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Compensation for service-connected disability

Compensation payments for service-connected disabilities were last increased October 1, 1962, the effective date of Public Law 87–645. Aside from the statutory rates established by Congress for the more seriously disabled, payments of compensation are based on a schedule for rating disabilities. Under law, the Administrator of Veterans Affairs adopts and applies a schedule of ratings of reductions in earning capacity from specific injuries or combination of injuries. These ratings—as far as practicable_are based upon the average impairments of earning capacity resulting from such earnings in civil occupations. The schedule adopted by the Administrator provides 10 grades of disability in increments of 10 percent from 10 to 100 percent. The 1945 schedule for rating disabilities, as amended and republished in looseleaf form in 1957, is the current document for evaluating the degree of disability for compensation payments. Whatever its shortcomings may be, this flat rate schedule, supported by the statutory ratings provided by Congress for the more seriously disabled, seems to meet with general approval because of its relative simplicity, definiteness, and application.

Assuming there is agreement among us that the VA schedule for rating disabilities is an adequate standard with which to measure the degree of effect of physical or mental impairment of a veteran's economic adjustment, we must next examine whether these payments of compensation restore the economic loss that has resulted from the service-incurred disability.

To enable veterans to cope with the ever increasing cost of living and advancing standard of living, Congress made the following increases in the monthly rates of compensation payable for total (100 percent) disability :

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1 This maximum does not include the additional amounts later authorized for dependents of those rated above 49 percent or the aid and attendance rate while not hospitalized, as provided under 38 U.S.C. 314(r).

Comparative data compiled by the President's Commission on Pensions from an October 1955 survey by the Bureau of Census and the survey of individuals on the Veterans' Administration compensation rolls indicated that the total annual income of veterans with service-connected disabilities was about $365 less than that of nondisabled veterans and the median income, including disability compensation, of veterans with a 100 percent disability was about $1,300 below the median income of all veterans.

Table 466 of the 1964 Statistical Abstract of the United States gives the following figures on median income of male employed civilians : 1947 $2, 406 | 1960.

$4, 822 1950. 2, 831 | 1961.

5, 035 1955_ 3, 797 | 1962_

5, 240 1959...

4, 658 Current reports say that the median income in 1964 for these employees is in excess of $5,400.

From the foregoing, it seems to us that, from the standpoint of an average impairment or flat rate schedule for rating disability, compensation payments do not fully restore to a disabled veteran the loss of annual income. In addition, we believe these data establish rather clearly that the increases in compensation payments granted since 1933 have failed to keep pace with the increased standard of living as well as the rising cost of living as illustrated by the ever upward movement of the median annual income of the male employed civilian. A comparison of the median incomes given in the statistical abstract for 1947 and 1962 gives a ratio of 2.17 to 1. Application of this ratio to the rate of compensation for total disability payable in 1946 indicates that $300 in monthly compensation should have been payable in 1963 if the objective is to have these benefits keep pace with the rising economic income of fully employed male civilians.

Much discussion has been associated with the 1963 definition of poverty. Under this definition, a family of two persons or more with an income of less than $3,000 was considered to be in poverty circumstances. The present analysis, according to the March 1965 Monthly Labor Review, pivots about a standard of $3,130 for a family of four persons. This standard is based on about 70 cents a day per person for food and an additional $1.40 for all other items-from housing and medical care to clothing and carfare. A somewhat less conservative but by no means generous standard requiring 90 cents a day for food per individual with a modest increase in the cost of the other necessities of life would raise the poverty delineation to $1,000.

Patently, the $250 compensation plus additional compensation for dependents now payable to a veteran with a total disability who has a wife and two or more children is inadequate if he has no other sources of income. His plight is well illustrated by the 1955 comparative data compiled by the President's Commission on Veterans Pensions.

