Military and Veterans' Benefits
Observations on the Concurrent Receipt of Military Retirement and VA Disability Compensation Gao ID: GAO-03-575T March 27, 2003Because pending legislation would modify current law, which requires that military retirement pay be reduced by the amount of VA disability compensation benefit received, the Subcommittee on Personnel, Senate Committee on Armed Services asked GAO to discuss the treatment of concurrent benefit receipt in other programs. GAO was also asked to discuss its broader work on federal disability programs.
Three factors are important to weigh in deliberations on the merits of modifying the military offset provision. First, many benefit programs use offset provisions when individuals qualify for benefits from more than one program. Generally, the provisions are designed to treat beneficiaries of multiple programs fairly and equitably in relation to all other program beneficiaries, consistent with the program's purpose. Moreover, eliminating the military retirement offset provision could establish a precedent for other federal benefit programs that could prove costly. Second, the proposed modifications to the concurrent receipt provisions in the military retirement system would have implications not only for the Department of Defense's retirement costs but would also increase the demand placed on the Department of Veterans Affairs' (VA) claim processing system. This would come at a time when the system is still struggling to correct problems with quality assurance and timeliness. Third, such increased demand would come at a time when the VA disability program compensation, along with other federal disability programs, is facing the need for more fundamental reform. Modifying the concurrent receipt provisions adds to the current patchwork of federal disability policies and programs at a time when transformation and modernization are needed. While we are not taking a position on whether military retirement should be modified, as the Congress and other policymakers deliberate this issue, it would be appropriate to consider how modifying the offset would affect the pursuit of more fundamental reforms.
GAO-03-575T, Military and Veterans' Benefits: Observations on the Concurrent Receipt of Military Retirement and VA Disability Compensation
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Testimony before the Subcommittee on Personnel, Committee on Armed
Services, U.S. Senate:
United States General Accounting Office:
GAO:
For Release on Delivery Expected at 2:30 p.m. EST:
Thursday, March 27, 2003:
Military and Veterans‘ benefits:
Observations on the Concurrent Receipt of Military Retirement and VA
Disability Compensation:
Statement of Cynthia A. Bascetta, Director,
Education, Workforce, and Income Security Issues:
GAO-03-575T:
GAO Highlights:
Highlights of GAO-03 -575T, testimony before the Subcommittee on
Personnel, Committee on Armed Services, U.S. Senate
Why GAO Did This Study:
Because pending legislation would modify current law, which requires
that military retirement pay be reduced by the amount of VA disability
compensation benefit received, the Subcommittee asked GAO to discuss
the treatment of concurrent benefit receipt in other programs. GAO was
also asked to discuss its broader work on federal disability programs.
What GAO Found
Three factors are important to weigh in deliberations on the merits of
modifying the military offset provision. First, many benefit programs
use offset provisions when individuals qualify for benefits from more
than one program. Generally, the provisions are designed to treat
beneficiaries of multiple programs fairly and equitably in relation
to all other program beneficiaries, consistent with the program‘s
purpose. Moreover, eliminating the military retirement offset
provision could establish a precedent for other federal benefit
programs that could prove costly.
Second, the proposed modifications to the concurrent receipt
provisions in the military retirement system would have implications
not only for the Department of Defense‘s retirement costs but would
also increase the demand placed on the Department of Veterans Affairs‘
(VA) claim processing system. This would come at a time when the
system is still struggling to correct problems with quality assurance
and timeliness.
Third, such increased demand would come at a time when the VA
disability program compensation, along with other federal disability
programs, is facing the need for more fundamental reform. Modifying
the concurrent receipt provisions adds to the current patchwork of
federal disability policies and programs at a time when
transformation and modernization are needed. While we are not taking
a position on whether military retirement should be modified, as the
Congress and other policymakers deliberate this issue, it would be
appropriate to consider how modifying the offset would affect the
pursuit of more fundamental reforms.
www.gao.gov/cgi-bin/getrpt?GAO-03-575T.
