Monthly compensation that the Department of Veterans Affairs pays to veterans with service-connected disabilities is intended to replace average earnings loss due to their injuries or ailments.

But should VA also pay disabled veterans something extra for diminished quality of life? Two prominent commissions in 2007 said that it should. On Wednesday, however, a senior VA official told senators that the department isn’t prepared yet to endorse a qualify-of-life payment, or to make any other significant change to disability compensation.

“There’s more information that’s needed, and…more discussion that needs to take place with many experts, before we are prepared to say yes or no on any of those recommendations,” said Patrick W. Dunne, under secretary for benefits in VA’s Veterans Benefits Administration.

Sen. Richard Burr (N.C.), ranking Republican on the veterans’ affairs committee, raised the issue in a hearing on a different topic: What VA is doing to speed the processing of a rising number of disability claims.

Burr noted that VA just last year commissioned a study, by Economic Systems Inc., of Falls Church, Va., on appropriate levels of disability pay to compensate for loss of earning capacity and quality of life as a result of service-related disabilities. This six-month study was to follow up on recommendations from both the Veterans’ Disability Benefits Commission and the Dole-Shalala Commission in 2007 to reform disability compensation.

The benefits commission, in its comprehensive report, concluded that VA disability pay was too low for three categories of veterans: those who suffer from mental disabilities; those severely injured while young, and those deemed unemployable (i.e., rated IU or Individual Unemployability) by VA.

The commission also said current disability pay should reflect the “adverse impact…on quality of life” of veterans’ disabilities. Commissioners recognized that some severely injured veterans are paid a Special Monthly Compensation too on top of VA disability pay. But they said the VA rating schedule still should be revised to compensate many more veterans for diminished quality of life. In the interim, the commission said, Congress should increase VA disability compensation immediately by 25 percent.

The Dole-Shalala panel focused its recommendations on wounded warriors and veterans who were in service after the attacks of 9/11. It recommended restructuring their VA disability compensation into three parts: transition payments to cover short-term living expenses for disabled vets and their families; earning loss payments until veterans become eligible for social security, and a quality-of-life payment to compensate for non-work-related effects of permanent “combat-related” injuries.

The study by Economic Systems, Inc. (EconSys), delivered last August, looked at VA disability compensation with regard to earnings loss, loss of quality of life, transition benefits and other areas raised by the two commissions. To ensure that VA didn’t ignore the findings, the Veterans' Benefits Improvement Act of 2008 directed VA to evaluate the EconSys study and, in a report to Congress, give a timeline and a list of legislative changes needed to make any worthy disability pay reforms.

VA’s assessment of the EconSys study arrived on Capitol Hill July 22.

“But I don’t see any planned actions or timelines laid out in the VA’s report,” Burr told Dunne a week later. “Could you clarify whether VA plans to take any actions in response to that study?”

Dunne said EconSys did a “good job” considering its six-month deadline, but much more information and debate is needed before VA can back changes. For VA or Congress to act based on the “truly national policy recommendations” found in the EconSys study, which relied on insufficient cost and earnings data, “would not be serving our veterans properly,” Dunne said.

In reading VA’s evaluation of the $3.2 million EconSys study, it’s easy to see why VA officials are cautious. It’s a mixed bag for veterans. Some options are quite costly but might help many veterans. Others, like one calling for IU compensation eligibility to end in old age, would save VA money but anger many veterans. VA calls some of the recommendations “inconsistent with the nation’s obligations to its wounded warriors.”

EconSys presented three options for compensating for loss of quality of life. The easiest to understand would create a standard additional payment based on a veteran’s combined degree of disability. Payments would be set by assigning a quality-of-life score to the degree of disability.

“The report used several factors in coming up with the score, but also found that the overall quality of life varies greatly among veterans with the same disability rating, depending on the body system involved,” VA warned.

A second option would create a separate pay scale for loss of quality of life, based on a veteran's combined degree of disability and primary disability. Certain disabilities would be associated with greater quality-of-life loss than others. That might result in veterans with a lower combined degree of disability getting a higher quality-of-life payment, VA said.

A third option would have VA conduct individual clinical and rating assessments and establish separate, empirically-based rates for loss of earnings and loss of quality of life. The VA medical exam would have to be expanded to include a rater to assess a wide range of quality-of-life criteria.

EconSys estimated the annual cost of each of its quality of life payment options would be in a range of between $10 billion to $30 billion.

Burr urged Dunne to consult with VA Secretary Eric Shinseki, and then tell Congress “what the next step should be.” Burr noted that both major commissions saw a need to “move to a system that compensates for the loss of quality of life.” That course was favored too, for a time, within VA and Congress. That momentum to help veterans shouldn’t be lost, Burr said.

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