. 

2538 U.S.C. §§ 1965-1980A. 

Page 9 GAO-10-62 Military and Veterans' Benefits
 

Benefit Plan (SBP).26 These payments equal 55 percent of the 

servicemember’s retirement pay.27 In addition to cash payments, survivors 

may also be eligible for health care, housing assistance, and education 

benefits.28

Survivors of federal employees can receive benefits through retirement 

programs, workers’ compensation, and life insurance. CSRS provides 

benefits to the surviving spouses of retired employees.29 The maximum 

CSRS survivor benefit is 55 percent of the retired employee’s monthly 

payment.30 CSRS also provides payments to the survivors of covered 

employees who die while employed, with survivors receiving a percentage 

of the employee’s calculated retirement annuity.31 FERS offers similar 

survivor benefits, but the maximum is 50 percent of the retired employee’s 

Federal Employees 

 

26Retired servicemembers must choose to receive a reduced annuity in order to participate 

in SBP. 

2710 U.S.C. § 1451. If SBP benefits are paid to a survivor of a deceased military retiree, the 

payment equals 55 percent of the deceased’s retired pay. If SBP benefits are paid to the 

survivor of a servicemember who died on active duty, the payment equals 55 percent of 

what the servicemember would have received in retirement at the 100 percent disability 

level. In general, a survivor’s payments are reduced by any DIC benefits. DOD provides 

payments to survivors to partially make up for this offset. This offset does not apply if the 

surviving spouse chose “child only” SBP benefits. 

28DOD provides survivors of servicemembers with health care benefits through its 

TRICARE program. 10 U.S.C. §§ 1071-1110. Survivors of veterans may receive health care 

benefits through the Civilian Health and Medical Program of VA. 38 U.S.C. §§ 1721-1730. 

Housing benefits include temporary rent-free government housing or a tax-free housing 

allowance for the survivors of servicemembers and home loan assistance for survivors of 

veterans. VA provides education benefits through its Dependents’ Educational Assistance 

Program. 38 U.S.C. §§ 3500-3697A. 

29For both the CSRS and FERS programs, the retiree must take a reduced retirement 

annuity in order to provide this survivor benefit. A couple may choose to waive their right 

to a survivor benefit and not have the retiree’s annuity reduced. 

30The 55 percent calculation is based on what the retired employee’s benefit would have 

been if a couple had waived the right to a survivor benefit. 

31The calculated annuity is the amount that the employee would have received if he or she 

had retired on a disability retirement as of the date of death. 

Page 10 GAO-10-62 Military and Veterans' Benefits
 

monthly payment.32 Under FECA, the federal workers’ compensation 

program, benefits may be provided to the survivors of federal civilian 

employees who die as a result of work-related injuries and illnesses. 

Payment amounts are based on the deceased’s last salary and, unlike other 

federal employee programs, FECA provides additional benefits to the 

spouse for dependent children. A surviving spouse is eligible to receive 50 

percent of the deceased’s salary, or 45 percent plus 15 percent for each 

dependent child, up to a maximum of 75 percent. Survivors of federal 

employees who die of a work-related injury or disease may receive 

benefits under either FECA or the employee’s retirement program, CSRS 

or FERS, but if eligible for more than one benefit, survivors typically 

choose the more generous FECA benefit. FECA benefits are not subject to 

federal income taxes.33 Survivors also may receive a lump sum benefit 

from the employee’s Federal Employees’ Group Life Insurance policy. 

Survivors may also collect Social Security benefits through the Old Age, 

Survivors, and Disability Insurance program. These benefits are paid to the 

surviving spouse, children, and dependent parents of any worker with a 

qualifying work history, including military servicemembers and federal 

employees under FERS. Survivor benefits may also be paid to the 

survivors of veterans and some CSRS-covered federal employees, if the 

veteran or federal employee had sufficient Social Security earnings 

credits. For the surviving spouse, eligibility for full benefits may occur at 

the spouse’s normal retirement age, while partial benefits can be paid as 

early as age 60.34 Also, a surviving spouse can receive survivor benefits at 

any age if caring for a child who is receiving Social Security benefits and is 

Social Security Survivor 

Benefits 

 

