VBA Needs to Improve the Accuracy of Decisions for Total Disability Based on Individual Unemployability

When a veteran is unable to secure and maintain a substantially gainful occupation because of service-connected disabilities, VA policy states that the veteran should be rated totally disabled—also referred to as total disability based on individual unemployability (TDIU)—for monthly compensation. The VA OIG conducted this review to determine if claims processors were following policies and procedures and accurately deciding claims for individual unemployability. After reviewing two statistical samples of individual unemployability claims (granted and denied claims), the team found claims processors did not consistently follow policies and procedures when processing these claims, resulting in at least $100 million in improper payments (underpayments and overpayments) to veterans from May 1, 2022, to April 30, 2023. The team estimated that 74 percent of granted TDIU claims and 76 percent of denied TDIU claims completed during the review period had at least one claims processing error. These errors occurred because of inadequate system controls, inconsistent interpretations of VBA’s procedures manual by VBA staff, and claims processors’ limited exposure to individual unemployability claims. The OIG made seven recommendations to the under secretary for benefits to help VBA improve the accuracy of individual unemployability claims decisions. These recommendations included updating guidance, enhancing information systems, improving training, and evaluating workload distribution.