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become entitled under any law administered by the Veterans' Administration."

This provision, consistent with the bar to duplicate benefits of 38 U.S.C. 3104(a), precludes the possibility of double compensation for the same disability. We believe that the general concept behind this provision is sound since we see no justification for any group to be doubly compensated.

We have become aware, however, of a hardship situation that occasionally arises because of this recoupment provision. Disability severance pay often amounts to several thousands of dollars and recoupment of this amount from the disability compensation otherwise payable by the Veterans' Administration for the same disability generally takes an extended period of time, since it is usually based on a low disability evaluation. For example, it would require over 12 years to recoup severance pay of $5,000 for a peacetime-incurred disability evaluated as 20-percent disabling. We have learned of cases in which the service-connected disability unexpectedly changes into a totally disabling condition requiring prolonged hospitalization, with consequent termination of income. Such veterans are granted a 100-percent disability compensation rating by the Veterans' Administration, but the recoupment provision, of course, continues to bar the payment of disability compensation to the veteran. The increased evaluation accelerates the recoupment of the disability severance pay but in the meantime the recoupment provision has the effect of terminating all income for the veteran's and his family's maintenance. We believe that some revision of that provision, in order to alleviate this type of hardship situation, is indicated.

The enclosed draft of bill proposes to add a new section 361 to title 38, United States Code, limiting the rate at which the disability severance pay will be recouped to a monthly amount not in excess of the compensation to which the former member would currently be entitled based on the degree of his disability as determined on the initial rating by the Veterans'. Administration. In the example given above, the Veterans' Administration would withhold $34 monthly (the peacetime rate for 20-percent disability) and pay the veteran $286 (the peacetime rate for total disability being $320) for his and his family's maintenance during the continuation of the elevated evaluation. If the veteran has dependents, the amount of additional compensation payable in their behalf (under 38 U.S.C. 315 or 335) would be added to the veteran's payment rather than being applied toward the recoupment of the severance pay.

The Veterans' Administration has no firm basis for determining the number of veterans who would benefit from this proposal, if enacted. It is believed, however, that the number affected would be small and that any costs involved would not be significant.

The Veterans' Administration believes that this proposal, if enacted, while precluding double compensation for the veterans concerned and ultimately permitting recoupment of the disability severance pay, would at the same time alleviate hardship situations that develop under the present law. Accordingly, it is respectfully requested that the proposed legislation be introduced and considered for early enactment.

Advice has been received from the Bureau of the Budget that there is no objection from the standpoint of the program of the administration to submission of the draft bill. Sincerely,

W. J. DRIVER, Administrator.

34-108 0 -69 - 2

VETERANS' ADMINISTRATION,
OFFICE OF THE ADMINISTRATOR OF VETERANS' AFFAIRS,

Washington, D.C., June 30, 1969.
Hon. OLIN E. TEAGUE,
Chairman, Committee on Veterans Affairs,
House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: We are pleased to respond to your request for a report on H.R. 6802, 91st Congress.

The purpose of the bill is to increase the additional monthly pension payable to veterans and widows who are in need of regular aid and attendance, and to veterans who are permanently housebound.

Pension is payable to otherwise eligible veterans of World War I and later war periods who are permanently and totally disabled from non-service-connected causes. For a veteran unmarried and without a child, the monthly pension rates range from $29 to $110, depending upon annual income which may not exceed $2,000. For a veteran married or with a child, the monthly rates range from $34 to $130, depending upon the number of dependents and annual income which may not exceed $3,200. The applicable rate is increased by $100 monthly for a veteran in need of regular aid and attendance, or by $40 if the veteran is permanently housebound but not entitled to the rate for aid and attendance. H.R. 6802 would increase the aid and attendance allowance from $100 to $150, monthly, and the housebound allowance from $40 to $50 monthly.

