oversight

Military and Veterans' Benefits: Observations on the Concurrent Receipt of Military Retirement and VA Disability Compensation

Published by the Government Accountability Office on 2003-03-27.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                            United States General Accounting Office

GAO                         Testimony before the Subcommittee on
                            Personnel, Committee on Armed Services,
                            U.S. Senate


For Release on Delivery
Expected at 2:30 p.m. EST
Thursday, March 27, 2003    MILITARY AND
                            VETERANS’ BENEFITS
                            Observations on the
                            Concurrent Receipt of
                            Military Retirement and VA
                            Disability Compensation
                            Statement of Cynthia A. Bascetta, Director,
                            Education, Workforce, and Income Security Issues




GAO-03-575T
                                               March 2002


                                               MILITARY AND VETERANS’ BENEFITS

                                               Observations on the Concurrent Receipt
Highlights of GAO-03 -575T, testimony
before the Subcommittee on Personnel,          of Military Retirement and VA Disability
Committee on Armed Services, U.S.
Senate                                         Compensation


Because pending legislation would              Three factors are important to weigh in deliberations on the merits of
modify current law, which requires             modifying the military offset provision. First, many benefit programs use
that military retirement pay be                offset provisions when individuals qualify for benefits from more than one
reduced by the amount of VA                    program. Generally, the provisions are designed to treat beneficiaries of
disability compensation benefit                multiple programs fairly and equitably in relation to all other program
received, the Subcommittee asked
GAO to discuss the treatment of
                                               beneficiaries, consistent with the program’s purpose. Moreover, eliminating
concurrent benefit receipt in other            the military retirement offset provision could establish a precedent for other
programs. GAO was also asked to                federal benefit programs that could prove costly.
discuss its broader work on federal
disability programs.                           Examples of Offset Provisions in Benefit Programs

                                                Social Security benefits may be offset by
                                                Social Security retirement or disability benefits based on own record (reduces spousal or
                                                dependent benefits)
                                                Government pension based on non-Social Security-covered employment
                                                Workers’ compensation
                                                Disability benefits from non-Social Security-covered employment
                                                Black Lung benefits
                                                Federal Employees Retirement System benefits may be offset by
                                                Eligibility for federal workers compensation
                                                Social Security disability benefits
                                                Workers’ Compensation benefits may be offset by
                                                Social Security benefits
                                                Unemployment compensation benefits may be offset by
                                                Social Security and private pension benefits
                                                Private disability insurance may be offset by
                                                Social Security benefits
                                               Source: GAO analysis of Congressional Research Service and GAO Reports


                                               Second, the proposed modifications to the concurrent receipt provisions in
                                               the military retirement system would have implications not only for the
                                               Department of Defense’s retirement costs but would also increase the
                                               demand placed on the Department of Veterans Affairs’ (VA) claim
                                               processing system. This would come at a time when the system is still
                                               struggling to correct problems with quality assurance and timeliness.

                                               Third, such increased demand would come at a time when the VA disability
                                               program compensation, along with other federal disability programs, is
                                               facing the need for more fundamental reform. Modifying the concurrent
                                               receipt provisions adds to the current patchwork of federal disability
                                               policies and programs at a time when transformation and modernization are
                                               needed. While we are not taking a position on whether military retirement
                                               should be modified, as the Congress and other policymakers deliberate this
www.gao.gov/cgi-bin/getrpt?GAO-03-575T.
                                               issue, it would be appropriate to consider how modifying the offset would
To view the full report, including the scope   affect the pursuit of more fundamental reforms.
and methodology, click on the link above.
For more information, contact Cynthia A.
Bascetta at (202) 512-7101.
Mr. Chairman and Members of the Subcommittee:

Thank you for inviting me to discuss issues involved with the concurrent
receipt of military retirement pay from the Department of Defense (DOD)
and disability compensation from the Department of Veterans Affairs (VA).
Pending legislation would modify current law, which requires that military
retirement pay be reduced by the amount of VA disability compensation
benefit received. You asked us to discuss the treatment of concurrent
benefit receipt in other programs as well as our broader work on federal
disability programs.

