More Than $100 Million in Taxpayer Money Mistakenly Went to Vets in Prison

Audit says VA dropped the ball on monitoring overpayments to incarcerated vets because it was so focused on reducing the disability claims backlog.

This story was updated.

The government improperly shelled out $104.1 million in disability compensation and pension payments over seven years to veterans in prison, according to a new watchdog report.

The Veterans Benefits Administration failed to slash benefits given to vets incarcerated in federal, state and local correctional facilities between 2008 and 2015 in thousands of cases, the Veterans Affairs Department inspector general found, primarily because the agency was more focused on eliminating the disability claims backlog, which had ballooned to an all-time high in 2013.

Federal law requires the department to reduce disability compensation and discontinue pension payments for veterans serving more than 60 days in federal, state, or local correctional institutions for a felony, and in some cases, a misdemeanor. For vets with a service-connected disability rating of 20 percent or more, the government reduces disability compensation to a 10 percent rate while they are in prison; for those with a 10 percent rating, the VBA cuts the benefit payment in half for the duration of incarceration.

Because those adjustments do not require VA staff to attribute disability ratings to individual cases, they are not considered part of the department’s disability claims backlog. So, the VBA didn’t prioritize processing them, the watchdog discovered during its two-year audit, which meant millions of taxpayer dollars were wasted.  

In one case, the watchdog found that VBA already had overpaid a veteran -- who started serving a 151-month sentence in federal prison in 2012 -- $107,000 in vets’ benefits as of Oct. 1, 2015.

Overall, the inattention led to $59.9 million in overpayments to vets in federal prison, and $44.2 million in erroneous payments for those veterans housed in state and local correctional facilities. Because the workload was not a high priority for VA, data-sharing between VBA, the Justice Department’s Bureau of Prisons, and the Social Security Administration fell by the wayside resulting in significant processing delays, the inspector general found.

For example, after a computer-matching agreement between VBA and BOP expired, “VBA did not receive data from BOP on federal incarcerations from July 2008 through May 2015 – a total of 83 months,” according to the watchdog report. In 3,800 cases involving vets in state and local correctional facilities (out of 21,600 cases that the IG looked at), VBA failed to thoroughly process adjustments to benefits after it had received data from SSA, leading to significant delays.

“The longer the incarceration adjustment remains unaddressed, the larger the overpayment will be to the veteran. It took VBA an average of about 300 days to process state and local incarceration notifications received from March 2013 to August 2014,” the watchdog said. The IG looked at data for federal incarcerations between 2008 and 2015, and SSA notifications between 2013 and 2014 related to state and local incarcerations.

If VBA doesn’t get a handle on the problem, the improper payments could spike to $307.9 million by fiscal 2020, the IG estimated. In its response, the VBA said its staff has to do “additional, time-consuming research to determine the date of conviction” for the veteran because currently BOP does not provide that information.

“VBA will continue to work with FBOP and SSA to obtain the needed data and identify additional ways to streamline the process,” said former VBA Acting Undersecretary for Benefits Danny Pummill in an April response to the IG report.

The agency also noted that it continues to receive more “non-rating” claims, as it characterizes adjustments to the benefits of incarcerated vets, similar to the uptick in new disability compensation claims. “In fiscal year 2015, VBA completed a record 3.1 million non-rating claims, a 15 percent increase over fiscal year 2014,” Pummill wrote.

VBA agreed with all the IG’s recommendations, including making changes to the benefits of incarcerated vets a priority, and recouping any outstanding improper payments on the books. The agency also pledged to renew and improve its existing data-sharing agreements with BOP and SSA. 

VA spokesman James Hutton said VBA is also working to "support future automation of the process to minimize benefit overpayments" and that "veterans who become indebted as a result of adjustments to their benefit awards have the right to request a waiver of the overpayment or to establish a repayment plan to help ease the financial burden upon release." 

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.