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Office of Public and Intergovernmental Affairs


VA Backs Cost-of-Living Raise for Disabled Veterans

June 29, 2001

Printable Version


WASHINGTON – Deputy Secretary of Veterans Affairs Dr. Leo S. Mackay Jr. strongly urged the Senate Veterans Affairs Committee to support a raise in the monthly payments provided to more than 2.5 million veterans and survivors. 

The Department of Veterans Affairs (VA) is calling for a cost-of-living adjustment effective December 1 that is estimated at 2.5 percent.  The VA endorsed legislation before the committee that bases the exact amount on other federal programs including Social Security and veterans' pension that are linked to Consumer Price Index formulas.

"President Bush early on covered the need for a cost-of-living adjustment in veterans programs in his proposed budget for next year," Dr. Mackay said.  "We call now on Congress to join with us in seeing that compensation increase through the legislative hurdles."

In his prepared testimony June 28 for the Senate Veterans Affairs Committee, he observed that the cost-of-living adjustment is necessary to protect the benefits of veterans and their survivors from the eroding effects of inflation.

Affected by the legislation are veterans receiving disability compensation and veterans' survivors, including widows or widowers of veterans, dependent children and in some cases parents.  Unlike the automatic adjustments in the veterans pension program, which provides income to wartime veterans who have become disabled in their civilian life, the basic compensation program for service-disabled veterans and eligible survivors must be changed by law at regular intervals.

In other areas addressed by the Senate Veterans Affairs Committee, VA endorsed enhancements to several other programs benefiting veterans:

 • A change in VA home loan policies would allow eligible veterans to finance homes for up to $252,700 -- up from the current $203,000 limit imposed by lenders based on VA's current loan-guarantee limits. Lenders will generally lend up to four times a veteran's available VA-guarantee entitlement without requiring a downpayment, depending upon income, credit and the property appraisal, and proposed legislation backed by VA would raise the guaranty from $50,750 to $63,175.

• Congress was urged to extend the housing loan program for reservists and members of the National Guard who would otherwise have no eligibility for a VA-guaranteed home loan.  Although the scheduled end of the benefit is six years away, VA is concerned that people considering reserve service today have no assurance the benefits will be available once they have fulfilled their required six years of qualifying service.  The proposed extension would run through September 30, 2015.

• VA supported increasing the burial and funeral-expense allowance for veterans whose deaths were related to their military service, either directly in service or due to a disease that has been connected with the time of their service.  The last increase, from $1,000 to $1,500, was in 1988. VA supports raising this to $2,000.

• VA expressed support for allowing accelerated payment of Montgomery GI Bill education benefits.  This new educational benefit would provide flexibility to veterans who are eligible under the Montgomery GI Bill and who wish to pursue certain high-tech courses.  Some increasingly popular computer certification courses that are outside the normal university environment have an accelerated pace and cost that are not a good fit with the traditional GI Bill plan for monthly benefits.

• An expansion in the overall value of the Montgomery GI Bill educational benefit from the current $650 monthly rate for full-time studies to $1,100 by October 2003 earlier was endorsed by the administration under strict budget resolution commitments.  VA reiterated its support for a phased-in approach gradually raising the reimbursement over that time frame as an alternative to new education cost-indexing proposals.

• Legislation would continue the process whereby the National Academy of Sciences provides VA with ongoing analysis and reports on the long-term health effects of Agent Orange, a herbicide sprayed in Vietnam, through the use of expert committees to review the results of continuing scientific studies.  This collaboration has given VA the basis to expand health and compensation benefits to Vietnam veterans at regular intervals.

• VA is going to review a recent report on Agent Orange before deciding on whether it should change current eligibility standards for respiratory cancer benefits.  In testimony to the Senate committee, VA expressed its willingness to consider administrative improvements to benefits for Gulf War veterans with unexplained illnesses as an alternative to proposed legislative strategies.

• New controls on payments to incarcerated veterans and fugitive felons would eliminate an exception that allowed prisoners to draw $2.5 million annually in veterans compensation.

• Technical adjustments to laws governing the processing of veterans' applications for benefits would streamline processing and eliminate ambiguities in the current law.

• VA supports expansion of a program that provides opportunities for independent living for certain disabled veterans under VA's vocational rehabilitation program, enabling them to move from institutions to conventional family life or to group homes.

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