To view the full report, including the scope and methodology, click
on the link above. For more information, contact Cynthia A. Bascetta
at (202) 512-7101.
[End of section]
Mr. Chairman and Members of the Subcommittee:
Thank you for inviting me to discuss issues involved with the
concurrent receipt of military retirement pay from the Department of
Defense (DOD) and disability compensation from the Department of
Veterans Affairs (VA). Pending legislation would modify current law,
which requires that military retirement pay be reduced by the amount of
VA disability compensation benefit received. You asked us to discuss
the treatment of concurrent benefit receipt in other programs as well
as our broader work on federal disability programs.
To help you in your deliberations on this matter, I will explain the
use of offset provisions in other federal benefit programs as well as
in state and private sector programs. I will also discuss some of the
implications of modifying the concurrent receipt provisions for the VA
disability compensation program. In addition, I will address the more
fundamental problems facing VA‘s disability program. My statement is
based on a review of GAO reports on Workers‘ Compensation, Social
Security, and VA benefit programs and other literature relating to DOD
retirement and VA disability compensation. I will also draw on our
broader work on federal disability programs, which we recently
designated as high-risk because they are not well positioned to provide
meaningful and timely support to Americans with disabilities (see
Related GAO Products). Our work for this testimony was conducted in
March 2003, in accordance with generally accepted government auditing
standards.
In summary, three factors are important to weigh in your deliberations
on the merits of modifying the military retirement offset provision.
First, many benefit programs use offset provisions when individuals
qualify for benefits from more than one program. The use of offset
provisions in numerous benefit programs is a common method for dealing
with the consequences of beneficiaries qualifying for more than one
benefit program. The rationales for these offset provisions vary, but
they are generally designed to treat beneficiaries of multiple programs
fairly and equitably in relation to all other program beneficiaries,
consistent with the program‘s purpose. Moreover, eliminating the
military retirement offset provision could establish a precedent for
other federal benefit programs that could prove costly. Second, the
proposed modifications to the concurrent receipt provisions in the
military retirement system would have implications not only for DOD‘s
retirement costs, but would also increase the demand placed on VA‘s
claims processing system. This would come at a time with this system is
still struggling to correct problems with quality assurance and
timeliness. Third, the VA disability compensation program, along with
other federal disability programs, is facing the need for more
fundamental reform. Modifying the concurrent receipt provision would
add to the current patchwork of federal disability policies and
programs at a time when transformation and modernization should be
considered. While we are not taking a position on whether the military
retirement offset provision should be modified, as the Congress and
other policymakers deliberate this issue, it would be appropriate to
consider how modifying the offset would affect the pursuit of more
fundamental reforms.
Background:
Generally, DOD provides longevity retirement pay to military service
members upon completion of 20 creditable years of active duty service.
DOD also provides disability retirement pay to eligible servicemembers
who are determined unfit for duty-that is, unable to perform their
military duties. To qualify for military disability retirement, the
servicemember‘s disability must have been determined by DOD medical
personnel to be permanent and the servicemember must have (1) at least
20 years of creditable service or (2) an evaluation board determination
that the servicemember has a physical disability rating of at least 30
percent,[Footnote 1] and either at least 8 years of creditable service
or a disability resulting from active duty. Nearly 1.5 million retired
servicemembers received retirement and disability retirement pay in
fiscal year 2002. In fiscal year 2000, the average disability retiree
who had been an officer received about $2,022 per month, while the
average enlisted disability retiree received about $698 per month.
VA provides monthly disability compensation to veterans who have
service-connected disabilities to compensate them for the average
reduction in earnings capacity that is expected to result from injuries
or diseases incurred or aggravated by military service. The payment
amount is based on a disability rating scale that begins at 0 for the
lowest severity and increases in 10-percent increments to 100 percent
for the highest severity. Many veterans claim multiple disabilities,
and veterans can reapply for higher ratings and more compensation if
their disabilities worsen. For veterans who claim more than one
disability, VA rates each claim separately and then combines them into
a single rating. About
65 percent of compensated veterans receive payments based on a rating
of 30 percent or less and about 8 percent are rated at 100 percent.