To help you in your deliberations on this matter, I will explain the use of
offset provisions in other federal benefit programs as well as in state and
private sector programs. I will also discuss some of the implications of
modifying the concurrent receipt provisions for the VA disability
compensation program. In addition, I will address the more fundamental
problems facing VA’s disability program. My statement is based on a
review of GAO reports on Workers’ Compensation, Social Security, and VA
benefit programs and other literature relating to DOD retirement and VA
disability compensation. I will also draw on our broader work on federal
disability programs, which we recently designated as high-risk because
they are not well positioned to provide meaningful and timely support to
Americans with disabilities (see Related GAO Products). Our work for this
testimony was conducted in March 2003, in accordance with generally
accepted government auditing standards.

In summary, three factors are important to weigh in your deliberations on
the merits of modifying the military retirement offset provision. First,
many benefit programs use offset provisions when individuals qualify for
benefits from more than one program. The use of offset provisions in
numerous benefit programs is a common method for dealing with the
consequences of beneficiaries qualifying for more than one benefit
program. The rationales for these offset provisions vary, but they are
generally designed to treat beneficiaries of multiple programs fairly and
equitably in relation to all other program beneficiaries, consistent with the
program’s purpose. Moreover, eliminating the military retirement offset
provision could establish a precedent for other federal benefit programs
that could prove costly. Second, the proposed modifications to the
concurrent receipt provisions in the military retirement system would
have implications not only for DOD’s retirement costs, but would also
increase the demand placed on VA’s claims processing system. This would
come at a time with this system is still struggling to correct problems with
quality assurance and timeliness. Third, the VA disability compensation

Page 1                                                          GAO-03-575T
             program, along with other federal disability programs, is facing the need
             for more fundamental reform. Modifying the concurrent receipt provision
             would add to the current patchwork of federal disability policies and
             programs at a time when transformation and modernization should be
             considered. While we are not taking a position on whether the military
             retirement offset provision should be modified, as the Congress and other
             policymakers deliberate this issue, it would be appropriate to consider
             how modifying the offset would affect the pursuit of more fundamental
             reforms.


             Generally, DOD provides longevity retirement pay to military service
Background   members upon completion of 20 creditable years of active duty service.
             DOD also provides disability retirement pay to eligible servicemembers
             who are determined unfit for duty–that is, unable to perform their military
             duties. To qualify for military disability retirement, the servicemember’s
             disability must have been determined by DOD medical personnel to be
             permanent and the servicemember must have (1) at least 20 years of
             creditable service or (2) an evaluation board determination that the
             servicemember has a physical disability rating of at least 30 percent,1 and
             either at least 8 years of creditable service or a disability resulting from
             active duty. Nearly 1.5 million retired servicemembers received retirement
             and disability retirement pay in fiscal year 2002. In fiscal year 2000, the
             average disability retiree who had been an officer received about $2,022
             per month, while the average enlisted disability retiree received about
             $698 per month.

             VA provides monthly disability compensation to veterans who have
             service-connected disabilities to compensate them for the average
             reduction in earnings capacity that is expected to result from injuries or
             diseases incurred or aggravated by military service. The payment amount
             is based on a disability rating scale that begins at 0 for the lowest severity
             and increases in 10-percent increments to 100 percent for the highest
             severity. Many veterans claim multiple disabilities, and veterans can
             reapply for higher ratings and more compensation if their disabilities
             worsen. For veterans who claim more than one disability, VA rates each
             claim separately and then combines them into a single rating. About



             1
             A disability rating is essentially an indication of medical severity of an impairment: the
             more severe the medical condition, then the higher the percentage of the disability rating,
             which can range from 0 to 100 percent.



             Page 2                                                                        GAO-03-575T
65 percent of compensated veterans receive payments based on a rating of
30 percent or less and about 8 percent are rated at 100 percent. Average
monthly compensation payments in 2002 ranged from about $100 for a
10-percent rating to over $2,100 for a 100-percent rating.

