One Typo Cost the VA Millions... And They Can't Take It Back

Welcome back to Veterans Log. Today we are looking at a final rule issued by the Department of Veterans Affairs (VA) that corrects a significant error in the Servicemembers' Group Life Insurance Traumatic Injury Protection (TSGLI) program.
The VA is amending its regulations to fix an unintended change made to the Schedule of Losses. Specifically, this correction focuses on payments for an inability to perform at least two Activities of Daily Living (ADL) due to a traumatic injury other than a traumatic brain injury (referred to as Other Traumatic Injury or OTI).
Why was this correction necessary?
In March 2023, the VA published a rule that inadvertently changed the payment intervals for OTI. The error introduced shorter time periods for payments—specifically 15, 30, 60, and 90-day intervals—which were never intended for OTI. This final rule, which becomes effective on January 22, 2026, restores the original intended schedule.
The Restored Payment Schedule for OTI
Under the corrected regulation, the schedule for payments related to the loss of ADLs for OTI is as follows:
• 30 consecutive days of ADL loss: $25,000.
• 60 consecutive days of ADL loss: An additional $25,000.
• 90 consecutive days of ADL loss: An additional $25,000.
• 120 consecutive days of ADL loss: An additional $25,000.
Key Reasons for the Change
The VA and the Department of Defense (DoD) provided several reasons for restoring the longer timeframes:
• Financial Sustainability: An analysis showed that using shorter timeframes for OTI claims would have resulted in an additional $34.6 million in payouts over the last 10 years. This would have caused claims and expenses to exceed premium collections, putting upward pressure on the current $1.00 monthly TSGLI premium.
• Severity of Injury: The VA noted that while a 15-day loss of ADL due to a Traumatic Brain Injury (TBI) indicates a severe injury with lasting impact, a 15-day loss due to OTI often involves more temporary injuries, such as bone fractures or torn ligaments.
• DoD Feedback: The DoD was the first to identify the error and does not support the shorter payment intervals, arguing they are inconsistent with the program's long-standing rationale of basing payments on the severity and permanence of a loss.
Impact on Veterans and Servicemembers
This rule is considered a deregulatory action because it removes an unintended administrative burden. By restoring the intended schedule, the VA aims to prevent confusion and avoid the unnecessary reprocessing of claims or appeals that would occur under an inconsistent payment structure.
If you have questions about a claim, you can contact Samantha Yerdon, a Program Analyst with the Veterans Benefits Administration, at (215) 842-2000, ext. 5494.
To understand this correction, you can think of it like a safety valve on a boiler. By maintaining the correct time intervals for payments, the VA ensures the "pressure" on the program’s budget stays low, which keeps the "cost of fuel"—the $1 premium—affordable for every Servicemember while still providing critical support for the most severe injuries.
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