Average monthly compensation payments in 2002 ranged from about $100
for a
10-percent rating to over $2,100 for a 100-percent rating.
Military retirees with disabilities incurred during their military
service may receive military retirement pay (based on either longevity
or disability, whichever is more financially advantageous to the
servicemember) from DOD and disability compensation from VA. For
example, a servicemember who incurs a disability may still be fit for
duty, depending on the nature and severity of the impairment. If that
servicemember completes 20 years of creditable service, he or she may
retire based on longevity and also qualify for VA disability
compensation for the same impairment or a different impairment that is
also service-connected. Similarly, a servicemember who incurs a
disability and is found unfit for duty may receive military retirement
pay based on disability if he or she meets additional eligibility
requirements. This servicemember may also qualify for VA disability
compensation for the same impairment or a different impairment that is
also service-connected.
Current law requires that military retirement pay be reduced (’offset“)
by the amount of VA disability benefits received. In 1891, Congress
passed legislation to prohibit what it regarded to be dual compensation
for either past or current service and a disability pension. Despite
the reduction in military retirement pay, it is often to a retiree‘s
advantage to receive VA disability compensation in lieu of military
retirement pay. These VA benefits provide an after-tax advantage
because they are not subject to federal income tax, as military
retirement pay generally is. In addition, the disability compensation
VA pays can be increased if medical reevaluation of the retiree‘s
condition is found by VA to have worsened. Because VA disability
compensation is based on the severity of the disability and not on
actual earnings (as is military retirement pay), the VA benefit may, in
some instances, be larger than the amount of military retirement pay.
For certain retirees with serious disabilities, the National Defense
Authorization Act of 2000 provides a cash benefit that is less than
what they would have received through concurrent receipt of their
military retirement pay and VA disability compensation. The statute
states that these special compensation payments are not military
retirement pay. As such, they are not subject to the offset provisions,
and the legislation did not change the statute that prohibits
concurrent receipt. The special compensation payments were reauthorized
in 2001 and 2002. [Footnote 2]
In addition, the 2003 National Defense Authorization Act (P.L. 107-314)
authorized a new category of ’special compensation“ for retirees with
disabilities, including those who received a Purple Heart or have a
disability due to ’combat-related“ activities. Under the new law,
eligible retirees would now be able to receive the financial equivalent
of concurrent receipt, although, again, the legislation did not repeal
the statute prohibiting concurrent receipt.[Footnote 3] Military
retirees may become eligible for this special compensation if (1) their
disability is attributable to an injury for which the member was
awarded the Purple Heart, and is not rated less than a 10-percent
disability by DOD or VA; or (2) they receive a disability rating of at
least 60 percent from either DOD or VA for injuries that were incurred
due to involvement in ’armed conflict,“ ’hazardous service,“ ’duty
simulating war“ and through an instrumentality of war.[Footnote 4]
Retirees who are eligible under this new special compensation category
will no longer be entitled to the special compensation payments first
enacted in 2000. The Congressional Budget Office (CBO) estimated that
this new special compensation would cost about $6 billion over 10
years.
Table 1 shows the 2003 monthly payments amounts of the special
compensation enacted in 2000 as well as the monthly payment amounts for
the new category of special compensation.
Table 1: Special Compensation Monthly Payment Amounts for Service-
Connected Disabilities in Addition to Military Retirement Pay:
VA disability rating: 60%; 2003 payment amounts for special
compensation enacted in 2000: $50; 2003 payment amounts for new
category of special compensation[A]: $790.
VA disability rating: 70%; 2003 payment amounts for special
compensation enacted in 2000: $100; 2003 payment amounts for new
category of special compensation[A]: $995.
VA disability rating: 80%; 2003 payment amounts for special
compensation enacted in 2000: $125; 2003 payment amounts for new
category of special compensation[A]: $1,155.