32Under FERS, the pension benefit represents one part of a covered employee’s total 

retirement income. Retirees may also receive income through the Thrift Savings Plan 

(TSP), which offers federal employees the same type of savings and tax benefits that many 

private corporations offer their employees under ”401(k)” plans. Both civilian federal 

employees and servicemembers may contribute to retirement accounts in the TSP. Under 

FERS, the government matches employee contributions up to 5 percent of a covered 

employee’s salary, while there is no matching contribution for CSRS-covered employees or 

for sevicemembers. In the event of death, funds in these accounts are transferred to the 

employee’s or servicemember’s survivors. 

33A portion of CSRS and FERS benefits are subject to federal income tax. 

34If the surviving spouse is disabled, benefits can begin as early as age 50. 

Page 11 GAO-10-62 Military and Veterans' Benefits
 

younger than age 16 or disabled. Unmarried children may receive benefits 

if they are under age 18.35

For more than half the survivors who began collecting benefits in fiscal 

years 2004-2008, DIC replaced between 35 and 55 percent of the VA 

disability compensation or military pay previously paid to the veteran or 

servicemember.36 Most of the DIC recipients in this group survived a 

totally disabled veteran or a low- to mid-grade enlisted servicemember, 

such as an Army sergeant. Overall, the most common DIC recipient was a 

woman over the age of 50 with no minor children who was the widow of a

totally disabled veteran.

09 

 per 

 

37 In this most common case, the totally disabled 

veteran would have received $2,823 per month in VA compensation in 20

and, after his death, the surviving spouse would have received $1,154

month—the basic flat-rate DIC payment—for a replacement rate of 41 

percent. 

Under DIC, survivors receive benefits without regard to the veteran’s or 

servicemember’s prior income. This prior income can include VA disability 

compensation and military pay, which cease upon the death of the veteran 

or servicemember. Because DIC benefits are generally paid at the same 

flat rate, the replacement rate depends upon the amount of prior income. 

While survivors of 6 out of 10 veterans and servicemembers received 35 

percent to 55 percent of prior compensation, there are examples of DIC 

recipients at both ends of the replacement scale (see fig. 3).38

For Most Recent 

Survivors, DIC 

Replaced Between 35 

and 55 Percent of the 

VA Disability 

Compensation or 

Military Pay 

Previously Paid to the 

Veteran or 

Servicemember 

35Children up to age 19 qualify if they are attending elementary or secondary school full 

time. Also, children can receive benefits at any age if they were disabled before age 22 and 

remain so. Benefits may also be paid to stepchildren, grandchildren, stepgrandchildren, and 

adopted children. 

36For purposes of this analysis, when referring to survivors, we mean one or more persons 

(family members) surviving an individual veteran or servicemember. 

37VA defines totally disabled veterans as those whose disabilities it rates at 100 percent or 

who it considers unemployable because of the nature of their disability. 

38In reporting these percentages, we did not take into account any other income the 

veteran, servicemember, or their survivors may receive, such as monthly payments from 

private pensions or Social Security, or lump sum death benefits, both public and private. 

Page 12 GAO-10-62 Military and Veterans' Benefits
 

Figure 3: Percentage of VA Disability Compensation or Military Pay Replaced by 

DIC for Survivors of Veterans and Servicemembers 

Source: GAO analysis.

Percentage of disability compensation or military pay replaced by DIC

0% 35% 55% 100%

1 out of 10

had less than

35% replaced

3 out of 10

had more than

55% replaced

6 out of 10

had between 35%

and 55% replaced

Note: Because there was no prior benefit for comparison with DIC, we excluded from our analysis 

deceased veterans who had not been receiving VA disability compensation. We estimated military 

pay based on the servicemembers’ ranks. 

