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VA Defends Budget Cuts to Benefits for Elderly Veterans

June 2, 2017
budget cuts to benefits for elderly veterans

The proposed VA budget cuts for Fiscal Year 2018 include a new provision that would cut Individual Unemployability (IU) benefits for thousands of elderly veterans. Faced with questions and significant opposition from veterans, Veterans’ Service Organizations, and veterans’ advocates across the country, Secretary of Veterans Affairs Dr. David Shulkin publicly defended the Unemployability cuts.

Under current VA policy, disabled veterans can receive a 100% rating if their service-connected disabilities limit their abilities to the extent that they are unable to work. The VA calls this benefit Individual Unemployability (IU). The proposed budget cuts, if incorporated into the final budget, would halt the payment of IU benefits as soon as veterans reach the minimum retirement age for Social Security.

The Secretary Speaks on the Budget Cuts

“I don’t think we can continue to only expand services and not look at the ones we are delivering,” said Secretary Shulkin when questioned about the proposal at a House Veterans Affairs Committee budget hearing on May 24.  “I think people can understand paying veterans who are above age 80 unemployment benefits isn’t what makes sense to the average American.”

Who would be affected?

If the proposal is approved as it stands, the VA estimates that 225,000 elderly veterans could lose their IU benefits, including about 7,000 that are over the age of 80. Moreover, recipients of IU benefits are some of the most severely disabled veterans in the country, with disability ratings ranging from 60 to 100 percent.

The proposed budget cuts would also affect many surviving spouses and children of veterans.  Under current law, if a veteran is rated 100 percent disabled for 10 years immediately preceding his/her death, the surviving spouse or minor child is eligible for Dependency and Indemnity Compensation (DIC) benefits.  If the proposed budget passes and a veteran’s IU benefits are cut, the surviving spouse or minor child would not be eligible for the DIC benefits when the veteran dies.

VA Defends the Budget Cuts

Cuts to IU benefits would save the VA an estimated $3.2 billion in the first year alone and $40.9 billion over ten years. Some of these savings would go toward a $2.9 billion expansion of the Choice Program, which allows veterans to seek VA-funded care at private medical facilities.

“There are always hard decisions that have to be made,” said Secretary Shulkin at the House VA Committee budget hearing. “Sometimes that means you have to adjust current programs to support the growth of other benefits.”

At the same House hearing, Rep. Mark Takano of California pointed out, “If a veteran was provided this benefit because of the inability to maintain gainful employment, particularly at a young age, he or she would not have been able to pay for Social Security or put money into a 401(k) or other retirement savings account.”

Veterans who do not collect Social Security would be exempt from the reduction in VA benefits. But for veterans who will experience the reduction in benefits and have just enough employment earnings to qualify for Social Security the cuts will be dramatic.

At a White House press briefing on May 31, reporters questioned the Secretary about whether the budget cuts were in line with the administration’s promise to do better by veterans. Secretary Shulkin admitted that the 2018 VA Budget Cut he was proposing would use the money presently allocated to veterans receiving IU for other VA programs.

Concluding his remarks on the issue, Secretary Shulkin’s understatement of the press conference was, “Now, I understand there’s not always going to be agreement. This is Washington, and we’re always going to get passion over important topics… And I know that since we share the same goal of helping veterans, that we’ll get to the right answer.”