More than half of initial applicants claim multiple disabilities, and veterans who believe their disabilities have worsened can reapply for higher ratings and more compensation. VA has had long-standing difficulties in keeping up with its claims processing workload, resulting in increasing backlogs of pending claims.In fiscal year 1999, VA received approximately 468,000 compensation claims—about 345,000 of which were repeat claims. In its 1996 report, the Veterans’ Claims Adjudication Commission observed that 56 percent of veterans with pending repeat claims were rated as 30- percent or less disabled. Reactions to a Lump Sum Option Are Mixed

Veterans’ views captured through our survey and focus groups were based on the following features of both the lump sum and monthly payment options:
Both types of payment—monthly and lump sum—would be tax-free. Veterans and military personnel also suggested strategies that they believe would limit the risk of forgone compensation or other benefits if a veteran’s disability were to progress. Specifically, some suggested that a lump sum payment option not be offered to those who would be least able to manage the money well—such as those who have been declared incompetent or have a history of significant psychological disabilities—or that the lump sum payment be assigned to someone who could manage the money for the payee.One concern that was raised with this type of strategy was that there would not be enough time to declare a newly compensated veteran incompetent or in need of a representative before the veteran was offered a choice. We contacted officials from these countries directly or through the Department of State.
Why GAO Did This Study

Currently, veterans who are disabled while serving their country are compensated for average reduction in earning capacity. Monthly compensation is based on the severity of a veteran's disability. After an initial rating for compensation has been determined, veterans who believe their condition has worsened may file a claim with the Department of Veterans' Affairs (VA) to reevaluate their disability rating. These repeat claims outnumbered initial disability applications by nearly three to one in fiscal year 1999, dominating VA's workload. To help reduce the volume of repeat claims, the Veterans' Claims Adjudication Commission asked Congress to consider paying less severely disabled veterans compensation in a lump sum. GAO surveyed veterans who are now being compensated on their reaction to a lump sum option.

What GAO Found

Veterans had mixed views. Many veterans and military personnel could see advantages and disadvantages to this new option. They also suggested some strategies that they believed could minimize the financial risks a lump sum payment option might introduce.