*The following is the most current information provided to our office by the Veterans Administration regarding the potential budget shortfall. We will update this page with any additional information we receive.*
"VA is providing more benefits to Veterans and their families in record numbers. So far this year, we are outpacing last year's record-breaking year by nearly 30%. We are currently on pace to provide more than 2 million decisions this year, for the first time in VA's history. We have awarded over $112 billion dollars to Veterans and survivors in compensation and pension benefits this fiscal year by completing more than 1.9 million claims to date.
As a result, VA is notifying Congress of a potential budget shortfall that could impact Veterans, their families, and survivors. VA is working closely with Congress and the White House Office of Management and Budget to resolve these potential shortfalls in a way that prevents any adverse impacts on Veterans - and allows us to continue to deliver care and benefits to Veterans at record rates. VA defers to the Office of Management and Budget to work with Congressional leadership and the committees of jurisdiction to find an appropriate vehicle.
If VBA has insufficient funding to make benefit payments in September, compensation and pension benefit payments to over 7 million Veterans and survivors, and readjustment benefit payments (which supports various education programs for Veterans) to more than 500,000 Veterans and beneficiaries scheduled for delivery on October 1, 2024, are at risk of being delayed.
If VA does not receive additional funding, VA will continue to provide high-quality health care to Veterans - but have to make adjustments to remain within the current budget for fiscal year 2025. This could include adjustments in overall staffing levels, hospital maintenance and upgrades, delays in program expansions and enhancements, and more.
There are several contributing factors causing the potential VBA mandatory funding shortfall. Most notably, VBA is granting more benefits than ever before, exceeding estimates. In June 2024, VBA's workload projections were updated, showing an increase to 2.5 million completed rating claims in 2024. Additionally, VA has identified several factors that may cause a shortfall since the 2025 President Budget estimate was produced. These are:
- Due to higher numbers of Veterans and survivors filing claims, in June 2024, VBA's workload projections were updated, showing an increase to 2.5 million completed rating claims in 2024. This results in an estimated $1.7 billion increase in the Compensation and Pension account in 2024. (if asked: the cost of a VHA provided C&P exam is about the same as a contractor provided C&P exam).
- A higher average number of contract medical exams per claim and a higher average cost per exam is driving a $789 million increase to contract medical exams in the Compensation and Pension account in 2024 above the estimate in the 2025 President's Budget.
- Adjustments to VBA's baseline budget based on experience year-to-date as well as publication of rulemakings this spring, such as an update the VA's Schedule for Rating Disabilities for the digestive body system, increased costs by $213 million for the Compensation and Pension account and $169 million for the Readjustment Benefits account in 2024.
- The Rudisill v. McDonough court decision from April 2024 expands education benefits eligibility for service members who accrue benefits eligibility under both Montgomery and Post-9/11 GI Bills under separate service periods, which will result in substantial costs in 2024.
- Chapter 33 average payments are higher than anticipated year-to-date. Adjusting for this results in an increase of $520 million in Readjustment Benefit costs in 2024.
- Funding de-obligated from prior years partially offsets these increases and includes $438 million for the Compensation and Pension account plus $123 million in the Readjustment Benefits account.
Bottom line:
VA remains committed to working with Congress and the Office of Management and Budget to prevent any adverse impact to beneficiaries. VA will continue to provide high-quality health care to Veterans."