On the low end of the replacement scale, for about 1 of 10 survivors DIC 

replaced less than 35 percent of the veteran’s prior disability 

compensation or the servicemembers’ military pay. Many were survivors 

of veterans who received special compensation in addition to disability 

compensation due to the seriousness of the disability, for example, the 

loss of a limb. Some of the survivors of these veterans experienced a large 

drop in monthly compensation. For example, a severely disabled veteran 

could receive as much as $7,800 per month in disability and special 

compensation prior to death, but the surviving spouse would receive 

$1,40039 per month in DIC, or 18 percent of the prior amount (see fig. 4).40

Another group which sees a large drop is survivors of higher ranked 

servicemembers, such as officers. DIC’s flat rate replaces less of their 

military pay than it does for servicemembers in lower pay grades. A Navy 

lieutenant, for example, earned about $6,000 per month in 2009.41 If the 

lieutenant died on active duty, the surviving spouse would receive the 

basic DIC benefit—$1,154—which replaces about 19 percent of the 

lieutenant’s pay. 

 

39Assuming the veteran was totally disabled for a period of eight years, the surviving spouse 

would receive $246 per month, in addition to the basic rate of $1,154. 

40The lowest replacement rate for a surviving spouse is 15 percent. In this case, the veteran 

received the maximum amount of special monthly compensation and the surviving spouse 

received the basic DIC benefit. 

41We estimated pay using the midpoint of basic pay for each paygrade and added 

allowances for housing and subsistence. A Navy lieutenant is at DOD paygrade level O-3. 

Page 13 GAO-10-62 Military and Veterans' Benefits
 

Figure 4: Examples Showing the Difference Between Disability Compensation or 

Military Pay and the DIC Benefits Received by Surviving Spouses 

Source: GAO analysis.

Monthly

amount

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

-6,000

-5,000

-4,000

-3,000

-2,000

-1,000

Disability compensation or estimated military pay received prior to death

DIC compensation paid to surviving spouse

Change in monthly compensation after DIC begins

Totally disabled 

veteran receiving 

special monthly 

compensation

Totally 

disabled 

veteran

Partially 

disabled 

veteran

Navy

Lieutenant (O-3)

$5,947

$2,823

$7,800

$421

$2,328

$1,154 $1,154

Army 

Sergeant 

(E-5)

$3,519

$1,154 $1,154 $1,400

-$4,793

-$1,669

-$6,400

+$733

-$2,365

Army 

Private 

(E-1)

$1,154

-$1,174

 Drop In

Compen s ation

VETERAN Veterans S S SERVICE MEMBER ervice Members S

Page 14 GAO-10-62 Military and Veterans' Benefits
 

On the high end of the replacement scale, about 3 out of 10 survivors 

received DIC payments that replaced more than 55 percent of previous 

disability compensation or military pay, with many receiving 100 percent 

or more of the prior compensation.42 Many were survivors of veterans who 

received relatively low VA compensation prior to their death because they 

were considered partially disabled. For example, a veteran with a spouse 

and a 30 percent rated disability received $421 per month in VA disability 

compensation in 2009. Upon the veteran’s death, the surviving spouse 

received the DIC basic payment of $1,154 per month, which represented 

well over 200 percent of the prior compensation (see fig. 4). Some 

survivors of active duty servicemembers also fell into this group. 

Generally, these were servicemembers in lower pay grades whose 

survivors received additional DIC benefits to support children or parents. 

While DIC serves to replace some of the financial support lost due to a 

service-connected death, the law does not define a specific percentage of 

income that DIC should replace. In contrast, laws governing some other 

types of survivor benefits establish set replacement rate percentages. For 

example, a provision in federal law stipulates that most employment-based 

pensions must provide surviving spouses with 50 percent of the deceased’s 

pension payment, unless both the employee and spouse opt out.43

However, DIC is not a pension program, and there is no consensus among 

experts on an adequate or ideal replacement ratio for survivors. 

 

42In most cases, for DIC to replace 100% of VA disability compensation, the veteran’s 

compensation must be equal to the basic DIC rate of $1,154. There is no VA compensation 

rate exactly equal to this, but it would fall between the compensation rates for 60 percent 

and 70 percent disabled veterans. 