VA disability rating: 90%; 2003 payment amounts for special
compensation enacted in 2000: $225; 2003 payment amounts for new
category of special compensation[A]: $1,299.
VA disability rating: 100%; 2003 payment amounts for special
compensation enacted in 2000: $325; 2003 payment amounts for new
category of special compensation[A]: $2,163.
Source: Congressional Research Service and Department of Veterans
Affairs.
[A] Payment is equivalent to the base amount of the VA disability
compensation for each rating category. Amounts do not reflect
allowances for eligible family members. The table does not reflect
payment amounts for eligible Purple Heart recipients with disability
ratings of less than 60 percent.
[End of table]
Current proposals before Congress pertaining to concurrent receipt
would, if enacted, expand the number of those eligible to
simultaneously receive the equivalent of their full retirement pay and
compensation for a disability beyond the 2003 National Defense
Authorization Act. CBO estimated that an earlier version of these
proposals would cost about $46 billion over 10 years. Over a longer
time horizon, the additional financial liability would be of even
greater significance because of mounting concerns about the long-term
fiscal consequences of federal entitlements.
Many Programs Use Offset Provisions When Individuals Are Eligible for
Benefits from More than One Program:
Among the programs that provide benefits to individuals based on their
previous work experience or their inability to continue working because
of disability, many use offset provisions when an individual qualifies
for benefits under more than one program. The specific rationales for
these offset provisions vary, but they generally focus on restoring
equity and fairness by treating beneficiaries of more than one program
in a similar manner as beneficiaries who qualify for benefits under
only one of the programs. Table 2 provides examples of benefit programs
that include offset provisions. (See app. I for a description of these
programs.):
Table 2: Examples of Offset Provisions in Benefit Programs:
[See PDF for image]
Source: GAO analysis of Congressional Research Service and GAO reports.
[End of table]
Some programs use offset provisions to ensure that the total benefits
received from two programs do not exceed the total income received
while working. For example, the Social Security Disability Insurance
(DI) program provides benefits to insured persons to replace the income
lost when they are unable to work because of physical or mental
impairments. In addition to DI benefits, some individuals may also be
eligible for workers‘ compensation (WC) if the illness or injury is
work-related. WC benefits are designed to replace the loss of earnings
resulting from work-related illnesses or injuries. Each state and the
District of Columbia generally requires employers operating in its
jurisdictions to provide WC insurance for their employees.[Footnote 5]
The Social Security Administration (SSA) generally requires that DI
benefits be reduced for persons who also receive WC.[Footnote 6] This
offset applies when combined DI and WC benefits exceed 80 percent of
the injured worker‘s average current earnings. The reduction can apply
even if the DI and WC benefits are for unrelated injuries or illnesses.
In 1971, the Supreme Court validated the WC offset provision stating
that it was intended to provide an incentive for injured employees to
return to work because the Congress did not believe it was desirable
for injured workers to receive disability benefits that, in combination
with their WC benefits, exceeded their preinjury earnings.[Footnote 7]
Some programs use offset provisions to adjust benefit computation
formulas that were not originally designed to account for individuals
or their dependents working under more than one retirement system. An
example is Social Security‘s Government Pension Offset (GPO) provision,
enacted in 1977 to equalize the treatment of workers covered by Social
Security and those with government pensions not covered by Social
Security. The Social Security Act requires that most workers be covered
by Social Security benefits.[Footnote 8] In addition to paying
retirement and disability benefits to covered workers, Social Security
also generally pays benefits to spouses of retired, disabled, or
deceased workers. Although state and local government workers were
originally excluded from Social Security, today about two-thirds of
state and local government workers are covered by Social
Security.[Footnote 9] Prior to 1977, a spouse receiving a pension from
a government position not covered by Social Security could receive a
full pension benefit and a full Social Security spousal benefit as if
he or she were a nonworking spouse. The GPO prevents spouses from
receiving a full spousal benefit in addition to a full pension benefit
earned from noncovered government employment.[Footnote 10]
Offset provisions are also used by state governments. For example,
29 states and the District of Columbia permit insurers to reduce WC
cash payments when the beneficiary also receives other types of
benefits, such as those from Social Security retirement, survivor, or
disability programs or from government or private pension plans. In
addition, as required by federal law, states must deduct from
unemployment compensation the value of pensions, retirement pay, or
annuities based on previous work in certain situations. The purpose of
this offset is to reduce the incentive for retirees who receive
pensions to file for unemployment compensation and increase their
incentive to seek work.
