Cash benefits under FECA and the workers’ compensation programs and those provided under VA’s disability compensation program are provided for different purposes. Workers’ Compensation Programs

Workers’ compensation programs attempt to provide adequate benefits to injured workers while limiting employers’ liabilities strictly to workers’ compensation benefits. These programs provide cash benefits to employees for wage loss and permanent impairments. Employees whose injuries or illnesses result in lost wages may be entitled to receive wage-loss benefits. To be eligible for monetary benefits under workers’ compensation, workers must experience an actual loss in wages or a permanent impairment. Thus, like workers’ compensation for permanent impairments, veterans can receive compensation even if they are working and regardless of the amount they earn. Workers are paid a percentage of their wages or the wages they lose as a result of their work-related injury or disease, depending on whether they are being compensated for lost wages or permanent impairments. Most programs compensate for lost wages for the duration of the wage loss. As of January 1995, the FECA, District of Columbia, and most state workers’ compensation programs each maintained a schedule that specified the maximum number of weeks of compensation a worker under their jurisdiction could receive for specific permanent impairments that result in the total loss or loss of use of certain members (such as a hand, arm, or foot), organs, and functions of the body. Determining Disability Compensation Amounts Under VA’s Program

The amount of compensation veterans are awarded for their service-connected conditions is based on a percentage evaluation, commonly called the disability rating, which VA’s Schedule for Rating Disabilities assigns to a veteran’s specific condition. Veterans with the same condition at the same level of severity usually receive the same basic cash benefit. The rating schedule contains medical criteria and disability ratings. In contrast to many workers’ compensation programs, VA’s program does not place any limits on the total amount of monetary benefits veterans can receive or the time period for which they can receive these benefits. Cash Benefit Comparisons

Monthly benefits for workers with higher earnings under FECA for selected scheduled permanent impairments will likely be higher than VA’s monthly disability compensation because schedule award amounts for permanent impairments under the workers’ compensation programs are based on workers’ wages. However, a federal employee at the GS-5, step 1, salary level would receive about $1,065 a month (see table 4). In the long run, at the GS-12, step 1, salary level and below, compensation under VA’s disability program is generally higher than FECA compensation for selected permanent impairments. Assumptions Underlying the Comparison of Benefits Under FECA and the VA Disability Compensation Program

This appendix presents the specific assumptions that we adopted to estimate the present value, or lump-sum equivalent, benefits of FECA and VA disability compensation for this report.
Why GAO Did This Study

Pursuant to a congressional request, GAO compared the: (1) criteria used by the Department of Veterans Affairs (VA) disability compensation program and federal and state workers' compensation programs to determine compensation; and (2) compensation individuals with selected work-related injuries and diseases would receive under VA's disability program and what they would receive for the same impairments under the Federal Employees' Compensation Act (FECA).

What GAO Found

GAO found that: (1) the VA disability compensation program and workers' compensation programs, including FECA, differ with respect to program goals, types of benefits provided, and eligibility requirements for benefits; (2) most workers' compensation programs provide separate cash payments for wages lost and permanent impairment, while VA provides compensation only for service-connected conditions, which need not be permanent; (3) unlike the VA program, workers' compensation programs emphasize returning employees to work while limiting employers' liability, and the vast majority who receive workers' compensation receive only medical benefits, not cash awards; (4) to be eligible for wage loss benefits under workers' compensation programs, workers must actually lose all or a portion of their wages for a specified minimum period of time, then they receive a portion, usually 66 and two-thirds percent, of their actual lost wages for the duration of the period that wages are lost; (5) to collect compensation for permanent impairments, workers must sustain permanent loss or loss of use of a body part or function, but they need not lose wages to receive compensation for their permanent impairments; (6) unlike workers' compensation programs, the amount of basic compensation veterans may receive is established by statute and is not based on their individual wage loss or usual wages, but it is based on the rating VA's Schedule for Rating Disabilities assigns to that veteran's specific condition; (7) all veterans whose conditions are assigned the same rating receive the same basic benefits amount; (8) unlike workers' compensation for permanent impairments, there is no limit on the length of time veterans can receive benefits or the total amount they can receive for permanent conditions; (9) the monthly cash benefits for permanent impairments under FECA for employees at the GS-12, step 1, salary level tend to be higher than the benefits under VA's disability program for the same types of conditions; (10) this is likely to be the case for those at higher, but not lower, salary levels under FECA because workers' compensation is based on workers' usual wages, whereas veterans' benefits are not; and (11) unless workers' compensation continues under the wage loss provision after the cash awards for permanent impairment and, the amount and present value of VA compensation could be higher than FECA's over the long term.