Non-service-connected death pension is payable to widows of veterans of World War I and later war periods. For a widow without a child, the monthly rates range from $17 to $74 depending upon annual income which may not exceed $2,000. For a widow with one child, the monthly rates range from $41 to $90, depending upon annual income which may not exceed $3,200. A monthly amount of $16 is payable for each additional child. For these widows as well as widows of veterans of World War I, World War II, and the Korean conflict, receiving pension under the prior law in effect on June 30, 1960, and for widows of veterans of the Civil War and the Indian wars, receiving pension under other laws administered by the Veterans' Administration, the basic rate of pension is increased by $50 monthly if the widow is in need of regular aid and attendance. H. R. 6802 would increase this amount to $75 monthly.

The intent of the pension programs for veterans of World War I and later war periods, and their widows, is to provide a measure of financial assistance on the basis of need as determined primarily by income. The pension is intended to serve as an income supplement and not as a means of full support. The proposed $50 increase in the $100 aid and attendance allowance for veterans, which has been in

effect since January 1, 1965, would constitute a raise of 50 percent, as compared with an increase of only 16.5 percent in the cost of living since that date. An increase to $50 for the housebound allowance for veterans would constitute a raise of 25 percent over the $40 allowance which has been in effect since October 1, 1967, contrasted with an increase of only 8.3 percent in the cost of living during the same period. Similarly, the proposed $75 aid and attendance allowance for widows would represent an increase of 50 percent over the $50 rate in effect since October 1, 1967, as compared with the increase of only 8.3 percent in the cost of living. It is accordingly apparent that the pro-, posed rate increases are not supportable on the basis of the increases in the cost of living.

We also note that the proposal to increase the pension aid and attendance allowance for veterans to $150 monthly would bestow upon these veterans with non-service-connected disabilities a greater benefit than the $100 aid and attendance allowance now paid under 38 U.S.C. 314(1) to certain veterans for service-connected disability. We do not consider this proposed more favorable treatment of nonservice-connected disabled veterans over service-connected veterans to be warranted.

The cost of H.R. 6802, if enacted, is estimated at approximately $58 million for the first year, affecting approximately 134,000 cases, increasing in each of the 4 succeeding years to a cost of approximately $88 million, related to approximately 200,000 cases.

For the reasons indicated, I recommend that H.R. 6802 be not favorably considered.

Advice has been received from the Bureau of the Budget that there is no objection to the presentation of this report from the standpoint of the administration's program, Sincerely,

DONALD E. JOHNSON,

Administrator.

VETERANS' ADMINISTRATION,
OFFICE OF THE ADMINISTRATOR OF VETERANS' AFFAIRS,

Washington, D.C., July 1, 1969.
Hon. OLIN E. TEAGUE,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: We are pleased to respond to your requests for reports on identical bills H.R. 3070 and H.R. 3301, 91st Congress.

The proposals would liberalize the dependency and indemnity compensation program by providing an increase in the present monthly benefit for widows when they need the regular aid and attendance of another person.

Chapter 13 of title 38, United States Code (dependency and indemnity compensation), restates a portion of the Servicemen's and Veterans' Survivor Benefits Act (Public Law 881, 84th Cong., Aug. 1, 1956). This act established a new death benefits program of dependency and indemnity compensation for widows and other survivors of veterans dying from service-connected causes on or after January 1, 1957. Any person eligible for benefits under the earlier death compensation program, based on a veteran's death prior to January 1, 1957, may make an irrevocable election to receive benefits under the current dependency and indemnity compensation system.

The monthly rate of dependency and indemnity compensation payable to widows is geared to basic pay for active duty of members of the uniformed services. Under this program, a widow is paid at a monthly rate equal to a constant factor of $120 plus 12 percent of the basic pay of her deceased husband.

Our disability compensation program for veterans with service-connected disabilities has long provided an additional monetary allowance for those who need the regular aid and attendance of another person. In 1951, such an allowance was extended to veterans in receipt of pension who require regular aid and attendance. Effective October 1, 1967, under the provisions of Public Law 90–77, a similar allowance in the amount of $50 monthly was provided for widows receiving non-service-connected death pension.

The bills under consideration would extend the same type allowance, in the amount of $75 per month, to any widow entitled to dependency and indemnity compensation who is determined to be in need of regular aid and attendance.

The Veterans' Administration favors such an extension of this allowance, which would remedy the discriminatory situation which presently exists. We also believe the allowance should be further ex

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