Cut First, Notify Never: A 34% Error Rate in Disability Reductions

Before the VA cuts a veteran’s disability pay, the law requires notice and 60 days to respond. Reviewing 2024 reductions, the OIG estimated errors in 9,300 of 27,100 cases — $16.9M improper, with $964K more accruing monthly.

An "adverse action" is the VA moving to reduce or sever a veteran’s disability compensation. Because the money is often the veteran’s livelihood, the law builds in due process: notice, and 60 days to submit evidence before the cut lands.

The OIG projected from sampled 2024 cases that processors made one or more errors in about 9,300 of 27,100 adverse actions — roughly a third. The errors were not technicalities: insufficient due-process notification, outdated rating codesheets, wrong effective dates, and adverse actions proposed but never finalized, with some claims closed prematurely in both the 2024 and 2025 samples.

The dollar estimate runs in both directions, as these errors do — veterans improperly paid at least $16.9 million on 2024 cases, while other veterans faced cuts processed without the notice the law guarantees them. At least $964,000 more in improper payments accrues every month the errors sit unresolved. VBA concurred with the OIG’s four recommendations in July 2026.

"claims processors made one or more errors in about 9,300 of 27,100 cases"
— VA OIG

Source: VA OIG — Review of VBA’s Processing of Adverse Actions for Service-Connected Disability Compensation. Part of the VA Fraud library — see also the case files for the prosecutions these systems produced.