4329 U.S.C. § 1055(a)(2) and (e)(2). 

Page 15 GAO-10-62 Military and Veterans' Benefits
 

The amount paid by DIC to survivors of disabled veterans and 

servicemembers is generally higher than the amount paid by CSRS and 

FERS retirement programs to survivors of comparably paid federal 

employees. Such comparisons are difficult, however, because DIC 

provides a flat rate payment while CSRS and FERS survivor payments are 

determined by the salary and years of employment of the deceased 

employee. As a result, there is a range of payment amounts for survivors of 

federal employees. The monthly payment to a survivor of a federal 

employee with more years on the job and a higher salary will be larger 

than that to a survivor of a federal employee with fewer years or a lower 

salary. When we looked at veterans/servicemembers and federal 

employees with comparable pay and experience, we found that for most 

survivors, DIC provides higher benefits than the federal retirement 

programs because it gives more money to survivors of lower-paid 

individuals. About 82 percent of veterans or servicemembers whose 

survivors receive DIC were lower ranked during their time of service.44

Personnel in these lower ranks made less than $63,000 a year in 2009, and 

their survivors would have fared better under the DIC program than they 

would have under the federal retirement survivor programs.45

DIC Benefits Are 

Generally Higher 

Than Survivor 

Benefits Paid by 

Federal Retirement 

Programs, but Are 

Usually Lower Than 

Federal Workers’ 

Compensation 

Survivor Benefits 

The following examples illustrate how DIC generally provides higher 

payments to the survivors of those who die after a period of disability than 

CSRS for a majority of its recipients. Under DIC, the surviving spouse of 

an Army sergeant46 who was disabled for a prolonged period before dying 

in 2009 would be eligible for a monthly payment of $1,400.47 In contrast, 

the surviving spouse of a federal employee, also disabled before his or her 

death and with the same years of experience and salary as the Army 

sergeant, would be eligible for a monthly CSRS payment of $606. The 

surviving spouses of a private first class, a sergeant first class, and a 

captain would also receive higher payments under DIC than would the 

surviving spouses of federal employees with comparable pay and 

experience under CSRS. Although they represent a small portion of DIC 

recipients, survivors of higher-paid servicemembers would likely receive 

 

44We refer to lower-ranked pay levels as paygrades E-1 to E-7 for enlisted servicemembers 

and W-1 to W-2 and O-1 to O-2 for officers. 

45Assuming personnel began their careers at age 18 and worked 20 or fewer years. 

46An Army sergeant is at pay grade level E-5. 

47The $1,154 base payment and an additional $246 per month because the veteran was rated 

100 percent disabled for more than 8 years. 

Page 16 GAO-10-62 Military and Veterans' Benefits
 

less compensation than their federal employee counterparts. In 2009, for 

example, the survivor of an Army lieutenant colonel48 who was totally 

disabled for a prolonged period would receive the same DIC payment of 

$1,400 per month, but the survivor of a comparable federal employee 

would receive over $1,700 per month.49 (See fig. 5.) 

Figure 5: Comparison of Survivor Payments Under DIC and CSRS for Veterans and 

Former Federal Employees Who Died in 2009 After a Prolonged Disability (1983-2009) 

Source: GAO analysis.

Private First

Class (E-3)

Sergeant

(E-5)

Sergeant

First Class (E-7)

Captain

(O-3)

Lieutenant

Colonel (O-5)

2 years

5 years

15 years

5 years

20 years

Highest Grade/Rank

Years of service

before disability

$1,400

$1,400

$1,400

$1,400

$1,400

$0 b

$606

$848

$1,108

$1,719

Monthly DIC

benefits to

surviving

spouse

Monthly benefitsa

to spouse of a

federal employee

with comparable

pay and experience

ENLI S TED OFFICER S

Note: All the examples are for veterans and federal employees who began their careers prior to 1984 

(when CSRS was replaced by FERS). Because the individuals in this example had been disabled for 

a prolonged period of time, their surviving spouses receive $246 per month in addition to the basic 

payment of $1,154. Army titles are used in this example for illustrative purposes, but DIC payments 

are the same regardless of the servicemember’s branch of service. 

a

DIC benefits are exempt from federal income taxes, whereas CSRS benefits are taxable. 

b

CSRS employees must have 5 years of federal service to receive a disability retirement benefit. As 

such, an employee with 2 years of service would not receive CSRS disability retirement and would 

not leave behind a survivor payment. 

