Thursday, May 16, 2013

Changes to Disability Payments

Kristina Derro
Veteran Advocate
The federal government, in an attempt to address its long-term debt problem, has proposed changes to the way it calculates inflation for VA disability payments. Currently, government benefits (ex. VA disability benefits, Social Security benefits, etc.) are adjusted according to inflation. In an attempt to save some money, the government has endorsed using a slightly different measure of inflation to calculate Social Security benefits. This would allow the benefits to still grow, but at a slower rate.

The conventional Consumer Price Index (CPI) measures changes in retail prices of a constant market of goods and services. The Chained CPI (the variation that the government wants to utilize) considers changes in the quantity of goods purchased, as well as the prices of those goods. So, for example, if the price of steak goes up, many consumers will buy chicken, a cheaper alternative to steak, rather than buying less steak or going without meat.

Supporters of Chained CPI argue that it’s a truer indication of inflation. However, it tends to be less than the conventional CPI. Under the conventional CPI, disability payments increased 1.7 percent this year. Under Chained CPI, the disability payments would have only increased 1.4 percent. \

There has been talk by the government to apply this alternative inflation measure to VA disability payments for nearly 4 million veterans, as well as pension payments for 500,000 low income veterans and surviving families. However, veterans groups are rallying together to fight any potential change in the calculation. The argument is that the veterans have already suffered through their wounds and sacrifices while in service, and now they would be unduly burdened while they are trying to recover from those wounds. The groups are complaining that the government is attempting to balance a budget on the backs of disabled veterans, which is absurd given the administration’s history of generous funding for the VA.

No comments:

Post a Comment