Impact of Offsetting Earnings From VA's Work Therapy Programs From Veterans' Pensions

HRD-85-97: Published: Aug 27, 1985. Publicly Released: Aug 27, 1985.

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Pursuant to a congressional request, GAO conducted a study to determine the impact of offsetting income that veterans earn from the Veterans Administration's (VA) work therapy programs against their pension benefits.

Veterans that participate in two of the VA work therapy programs, incentive therapy and compensated work therapy, are paid wages based on their ability to function and work. Until 1978, the income they earned under these programs was not used to determine pension benefits. Legislation provided that all income from any nonexempt source would be counted and used to determine entitlement to and level of pension benefits. Although the number of veterans affected was small, the offset had detrimental effects and resulted in: (1) veterans being rehospitalized because of mental and emotional factors; (2) outpatient pensioners that could no longer afford to live in the community; (3) outpatients leaving the programs; (4) new outpatients refusing to participate in the programs; and (5) VA counselors not referring new outpatients to the programs. Therefore, due to the work therapy offsets, the programs were losing their theraputic value for many of the outpatient pensioners.

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