Mr. Chairman, in view of the foregoing, the American Legion is supporting enactment of H.R. 7567, a bill to increase the rates of disa ity compensation, and H.R. 7569, a bill to increase the additional compensation for reterans with dependents. While these bills, if enacted, may not fully restore to veterans the economic loss flowing from their service-connected disabilities, they will, we believe, go far toward alleviating their financial need. Equalization of the system of additional compensation for dependents of

veterans With the enactment of Public Law 877, 80th Congress, and its amendment by Public Law 339 of the 81st Congress, factors other than disability were introduced to determine the amounts of compensation payable to veterans with disability in excess of 49 percent who have a wife, child, or a dependent parent. We have no objection to this singular departure from the historic concept of disability compensation, but we fail to see any validity in the reasons advanced for denying the right to this additional compensation to veterans with a similar class of dependents whose service-connected disabilities are rated at less than 50 percent for compensation. In our opinion, the denial of this additional benefit to this group of veterans further compounds the inequity that exists because the rates of disability compensation and the percentages of disability no longer bear the same ratio to that payable for total disability. Our argument is well illustrated by the hardship imposed on a veteran with a wife and three children whose disability rating is reduced from 50 to 40 percenta reduction in compensation from $138 to $77. This loss of $61 in benefits is significant when you consider that $58 is payable for a disability of 30 percent.

H.R. 7569, referred to in the earlier part of this statement under increased disability compensation, would equalize the system of additional compensation for dependents of service-disabled veterans. A balanced system of disability compensation

Our discussion of the need for disability compensation increases ended with the statement that we favored the enactment of H.R. 7567, a bill to increase the rates of disability compensation to make them consistent with the economic impairment arising from the disability as well as the continuing increases in cost of living. A feature of that bill is that the rates proposed for disabilities rated less than total or 100 percent would restore balance to the disability compensation structure.

Previously in this statement, we referred to the authority granted the Administrator of Veterans' Affairs to adopt and apply a schedule for rating disabilities and the philosophy underlying the degree of impairment. Prior to July 1, 1952, there was a correspondence in the ratio of percentage disability to 100 percent with that of the disability compensation assigned to the amount payable for total disability. Today, this is no longer true. As an illustration, compensation provided for 100-percent disability is $250, while that provided for 50 percent is $107 and not $125 as would have been the case under the structure in effect prior to July 1, 1952.

We urge your favorable report on this part of the bill to restore the balanced system of disability compensation and to make meaningful the basic principle of the VA Schedule for Rating Disabilities; that is, that it be “a schedule of ratings of reductions in earning capacity from specific injuries or combination of injuries and these, as far as practicable, shall be based upon the average impairments of earning capacity resulting from such injuries in civil occupations." Death compensation

In reviewing the history of wartime death compensation payable under 38 U.S.C. 322, it is seen that Congress last increased the monthly rates in 1954, potwithstanding the fact that there has since that date been a considerable increase in the cost of living. Statistics compiled by the Bureau of Labor Statistics, in terms of the 1957–59 index, disclose that the Consumer Price Index rose from 93.6 in 1951 to 108.9 at the present time, an increase of more than 16 percent. Most widows and children and some parents did receive higher awards effective January 1, 1957, by electing to receive dependency and indemnity compensation provided by Public Law 881, 84th Congress, the Servicemen's and Veterans' Survivors Benefits Act. A majority of those widows and children who initially chose to remain under the death compensation provisions of law have since elected to receive the DIC benefit. Quite recently, the Veterans' Administration sent about 9,000 forma letters to those identified by the computer as being entitled to a greater benefit under Public Law 881. It is our understanding that about 5,000 of these bave, on the basis of this letter, elected to receive dependency and indemnity compeusation.

There is, however, a group of widows and children and parents receiving death compensation who may never receive dependency and indemnity compensation because of the bar in 38 U.S.C. 417 (a). If a veteran exercised the option to continue an inservice Government insurance premium waiver and the waiver was in force at the time of his death on or after May 1, 1957, his surviving widows and children as well as parents are prohibited from receiving dependency and indemnity compensation, the greater benefit. Admittedly, this group is not large; but, no matter how small, it is the belief of the American Legion that these survivors should receive benefits equivalent to those under the act providing dependency and indemnity compensation and should not be penalized because of a decision of the veteran. This provision of the law is clearly inequitable in view of the fact that those who initially chose to receive death compensation along with servicemen's indemnity, a free insurance coverage, and who, having exhausted the indemnity payments, have since elected to receive dependency and indemnity compensation.