 

48An Army lieutenant colonel is at pay grade level O-5. 

49We did not examine examples of employees covered under CSRS who died while still 

employed in 2009. Any such employees would have started their careers prior to 1984 and, 

as such, would have over 25 years of service, more than most of those serving in the 

military. 

Page 17 GAO-10-62 Military and Veterans' Benefits
 

The following examples illustrate how DIC generally provides higher 

payments than FERS for a majority of its recipients. For instance, the 

spouse of an Army sergeant who died in 2009 after a period of disability 

would receive the flat DIC payment of $1,154 a month. The spouse of a 

federal employee with equal pay and years of employment who died in 

2009 would receive $732 a month under FERS. Similarly, the surviving 

spouses of a private first class and a sergeant first class would receive 

higher payments under DIC than the surviving spouses of comparable 

federal employees would under FERS. This trend generally holds true for 

both employees who die while employed by the government and those 

who die after a period of disability: DIC survivor benefits are higher than 

FERS for the majority of individuals.50 Although they represent a small 

portion of DIC recipients, survivors of higher-paid servicemembers may 

receive lower payments than their federal employee counterparts. While 

the spouse of a higher-paid Army captain would still receive the basic DIC 

payment of $1,154 per month after the captain’s death in 2009, the spouse 

of a federal employee with equal amounts of pay and years of employment 

would receive nearly $1,300 under FERS. (See fig. 6.) 

 

50For federal employees who die while employed, they must have 10 years of experience in 

order for FERS to provide a recurring payment to their survivors. 5 U.S.C. § 8442(b)(1)(B). 

Page 18 GAO-10-62 Military and Veterans' Benefits
 

Figure 6: Comparison of Survivor Payments Under DIC and FERS for Veterans and 

Former Federal Employees Who Died in 2009 after Being Disabled (2005-2009) 

Source: GAO analysis.

Private First

Class (E-3)

Sergeant

(E-5)

Sergeant

First Class (E-7)

Captain

(O-3)

Lieutenant

Colonel (O-5)

2 years

5 years

15 years

5 years

20 years

Highest Grade/Rank

Years of service

before disability

$1,154

$1,154

$1,154

$1,154

$1,154

$553

$732

$1,058

$1,291

$2,021

Monthly DIC

benefits to

surviving

spouse

Monthly benefitsa

to spouse of a

federal employee

with comparable

pay and experience

ENLI S TED OFFICER S

Note: All the examples are for federal employees who began their careers after 1984 and are, thus, 

covered by FERS. Army titles are used in this example for illustrative purposes, but DIC payments 

are the same regardless of the servicemember’s branch of service. 

a

DIC benefits are exempt from federal income taxes, whereas FERS benefits are taxable. 

In contrast to CSRS and FERS, DIC survivor payments are generally lower 

than payments to survivors of comparably paid federal employees under 

the federal workers’ compensation program known as FECA. FECA 

provides survivor benefits to the families of federal employees who die as 

a result of injuries sustained on the job. FECA survivor payments are 

generally higher than those under CSRS or FERS and, like DIC, are not 

subject to federal income tax. A surviving spouse receives the equivalent 

of half the federal employee’s salary at the time of death. This payment 

would be larger than the basic DIC payment if the employee had an ending 

salary of at least $27,697 in 2009. Almost all servicemembers earn more 

than this salary in military pay, so their survivors would receive less under 

DIC than their civilian federal counterparts would receive under FECA. 

For example, under DIC, the surviving spouse of an Army sergeant who 

died while on active duty would receive DIC’s basic payment of $1,154 per 

month. The surviving spouse of a comparably paid federal employee 

would receive $1,722 under FECA for a death due to a work-related injury. 

Similarly, the spouse of a federal employee with pay comparable to an 

Page 19 GAO-10-62 Military and Veterans' Benefits
 

Army captain51 would receive over $3,000 per month under FECA 

compared to DIC’s $1,154. (See fig. 7.) 

