VA Watchdog Found Errors in One-Third of Veterans’ Disability Reduction Cases

The Department of Veterans Affairs (VA) made errors in about one-third of the cases it reviewed involving reductions to veterans’ disability compensation, according to a report from the agency’s watchdog.

The VA Office of Inspector General recently found that claims processors made one or more errors in roughly 34% of proposed and final decisions to reduce veterans’ service-connected disability compensation during the 2024 calendar year. In some instances, benefits were slashed without giving veterans the advance notice the law requires.

Federal law is supposed to guard against exactly that kind of mistake. Under a regulation known as 38 CFR 3.103, the VA cannot terminate, reduce or otherwise adversely affect a veteran’s disability compensation unless it first notifies the veteran.

It’s a due process protection intended to give veterans a chance to respond before their benefits change. There are claims that processors did not always follow it, per the OIG.

VA Says ‘Deficiency’ Due to Biden Administration

The report found errors in several forms. In some cases, processors did not provide sufficient notice before acting on a veteran’s benefits.

In others, they failed to update rating decision code sheets, applied incorrect effective dates, or failed to take an adverse action that should have been taken.

Some veterans continued receiving payments they were no longer entitled to because reductions were not properly processed, while others had their benefits affected without the notification the law requires.

In a sample of cases from the first nine months of 2025, the review found that some claims had been closed prematurely.

VA Press Secretary Quinn Slaven told Military.com that the department “appreciates OIG’s efforts in uncovering yet another deficiency” and attributed the problems to the previous Biden administration.

Slaven said that before the report’s release, the Veterans Benefits Administration had begun implementing fixes—including additional training for employees on how to properly process adverse actions, and on ensuring veterans have enough time to contest them.

“VA is committed to ensuring veterans receive the benefits they’ve earned and deserve,” Slaven said.

The department had reduced the backlog of veterans awaiting benefits and cut average disability claims processing times, he added.

The Big Cost

Processing errors come with price tags.

In its estimate, the inspector general found that veterans were improperly paid at least $16.9 million in proposed adverse-action cases closed during 2024.

They noted that at least $964,000 in improper payments would continue each month until the problems were fixed.

Much of that figure reflects money that kept flowing to veterans, rather than benefits wrongly taken away, since the department did not complete the reductions it had proposed.

The due process concern is for veterans whose compensation was reduced without the advance notice they were owed.

Familiar Findings

In 2022, an inspector general report found the VA had improperly created about $13.4 million in erroneous debts by reducing veterans’ disability levels without always informing them.

Another review found similar failures involving the effective dates of reduced evaluations and missing notifications.

Credit: VA-OIG, Public domain, via Wikimedia Commons

In the latest report, the inspector general made four recommendations, including creating standardized due process letters.

The OIG also suggested an enhanced level of review for certain decisions, building an automated report to catch proposed actions that were never finalized, and correcting the errors the review identified.

The principal deputy under-secretary for benefits concurred with all of them.

Disability compensation is a monthly, tax-free payment for veterans with injuries or illnesses connected to their military service. Any reduction can significantly cut monthly income.

By law, a veteran facing a proposed reduction is entitled to notice and an opportunity to respond before the change takes effect.

Any veteran who believes a reduction was made improperly can appeal or seek help from an accredited representative or a Veterans Service Organization.