Military retirees with disabilities incurred during their military service may
receive military retirement pay (based on either longevity or disability,
whichever is more financially advantageous to the servicemember) from
DOD and disability compensation from VA. For example, a servicemember
who incurs a disability may still be fit for duty, depending on the nature
and severity of the impairment. If that servicemember completes 20 years
of creditable service, he or she may retire based on longevity and also
qualify for VA disability compensation for the same impairment or a
different impairment that is also service-connected. Similarly, a
servicemember who incurs a disability and is found unfit for duty may
receive military retirement pay based on disability if he or she meets
additional eligibility requirements. This servicemember may also qualify
for VA disability compensation for the same impairment or a different
impairment that is also service-connected.

Current law requires that military retirement pay be reduced (“offset”) by
the amount of VA disability benefits received. In 1891, Congress passed
legislation to prohibit what it regarded to be dual compensation for either
past or current service and a disability pension. Despite the reduction in
military retirement pay, it is often to a retiree’s advantage to receive VA
disability compensation in lieu of military retirement pay. These VA
benefits provide an after-tax advantage because they are not subject to
federal income tax, as military retirement pay generally is. In addition, the
disability compensation VA pays can be increased if medical reevaluation
of the retiree’s condition is found by VA to have worsened. Because VA
disability compensation is based on the severity of the disability and not
on actual earnings (as is military retirement pay), the VA benefit may, in
some instances, be larger than the amount of military retirement pay.

For certain retirees with serious disabilities, the National Defense
Authorization Act of 2000 provides a cash benefit that is less than what
they would have received through concurrent receipt of their military
retirement pay and VA disability compensation. The statute states that
these special compensation payments are not military retirement pay. As
such, they are not subject to the offset provisions, and the legislation did




Page 3                                                            GAO-03-575T
not change the statute that prohibits concurrent receipt. The special
compensation payments were reauthorized in 2001 and 2002. 2

In addition, the 2003 National Defense Authorization Act (P.L. 107-314)
authorized a new category of “special compensation” for retirees with
disabilities, including those who received a Purple Heart or have a
disability due to “combat-related” activities. Under the new law, eligible
retirees would now be able to receive the financial equivalent of
concurrent receipt, although, again, the legislation did not repeal the
statute prohibiting concurrent receipt.3 Military retirees may become
eligible for this special compensation if (1) their disability is attributable to
an injury for which the member was awarded the Purple Heart, and is not
rated less than a 10-percent disability by DOD or VA; or (2) they receive a
disability rating of at least 60 percent from either DOD or VA for injuries
that were incurred due to involvement in “armed conflict,” “hazardous
service,” “duty simulating war” and through an instrumentality of war.4
Retirees who are eligible under this new special compensation category
will no longer be entitled to the special compensation payments first
enacted in 2000. The Congressional Budget Office (CBO) estimated that
this new special compensation would cost about $6 billion over 10 years.
Table 1 shows the 2003 monthly payments amounts of the special
compensation enacted in 2000 as well as the monthly payment amounts
for the new category of special compensation.




2
 The monthly dollar amounts of “special compensation” at each disability level of 70
percent or more will increase by $25 per month on October 1, 2004.
3
 As before, the statute states that these special compensation payments are not military
retirement pay. As such, they are not subject to the offset provisions.
4
 To date, regulations have not been promulgated to implement this provision, including
definitions for these terms.



Page 4                                                                       GAO-03-575T
                        Table 1: Special Compensation Monthly Payment Amounts for Service-Connected
                        Disabilities in Addition to Military Retirement Pay

                                                            2003 payment amounts for                 2003 payment amounts for
                                                                special compensation                    new category of special
                            VA disability rating                      enacted in 2000                           compensationa
                            60%                                                   $50                                      $790
                            70%                                                  $100                                      $995
                            80%                                                  $125                                    $1,155
                            90%                                                  $225                                    $1,299
                            100%                                                 $325                                    $2,163
                        Source: Congressional Research Service and Department of Veterans Affairs.
                        a
                        Payment is equivalent to the base amount of the VA disability compensation for each rating category.
                        Amounts do not reflect allowances for eligible family members. The table does not reflect payment
                        amounts for eligible Purple Heart recipients with disability ratings of less than 60 percent.


