When 70-year-old Ruby Sasaoka's husband Raymond died in December of last year, she spent their last check from the Veterans Administration on his funeral expenses.

Then in January, the Veterans Administration told her she wasn't entitled to the $2,669 for his December pension and disability check.

“;I thought they were right because he passed away,”; she said. She started to repay the money.

But Sasaoka was surprised when her checks started bouncing in September and her bank account had no funds. She found the U.S. Treasury seized the entire amount of her husband's last check.

Sasaoka, a retired state employee, wrote to U.S. Sen. Daniel Akaka, chairman of the Veterans Affairs Committee.

That letter led to the discovery that surviving spouses of war veterans have been wrongfully denied up to millions of dollars in government benefits over the past 12 years.

Congress passed a law in 1996 giving veterans' spouses the right to keep their partners' final month of benefits. It instructed the VA to make changes as needed to comply with the law, which took effect for spouses of veterans who died after Dec. 31, 1996.

But the VA never updated its automated computer systems, which send out checks and notification letters. As a result, widows or widowers were either denied the final month of payment or asked to send the checks back. In many cases, if the checks were already deposited or spent, the U.S. Treasury moved to seize the money directly from their accounts.

Akaka confronted VA Secretary James Peake about the problem in a letter last week after receiving Sasaoka's complaint. In response, Peake instructed the Veterans Benefits Administration to update its systems as quickly as possible to prevent future denials of benefits.

“;This problem must be fixed,”; Peake said. The department indicated in an “;action plan”; provided to the Associated Press that up to millions of dollars in back payments could be given to the surviving spouses sometime after next February, once it can identify them.

The Veterans Affairs Department said yesterday it wasn't fully aware of the problem. It pledged to work quickly to give back the pension and disability checks - ranging from $100 to more than $2,500 - that hundreds of thousands of widows or widowers should have received during the month of their spouse's death.

“;This flawed practice has caused serious hardship for many widows,”; Akaka said yesterday. “;Now that this problem has been brought to light, I trust that surviving spouses will receive the benefits they are due.”;

The VA has yet to identify the exact number of widows or widowers affected, but acknowledged it could be “;sizable.”; Akaka's committee estimates that 50,000 surviving spouses each year since 1996 could be affected, based on VA numbers indicating more than 100,000 veterans die each year - some of whom may have been single or divorced - while receiving VA benefits.

Out of that 50,000, some spouses might have received the payments they were due if they called the VA at the time to inquire about their rights.

The disclosure comes as the VA is scrambling to upgrade government technology systems before new legislation providing for millions of dollars in new GI education benefits takes effect next August. Thousands of veterans currently also endure six-month waits for disability benefits, despite promises by Peake and his predecessor, Jim Nicholson, to reduce delays.

President-elect Barack Obama has pledged to “;fix the benefits bureaucracy”; at the VA. Last week, he named retired Gen. Eric K. Shinseki, a former Army chief of staff and Kauai native, to be the next VA secretary.

Sasaoka, whose letter led to the discovery of the problem, said at the time she thought she was the only one with a problem.

“;I'm glad Sen. Akaka is doing things for the widows,”; she said. “;There's so much pain and suffering, besides losing somebody you love, to have to go through something like this.”;

Her husband of 51 years, Raymond Sasaoka, was an Army corporal, who served in the Korean War and suffered from post-traumatic stress disorder and hearing loss.

“;I was just astounded,”; she continued. “;You think the government has it under control and they really don't.”;