Pension

High-priority program

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Program level Payment Integrity results

Sponsoring agency: Department of Veterans Affairs

The Pension program helps eligible Veterans and their survivors cope with financial challenges by providing supplemental income through Veterans and Survivors Pension Benefits. A change in benefit payment occurs when a required adjustment is made due to a status change (e.g., change in income, net worth, medical expenses, dependency, etc.); which caused a projected $381.78 million in monetary loss in FY 2024. A known barrier is relying on beneficiaries to notify the VA when they experience life or financial changes since these factors may impact continued eligibility. When applicable, the VA pursues debt collection by offsetting benefit payments for the full amount of the debt or by approved repayment installments.

View on Federal Program Inventory

PROGRAM METRICS

$4,893 M

in FY 2021 outlays, with a

92.2%

payment accuracy rate

PROGRAM METRICS

$4,225 M

in FY 2022 outlays, with a

88.3%

payment accuracy rate

PROGRAM METRICS

$3,862 M

in FY 2023 outlays, with a

89.1%

payment accuracy rate

PROGRAM METRICS

$3,743 M

in FY 2024 outlays, with a

86.1%

payment accuracy rate

PROGRAM METRICS

$3,550 M

in FY 2025 outlays, with a

90.0%

payment accuracy rate

  • Improper payment estimates over time
    View as:

    Chart toggle amounts:
    Proper payments
    Overpayment
    Underpayment
    Technically improper
    Unknown

Payment Integrity results

  • FY 2021 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2019 - 09/2020


    Confidence interval:

    >90%


    Margin of error:

    +/-2.56

Overpayments

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $38.29 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $1.3 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $36.99 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $329.32 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $7.15 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.06 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $322.11 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $12.26 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.01 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $12.25 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$12.26 M

Unknown Payment Details

VA had lacking or insufficient documentation to validate whether a payment was proper or not.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $2.63 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation

Evaluation of corrective actions

VA continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper payments agency-wide as evidenced by its third consecutive and largest year of reductions. Due to Pension reporting over $100 million of overpayments/loss in FY2020, the program was required by Office of Management and Budget to report quarterly on activities and accomplishments that reduce monetary loss. Those activities and accomplishments can be found at PaymentAccuracy.gov. Pension has remained committed to actions that reduce monetary loss and continues to tailor corrective actions to reduce improper payments.

Future payment integrity outlook

Pension has established a baseline.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $4,771.14 M
Current year +1 estimated future improper payments $354.26 M
Current year +1 estimated future unknown payments $3.58 M
Current year +1 estimated future improper payment and unknown payment rate 7.5 %

The program's current year improper payment and unknown payment rate of 7.82 % has not been achieved with a balance of payment integrity risk and controls and does not represent the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is not the tolerable rate.

VA does not have additional program needs.

Additional programmatic information

  • FY 2022 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2020 - 09/2021


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-3.25

Overpayments

Overpayments within agency control occur when claims processors fail to use available beneficiary information to correctly process beneficiary awards. In some instances, beneficiary information may not be current, however, claims processors can use the available information as a basis for calculating correct benefit amounts or deferring actions or decisions until additional information is received from the beneficiary. The program has the direct ability to prevent overpayments through the use of reviews to ensure proper policies and procedures are applied in the adjudication of claims and taking corrective action when errors resulting in improper payments are identified.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $480.67 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $14.99 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $465.68 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $11.3 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $4.44 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $6.86 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $0.46 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.46 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$0.46 M

Unknown Payment Details

Evaluation of corrective actions

VA performed an effectiveness review in FY 2022 of the corrective action plans implemented in FY 2021. The purpose of this review was to assess the appropriateness of corrective actions and mitigation strategies and whether the actions were effectively implemented and prioritized within the agency. The results of the Pension program indicated that of the seven actions assessed, four were closed and determined to be effective in mitigating the root cause, one was open and determined to be ineffective in mitigating the root cause, and two were designed ineffectively to mitigate the root cause.

For errors tied to failure to access data/information and inability to access data/information, associated corrective actions or mitigation strategies contributed to a total reduction in improper payment amount from $410.52m in FY 2020 to $378.87m in FY 2021, or a 7% reduction. For errors tied to unable to determine whether proper or improper, associated corrective actions contributed to a total reduction in the unknown payment amount from $4.64m in FY 2020 to $2.63m in FY 2021, or a 43% reduction.

VA will perform an effectiveness review in FY 2023 of the corrective action plans implemented in FY 2022 due to the time needed to implement actions as well as to impact the payment process. Results of this review will be reported in FY 2023.

Future payment integrity outlook

Pension has established a baseline.