                        Current proposals before Congress pertaining to concurrent receipt
                        would, if enacted, expand the number of those eligible to simultaneously
                        receive the equivalent of their full retirement pay and compensation for a
                        disability beyond the 2003 National Defense Authorization Act. CBO
                        estimated that an earlier version of these proposals would cost about $46
                        billion over 10 years. Over a longer time horizon, the additional financial
                        liability would be of even greater significance because of mounting
                        concerns about the long-term fiscal consequences of federal entitlements.

                        Among the programs that provide benefits to individuals based on their
Many Programs Use       previous work experience or their inability to continue working because
Offset Provisions       of disability, many use offset provisions when an individual qualifies for
                        benefits under more than one program. The specific rationales for these
When Individuals Are    offset provisions vary, but they generally focus on restoring equity and
Eligible for Benefits   fairness by treating beneficiaries of more than one program in a similar
                        manner as beneficiaries who qualify for benefits under only one of the
from More than One      programs. Table 2 provides examples of benefit programs that include
Program                 offset provisions. (See app. I for a description of these programs.)




                        Page 5                                                                                    GAO-03-575T
Table 2: Examples of Offset Provisions in Benefit Programs

    Social Security benefits may be offset by
    • Receipt of social security retirement or disability benefits based on own record
       (reduces spousal or dependent benefits)
    • Government pension based on non-Social Security-covered employment
    • Workers’ compensation
    • Disability benefits from non-Social Security-covered employment
    • Black Lung benefits
    Railroad Retirement benefits may be offset by
    • Social Security benefits
    • Workers’ compensation
    • A husband or wife’s own railroad retirement or disability benefits (reduces their
       spousal benefits)
    • A government pension based on non-Social Security-covered employment
    Black Lung benefits may be offset by
    • Workers compensation
    • Unemployment insurance
    Federal Employees Retirement System benefits may be offset by
    • Eligibility for federal workers compensation
    • Social Security disability benefits
    Workers’ Compensation benefits may be offset by
    • Social Security benefits
    Unemployment compensation benefits may be offset by
    • Social Security and private pension benefits
    Private disability insurance may be offset by
    • Social Security benefits

Source: GAO analysis of Congressional Research Service and GAO reports.


Some programs use offset provisions to ensure that the total benefits
received from two programs do not exceed the total income received
while working. For example, the Social Security Disability Insurance (DI)
program provides benefits to insured persons to replace the income lost
when they are unable to work because of physical or mental impairments.
In addition to DI benefits, some individuals may also be eligible for
workers’ compensation (WC) if the illness or injury is work-related. WC
benefits are designed to replace the loss of earnings resulting from work-
related illnesses or injuries. Each state and the District of Columbia
generally requires employers operating in its jurisdictions to provide WC
insurance for their employees.5 The Social Security Administration (SSA)


5
 These programs established a mechanism to pay injured workers predictable levels of
compensation without delay. Although WC programs exist in all states, the programs are
not federally mandated, administered, or regulated. Rather, they evolved throughout the
20th century under state laws with the support of labor and management.


Page 6                                                                           GAO-03-575T
generally requires that DI benefits be reduced for persons who also
receive WC.6 This offset applies when combined DI and WC benefits
exceed 80 percent of the injured worker’s average current earnings. The
reduction can apply even if the DI and WC benefits are for unrelated
injuries or illnesses. In 1971, the Supreme Court validated the WC offset
provision stating that it was intended to provide an incentive for injured
employees to return to work because the Congress did not believe it was
desirable for injured workers to receive disability benefits that, in
combination with their WC benefits, exceeded their preinjury earnings.7