Figure 7: Comparison of Survivor Payments Under DIC and FECA for 

Servicemembers and Federal Employees Who Died in Service in 2009 

Source: GAO analysis.

Private First

Class (E-3)

Sergeant

(E-5)

Sergeant

First Class (E-7)

Captain

(O-3)

Lieutenant

Colonel (O-5)

2 years

5 years

15 years

5 years

20 years

Highest Grade/Rank

Years of service

before death

$1,154

$1,154

$1,154

$1,154

$1,154

$1,356

$1,722

$2,500

$3,010

$4,696

Monthly DIC

benefits to

surviving

spouse

Monthly benefits

to spouse of a

federal employee

with comparable pay 

ENLI S TED OFFICER S

Note: Army titles are used in this example for illustrative purposes, but DIC payments are the same 

regardless of the servicemember’s branch of service. 

Survivors of both veterans/servicemembers and civilian federal employees 

may draw on other government benefits and additional sources of income 

concurrently. For example, Social Security may allow spouses of veterans, 

servicemembers, and federal employees to collect survivor benefits based 

on the deceased’s employment earnings, and also may provide survivor 

payments to the deceased’s unmarried children.52 In addition, past reports 

on DIC indicate that some DIC benefit recipients also receive survivor 

payments from the Survivor Benefit Plan, a survivor benefit available to 

 

51An Army captain is at pay grade O-3. 

52Survivors of FERS employees may be eligible because FERS employees pay into the 

Social Security system. In contrast, CSRS employees do not pay into Social Security and 

are generally not eligible for Social Security benefits based on their CSRS employment. 

Page 20 GAO-10-62 Military and Veterans' Benefits
 

those collecting a military pension.53 Military survivors may also receive 

burial assistance, and health and education benefits. Finally, survivors of 

both military personnel and civilian federal employees may draw income 

from their own employment and receive life insurance payments. 

We provided a draft of this report to VA for its review and comment. The 

agency provided comments that were technical in nature and we 

incorporated them as appropriate. 

Agency Comments 

We are sending copies of this report to relevant congressional committees, 

the Secretary of Veterans Affairs, and other interested parties. In addition, 

the report will be available at no charge on GAO’s Web site at 

http://www.gao.gov. 

If you or your staff have any questions regarding this report, please 

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

our Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. Key contributors to this report are listed in 

appendix II. 

aniel Bertoni 

Director, Education, Workforce, and 

urity 

 

D

 Income Sec

53SBP payments are offset by any DIC payment. However, DOD provides payments to 

survivors to partially make up for this offset. Survivors of servicemembers who die on 

active duty may also receive SBP. 

Page 21 GAO-10-62 Military and Veterans' Benefits
 

List of Congressional Committees 

The Honorable Daniel K. Akaka 

Chairman 

The Honorable Richard Burr 

Ranking Member 

Committee on Veterans’ Affairs 

United States Senate 

The Honorable Tim Johnson 

Chairman 

The Honorable Kay Bailey Hutchison 

Ranking Member 

Subcommittee on Military Constructions, Veterans’ Affairs, 

 and Related Agencies 

Committee on Appropriations 

United States Senate 

The Honorable Bob Filner 

Chairman 

The Honorable Steve Buyer 

Ranking Member 

Committee on Veterans’ Affairs 

House of Representatives 

The Honorable Chet Edwards 

Chairman 

The Honorable Zach Wamp 

Ranking Member 

Subcommittee on Military Construction, Veterans’ Affairs 

 and Related Agencies 

Committee on Appropriations 

House of Representatives 

Page 22 GAO-10-62 Military and Veterans' Benefits
Appendix I: 

Methodology 

Objectives, Scope, and 

Page 23 GAO-10-62 

Appendix I: Objectives, Scope, and 

Methodology 

Our review focused on (1) the extent to which Dependency and Indemnity 

Compensation (DIC) replaces Department of Veterans Affairs (VA) 

disability compensation or active duty military pay lost due to the death of 

a veteran or servicemember, and (2) how DIC benefits compare to benefits 

for survivors of civilian federal employees. To address these objectives, we 

obtained and analyzed data on DIC benefits, VA disability compensation, 

and military pay. We also obtained information on programs that provide 

survivor benefits to federal employees and compared these survivor 

payments to DIC payments. To obtain additional context, we reviewed 

past evaluations of DIC and interviewed officials at VA and several 

organizations representing veterans, servicemembers, and their survivors. 

