WASHINGTON - This isn't the same as getting a free duffel bag for being the millionth person to go through the turnstiles: The Veterans Affairs Department appears poised to have hit the one million milestone on claims it still hasn't processed.

This unwelcome marker approaches as the agency scrambles to hire and train new claims processors, which can take two years. VA officials are working with the Pentagon under orders from President Obama to create by 2012 a system that will allow the two agencies to electronically exchange records, a process now done manually on paper.

Meanwhile, veterans, some of whom were severely wounded in Iraq and Afghanistan, continue to endure financial hardship while their claims are processed. They wait more than four months on average for a claim to be processed, and appealing a claim takes a year and a half on average.

Adding to the backlog are factors ranging from the complexity of processing mental-health-related claims of Iraq veterans, to a change that made it easier for Vietnam veterans exposed to the Agent Orange herbicide to qualify for disability payments. The VA says it is receiving about 13 percent more claims than it did a year ago.

The VA's Web site shows the department has more than 722,000 claims and more than 172,000 appeals it currently is processing, for a total of about 900,000. That is up from about 800,000 total claims in January, according to the site.

Since early 2007, the VA has hired 4,200 claims processors and with that has seen improvements in the number of claims it is processing. It is also working to modernize its system.

Last year, Congress passed legislation that sought to update the disability rating process. A hearing yesterday by a House Veterans Affairs subcommittee was looking into whether the law's changes were being implemented and whether the VA would be able to handle a million claims.

Veterans advocates acknowledge there have been improvements in the claims process but say it still is too cumbersome. They say some injured veterans from the recent wars are paying bills with credit cards, pending their first disability payments.

"They keep talking about a seamless transition, but I can tell you I haven't seen it being very seamless," said John Roberts of Houston, who is national service director for the nonprofit Wounded Warrior Project.