An investigation by the VA Office of Inspector General revealed that a flawed automated benefits system mishandled nearly all processed Dependency and Indemnity Compensation survivor claims.
“VA OIG, the Office of Inspector General, included a review of 8,100 cases of these automated DIC decisions and found that in 8,000 of them there were errors. So, this is essentially every case,” said Claire Hillan Sosa, a Senior Disability Attorney with Deuterman Law Group, which has offices in Greenville.
She said the mishandled DIC cases contained legal or procedural errors, causing a wave of incorrect notification letters, missing evidence summaries, and millions in improper financial distributions.
“I think technically some of them are AI, some of them are not,” Hillan Sosa explained, “They use various rule-based systems to do some initial screening processes. One of the ones that they implemented a few years back is one that was actually making decisions in these cases that we call DIC claims. It's Dependency and Indemnity Compensation.”
OIG said flaws in predefined system rules led the software to wrongfully approve at least $2.7 million in overpayments to unverified or unqualified applicants. In one instance, the system automatically paid out more than $22,000 to a family after attributing a veteran’s death to a service-connected condition without checking for any required medical evidence.
“They highlighted one case where the system granted service connection for a cause of death based on hypertension due to the veteran having been service-connected for hypertension at the time of their death, but the cause of death on the death certificate was actually pulmonary hypertension, which is a different condition,” Hillan Sosa said.
Nearly all issued award letters, 98% of them, omitted legally required favorable findings or failed to properly summarize the case evidence used, and Hillan Sosa said that severely limited transparency for grieving families. “There's a whole checklist under the law of the things that VA decisions have to include,” she said. “And a great deal of these decisions made by the automated system did not include those things.”
While the audit focused on overpayments, Hillan Sosa warns that the same blind system introduces a severe risk of incorrectly rejecting or underpaying valid claims. “If you were denied DIC during this time period or any time period, and the notice you received did not include one of those items that are legally required, then actually that decision is not a final decision and your claim technically still remains pending,” she said, “So, you could, in one of those instances, ask VA to make that decision now with the proper notice … and if it's denied, then you still have the opportunity to appeal and keep alive that effective date based on your initial claim.”
For spouses or family members who were mistakenly granted survivor benefits, she says it’s critical to look into the issue immediately because, “VA may attempt to begin proposing to sever DIC, so taking away the benefits that they granted for these surviving family members of veterans. In those cases, those family members will have due process rights. So, it's very important to become aware of those, look for letters in the mail and make sure that you're exercising those rights because you do only have a limited time period to request a due process hearing if VA wants to take away your benefits.”
While it’s not absolutely certain, Hillan Sosa said it’s unlikely that the government will try to claw back money that has already been paid out. She said, “Usually, if an error is made because of VA's administrative mistake, VA would not create a debt on the account. Usually, that is just VA money lost because they messed up.”
Still, she suggested that anyone impacted by the VA’s mistakes should not try to go it alone. Hillan Sosa said, “If you were denied DIC in the past five years or so, then I would recommend seeking help from a VSO or an accredited attorney or agent representative who can take a close look at that denial letter to see if maybe your claim is actually still going and whether you can appeal that now.”
A related federal review of broader automated pension systems found underpayment rates hitting as high as 16 percent for specific burial and transportation benefits due to premature system rejections.