The Pension reduction target is equal to the estimated future improper payment and unknown payment rate. VA establishes reduction targets by setting them lower than the current year improper payment estimates. Reduction targets are a balance between being aggressive and realistic. One thing VA has learned from the many years it has been working to comply with improper payments legislation is that it can take three years from the point an error cause is isolated during testing to develop a corrective action, implement it, and then wait for payments to be made that can then be tested the following year since VA tests and reports improper payments one year in arrears.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $3,882.83 M
Current year +1 estimated future improper payments $385.96 M
Current year +1 estimated future unknown payments $1.94 M
Current year +1 estimated future improper payment and unknown payment rate 9.99 %
Current year +1 estimated future improper payment and unknown payment reduction target 9.99 %

The program's current year improper payment and unknown payment rate of 11.66 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. VA continues to prioritize implementing appropriate corrective actions and mitigation strategies to reduce improper and unknown payments. The program plans to be compliant with the Payment Integrity Information Act of 2019 for FY 2024.

VA has not yet determined the tolerable rate. VA is working to determine all requirements for establishing a tolerable rate per Office of Management and Budget guidance before attempting to establish tolerable rates. At this time, VA is not aware of additional program needs.

VA has not yet determined the tolerable rate. VA is working to determine all requirements for establishing a tolerable rate per Office of Management and Budget guidance before attempting to establish tolerable rates. At this time, VA is not aware of additional program needs.

Additional programmatic information

The Pension program continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper and unknown payments. Although the Pension program experienced an overall increase in improper payments from FY 2021 to FY 2022, the program made significant headway in implementing a mitigation strategy process designed to decrease improper payments in the highest overall error category, failure to access data/information. Starting in September 2022, a large batch of claims is sent weekly to claims processors for review and corrective action. Given the time it takes to implement corrective actions and mitigation strategies, the program expects the impact of this action on FY 2023 payments with anticipated compliance with the Payment Integrity Information Act of 2019 for FY 2024.

  • FY 2023 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2021 - 09/2022


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-2.97

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Automation
    Actions taken regarding automation include conducting quarterly matches with the Social Security Administration to identify variances between Social Security Administration income a beneficiary is receiving versus the amounts reported by a beneficiary to VA. Differences indicate potential overpayments, so correcting the differences ensures VA is making correct payments and prevents future improper payments. In FY 2023, errors are largely attributable to failure to access data/information prior to issuing payment. To address the root cause, VA automated the process of implementing a match between Social Security Administration income data and VA income data for pension beneficiaries. This enables VA to identify variances which are indicators of potential overpayments. Claims with variances are prioritized and sent to claims processors in batches to resolve discrepancies, identify and establish debts for overpayments if applicable, and prevent future overpayments. In addition, VA uses the Social Security Administrations Death Master File to match against active beneficiaries and their dependents, which allows VA to stop payment timely for deceased beneficiaries. These ongoing Social Security Administration matches identify potential deceased beneficiaries still receiving benefits for VA to stop benefits and prevent overpayments. These actions are designed to reduce improper payment errors associated with failure to access data/information needed to ensure proper payment amounts. Automation was the best mitigation strategy in order to improve accuracy and accessibility of data to validate beneficiary income and eligibility status prior to payment.
    FY2023 Q4
    Completed
    Audit
    Actions taken regarding audit include randomly reviewing claim processors’ work to ensure policies and procedures are properly applied in making accurate pension rate decisions to prevent future improper payments. In FY 2023, errors are largely attributable to failure to access data/information prior to issuing payment. Due to administrative errors corrective action includes conducting Special Focus Reviews to ensure claims processors apply proper policies and procedures in making accurate decisions. Additional audit actions include taking corrective actions when improper payments are identified such as proper adjudication of claims or collection of overpayments, if applicable. These actions are designed to reduce improper payment errors associated with failure to access data/information needed to ensure proper payment amounts. Audit was the best mitigation strategy in order to identify discrepancies and reinforce adherence to policies and procedures to make accurate decisions prior to payment.
    FY2023 Q3
    Completed
    Automation
    Actions planned regarding automation include conducting quarterly matches with the Social Security Administration to identify variances between Social Security Administration income a beneficiary is receiving versus the amounts reported by a beneficiary to VA. Differences indicate potential overpayments, so correcting the differences ensures VA is making correct payments and prevents future improper payments. In FY 2023, errors are largely attributable to failure to access data/information prior to issuing payment. To address the root cause, VA will use the existing match between Social Security Administration income data and VA income data for pension beneficiaries. This enables VA to identify variances which are indicators of potential overpayments. Claims with variances are prioritized and sent to claims processors in batches to resolve discrepancies, identify and establish debts for overpayments if applicable, and prevent future overpayments. In addition, VA uses the Social Security Administrations Death Master File to match against active beneficiaries and their dependents, which allows VA to stop payment timely for deceased beneficiaries. These ongoing Social Security Administration matches identify potentially deceased beneficiaries still receiving benefits for VA to stop benefits and prevent overpayments. These actions are designed to reduce improper payment errors associated with failure to access data/information needed to ensure proper payment amounts. Automation was the best mitigation strategy in order to improve accuracy and accessibility of data to validate beneficiary income and eligibility status prior to payment.
    FY2025
    Planned
    Audit
    Actions planned regarding audit include randomly reviewing claim processors’ work to ensure policies and procedures are properly applied in making accurate pension rate decisions to prevent future improper payments. In FY 2023, errors are largely attributable to failure to access data/information prior to issuing payment. Due to administrative errors, corrective action includes conducting Special Focus Reviews to ensure claims processors apply proper policies and procedures in making accurate decisions. Additional audit actions include taking corrective actions when improper payments are identified such as proper adjudication of claims or collection of overpayments if applicable. These actions are designed to reduce improper payment errors associated with failure to access data/information needed to ensure proper payment amounts. Audit was the best mitigation strategy in order to identify discrepancies and reinforce adherence to policies and procedures to make accurate decisions prior to payment.
    FY2024
    Planned

