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IU Benefits Update: VA Secretary Willing to Find Alternative to Cuts

June 15, 2017

VA Secretary David Shulkin told the Senate Veterans’ Affairs Committee on Wednesday (June 14, 2017) that he’s willing to work with lawmakers to find an alternative to the administration’s proposed cuts to Individual Unemployability, or IU benefits for hundreds of thousands of elderly veterans.

At Wednesday’s committee hearing, Shulkin acknowledged that the cuts to IU benefits would harm vulnerable veterans:

“As I began to listen to veterans and their concerns… it was clear this would be hurting veterans and would hurt veterans who can’t afford to have those benefits taken away.” He later added, “We have to look into ways to do things better. I’m not going to support policies that hurt veterans.”

Shulkin’s announcement comes after several weeks of outrage over the IU cuts from veterans, veterans’ service organizations (VSOs), and other veterans’ advocates. The budget cuts, outlined in the President’s proposed VA budget for Fiscal Year 2018, would terminate unemployability benefits for veterans when they reach the minimum Social Security retirement age. The cuts would save $3.2 billion, which Shulkin previously said would be reallocated to other VA initiatives, like the Veterans Choice Program.

The Initial Proposal

Under the current IU benefits rule, veterans with severe disabilities (rated 60 percent or higher) who are unable to work (because of said disability) receive compensation at the 100 percent level. These payments, a VA official told Senators at the hearing, average about $1600 per month. The proposed cuts, VA estimates, would affect roughly 210,000 veterans over the age of 60, about 7,000 of whom are over the age of 80.

The severance of unemployability benefits would cause veterans and their families to lose other benefits as well. Because veterans would lose their 100 percent rating, they would lose VA dental care and certain state-specific benefits like property tax exemptions. Their dependents would lose access to CHAMPVA healthcare coverage, the Dependents Educational Assistance program, and even Dependency and Indemnity Compensation after the veterans’ death.

“If we were designing this system from the beginning, we wouldn’t have used [IU benefits] for veterans’ retirement,” Shulkin said at Wednesday’s hearing. “But the end result is–that is the benefit. And to withdraw that money now is something that would be very difficult to do.”

The Backlash

The proposed VA budget was met with outrage when veterans learned of the proposed cuts to benefits for vulnerable elderly veterans. Veterans’ service organizations (VSOs) reported receiving thousands of calls from anxious veterans–some of whom, VSOs stated at the meeting, were near suicidal. A representative from the VSO Veterans of Foreign Wars (VFW) said that, in the last week alone, 30,000 emails and letters about the issue have flooded Congress.

On Monday, a letter from 57 members of Congress was sent to Shulkin urging him to eliminate the IU benefits changes, according to Representatives from AMVETS, a VSO, canvassed congressional offices on Tuesday, trying to build support for killing the IU proposal. And earlier this week, officials from the House Appropriations Committee put forth VA budget language for FY 2018 without the Individual Unemployability cuts.

What’s next?

At Wednesday’s Senate hearing, Secretary Shulkin said he looks forward to working with members of the VA Committee to find an alternative to cutting Individual Unemployability.  He also reaffirmed his position that the VA has a responsibility to use its funds in a way that makes sense for both veterans and taxpayers.

“We have budget numbers and targets we have to hit,” said Shulkin. “But we shouldn’t be doing things that are going to be hurting veterans that can’t afford to lose these benefits.”

Finding an alternative to cutting IU benefits may be difficult. The cuts would have saved $3.2 billion and Shulkin has indicated these savings would be used to fund a new and improved Veterans Choice Program, which allows veterans to get healthcare (paid for by the VA) from private providers. The Choice Program is already $1 billion short for this fiscal year because of increases in enrollment, Shulkin revealed at the hearing.

Shulkin did not provide details about areas of the budget that might be cut to make up the $3 billion difference. He did briefly state, however, that the IU cuts were “part of a menu of opportunities that we had for thinking how we could make the budget process better.”

Calls for Certainty on IU Benefits

Veterans’ service organizations testified at the VA Committee hearing after Shulkin announced he was no longer supporting the Individual Unemployability cuts. In their testimony, they reaffirmed their opposition to those cuts and asked Congress and Secretary Shulkin to make a public commitment to dropping that part of the budget proposal.