A federal watchdog warned lawmakers that the U.S. Department of Veterans Affairs needs to fully revise the 80-year-old criteria for awarding disability payments or risk miscalculating benefits for millions of veterans. The VA administers one of the nation’s largest disability compensation programs — providing $195 billion in compensation in fiscal year 2025. But criteria the VA developed in 1945 do not align with modern medicine, employment, and the impact of disabilities on a veteran’s earnings potential, the Government Accountability Office (GAO) testified at a subcommittee hearing of the House Veterans’ Affairs Committee Wednesday. Disability ratings in 2026 are based on physicians’ and lawyers’ judgments from 80 years ago about service-connected disabilities and average earnings losses from disabilities, according to findings in a GAO report issued Wednesday before the hearing. The report was titled “VA Disability Benefits: Progress Made but VA Decisions on Veterans’ Claims Continue to Be Based, in Part, on Outdated Criteria.” VA’s management of disability compensation claims has been on the GAO’s “High-Risk List” since 2003.

Read the GAO report here.