Overpayments

VA overpayments are within the agency’s control and occur when the program failed to access the data/information needed to correctly process beneficiary awards. These overpayments occurred for multiple reasons; however, the two main reasons are: (1) that beneficiaries failed to notify VA of changes and (2) human error. Claims processors can manually access Social Security Administration income information to calculate correct benefit amounts when a beneficiary notifies VA of a change. VA is improving administrative compliance by using the Social Security Administration income match. The program is also working with claims processing stations on the individual errors identified each fiscal year. These improvements will result in increased payment accuracy.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $362.34 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $362.34 M

VA overpayments outside the agency’s control occur when the program is either unable to access information which is needed or the information needed does not exist to validate payment accuracy prior to payment due to regulatory barriers. Specifically, overpayments occur when Social Security benefits are increased as the result of a Social Security cost-of-living adjustment, the Pension maximum annual rates are increased by a like percentage at the same time (per Code of Federal Regulations: Pensions, Bonuses, and Veterans' Relief (Title 38), Department of Veterans Affairs (Chapter One), Adjudications (Part Three), Pension, Compensation, and Dependency and Indemnity Compensation (Subpart A), Improved Pension Rates (3.23). The effective date of Social Security Administration and Pension cost-of-living adjustments is December 1; which are paid January 1. Pension is unable to prevent these overpayments from occurring because VA is unable to access the ‘post cost-of-living adjustment’ Social Security Administration income amount data at the time in which VA makes its cost-of-living adjustment changes in December for the January Pension payments. The cost of establishing additional cross data sharing with the Social Security Administration has been explored and the cost of internal and external IT information technology infrastructure and strategic changes are not cost effective. Code of Federal Regulations: Pensions, Bonuses, and Veterans' Relief (Title 38), Department of Veterans Affairs (Chapter One), Adjudications (Part Three), Pension, Compensation, and Dependency and Indemnity Compensation (Subpart A), Elections of Pension or Compensation (3.701) requires VA to pay a beneficiary who has dual entitlements (Pension and Compensation) the higher of the two amounts; unless a beneficiary specifically elects one over the other. Overpayments can also occur when beneficiaries, as allowed by the Code of Federal Regulations: Pensions, Bonuses, and Veterans' Relief (Title 38), Department of Veterans Affairs (Chapter One), Adjudications (Part Three), Pension, Compensation, and Dependency and Indemnity Compensation (Subpart A), Computation of Income (3.271), provide revised medical expenses to VA after payments are made. VA is unable to prevent these overpayments from occurring because regulations require VA to make applicable retroactive adjustments based upon the revised medical expenses for which beneficiaries are the sole source of information. In addition, overpayments occur if Prisoner status information is not timely received, resulting in overpayments. VA is unable to prevent these overpayments from occurring because VA relies on sources outside the agency to provide timely prisoner status information.
Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $55.72 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $23.26 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $32.46 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Outside Agency Control Financial $32.73 M
Overpayments Outside Agency Control Prisoner Status $22.99 M
Overpayments Within Agency Control Deceased $25.04 M
Overpayments Within Agency Control Dependency $1.92 M
Overpayments Within Agency Control Financial $319.87 M
Overpayments Within Agency Control Marital Status $2.97 M
Overpayments Within Agency Control Prisoner Status $12.54 M

Overpayment type Mitigation strategies taken Mitigation strategies planned
Overpayments within the agency’s control Audit, Automation Audit, Automation

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $1.21 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $1.21 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Eligibility element/information needed Eligibility amount
Financial $1.21 M

Mitigation strategies taken Mitigation strategies planned
Audit Audit

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$1.21 M

Unknown Payment Details

Evaluation of corrective actions

The Pension program continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper payments. In FY 2023, VA performed an effectiveness review of actions developed and implemented in FY 2022. The purpose of this review was to assess the appropriateness of corrective actions or mitigation strategies and whether the actions were effectively implemented and prioritized within the agency. The results for the Pension program indicated that of the four actions assessed, one was closed and determined to be effective in mitigating the root cause, one was open and determined to be correctly designed to mitigate the root cause, and two were open and determined that improvements could be made to effectively mitigate the root cause. If improvements could be made, VA conducted a root cause analysis to refine the program's mitigation strategies to ensure they address and reduce root cause(s) of error. For errors tied to failure to access data/information, associated corrective actions or mitigation strategies contributed to a reduction in the improper payment amount from $472.99 million in FY 2022 to $362.34 million in FY 2023, or a 23% reduction. VA will perform an effectiveness review in FY 2024 of the corrective action plans developed and implemented in FY 2023 due to the time needed to develop and implement actions as well as to impact the payment process. Results of this review will be reported in FY 2024.

