Veterans' disability panel rejects lump-sum option.

The Veterans' Disability Benefits Commission has rejected a proposal that the Department of Veterans Affairs begin offering some veterans a lump-sum payment instead of lifetime monthly compensation.

The 13-member commission voted unanimously against considering lump-sum payments for disability compensation after hearing arguments against the idea from DAV National Legislative Director Joseph A. Violante, who testified on behalf of more than a dozen military and veterans' service organizations.

"Veterans should be relieved that the commission has apparently given up on the idea of lump sums," said National Adjutant Arthur H. Wilson. "The DAV has long opposed such schemes to save the government money because of the potential adverse impact on disabled veterans."

In his Oct. 19 testimony, Violante told the commission that "there are no good answers" to the "complex and perplexing questions" that a lump sum program for disabled veterans would present.

Violante cited an earlier report from the commission's own contractor, the CNA Corporation, which acknowledged that "the dual goals of reducing VA costs and serving veterans better are conflicting." (See the November/ December 2006 DAV Magazine.)

The CNA report focused on lump-sum compensation, rather than monthly disability pay, for veterans rated 10 percent or 20 percent disabled by the VA. For example, a 25-year-old veteran newly rated as 10 percent disabled might be offered $11,000. A veteran also 25 with a 20 percent rating might be offered $22,000.

Actual amounts would be based not only on age and disability but the amount of money a veteran is willing to accept in a one-time settlement versus a lifetime of monthly payments.

"You cannot take an idea that is inherently and fundamentally bad and come up with good design options," Violante told the commission.

Violante's testimony examined several possible circumstances under which disabled veterans might be offered a one-time payment and provided detailed reasons why such a plan would not be practical for the VA and would not be in the best interests of veterans.

Veterans tempted by lump sums would be giving up a lot of their benefit and would face the possibility of not being able to reopen their claim, should their disabilities worsen, Violante noted.

"For a lump sum program to accomplish something other than giving veterans instant cash and have an effect other than increasing administrative burdens and costs, there must be government savings," Violante noted.

"Every choice to maintain fairness for veterans works against the goal of government savings," he said. "To the extent you save money for the government, you must take it from disabled veterans."

"People who are interested primarily in reducing VA's workload and reducing government spending with total restrictions on reopening claims and deeply discounted lump sums have seen this as an attractive and easy way to do that," Violante said. "But they have never really considered the ramifications of a lump sum program."

The commission, created by Congress in 2004, is conducting a comprehensive review of veterans disability benefits and is scheduled to deliver its recommendations to lawmakers in the fall of 2007.