Private sector insurers also use offsets. Our study of three large
private disability insurers[Footnote 11] found that nearly two-thirds
of those receiving private long-term disability benefits from the three
private insurers also received DI benefits.[Footnote 12] In such cases,
the private disability benefit payments were generally reduced by the
amount of the DI benefit payment.
Modifying the Concurrent Receipt Provisions Has Implications for the VA
Disability Compensation Program:
In addition to the cost of the benefits, allowing concurrent receipt
would have implications for VA program management. Allowing concurrent
receipt of military retirement pay and VA disability compensation could
provide new incentives for military retirees to file for VA
compensation or to seek increases in their disability ratings for VA
compensation that they are already receiving. These new claims could
further tax VA‘s claims processing system. We recently reported that VA
faces long-standing challenges to improve the timeliness and quality of
disability claims decisions. In addition to creating delays in
veterans‘ receipt of entitled benefits, untimely, inaccurate, and
inconsistent claims decisions can negatively affect veterans‘ receipt
of other VA benefits and services, including health care, because VA‘s
assigned disability ratings help determine eligibility and priority for
these benefits.[Footnote 13] While the cost of these new benefits and
VA‘s administrative challenges in processing the claims may not provide
sufficient bases to retain the offset, they warrant consideration in
weighing this matter.
VA Disability Programs Face Fundamental Problems:
While VA has had difficulty making decisions in a timely and consistent
manner, VA‘s disability programs also face more fundamental problems.
Our concerns about the long-standing challenges that VA faces in claims
processing contributed to our recent decision to place federal
disability programs, including VA‘s programs, on our high-risk list of
programs that need urgent attention and transformation to ensure that
they function in the most economical, efficient, and effective manner
possible.[Footnote 14] This designation was based in part on our
finding that these programs use outmoded criteria for determining
disability. For example, VA‘s disability ratings schedule is still
primarily based on physicians‘ and lawyers‘ judgments made in 1945
about the effect service-connected conditions had on the average
individual‘s ability to perform jobs requiring manual or physical
labor. Although VA is revising the medical criteria for its Schedule
for Rating Disabilities, the estimates of how impairments affect
veterans‘ earnings have generally not been reexamined. As a result,
changes in the nature of work that have occurred over the last half-
century--which potentially affect the extent to which disabilities
limit one‘s earning capacity--are overlooked by the program‘s criteria.
For example, in an increasingly knowledge-based economy, one could
consider whether physical impairments such as the loss of an extremity
still reduce earning capacity by 40 to 70 percent.[Footnote 15]
These outdated concepts persist despite scientific advances and
economic and social changes that have redefined the relationship
between impairments and the ability to work. Advances in medicine and
technology have reduced the severity of some medical conditions and
have allowed individuals to live with greater independence and function
in work settings. Moreover, the nature of work has changed as the
national economy has become increasingly knowledge-based. Without a
current understanding of the impact of physical and mental conditions
on earnings given labor market changes, VA and other agencies
administering federal disability programs may be overcompensating some
individuals while undercompensating or denying benefits to other
individuals because of outdated information on earning capacity. At the
same time, the projected slowdown in growth of the nation‘s labor force
makes it imperative that those who can work are supported in their
efforts to do so.