We conducted this performance audit from February 2009 to November 

2009, 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 based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings based on our audit 

objectives. 

Analysis of VA Data on DIC 

Recipients 

We obtained and analyzed data from VA’s Benefits Delivery Network 

(BDN) data system on all survivors who received DIC payments in 

September 2008, the last month of fiscal year 2008. These data included 

information on individual DIC recipients, such as the recipient’s age and 

the level of DIC payments the recipient received. To determine the extent 

to which DIC benefits replaced prior VA disability compensation, we 

obtained additional data on survivors who began receiving DIC payments 

during a 5-year period: fiscal years 2004-2008. Specifically, we obtained 

data on the amount of monthly VA disability compensation received by the 

disabled veteran prior to death. We focused on those who recently began 

collecting DIC benefits due to VA’s limited historical data on disability 

compensation payments to veterans. For these recent recipients, we 

compared their monthly DIC payments with the amount of VA disability 

compensation received by the veterans. To determine the extent to which 

DIC replaces military pay lost due to the death of a servicemember on 

active duty, we estimated the pay of the servicemember prior to death. 

VA’s data included the servicemember’s last military grade, but not his or 

her last military pay rates. To estimate pay rates, we obtained military pay 

information from DOD and used the midpoint in the pay ranges for the 

servicemember’s grade in the year he or she died, including the basic pay 

and housing and subsistence allowances applicable to the 

servicemember’s grade. We compared this estimated pay with the actual 

 Military and Veterans' Benefits 
Appendix I: Objectives, Scope, and 

Methodology 

amount of DIC benefits received by the servicemember’s survivors. For 

purposes of this analysis, when referring to survivors, we mean one or 

more persons (family members) surviving a single veteran or 

servicemember. 

We assessed the reliability of the VA data we used and judged them to be 

sufficiently reliable for our purposes. We identified data limitations that 

did not significantly impact the results of our data analysis, or our 

findings. For example, 314 of the cases were missing from our data 

because VA is transitioning from BDN to a new data system. Additionally, 

we found 31 cases where the recipient’s award amounts were incorrect. 

According to VA officials, this was likely due to data entry errors. We 

excluded these 345 records—about 1/10 of 1 percent of the entire 

September 2008 beneficiary file—from our analysis. 

Comparison with Federal 

Employee Survivor 

Benefits 

Our comparisons of DIC with survivor benefits for federal employees 

focused on three programs: the Civil Service Retirement System (CSRS), 

the Federal Employees’ Retirement System (FERS), and the federal 

workers’ compensation program established by the Federal Employees’ 

Compensation Act (FECA). We chose these programs because they cover 

the majority of federal employees and, like the DIC program, provide 

ongoing survivor benefits in the event of the employee’s death. 

Additionally, these programs provide disability benefits to federal 

employees who suffer an injury or illness, mirroring, to an extent, VA 

compensation for veterans with disabilities related to their military 

service. 

It is difficult to compare DIC benefits to survivor benefits under these 

programs because DIC generally provides flat payments to survivors 

regardless of their past incomes, while these federal programs base benefit 

amounts on prior income levels. Additionally for CSRS and FERS, the 

employee’s length of service and age affect benefits calculations. 

Therefore, to compare benefits, we constructed several scenarios to 

examine the DIC benefits available to various veterans and 

servicemembers, and those available to federal employees with pay and 

experience equivalent to those veterans and servicemembers. For CSRS 

and FERS, we developed examples in which the individuals started their 

careers in time periods in which the federal employees would have been 

Page 24 GAO-10-62 Military and Veterans' Benefits
Appendix I: Objectives, Scope, and 

Methodology 

covered by the respective programs.1 We obtained information on the 

military pay applicable to a veteran or servicemember in the last year he or 

she served and assumed that the federal employee would have a high-three 

average salary2

 equal to this amount. We used these salary amounts to 

calculate the federal employees’ disability benefits to which they were 

entitled, and used the appropriate cost of living adjustments to determine 

what their disability benefits would have been in 2009 before dying, and 

their survivor’s benefit after their death in 2009. Similarly, we calculated 

survivor benefits for servicemembers who died on active duty and for 

federal employees with comparable years of service and pay at the time of 

death. 

