Veterans' Benefits

In 1993, the Department of Veterans Affairs' Dependency and Indemnity Compensation (DIC) program paid benefits totaling $2.7 billion to about 276,000 surviving spouses of service members who had died on active duty and surviving spouses of some disabled veterans. These benefits were paid under the Veterans' Benefits Act of 1992, which changed the basis for DIC benefits from the military rank of the deceased service member or veteran to a flat rate for all surviving spouses. This report (1) estimates DIC recipients' total income and determine the kinds and the amounts of benefits received from other programs, (2) determines the financial impact on surviving spouses of the deaths of totally disabled veterans and of veterans who were receiving supplemental payments because they had multiple severe disabilities and could not care for themselves, and (3) assesses alternative ways to set DIC benefits.

GAO found that: (1) in 1993, the minimum DIC benefit equaled about 55 percent of the estimated median income of DIC recipients; (2) in 1993, surviving spouses received an average of $9,846 in DIC benefits; (3) spouses of deceased and disabled veterans often receive other benefits, including Social Security and DOD survivor benefits, but they receive significantly less VA support when severely disabled veterans die; (4) surviving spouses of disabled veterans receive about 50 percent less than their spouses' basic disability compensation; (5) although some veterans receive supplemental payments in addition to basic compensation because of multiple or severe disabilities, the reduction in DIC benefits for surviving spouses can be as much as 80 percent; (6) most of the alternative methods of setting DIC benefits would likely reduce benefits to all recipients or substantially increase federal outlays; (7) basing DIC benefits on the level of veterans' basic disability compensation would increase benefits for about two-thirds of DIC recipients without increasing program costs and ensure that VA support to spouses changes more proportionately when veterans die; and (8) Congress will need to make a policy decision if it intends to change the DIC payment structure.