Some programs use offset provisions to adjust benefit computation
formulas that were not originally designed to account for individuals or
their dependents working under more than one retirement system. An
example is Social Security’s Government Pension Offset (GPO) provision,
enacted in 1977 to equalize the treatment of workers covered by Social
Security and those with government pensions not covered by Social
Security. The Social Security Act requires that most workers be covered
by Social Security benefits.8 In addition to paying retirement and disability
benefits to covered workers, Social Security also generally pays benefits to
spouses of retired, disabled, or deceased workers. Although state and local
government workers were originally excluded from Social Security, today
about two-thirds of state and local government workers are covered by
Social Security.9 Prior to 1977, a spouse receiving a pension from a
government position not covered by Social Security could receive a full
pension benefit and a full Social Security spousal benefit as if he or she
were a nonworking spouse. The GPO prevents spouses from receiving a




6
 SSA cannot offset disability benefits if the state WC program allows the insurers to reduce
the amount of WC benefits they would normally pay to an injured worker when the worker
also receives Social Security DI benefits. In 1981, the Congress limited recognition of such
exceptions to the 14 states that had established them by Feb. 18, 1981.
7
Richardson v. Belcher, 404 U.S. 78 (1971).
8
Workers contribute to Social Security through payroll taxes.
9
 Starting in the 1950s, state and local governments had the option of selecting Social
Security coverage for their employees or retaining their noncovered status. In 1983, state
and local governments in the Social Security system were prohibited by law from opting
out of it.



Page 7                                                                        GAO-03-575T
                       full spousal benefit in addition to a full pension benefit earned from
                       noncovered government employment.10

                       Offset provisions are also used by state governments. For example,
                       29 states and the District of Columbia permit insurers to reduce WC cash
                       payments when the beneficiary also receives other types of benefits, such
                       as those from Social Security retirement, survivor, or disability programs
                       or from government or private pension plans. In addition, as required by
                       federal law, states must deduct from unemployment compensation the
                       value of pensions, retirement pay, or annuities based on previous work in
                       certain situations. The purpose of this offset is to reduce the incentive for
                       retirees who receive pensions to file for unemployment compensation and
                       increase their incentive to seek work.

                       Private sector insurers also use offsets. Our study of three large private
                       disability insurers11 found that nearly two-thirds of those receiving private
                       long-term disability benefits from the three private insurers also received
                       DI benefits.12 In such cases, the private disability benefit payments were
                       generally reduced by the amount of the DI benefit payment.


                       In addition to the cost of the benefits, allowing concurrent receipt would
Modifying the          have implications for VA program management. Allowing concurrent
Concurrent Receipt     receipt of military retirement pay and VA disability compensation could
                       provide new incentives for military retirees to file for VA compensation or
Provisions Has         to seek increases in their disability ratings for VA compensation that they
Implications for the   are already receiving. These new claims could further tax VA’s claims
                       processing system. We recently reported that VA faces long-standing
VA Disability          challenges to improve the timeliness and quality of disability claims
Compensation           decisions. In addition to creating delays in veterans’ receipt of entitled
Program                benefits, untimely, inaccurate, and inconsistent claims decisions can
                       negatively affect veterans’ receipt of other VA benefits and services,
                       including health care, because VA’s assigned disability ratings help



                       10
                         If both spouses worked in positions covered by Social Security, each may not receive
                       both the benefits earned as a worker and a full spousal benefit; rather each member of the
                       couple would receive the higher amount of the two.
                       11
                         In 1997, these three companies covered about half of the long-term U.S. private disability
                       insurance market.
                       12
                         U.S. General Accounting Office, SSA Disability: Other Programs May Provide Lessons
                       for Improving Return-to-Work Efforts, GAO-01-153 (Washington, D.C.: Jan. 12, 2001).



                       Page 8                                                                        GAO-03-575T
                determine eligibility and priority for these benefits.13 While the cost of
                these new benefits and VA’s administrative challenges in processing the
                claims may not provide sufficient bases to retain the offset, they warrant
                consideration in weighing this matter.