Future payment integrity outlook

Pension has established a baseline.

The Pension reduction target is equal to the estimated future improper payment and unknown payment rate. VA establishes reduction targets by setting them lower than the current year improper payment estimates. Reduction targets are a balance between being aggressive and realistic. One thing VA has learned from the many years it has been working to comply with improper payments legislation is that it can take three years from the point an error cause is isolated during testing to develop a corrective action, implement it, and then wait for payments to be made that can then be tested the following year since VA tests and reports improper payments one year in arrears.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $3,766.49 M
Current year +1 estimated future improper payments $373.68 M
Current year +1 estimated future unknown payments $2.6 M
Current year +1 estimated future improper payment and unknown payment rate 9.99 %
Current year +1 estimated future improper payment and unknown payment reduction target 9.99 %

The program's current year improper payment and unknown payment rate of 10.86 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. VA continues to prioritize implementing appropriate corrective actions and mitigation strategies to reduce improper and unknown payments.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. In March 2023, GAO acknowledged VA’s substantial reduction in improper and unknown payments using effective mitigation strategies and corrective actions (GAO-23-106285, IMPROPER PAYMENTS: Fiscal Year 2022 Estimates and Opportunities for Improvement). VA continues to prioritize implementing appropriate corrective actions and mitigation strategies and has adequate funding to implement improvements planned to internal controls, human capital, information systems and other infrastructure, as needed, over VA’s payment processing and procurement systems to continue reducing improper and unknown payments. VA will establish a tolerable rate if all applicable requirements are met.

At this time, VA is not aware of additional program needs. Therefore, VA has not requested additional resources to establish and maintain internal controls to reduce improper and unknown payments to the tolerable rate.

Additional programmatic information

The Pension program continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper payments. Although VA pension remains non-compliant, the impact of the program changes is reflected in a decrease in the improper and unknown payment rate from 11.66% in FY 2022 to 10.86% (for a 0.80% reduction) and a $73.16 million decrease in improper payments in FY 2023. Given the time it takes to implement corrective actions and mitigation strategies, the program expects the continued positive impact of these actions on its FY 2024 improper and unknown payment rate.

  • FY 2024 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2022 - 09/2023


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-3.18

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Automation
    Actions taken included conducting quarterly matches with the Social Security Administration to identify variances between Social Security Administration income a beneficiary is receiving versus the amounts reported by a beneficiary to VA. Differences indicate potential changes in a beneficiary’s income, which could require a change to their pension benefit. Validating whether a change is needed and making changes if necessary, prevents future improper payments. To address the root cause, VA automated the process of implementing a match between Social Security Administration income data and VA income data for pension beneficiaries. This enabled VA to identify variances which were indicators of potential overpayments. Claims with variances were prioritized and sent to claims processors in batches to resolve discrepancies, adjust benefits if appropriate, and prevent future overpayments. In addition, VA used the Social Security Administration's Death Master File to match against active beneficiaries or their dependents, which allowed VA to stop payment timely for deceased beneficiaries. These ongoing Social Security Administration matches identified potential deceased beneficiaries or their dependents still receiving benefits for VA to stop benefits and prevent future overpayments. These actions were taken to reduce future improper payment errors associated with failure to access data/information needed to ensure proper payment amounts and unknown payments attributed to being unable to determine whether proper or improper. Automation was the best mitigation strategy in order to improve accuracy and accessibility of data to validate beneficiary income and eligibility status prior to payment.
    FY2024 Q4
    Completed
    Audit
    Actions taken included randomly reviewing claims processors’ work to ensure policies and procedures were properly applied in making accurate pension rate decisions to prevent future improper payments. Due to human errors, corrective action included conducting focused reviews to ensure claims processors properly applied policies and procedures in making accurate pension rate decisions. These actions were taken to reduce future improper payment errors associated with failure to access data/information needed to ensure proper payment amounts and unknown payments attributed to being unable to determine whether proper or improper. Audit was the best mitigation strategy in order to identify systemic discrepancies and reinforce adherence to policies and procedures to improve accurate pension rate decisions prior to payment.
    FY2024 Q4
    Completed
    Automation
    Actions planned include conducting quarterly matches with the Social Security Administration to identify variances between Social Security Administration income a beneficiary is receiving versus the amounts reported by a beneficiary to VA. Differences indicate potential changes in a beneficiary’s income, which could require a change to their pension benefit. Validating whether a change is needed and making changes if necessary, prevents future improper payments. To address the root cause, VA will use the existing match between Social Security Administration income data and VA income data for pension beneficiaries. This enables VA to identify variances which are indicators of potential overpayments. Claims with variances are prioritized and sent to claims processors in batches to resolve discrepancies, adjust benefits if appropriate, and prevent future overpayments. These actions are designed to reduce future improper payment errors associated with failure to access data/information needed to ensure proper payment amounts and unknown payments attributed to being unable to determine whether proper or improper. Automation was the best mitigation strategy in order to improve accuracy and accessibility of data to validate beneficiary income prior to payment.
    FY2025
    Planned
    Training
    Actions planned include training staff to ensure policies and procedures are properly applied in making accurate pension rate decisions to prevent future improper payments. To address the root cause, training will focus on human errors identified during FY 2024 payment integrity testing. These actions are designed to reduce future improper payment errors associated with failure to access data/information needed to ensure proper payment amounts and unknown payments attributed to being unable to determine whether proper or improper. Training was the best mitigation strategy in order to improve awareness and increase skills to improve accurate pension rate decisions prior to payment.
    FY2025
    Planned
    Audit
    Actions planned include randomly reviewing claims processors’ work to ensure policies and procedures are properly applied in making accurate pension rate decisions to prevent future improper payments. Due to human errors, corrective action will include conducting focused reviews to ensure claims processors properly apply policies and procedures in making accurate pension rate decisions. These actions are designed to reduce future improper payment errors associated with failure to access data/information needed to ensure proper payment amounts and unknown payments attributed to being unable to determine whether proper or improper. Audit was the best mitigation strategy in order to identify systemic discrepancies and reinforce adherence to policies and procedures to improve accurate pension rate decisions prior to payment.
    FY2025
    Planned