To compare FECA benefits with DIC benefits, we constructed several 

scenarios in which a servicemember died in 2009 and compared these 

scenarios to a federal employee with an equivalent salary. We assumed 

that the federal employee died of a job-related injury that was covered by 

FECA. 

Reviews of Past Work and 

Interviews 

To provide context for our analysis of DIC benefits, we reviewed previous 

evaluations of DIC benefits. These included: 

• Past GAO reviews of DIC and other survivor benefits;3

• A program evaluation report prepared for VA in May 2001;4 and 

• The CNA Corporation’s 2007 report prepared for the Veterans’ Disability 

Benefits Commission on VA disability compensation and DIC benefits.5

 

1

For example, CSRS benefits are for federal employees who began their federal service 

prior to 1984. CSRS employees had the option to switch to FERS, but we did not examine 

these cases in our examples. 

2

The average of the employee’s three highest years of pay. 

3

GAO/HEHS-95-30, and GAO, Military Personnel: Survivor Benefits for Servicemembers 

and Federal, State, and City Government Employees, GAO-04-814 (Washington, D.C.: July 

15, 2004.) 

4

System Flow Inc., Economic Systems Inc., Macro International Inc., and Hay Group, 

Program Evaluation of Benefits. 

5

The CNA Corporation, Final Report for the Veterans’ Disability Benefits Commission.

Page 25 GAO-10-62 Military and Veterans' Benefits
Appendix I: Objectives, Scope, and 

Methodology 

To gain an understanding of DIC, its benefit levels, and related issues, we 

interviewed VA officials, and officials of several veterans and military 

service organizations. The organizations included the American Legion, 

the Disabled American Veterans, the Iraq and Afghanistan Veterans of 

America, The Military Officers Association of America, the National 

Association for Uniformed Services, the National Military Family 

Association, the Paralyzed Veterans of America, the Retired Enlisted 

Association, the Society of Military Widows, the Gold Star Wives of 

America, Inc., The Military Coalition, and the Tragedy Assistance Program 

for Survivors. 

Finally, to provide background on the various disability and survivor 

benefits identified in this report, we reviewed literature from several 

agencies’ Web sites, including VA, the Department of Defense (DOD), the 

Social Security Administration (SSA), the Department of Labor, and the 

Office of Personnel Management. We also reviewed related GAO and 

Congressional Research Service reports, and relevant federal laws and 

regulations. 

Page 26 GAO-10-62 Military and Veterans' Benefits
Appendix II: 

A

GAO Contact and Staff 

cknowledgments 

Page 27 GAO-10-62 

Appendix II: GAO Contact and Staff 

Acknowledgments 

Daniel Bertoni, (202) 512-7215 or bertonid@gao.gov

Melissa H. Emrey-Arras (Assistant Director), Paul R. Schearf (Analyst-inCharge), Daniel R. Concepcion, and Gregory D. Whitney made major 

contributions to this report. In addition, Kirsten B. Lauber and Walter K. 

Vance assisted in developing the study’s methodology; Beverly Ross 

analyzed VA data; Kyle C. Adams assisted with the calculation of survivor 

benefits; Susan L. Aschoff and Charles E. Willson provided writing 

assistance; James E. Bennett helped develop our graphics; and Craig H. 

Winslow provided legal support. Joseph Applebaum, Timothy J. Carr, 

Cynthia C. Heckmann, David E. Moser, and Patricia Owens provided 

additional support and guidance. 

 Military and Veterans' Benefits 

GAO Contact 

Staff 

Acknowledgments 

(130914) 
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Automated answering system: (800) 424-5454 or (202) 512-7470 

Ralph Dawn, Managing Director, dawnr@gao.gov, (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, DC 20548 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548 

Public Affairs 

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