Another group of survivors, the parents, who continue to receive death compensation under the above provisions of title 38, United States Code, even though there is no bar to their electing to receive dependency and indemnity compensation, chose to do so because it is to their advantage to remain under the old provisions where the annual income limits and the death compensation rates are somewhat more liberal than those provided under the dependency and indemnity provisions of 38 U.S.C. 415. Although it is to the economic advantage of these endent parents to remain under the old provisions of law, the death compensation provided thereunder, last increased by Congress in 1954, is insufficient to meet present costs of essential goods and services and drugs and medicines and to give them the means to live somewhat in consonance with others in their community under the current high standards of living.

Under the provisions of 38 U.S.C. 322, if both parents are surviving, they receive $40 each, and if one is surviving, $75 is payable. Dependency of parents is determined under the criteria of 38 U.S.C. 102. In part, the law states that dependency of a parent shall not be denied where the monthly income for a mother or father, not living together, is not more than $105, or where the monthly income of a father and mother living together is not more than $175, plus, in either case, $45 for each additional member of the family whom the mother or father is 'under legal obligation to support, as determined by the Administrator.

In considering this matter, the committee is asked to note the fact that this is, generally, a closed group of beneficiaries, that is, they are parents of veterans whose service-connected death occurred before January 1, 1957. As such, the number entitled each year will decline, not increase.

Enactment of H.R. 7568 would be in keeping with our Nation's traditional liberal treatment of those dependent survivors of veterans whose death resulted from a service-connected condition.

DEPENDENCY AND INDEMNITY COMPENSATION Dependency and indemnity compensation is a monthly benefit payable by the Administrator of Veterans' Affairs to a widow, child, or parent because of a service-connected death occurring on or after January 1, 1957, or pursuant to an election of a widow, child, or parent in the case of such a death occurring before January 1, 1957. Liberalization of the dependency and indemnity program for dependent parents

Although the rates of dependency and indemnity compensation payable to dependent parents under 38 United States Code 415 were adjusted upward by 10 percent on enactment of Public Law 21, 88th Congress, the annual income limitations which control eligibility to this benefit have not been increased since they were set up by the enabling act, Public Law 881 of the 84th Congress.

In the light of statistical data, it is our thought that the present rates and corresponding income limitations are unrealistically low. The 1963 report of the President's Council on Aging contains interesting information on the incomes and living costs of elder citizens. Since, in general, dependent parents are in this elderly category, the information appears to be particularly pertinent for measuring the needs of dependent parents and for formulating entitlement criteria for payment of dependency and indemnity compensation. According to this report, an average elderly couple living in an average city had a yearly income of $2,530 or slightly more than $210 a month. Living alone, the average elderly person had an income of only $1,055. In this average city, the modest but adequate budget established that an elderly couple renting a small house or an apartment would need $3,010 a year to provide them with goods and services necessary for a healthful self-respecting living and permit normal participation in community life. Unfortunately, this report did not give a measure of the needs of a single elderly preson or one living alone. Some measure of their need may be gleaned from the discussion of the poverty standard in the Monthly Labor Review of March 1965. Here, the economic separation point of an unrelated individual from poverty is an income of $1,540.

The bill, H.R. 7570, supported by the American Legion, would liberalize the DIC program for dependent parents in two ways: By increasing the annual income limits and by increasing the monthly benefit by $5.

MISCELLANEOUS

Enactment of the following bills is supported by the American Legion:

H.R. 3805 would provide that special consideration for the purpose of compensation shall be given those veterans who have suffered deafness in one ear, the result of a service-connected disability, and who suffer deafness in the other ear, not the result of service and not the result of his own willful misconduct. Section 360 of title 38, United States Code, now permits such special consideration by the Administrator of Veterans Affairs in cases of blindness or where there is bilateral kidney involvement. Since deafness in both ears is a severe impairment-one that denies a veteran the full use of an essential sense and seriously limits his ability to communicate with his fellow man-it is our feeling that the purpose of this bill deserves favorable consideration by Congress.