Overpayments

VA overpayments are within the agency’s control and occur when the program failed to access the data/information needed to correctly process beneficiary awards. These overpayments occurred for multiple reasons; however, the two main reasons are: (1) that beneficiaries failed to notify VA of changes and (2) human error. Claims processors can manually access Social Security Administration income information to calculate correct benefit amounts when a beneficiary notifies VA of a change. VA is improving administrative compliance by using the Social Security Administration income match; however, when a potential variance is identified, VA must continue to make the current benefit payment while determining whether the change in benefit is valid which results in potential overpayments. The program is also working with claims processing stations on the human errors identified each fiscal year. These improvements will result in increased payment accuracy.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $381.78 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $381.78 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Within Agency Control Financial $26.04 M
Overpayments Within Agency Control Receiving Benefits from Other Sources $355.74 M

Overpayment type Mitigation strategies taken Mitigation strategies planned
Overpayments within the agency’s control Audit, Automation Audit, Automation, Training

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $22.23 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $22.23 M

Eligibility element/information needed Eligibility amount
Financial $22.18 M
Receiving Benefits from Other Sources $0.05 M

Mitigation strategies taken Mitigation strategies planned
Audit, Automation Audit, Automation, Training

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$22.23 M

Unknown Payment Details

If a benefit payment is identified as a potential overpayment and has yet to enter due process or is currently in due process, a determination of whether it is proper or improper cannot be made. VA must provide a 60-day due process period that protects a beneficiary’s rights to provide additional financial documentation which could potentially change or even eliminate a match to third party data indicating there was a change in income. Until due process is complete, VA cannot make a final determination and the payment must be classified as unknown.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $114.57 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation
Other $114.57 M If a benefit payment is identified as a potential overpayment due to a beneficiary failing to inform VA of changes that impact the payment rate, VA must provide a 60-day due process period that protects a beneficiary’s rights to provide additional financial documentation which could potentially change or even eliminate a match to third party data indicating there was a change in income. Until due process is complete, VA cannot make a final determination and the payment must be classified as unknown. Payments must also continue unchanged until the 60-day due process period concludes.

Mitigation strategies taken Mitigation strategies planned
Audit,Automation Audit,Automation,Training

Evaluation of corrective actions

The Pension program continues to prioritize and implement corrective actions and mitigation strategies that reduce improper payments. In FY 2024, VA performed an effectiveness review of actions developed and implemented in FY 2023. The purpose of this review was to assess the appropriateness of corrective actions or mitigation strategies and whether the actions were effectively implemented and prioritized within the agency. The results for the Pension program indicated that of the three actions assessed, one was open and determined to be designed effectively to mitigate the root cause, and two were open and determined that improvements could be made to effectively mitigate the root cause. VA conducted a root cause analysis to refine the program's mitigation strategies to ensure they address and reduce root cause(s) of error and added training to corrective actions planned for FY 2025. Additionally, VA obtained more details during payment integrity testing this year for the program to improve development of effective corrective actions. VA will perform an effectiveness review in FY 2025 of the corrective action plans developed and implemented in FY 2024 due to the time needed to develop and implement actions as well as to impact the payment process. Results of this review will be reported in FY 2025.

