U.S. Marine Staff Sgt. Jason Pacheco stretches before a run at Camp Pendleton, California. Pacheco lost his right leg after being wounded by an IED in Afghanistan in 2010. (Photo: U.S. Marine Corps Lance Cpl. Drake Nickels)
A new VA watchdog report found problems in roughly one-third of 2024––and a similar figure in 2025––cases involving proposed or completed reductions to Veterans’ service-connected disability compensation.
The VA Office of Inspector General reviewed how the Veterans Benefits Administration handled cases that could lower or end an existing disability award. Investigators estimated that claims processors made at least one error in about 34% of the cases examined. This includes incomplete notices to Veterans, incorrect effective dates, mistakes in rating documents, and cases that were closed before the required action was finished.
These errors can affect a Veteran’s compensation. A lower disability evaluation may reduce a monthly payment, while ending service connection can stop compensation for a particular disability. An incorrect effective date can also determine when a change in benefits begins.
The 34% figure does not apply to all VA disability claims. The OIG review focused specifically on cases in which the VA proposed or completed a reduction involving service-connected compensation.
VA regulations generally require Veterans to receive advance notice before compensation is reduced or terminated. Veterans are also allowed to submit evidence showing why the proposed change should not take place. Investigators found that those procedures were not followed consistently.
The OIG estimated that processing errors resulted in at least $16.9 million in improper payments during 2024. The amount does not represent benefits that Veterans were wrongly denied. In many cases, payments continued because the VA proposed a reduction or another change but did not properly complete the process.
Investigators estimated that another $964,000 in improper payments could continue each month until the affected cases are corrected.
The OIG also reviewed cases from January through September 2025 and identified additional claims that had been closed before a final rating decision was completed.
The report included four recommendations for the Veterans Benefits Administration. They call for more consistent due-process letters, stronger review of certain decisions, a better way to identify unresolved proposed actions, and corrections to errors uncovered during the review.
The Veterans Benefits Administration agreed with the recommendations and outlined steps to address the findings.
The report is significant for Veterans because disability compensation can make up an important part of monthly household income. Even when the VA believes a reduction is warranted, Veterans must receive the proper notice and an opportunity to respond before a final decision is made. Veterans who receive a proposed reduction or termination notice should carefully review the reason for the change and any response deadlines. They can also seek assistance from an accredited Legion Veterans Service Officer when responding to a proposed reduction or appealing a disability decision.
Author: Rikki Almanza
Rikki is a Web Content Coordinator for the American Legion, Department of California. With a deep-rooted family connection to the military, Rikki is committed to using her skills and knowledge to provide valuable assistance and resources to servicemembers and veterans.