                While VA has had difficulty making decisions in a timely and consistent
VA Disability   manner, VA’s disability programs also face more fundamental problems.
Programs Face   Our concerns about the long-standing challenges that VA faces in claims
                processing contributed to our recent decision to place federal disability
Fundamental     programs, including VA’s programs, on our high-risk list of programs that
Problems        need urgent attention and transformation to ensure that they function in
                the most economical, efficient, and effective manner possible.14 This
                designation was based in part on our finding that these programs use
                outmoded criteria for determining disability. For example, VA’s disability
                ratings schedule is still primarily based on physicians’ and lawyers’
                judgments made in 1945 about the effect service-connected conditions had
                on the average individual’s ability to perform jobs requiring manual or
                physical labor. Although VA is revising the medical criteria for its Schedule
                for Rating Disabilities, the estimates of how impairments affect veterans’
                earnings have generally not been reexamined. As a result, changes in the
                nature of work that have occurred over the last half-century—which
                potentially affect the extent to which disabilities limit one’s earning
                capacity—are overlooked by the program’s criteria. For example, in an
                increasingly knowledge-based economy, one could consider whether
                physical impairments such as the loss of an extremity still reduce earning
                capacity by 40 to 70 percent.15



                13
                 U.S. General Accounting Office, Major Management Challenges and Program Risks:
                Department of Veterans Affairs, GAO-03-110 (Washington, D.C.: Jan. 2003).
                14
                 U.S. General Accounting Office, High-Risk Series: An Update, GAO-03-119 (Washington,
                D.C.: Jan. 2003)
                15
                  GAO-03-110. VA recognizes that there have been significant changes in the nature of work,
                but does not believe that these changes need to be reflected in the disability ratings. VA
                contends that the disability rating schedule, as constructed, represents a consensus among
                Congress, VA, and the veteran community, and that the ratings generally represent an
                equitable method to determine disability compensation. We continue to believe, as we have
                said in the past, that the current estimates of the average reduction in earning capacity
                should be reviewed. Further, we believe that updating disability criteria is consistent with
                the law. U.S. General Accounting Office, SSA and VA Disability Programs: Re-Examination
                of Disability Criteria Needed to Help Ensure Program Integrity,
                GAO-02-597 (Washington, D.C.: Aug. 9, 2002).



                Page 9                                                                       GAO-03-575T
These outdated concepts persist despite scientific advances and economic
and social changes that have redefined the relationship between
impairments and the ability to work. Advances in medicine and technology
have reduced the severity of some medical conditions and have allowed
individuals to live with greater independence and function in work
settings. Moreover, the nature of work has changed as the national
economy has become increasingly knowledge-based. Without a current
understanding of the impact of physical and mental conditions on earnings
given labor market changes, VA and other agencies administering federal
disability programs may be overcompensating some individuals while
undercompensating or denying benefits to other individuals because of
outdated information on earning capacity. At the same time, the projected
slowdown in growth of the nation’s labor force makes it imperative that
those who can work are supported in their efforts to do so.

In reexamining the fundamental concepts underlying the design of federal
disability programs, approaches used by other disability programs may
offer valuable insights. For example, our prior review of three private
disability insurers shows that they have fundamentally reoriented their
disability systems toward building the productive capacities of people with
disabilities, while not jeopardizing the availability of cash benefits for
people who are not able to return to the labor force. As we previously
reported, to fully incorporate scientific advances and labor market
changes into the disability programs would require more fundamental
change, such as revisiting the programs’ basic orientation from incapacity
to capacity. Reorienting programs in this direction would align them with
broader social changes that focus on building and supporting the work
capacities of people with disabilities. Such a reorientation would require
examining complex program design issues such as beneficiaries’ access to
medical care and assistive technologies, the benefits offered and their
associated costs, and strategies to return beneficiaries to work. Moreover,
reorientation of the federal disability programs would necessitate the
integration of the many programs and policies affecting people with
disabilities, including those of DOD and VA.


Mr. Chairman, this concludes my prepared remarks. I would be happy to
answer any questions that you or the other Subcommittee members might
have.




Page 10                                                        GAO-03-575T
                  For further information regarding this testimony, please contact me at
Contacts and      (202) 512-7101 or Carol Dawn Petersen at (202) 512-7215. Suit Chan,
Acknowledgments   Beverly Crawford, and Shelia Drake also contributed to this statement.