Although the overall error rate for this program increased from 10.86% in FY 2023 to 13.85% in FY 2024 (for a 2.99% increase), the program underwent improvements in FY 2024 that will improve its ability to reduce improper and unknown payments in the future. This included updating testing procedures to correctly differentiate monetary loss from unknown payments, obtaining more details during payment integrity testing to improve development of effective corrective actions, and improving corrective action and mitigation strategies planned for FY 2025. Additionally, the Cost-of-Living Adjustment error category was changed to within agency control and recategorized under Social Security Administration Income as the root cause to improve transparency related to VA’s access to SSA income data. This change reduced the Cost-of-Living Adjustment errors to zero in FY 2024. Dependency, incarceration, and death of beneficiary errors were reduced to zero in FY 2024 and focused reviews found no systemic causes for these errors. Claims processors were informed of these prior year errors and subsequently adjudicated the claims properly. VA's corrective actions and mitigation strategies have been evaluated by the Office of Inspector General during their FY 2024 annual audit and determined reasonable with no recommendations for improvement. The overpayments and underpayments were attributed to VA's failure to access data/information and unknown payments were attributed to being unable to determine whether proper or improper. Actions taken and planned regarding automation include conducting quarterly matches with the Social Security Administration to identify variances between Social Security Administration income a beneficiary is receiving versus the amounts reported by a beneficiary to VA. Differences indicate potential changes in a beneficiary's income, which could require a change to their pension benefit. Validating whether a change is needed and making changes if necessary, prevents future improper payments. Actions taken and planned regarding audit include randomly reviewing claims processors’ work to ensure policies and procedures are properly applied in making accurate pension rate decisions to prevent future improper payments. Actions planned regarding training include training staff to ensure policies and procedures are properly applied in making accurate pension rate decisions to prevent future improper payments.

VA has identified root causes of improper and unknown payments and developed corrective actions and mitigation strategies. The causes of FY 2024 overpayments and underpayments were attributed to failure to access data/information, and the cause of unknown payments was attributed to unable to determine whether proper or improper. In particular, the majority of overpayments occurred due to beneficiaries not timely reporting changes in Social Security income to VA which then requires VA to identify discrepancies and work with beneficiaries to determine if adjusting benefits is appropriate. The majority of underpayments were due to human errors. The majority of unknown payments occurred because beneficiaries did not timely report changes in Social Security income to VA requiring due process before VA can make a final determination. If a sampled benefit payment is identified as a potential overpayment and has yet to enter due process or is currently in due process, a determination of whether it is proper or improper cannot be made.

Automation was the best mitigation strategy because overpayments resulted from beneficiaries not timely providing information to VA, so VA identified the Social Security Administration as an alternative data source and implemented a quarterly Social Security income match. This match enables VA to identify variances between Social Security Administration income a beneficiary is receiving versus the amounts reported by a beneficiary to VA. Differences indicate potential changes in a beneficiary’s income, which could require a change to their pension benefit. Validating whether a change is needed and making changes if necessary, prevents future improper payments. The Social Security income match occurs quarterly and regulations require a 60-day due process period. The due process period protects the beneficiary from reduction adjustments being made to their pension payments without validation of the data VA has received from a third party. Therefore, VA must continue to make the pension payment and does not know if the payment is accurate or not until due process is complete. Audit was the best mitigation strategy in order to identify systemic discrepancies and reinforce adherence to policies and procedures to improve accurate pension rate decisions prior to payment. Training was the best mitigation strategy in order to improve awareness and increase skills to improve accurate pension rate decisions prior to payment.

VA updates corrective action plans annually based on testing results, and no less than quarterly throughout the fiscal year, to ensure actions are appropriately prioritized and designed to mitigate risks of improper and unknown payments. VA monitors progress and results of implementation on a quarterly basis. Additionally, an effectiveness review is performed annually to measure if an action reduced or is properly designed to reduce improper and unknown payments for a specific root cause based on a set benchmark. The annual effectiveness review process allows VA to create or update actions as necessary to ensure continued progress in the remediation of improper and unknown payments. If areas for improvement are identified, VA conducts a root cause analysis to refine the program's mitigation strategies to ensure they addressed and reduced root cause(s) of error. The increase in the Pension program's improper payment and unknown payment rate from 10.86% in FY 2023 to 13.85% in FY 2024, and the $99.31 million increase in improper and unknown payments supports the effectiveness review determination that improvements are needed to at least two of the program's corrective actions in place in FY 2024. As part of the established corrective action process, the program reported improved corrective action and mitigation strategies planned for FY 2025.

Future payment integrity outlook

Pension has established a baseline.

The Pension reduction target is equal to the estimated future improper payment and unknown payment rate. VA establishes reduction targets by setting them lower than the current year improper and unknown payment estimates. Reduction targets are a balance between being aggressive and realistic. One thing VA has learned from the many years it has been working to comply with improper payments legislation is that it can take three to five years from the point an error cause is isolated during testing to develop a corrective action, implement it, and then wait for payments to be made that can then be tested the following year since VA tests and reports improper payments one year in arrears.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $3,561.97 M
Current year +1 estimated future improper payments $284.67 M
Current year +1 estimated future unknown payments $55.21 M
Current year +1 estimated future improper payment and unknown payment rate 9.54 %
Current year +1 estimated future improper payment and unknown payment reduction target 9.54 %

