John Plahovinsak
A recent Department of Veterans Affairs (VA) Office of Inspector General (OIG) Report, issued on May 29, 2025, revealed that the Veterans Benefit Administration (VBA) Special Monthly Compensation (SMC) Calculator for Rating Disability Compensation did not always produce accurate results.
The errors initially found by the OIG (in October of 2024) resulted in monthly underpayments to disabled veterans of $132.74 to $4,170.59, as well as monthly overpayments to disabled veterans of $373.18.
If disabled veterans were SMC-rated between 2017 to 2024, they could have been underpaid or overpaid. The VBA stated it would retest its calculations by July 31, 2025.
The VBA provides tax-free monthly compensation payments to veterans in recognition of their disabilities incurred while in military service. This is disability compensation, known as service-connected disabilities.
In addition to these disability ratings, the VBA awards special monthly compensation (SMC) for certain disabilities or a combination of disabilities.
There are several SMC levels, and they are generally referred to by letters, such as: “K”, “L”, “M”, “N” and “O”. These letters correspond to the sections of the law (contained in 38 U.S.C. of Section 1114) establishing the specific payment amount. The VBA errors occurred in “L” through “O” calculations.
For example, a disabled veteran with the loss of use of both feet and one hand should have received SMC for “K” and “M,” in addition to their monthly compensation earned by their service-connected disability rating.
Another example would be a disabled veteran with 5/200 vision in one eye and only light perception in the other eye should qualify for SMC “L ½”. The monthly loss, if not calculated correctly, should be $1,153.65 in addition to their compensation earned by their service-connected disability rating.
According to the OIG Report, the VBA utilized two versions of an SMC calculator to help claim processors identify the correct SMC levels and the corresponding veteran’s payment rate.
According to the OIG Report, comprehending the SMC is a difficult subject for VBA claims processors to learn and correctly apply. The first version of the SMC calculator is called the “Legacy Calculator,” and the second version was called the “Veterans Benefits Management System for Rating” or the VBMS-R.
The errors occurred in certain situations when the SMC VBMS-R Calculator was utilized. The OIG recommended that the VBMS-R Calculator be disabled in October of 2024 and only the “Legacy Calculator” be used by the VBA. The VBA complied with the OIG recommendations.
The OIG Report concluded that the VBA’s SMC Calculator is an important tool intended to help claims processors make accurate decisions on complex claims for severely disabled veterans.
The SMC’s VBMS-R version offers additional functionality that can make it more user-friendly than the Legacy Calculator version. However, it is critical that the VBMS-R calculator function properly and produce accurate results.
By fixing the errors identified in this review and conducting additional testing to confirm the accuracy of the VBMS-R calculator, VBA can ensure it serves its intended purpose and that veterans receive all benefits to which they are entitled.
My Opinion: The OIG has identified that the SMC VBMS-R Calculator was flawed in making determinations for the financial compensation of veterans.
The OIG’s estimate ranged from monthly underpayments of $132.74 to $4,170.59.
The OIG should be commended for finding this error and taking action to ensure that it does not occur again. The VA stated they would retest every disabled veteran who fell into the classification of receiving SMC payments in the categories of “L” through “O” of the 38 United States Code.
This is being done to ensure that the compensation received is accurate. This should be accomplished, according to the VA, by July 31, 2025.
If the veterans that are receiving Special Monthly Compensation (SMC) and are in the categories of “L” through “O” between the timeframe of 2017 to 2024 want to verify the accuracy of the corrective action, they should contact their veteran service organization (V.S.O.) that submitted their disability claim to the VBA.
BioSketch: John Plahovinsak is a 32-year retired Army veteran who served from 1967 to 1999. He is the Disabled American Veterans (DAV) Department of Ohio’s Hospital Chairman and Adjutant of DAV Chapter #63 (Clermont County). He can be reached at: [email protected].
Subscribe to The Clermont Sun today!
https://www.clermontsun.com/subscribe