The Veterans Affairs Department (VA) oversees a disability program that seeks to compensate US veterans for injuries or medical conditions aggravated or incurred during military duty. The disability program makes payment to the veterans through the Veterans Benefits Administration (VBA). According to CBO, VA disability compensation accounted for 70% of VBA’s total mandatory spending in 2013, amounting to $54 billion. This money was distributed to about 3.5 million of the nation’s 22 million veterans

Changes in the Federal Spending on VA Disability from 2000 to 2013

According to CBO, the number of veterans who were compensated for disability rose from 2.3 million to 3.5 million, representing about 55 % increase. This is despite a population decline of 17% in the total number of living veterans. In 2000, only 9% of all veterans received disability benefits compared to the 16% in 2013. The average real annual disability payments during the same period, adjusted to inflation, rose from $8,00 to $12,900, representing a 60% increase. This is consistent with the increase in the average severity and average number of compensable disabilities per veteran. CBO reports that there was an increase in both the average real amounts of those payments and the share of veterans receiving disability payments. The spending on veteran disability benefits has gradually risen by an average of nearly 8% annually almost tripling the figure from $20 to $54. VA projects a further increase to $60 billion, in 2014.

Characteristics of VA’s Disabled Beneficiaries

According to CBO, the most common broad categories of disability among the veterans who were being compensated were musculoskeletal (36%), hearing related (13%) and skin related (11%). The three most prevalent specific disabilities that collectively represented 16% of the total were tinnitus (6.7%), hearing loss (5.3%) and post-traumatic stress disorder (4 %).

16% of all veterans received VA disability compensation in 2013, bringing the number of beneficiaries up to 3.5 million veterans. 46% of all the recipients were aged between 55 and 74, compared to the 43% of all veterans. Most of these recipients began receiving the benefits at 55 years of age.CBO further reports that just under40% of had high school education or less. The number of disabled veterans who had less than a high school diploma was much less than that of civilians, 6% to 13% respectively. A majority of the disabled veterans aged between 18 and 65 are working in the labor force with lower labor force participation than the non-disabled. There was a 73% participation among disabled male veterans who had left the military after September 2001 and had their disability determined by DoD or the VA. The non-disabled male veterans’ participation was 88%. That said though, the CBO reports that the participation rate of disabled and working aged male veterans was lower than for disabled veterans and stood at 13% in 2013. This is partly because other disability programs have more stringent rules on what substantiates a compensable disability, and they place higher limits on employments for recipients.

The unemployment rate among non-disabled veterans of working age was 12% in 2013 while that among disabled veterans was at 7%. This is partly attributed to the large portion of disabled veterans who were not working in the labor force. According to CBO, disabled veterans had more chances of being employed at 31% compared to 19% of other veterans. Averagely, US households with disabled veterans were reported to have the same income ($80,500), as all US households ($82,000). This is irrespective of the difference in income compensation. The income distribution for non-elderly households in the population at large is the same with that of non-elderly disabled veterans. However, the household with non-elderly disabled veterans whose income is lower than 20% of that group, has more total income, on average, than the lowest-income earning non-elderly household ($16,800 to $14,500 respectively).

Implications of recent conflicts in Afghanistan and Iraq

CBO reports that a significant and growing number of veterans deployed to Afghanistan and Iraq makes up a large portion of disabled veterans. This group is reported to be currently receiving more than twice compensation compared to the rate of other veterans in the Gulf War. This led to 10% post deployment of all veterans in 2013 with 17% of veterans receiving disability compensation. According to CBO, the rate of increase in the number of disabled veterans in Iraq and Afghanistan cannot be fully explained by combat injuries. It is a partly attributed to occupational and environmental factors such as chemical exposures and open-air emissions, high altitudes, multiple deployments, age of veterans and the effect of carrying heavy equipment. The cumulative number of service personnel wounded in Afghanistan or Iraq in 2013 was about 50,000. The number of veterans who experienced traumatic injuries were lower than in previous years. By July 2013, about 75% of the veterans or service members had filed for Service Member’s Group Life Insurance Traumatic Injury Protection, which is a special benefit available to applicants with particular traumatic injuries.