The program's current year improper payment and unknown payment rate of 13.85 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. VA continues to identify and implement appropriate corrective actions and mitigation strategies to further reduce the improper and unknown payment rate. VA has determined these corrective actions and mitigation strategies do not impede the mission and can be implemented cost-effectively within existing budget authority.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. In March 2023, the Government Accountability Office acknowledged VA’s substantial reduction in improper and unknown payments using effective mitigation strategies and corrective actions (GAO-23-106285, IMPROPER PAYMENTS: Fiscal Year 2022 Estimates and Opportunities for Improvement). VA continues to prioritize implementing appropriate corrective actions and mitigation strategies and has adequate funding to implement improvements planned to internal controls, human capital, information systems and other infrastructure, as needed, over VA’s payment processing and procurement systems to continue reducing improper and unknown payments. VA is still actively reducing improper and unknown payments within its existing budget authority. VA considers the reduction of improper and unknown payments a critical part of its financial stewardship efforts.

At this time, VA is not aware of additional program needs. Therefore, VA has not requested additional resources to establish and maintain internal controls to reduce improper and unknown payments to establish and maintain payment integrity.

Additional programmatic information

The Pension program continues to prioritize and implement corrective actions and mitigation strategies that reduce improper and unknown payments. Although the Pension program remains noncompliant and reported an increase in overall improper and unknown payments, the program underwent improvements in FY 2024 that will improve its ability to reduce improper payments in the future. This included updating testing procedures to correctly differentiate monetary loss from unknown payments, increasing detail obtained during testing to improve development of effective corrective actions, and improving corrective action and mitigation strategies planned for FY 2025.

Accountability for detecting, preventing, and recovering improper payments

The Pension program was determined noncompliant with PIIA for FY 2023 by the OIG in May 2024. Additionally, the program is reporting improper and unknown payments above the required thresholds in FY 2024 for a compliance determination by the OIG in May 2025. In FY 2025, the Executive Director for Pension and Fiduciary Service will be focused on prevention and recovery of overpayments as appropriate. This will include various mitigation strategies such as audit, automation, and training. These actions will help bring the program into compliance by reducing errors associated with failure to access data/information and unknown payments attributed to being unable to determine whether proper or improper. The Executive Director for Pension and Fiduciary Service’s performance plan includes performance metrics appropriate to ensure mission is met while still ensuring payment integrity.

Generally, VA Senior Executives are held accountable via the performance appraisal process as established by VA’s Corporate Senior Executive Management Office. This process includes oversight from VA’s Performance Review Board, which evaluates each executive’s performance appraisal, the executive’s response to the initial summary rating, if any, and the results of any higher-level official’s findings and recommendations. Performance bonuses and/or salary increases are aligned with each Senior Executive’s overall level of performance.

  • FY 2025 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2023 - 09/2024


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-2.87

Causes

VA overpayments are within the agency's control and occured when the program failed to access the data/information needed to validate correct beneficiary award amounts. These overpayments occurred for multiple reasons; however, the two main causes are: (1) that beneficiaries failed to notify VA of changes in income and (2) human error. Claims processors can manually access Social Security Administration income information to calculate correct benefit amounts when a beneficiary notifies VA of a change. VA is improving administrative compliance by using data from the SSA via a Computer Matching Agreement; however, when a potential variance is identified, VA must continue to make the current benefit payment while determining whether the change in benefit is valid, which results in potential overpayments. The program is also working with claims processing stations on the human errors identified each fiscal year. These improvements will result in increased payment accuracy. Underpayments occurred when the program failed to access data/information needed to correctly process beneficiary awards. The main causes for underpayments were human error and beneficiaries failing to notify VA about changes in SSA income. Human errors involved accounting for medical expenses, other income, and dependency issues. Payments are considered unknown payments when VA had missing or insufficient documentation to process beneficiary awards. The main causes for unknown payments were unreported changes in SSA income and human error related to medical expenses, other income, dependency issues, and other general human errors.

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $272.29 M
Amount of overpayments outside the agency's control $0.0 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
Amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
Amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $272.29 M

Underpayment root cause Underpayment amount
Amount of underpayments $38.47 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $38.47 M

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

The amount that could either be proper or improper but the agency is unable to determine whether it was proper or improper as a result of insufficient or lack of documentation $43.72 M