                  Page 11                                                       GAO-03-575T
Appendix I. Benefits and Eligibility
Requirements for Programs Containing
Offset Provisions
Program                         Benefits provided                                    Eligibility
Social Security benefits        Cash benefits to workers and their dependents        The worker and his/her eligible family
                                who qualify as beneficiaries under the Old-Age       members must meet different sets of
                                Survivors, and Disability Insurance (OASDI)          requirements for each type of benefit. An
                                programs of the Social Security Act. OASDI           underlying condition of payment of most
                                replaces a portion of earnings lost as a result of   benefits is that the worker has contributed to
                                retirement, disability, or death.                    Social Security for the required period of time.
Social Insurance for Railroad   Cash benefits to retired or disabled railroad        Railroad worker must have had at least 120
Workers (Railroad retirement    workers, their dependents and survivors. Railroad    months of creditable railroad service or 60
benefits)                       workers may also receive sickness and                months of creditable railroad service if such
                                unemployment benefits.                               service was performed after 1995.
Coal Mine Workers’              Cash benefits to coal miners who have become         Coal miner must have worked in the nation’s
Compensation (Black Lung        totally disabled due to coal workers’                coal mines or a coal preparation facility and
benefits)                       pneumoconiosis, and to widows and other              become totally disabled from pneumoconiosis.
                                surviving dependents of miners who have died of
                                this disease
Federal Employees Retirement    Cash benefits to retired or disabled federal         Federal employees whose initial federal
System                          employees, and survivors of federal employees        employment began after December 31, 1983,
                                and retirees.                                        or who voluntarily switched from Civil Service
                                                                                     Retirement System (CSRS) to FERS. The
                                                                                     worker must have at least 5 years of creditable
                                                                                     civilian service. Survivor and disability benefits
                                                                                     are available after 18 months of civilian service
Workers’ Compensation           Various cash and medical benefits to workers         Specific eligibility requirements and benefit
                                injured while working or who have occupational       amounts vary from state to state.
                                diseases.
Federal-State Unemployment      Temporary financial assistance to eligible workers Worker must meet the state requirements for
Insurance Program               who are unemployed through no fault of their own wages earned or time worked during an
(Unemployment compensation)     and are actively engaged in job search.            established period of time, and be determined
                                                                                   unemployed through no fault of his/her own,
                                                                                   and meet other eligibility requirements of
                                                                                   his/her state law.
Private disability insurance    Short- or long-term disability insurance, or both, Specific eligibility requirements vary from plan
                                to replace income lost by employees because of     to plan.
                                injuries and illnesses.
                                        Source: GAO analysis of Congressional Research Service and GAO reports.




                                        Page 12                                                                        GAO-03-575T
Related GAO Products


             Social Security: Congress Should Consider Revising the Government
             Pension Offset “Loophole.” GAO-03-498T. Washington, D.C.: February 27,
             2003.

             Major Management Challenges and Program Risks: Department of the
             Veteran Affairs. GAO-03-110. Washington, D.C.: January 2003.

             High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January
             2003.

             Veterans’ Benefits: Claims Processing Timeliness Performance Measures
             Could Be Improved. GAO-03-282. Washington, D.C.: December 19, 2002.

             Veterans’ Benefits: Quality Assurance for Disability Claims and Appeals
             Processing Can Be Further Improved. GAO-02-806. Washington, D.C.:
             August 16, 2002.

             SSA and VA Disability Programs: Re-Examination of Disability
             Criteria Needed to Help Ensure Program Integrity. GAO-02-597.
             Washington, D.C.: August 9, 2002.

             Veterans’ Benefits: Despite Recent Improvements, Meeting Claims
             Processing Goals Will Be Challenging. GAO-02-645T. Washington, D.C.:
             April 26, 2002.

             Workers’ Compensation: Action Needed to Reduce Payment Errors in
             SSA Disability and Other Programs. GAO-01-367. Washington, D.C.: May
             4, 2001

             SSA Disability: Other Programs May Provide Lessons for Improving
             Return-to-Work Efforts. GAO-01-153. Washington, D.C.: January 12, 2001.




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