Veterans' Pensions

Verifying Income With Tax Data Can Identify Significant Payment Problems Gao ID: HRD-88-24 March 16, 1988

In response to a congressional request, GAO assessed the Veterans Administration's (VA) Pension Program to determine: (1) how accurately it records beneficiary income; (2) the extent of overpayments in the program nationwide; and (3) whether program access to tax data was warranted.

GAO found that: (1) of the 1.4 million 1984 VA pension recipients, 549,000 had $947 million more income on their tax records than on the VA records; (2) because it did not include this income in its pension calculations, VA made potential overpayments of $182.5 million; (3) more than 26,000 recipients reported no earned income to VA, while tax data showed earnings of at least $1,000; (4) some recipients reported no earnings over several years while tax data showed significant earnings in those years; and (5) VA attributed about 60 percent of the overpayments to unrecorded interest and dividend income. GAO also found that: (1) VA could not identify about $157.2 million in potential overpayments because it lacked access to tax data; (2) since VA did not field-test its self-reporting questionnaires before using them, design weaknesses could have added to the inaccurate reporting; and (3) although allowing VA access to third-party-reported tax data would be the most practical way to verify income, the use of tax data for nontax purposes could intrude on personal privacy and erode public support of the nation's voluntary tax system.

Recommendations

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