Prevention

To correct the causes of improper and unknown payments, VA implemented several corrective actions focused on enhancing data accuracy and payment integrity. Actions taken and planned for audit include randomly reviewing claims processors’ work to ensure policies and procedures are properly applied in making accurate pension rate decisions to prevent future improper payments. Specific reviews conducted in FY 2025 include National Quality Reviews of 41 claims monthly at 3 processing locations; focused reviews of targeted program areas within claims processing; and an audit of Federal Tax Information reported on initial pension applications on a quarterly basis. In addition, VA did and will perform focused reviews of targeted problem areas toaddress Social Security Administration income match claims and human errors during annual site visits. These actions are fully implemented and are ongoing from year to year, versus being completed once. Actions taken and planned for automation included conducting quarterly automated matches with SSA to identify variances between SSA income a beneficiary is receiving versus the amounts reported by a beneficiary to VA. These automated matches allow VA to identify discrepancies that may indicate changes in the beneficiary's income and adjust pension payments accordingly. By identifying claims with income variances and routing them to claims processors in batches, VA significantly improved its ability to detect and prevent overpayments. These actions are fully implemented and are ongoing from year to year, versus being completed once. Actions taken and planned for training included focused staff training on unreported SSA errors and human errors related to income and medical expense counting to ensure consistent application of policies and procedures in making accurate pension rate decisions to prevent errors linked to data access issues and future improper payments. These actions are fully implemented and are ongoing from year to year, versus being completed once. The expected completion date for this action is September 30, 2026.
The Pension program continues to prioritize and implement corrective actions and mitigation strategies designed to reduce improper and unknown payments. In FY 2025, VA performed an effectiveness review of the actions developed and implemented in FY 2024. The purpose of this review was to assess the appropriateness of corrective actions or mitigation strategies and whether the actions were effectively implemented and prioritized within the agency. The results for the Pension program indicated that of the two actions assessed, both were determined to be ineffective to mitigate the root cause. Despite that determination, the program reduced overall improper and unknown payments during FY 2024, as evidenced by FY 2025 testing results. Overall improper and unknown payments decreased from $518.58 million in FY 2024 to $354.48 million in FY 2025, a decrease of 31.64%. Errors tied to failure to access data/information decreased from $404.01 million in FY 2024 to $310.76 million in FY 2025, a decrease of 23.08%. Errors tied to inability to determine whether proper or improper decreased from $114.57 million in FY 2024 to $43.72 million in FY 2025, a decrease of 61.84%. The program continued to update corrective actions to address improper and unknown payments during FY 2025. VA will perform an effectiveness review in FY 2026 of the corrective action plans developed and implemented in FY 2025 due to the time needed to develop and implement actions as well as to impact the payment process. Results of this review will be reported in FY 2026.

VA updates corrective action plans annually based on testing results, and no less than quarterly throughout the FY, to ensure actions are appropriately prioritized and designed to mitigate risks of improper and unknown payments. VA monitors progress and results of implementation on a quarterly basis. Additionally, an effectiveness review is performed annually to measure if an action reduced or is properly designed to reduce improper and unknown payments for a specific root cause based on a set benchmark. The annual effectiveness review process allows VA to create or update actions as necessary to ensure continued progress in the remediation of improper and unknown payments. If areas for improvement are identified, VA conducts a root cause analysis to refine the program’s mitigation strategies to ensure they addressed and reduced root causes of error. The decrease in the improper payment and unknown payment rate from 13.85% in FY 2024 to 9.99% in FY 2025 and the $164.10 million reduction in improper and unknown payments supports the effective implementation and prioritization of action within the agency.

Payment type Mitigation strategies taken Mitigation strategies planned
Overpayments Audit, Automation, Training Audit, Automation, Training
Underpayments Audit, Automation, Training Audit, Automation, Training
Unknown payments Audit,Automation,Training Audit,Automation,Training

Eligibility element/information needed Description of the eligbility element/information
Dependency Describes who the recipient/beneficiary relies on as a primary source of support
Financial The financial position or status of a beneficiary, recipient, or their family
Receiving Benefits from Other Sources Beneficiary or recipient is receiving benefits from an additional source

Additional information

The Pension program continues to prioritize and implement corrective actions and mitigation strategies that reduce improper and unknown payments. From FY 2024 to FY 2025, Pension reduced its improper and unknown payment error rate from 13.85% to 9.99%. The reduction of 3.86% brought the program under the 10% compliance threshold established by the Payment Integrity Information Act of 2019. The program expects the continued positive impact of these actions on its FY 2026 improper and unknown payment rate.

Reduction target

9.54 %

VA continues to prioritize implementing appropriate corrective actions and mitigation strategies and has adequate funding to implement improvements
planned to internal controls, human capital, information systems, and other infrastructure, as needed, over VA’s payment processing and procurement
systems to continue reducing improper and unknown payments. VA is still actively reducing improper and unknown payments within its existing budget
authority. VA considers the reduction of improper and unknown payments a critical part of its financial stewardship efforts.

At this time, VA is not aware of additional program needs. VA has not requested additional resources in the most recent budget submission to establish
and maintain internal controls to reduce improper payments and unknown payments and maintain payment integrity.

This program was determined noncompliant in FY 2025 by the OIG and reported improper and unknown payments above the thresholds for a
compliance determination in FY 2026. In FY 2026, VA executive managers and program personnel will be focused on prevention and recovery of
overpayments as appropriate. VA’s executive managers to include the Executive Director, Pension and Fiduciary Service and program personnel will be
held accountable through annual performance criteria contained within their performance plans. Performance criteria will be unique to and inclusive of all
their duties. Depending on each employee’s responsibilities, duties can include preventing improper and unknown payments through effective internal
controls, recovering overpayments if appropriate, and implementing remediation efforts for known causes of improper and unknown payments. State and
local governments are not involved in the execution of this program.

$38.47 M