Mandatory Spending

Function 700 - Veterans' Benefits and Services

Restrict VA's Individual Unemployability Benefits to Disabled Veterans Who Are Younger Than the Full Retirement Age for Social Security

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of dollars 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015-2019 2015-2024
Change in Outlays 0.0 -1.0 -1.9 -1.9 -1.9 -1.9 -1.9 -1.9 -1.9 -1.9 -6.7 -16.3

Note: This option would take effect in October 2015. Estimates are relative to CBO’s August 2014 baseline projections.

The Department of Veterans Affairs (VA) supplements regular disability compensation payments with Individual Unemployability (IU) payments for low-income veterans that it deems unable to engage in substantial work. To qualify, veterans’ wages or salaries cannot exceed the federal poverty guidelines for a single person, and applicants generally must be rated between 60 percent and 90 percent disabled. A veteran qualifying for the IU supplement receives a monthly disability payment equal to the amount that he or she would receive with a 100 percent disability rating.

Under this option, VA would no longer make IU payments to veterans who were past Social Security’s full retirement age, which varies from 65 to 67, depending on a beneficiary’s birth year. Therefore, at the full retirement age, VA disability payments would revert to the amount associated with the disability rating.