In reexamining the fundamental concepts underlying the design of
federal disability programs, approaches used by other disability
programs may offer valuable insights. For example, our prior review of
three private disability insurers shows that they have fundamentally
reoriented their disability systems toward building the productive
capacities of people with disabilities, while not jeopardizing the
availability of cash benefits for people who are not able to return to
the labor force. As we previously reported, to fully incorporate
scientific advances and labor market changes into the disability
programs would require more fundamental change, such as revisiting the
programs‘ basic orientation from incapacity to capacity. Reorienting
programs in this direction would align them with broader social changes
that focus on building and supporting the work capacities of people
with disabilities. Such a reorientation would require examining complex
program design issues such as beneficiaries‘ access to medical care and
assistive technologies, the benefits offered and their associated
costs, and strategies to return beneficiaries to work. Moreover,
reorientation of the federal disability programs would necessitate the
integration of the many programs and policies affecting people with
disabilities, including those of DOD and VA.
Mr. Chairman, this concludes my prepared remarks. I would be happy to
answer any questions that you or the other Subcommittee members might
have.
Contacts and Acknowledgments:
For further information regarding this testimony, please contact me at
(202) 512-7101 or Carol Dawn Petersen at (202) 512-7215. Suit Chan,
Beverly Crawford, and Shelia Drake also contributed to this statement.
[End of section]
Appendix I: Benefits and Eligibility Requirements for
Programs Containing Offset Provisions:
Program: Social Security benefits; Benefits provided: Cash benefits to
workers and their dependents who qualify as beneficiaries under the
Old-Age Survivors, and Disability Insurance (OASDI) programs of the
Social Security Act. OASDI replaces a portion of earnings lost as a
result of retirement, disability, or death.; Eligibility: The worker
and his/her eligible family members must meet different sets of
requirements for each type of benefit. An underlying condition of
payment of most benefits is that the worker has contributed to Social
Security for the required period of time..
Program: Social Insurance for Railroad Workers (Railroad retirement
benefits); Benefits provided: Cash benefits to retired or disabled
railroad workers, their dependents and survivors. Railroad workers may
also receive sickness and unemployment benefits.; Eligibility: Railroad
worker must have had at least 120 months of creditable railroad service
or 60 months of creditable railroad service if such service was
performed after 1995..
Program: Coal Mine Workers‘ Compensation (Black Lung benefits);
Benefits provided: Cash benefits to coal miners who have become totally
disabled due to coal workers‘ pneumoconiosis, and to widows and other
surviving dependents of miners who have died of this disease;
Eligibility: Coal miner must have worked in the nation‘s coal mines or
a coal preparation facility and become totally disabled from
pneumoconiosis..
Program: Federal Employees Retirement System; Benefits provided: Cash
benefits to retired or disabled federal employees, and survivors of
federal employees and retirees.; Eligibility: Federal employees whose
initial federal employment began after December 31, 1983, or who
voluntarily switched from Civil Service Retirement System (CSRS) to
FERS. The worker must have at least 5 years of creditable civilian
service. Survivor and disability benefits are available after 18 months
of civilian service.
Program: Workers‘ Compensation; Benefits provided: Various cash and
medical benefits to workers injured while working or who have
occupational diseases.; Eligibility: Specific eligibility requirements
and benefit amounts vary from state to state..
Program: Federal-State Unemployment Insurance Program (Unemployment
compensation); Benefits provided: Temporary financial assistance to
eligible workers who are unemployed through no fault of their own and
are actively engaged in job search.; Eligibility: Worker must meet the
state requirements for wages earned or time worked during an
established period of time, and be determined unemployed through no
fault of his/her own, and meet other eligibility requirements of his/
her state law..
Program: Private disability insurance; Benefits provided: Short-or
long-term disability insurance, or both, to replace income lost by
employees because of injuries and illnesses.; Eligibility: Specific
eligibility requirements vary from plan to plan..
[End of table]
Source: GAO analysis of Congressional Research Service and GAO reports.
[End of section]
Related GAO Products:
Social Security: Congress Should Consider Revising the Government
Pension Offset ’Loophole.“ GAO-03-498T. Washington, D.C.: February 27,
2003.
Major Management Challenges and Program Risks: Department of the
Veteran Affairs. GAO-03-110. Washington, D.C.: January 2003.
