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By Aliss Higham
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Thousands of veterans may have had their disability benefits delayed, missed or underpaid after the Department of Veterans Affairs (VA) wrongly classified documents as belonging to unidentified claimants, according to a new watchdog report.
In a report released this week, the VA Office of Inspector General (OIG) estimated that around 35,100 of more than 164,000 mail packets reviewed from July 2018 through March 1, 2025, had been incorrectly certified as “unidentifiable,” despite containing enough information for the Veterans Benefits Administration (VBA) to determine who they belonged to.
The mistakes potentially affected disability compensation and other VA benefits. The OIG estimated that veterans and other claimants were underpaid by at least $822,000, while warning that further underpayments were likely to exist.
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Additional cases examined from June and July 2026 showed no significant change from the watchdog’s original findings.
Disability payments from the VA provide financial support for veterans living with a broad range of physical and mental health conditions, such as chronic illnesses, mobility impairments, post-traumatic stress disorder and traumatic brain injuries.
Newsweek has contacted the VA for comment via email outside of regular working hours.
Thousands of Claims Potentially Affected
VA processes documents it receives as “mail packets,” which can include applications and supporting evidence submitted physically or electronically. When staff cannot match those documents to a claimant’s electronic claims folder, the packet can be classified as unidentifiable.
Incorrectly making that determination means evidence may not be taken into account when a claim is processed, potentially resulting in claims being delayed, denied or missed altogether, or claimants receiving less money than they should.
The OIG estimated that about 19,900 packets contained errors that could potentially affect a claimant’s benefits once properly processed. Of these, an estimated 3,800 contained claim forms that could have resulted in new or increased benefit awards if they had not been missed.
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Veteran Underpaid by Nearly $35,000
One case highlighted in the report involved a Vietnam-era veteran who submitted a disability compensation claim related to prostate cancer in June 2023.
His application included military discharge documents, medical records, his Social Security number and date of birth, information the OIG said should have allowed VA staff to identify him and establish an electronic claims folder. Nevertheless, the documents were marked unidentifiable.
The veteran applied again in February 2024 and was subsequently awarded a 100 percent disability rating, effective from that second filing.
The OIG found that the earlier mistake appeared to have left him underpaid by approximately $34,782, because his benefits were not dated back to his original June 2023 application.
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Another case involved a Vietnam-era veteran who applied for disability compensation for a lower back condition, high blood pressure, and diabetes due to Agent Orange exposure in February 2019. Although his application contained service dates and information about treatment at a VA medical center, his paperwork was ultimately classified as unidentifiable. The OIG later determined that information already held within VA systems could have been used to verify his identity.
His claim was eventually processed in March 2026 after the OIG alerted VBA to the case, amounting to a delay of almost seven years. The claim did not ultimately result in additional benefits.
Why Were the Errors Happening?
Investigators found shortcomings across several parts of VBA's mail-processing system.
According to VBA data reviewed by the OIG, 40 percent of claims assistants who could be assigned mail-processing work did not have phones to make calls that may be required when attempting to identify a claimant. Some employees also lacked access to databases they were expected to check.
VBA reported that 39 of 116 claims assistants did not have active access to one system used to view VA health records and identifying information. Two of four supervisors interviewed by investigators also said they lacked access.
The watchdog also found deficiencies in how staff documented their work and said VBA's quality-review process did not specifically assess the handling of unidentifiable mail. Staff had also not received dedicated mandatory national training on how to process these cases.
What Happens Next
The OIG issued five recommendations, including requiring staff to document each step taken before declaring mail unidentifiable, ensuring employees have access to necessary systems, improving the storage of communications with claimants and introducing dedicated quality reviews and mandatory training.
VBA concurred with the report's findings and agreed with four of the recommendations while agreeing in principle with the fifth.
The agency said it plans to update documentation requirements by September 30, 2027 and ensure employees have access to necessary systems by October 30. Dedicated training is targeted for January 2027, while mail-specific quality reviews are scheduled to be in place by July 2027.
The OIG said it would continue monitoring VBA's corrective actions, warning that until the problems are addressed, incorrect classifications could continue to cause underpayments and delayed or missed claims.
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