H.R. 5509 would amend 38 U.S.C. 3104 to authorize payments of pension under chapter 15 to a veteran, otherwise entitled, in addition to a statutory award of disability compensation under section 314(k) of the title because of a serviceconnected loss or loss of use of one foot, or one hand, or both buttocks, or blindness or one eye having only light perception.

At present, 38 U.S.C. 3104 (a) provides that not more than one award of pension or compensation shall be made concurrently to any person based on his own service. Thus, a veteran entitled to disability compensation and to the statutory award payable under 314(k) for any of the conditions set forth above cannot draw both compensation and pension. He must elect one or the other-usually the greater benefit. This bill is directed to those veterans who suffer a serviceconnected injury and who suffer loss of physical integrity as well. Because of this loss of physical integrity, Congress in its wisdom and generosity provided a statutory award-an award in addition to that payable based on a schedular evaluation of the disability. Since statutory awards were designed by Congress to compensate a veteran for embarrassment and discomfort and not impaired earning or economic readjustment, it is our thought that they should not be taken away from a veteran when he chooses to receive disability pension upon meeting the test of income and net worth. It would not, we think, impair the general concept associated with gratuitous benefits, that not more than one payment be made for the same disability.

H.R. 5511 is a bill to amend 38 U.S.C. 314(k) to authorize payment of a statutory rate of $47 in addition to the basic compensation for the rated disability to a veteran who, as a result of service, has suffered the loss or loss of use of one kidney. Special statutory awards represent instances in which Congress has established rates by specific enactment for loss of a body member or part; conditions that are a source of embarrassment or concern or discomfort or to which the average impairment rule does not appear to apply with equity. It is true that the loss or loss of use of a kidney is not apparent to persons other than the veteran or to his family but, to the veteran, there is reason for marked concern because of the knowledge that his lifespan rests on the remaining kidney being free of disease pathology. In other words, these veterans have a marked concern over their state of health-and well they may. To the Legion, this is a sufficient reason to extend to this group of veterans entitlement to the statutory award payable under 38 U.S.C. 314(k).

Mr. Chairman and members of the subcommittee, this concludes our statement on those bills of interest to the American Legion based on mandates of our policymaking bodies. Again, may I express the appreciation of our organization for the opportunity to appear before you today in connection with our legislative program on service-connected benefits.

Mr. CORCORAN. We have broken down our statement into several major categories. The first one deals with increases in the rate of disability compensation. In this field the American Legion supports H.R. 7567 and 7569. The basic points of those bills are that, first of all, we believe that total disability should be compensated at the rate of $300 per month, and there should be increases in allowance for dependents of those service-connected veterans. The methods that we used, Mr. Chairman, in arriving at the $300 rate included, first of all, a comparison between the rates payable in 1933 and the rates payable at present. We used data from the Bradley Commission which shows the decreased earning capacity of service-disabled veterans. We took note of the median income of male employed civilians in the United States, which was $5,240 in 1962. We compared the increase in that median income between 1947 and 1962, an increase of over two times.

We took cognizance of the $3,000 poverty line that has been used quite frequently. We took into account the Department of Labor's estimate of a modest, but adequate budget necessary for the family of four, and we tried to relate all of this material to the amount of compensation payable for the totally disabled. The American Legion concludes that a fair and reasonable and perhaps even conservative amount payable for the total disability is, and should be, $300 a month.

Ănother major category that we discussed in our prepared statement is escalation of the system of additional compensation, additional allowances for dependents. As you know, at present, a service-disabled veteran who is rated 50

percent or more gets some additional allowances for dependents. This is true only for those rated 50 percent or more. This is not true for those rated 40 percent or less. This inequity just does not make sense to the American Legion. Previous witnesses have called to your attention some of the severe conditions now rated at 40 percent.

For example, if a man has the anatomical loss of an eye suffered in service, he is rated 40 percent. If an amputation of the leg is below the knee, he is rated at 40 percent. This seriously disabled person gets no additional allowance for dependents. The difficulty of explaining this type of arrangement to a veteran is demonstrated when a veteran who

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