High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January
2003.
Veterans‘ Benefits: Claims Processing Timeliness Performance Measures
Could Be Improved. GAO-03-282. Washington, D.C.: December 19, 2002.
Veterans‘ Benefits: Quality Assurance for Disability Claims and Appeals
Processing Can Be Further Improved. GAO-02-806. Washington, D.C.:
August 16, 2002.
SSA and VA Disability Programs: Re-Examination of Disability Criteria
Needed to Help Ensure Program Integrity. GAO-02-597. Washington, D.C.:
August 9, 2002.
Veterans‘ Benefits: Despite Recent Improvements, Meeting Claims
Processing Goals Will Be Challenging. GAO-02-645T. Washington, D.C.:
April 26, 2002.
Workers‘ Compensation: Action Needed to Reduce Payment Errors in SSA
Disability and Other Programs. GAO-01-367. Washington, D.C.: May 4,
2001:
SSA Disability: Other Programs May Provide Lessons for Improving
Return-to-Work Efforts. GAO-01-153. Washington, D.C.: January 12, 2001.
FOOTNOTES
[1] A disability rating is essentially an indication of medical
severity of an impairment: the more severe the medical condition, then
the higher the percentage of the disability rating, which can range
from 0 to 100 percent.
[2] The monthly dollar amounts of ’special compensation“ at each
disability level of 70 percent or more will increase by $25 per month
on October 1, 2004.
[3] As before, the statute states that these special compensation
payments are not military retirement pay. As such, they are not subject
to the offset provisions.
[4] To date, regulations have not been promulgated to implement this
provision, including definitions for these terms.
[5] These programs established a mechanism to pay injured workers
predictable levels of compensation without delay. Although WC programs
exist in all states, the programs are not federally mandated,
administered, or regulated. Rather, they evolved throughout the 20th
century under state laws with the support of labor and management.
[6] SSA cannot offset disability benefits if the state WC program
allows the insurers to reduce the amount of WC benefits they would
normally pay to an injured worker when the worker also receives Social
Security DI benefits. In 1981, the Congress limited recognition of such
exceptions to the 14 states that had established them by Feb. 18, 1981.
[7] Richardson v. Belcher, 404 U.S. 78 (1971).
[8] Workers contribute to Social Security through payroll taxes.
[9] Starting in the 1950s, state and local governments had the option
of selecting Social Security coverage for their employees or retaining
their noncovered status. In 1983, state and local governments in the
Social Security system were prohibited by law from opting out of it.
[10] If both spouses worked in positions covered by Social Security,
each may not receive both the benefits earned as a worker and a full
spousal benefit; rather each member of the couple would receive the
higher amount of the two.
[11] In 1997, these three companies covered about half of the long-term
U.S. private disability insurance market.
[12] U.S. General Accounting Office, SSA Disability: Other Programs May
Provide Lessons for Improving Return-to-Work Efforts, GAO-01-153
(Washington, D.C.: Jan. 12, 2001).
[13] U.S. General Accounting Office, Major Management Challenges and
Program Risks: Department of Veterans Affairs, GAO-03-110 (Washington,
D.C.: Jan. 2003).
[14] U.S. General Accounting Office, High-Risk Series: An Update,
GAO-03-119 (Washington, D.C.: Jan. 2003)
[15] GAO-03-110. VA recognizes that there have been significant changes
in the nature of work, but does not believe that these changes need to
be reflected in the disability ratings. VA contends that the disability
rating schedule, as constructed, represents a consensus among Congress,
VA, and the veteran community, and that the ratings generally represent
an equitable method to determine disability compensation. We continue
to believe, as we have said in the past, that the current estimates of
the average reduction in earning capacity should be reviewed. Further,
we believe that updating disability criteria is consistent with the
law. U.S. General Accounting Office, SSA and VA Disability Programs:
Re-Examination of Disability Criteria Needed to Help Ensure Program
Integrity, GAO-02-597 (Washington, D.C.: Aug. 9, 2002).
