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M21-1, Part III, Subpart v, Chapter 3, Section A – Apportionment Process

Overview


In This Section

This section contains the following topics:
Topic
Topic Name
1
2
3
4

1.  General Information on Apportionments


Introduction

This topic contains general information on apportionments, including

Change Date

February 19, 2019

III.v.3.A.1.a.  Apportionment of a Competent Primary Beneficiary’s Benefits

In order for a claimant to receive an apportionment of a competent primary beneficiary’s benefits, the claimant must
If the requirements above are met and the primary beneficiary will not suffer undue hardship, the Department of Veterans Affairs (VA) may authorize an apportionment of the primary beneficiary’s benefits to be paid to the claimant.
Important:
  • VA’s primary obligation is to the Veteran.  Even if the claimant demonstrates a need, VA may not impose undue hardship on the Veteran.
  • The requirement that a claimant file a claim for apportionment on VA Form 21-0788 went into effect on March 24, 2015. If a claimant requests an apportionment on or after that date on anything other than a VA Form 21-0788,

III.v.3.A.1.b.  Who May Receive an Apportionment of a Competent Primary Beneficiary’s Benefits

An apportionment may be paid to
  • an estranged spouse and child
  • children in an estranged spouse’s custody
  • a child or children not living with the primary beneficiary or surviving spouse and to whom the primary beneficiary or surviving spouse is not reasonably contributing, or
  • a dependent parent (in compensation cases).
Important:  VA may apportion benefits to a dependent, even if the dependent is not on the beneficiary’s award, as long as the dependent’s relationship to the Veteran, on whose service the award is based, is properly established.  However, VA cannot add such a dependent to the award unless the beneficiary submits the appropriate form.
Example:  A Veteran is receiving compensation as a single Veteran evaluated as 50-percent disabled.  An ex-wife submits a claim for an apportionment on behalf of her 10-year old boy in her custody.  She submits a certified birth certificate showing the Veteran is, in fact, the biological father of the child.
Analysis:  Even though the Veteran is not currently receiving additional benefits for the child, and regardless of whether or not the Veteran submits the appropriate form to add the child to his award, VA may apportion benefits for the child because
  • the relationship to the Veteran is properly established, and
  • there is no indication the Veteran has given up the child for adoption.
References:  For more information on

III.v.3.A.1.c. Circumstances Under Which an Apportionment Is Not Payable

The table below contains a description of the circumstances under which 38 CFR 3.458 prohibits the apportioning of a primary beneficiary’s benefits.
Circumstance
Additional Information
  • The total benefit payable to the primary beneficiary is so small that it does not allow payment of a reasonable amount to any apportionee.
  • The amount available for apportionment is so small that it would do little or nothing to mitigate the apportionee’s need.
  • 38 CFR 3.458 requires a subjective assessment of the apportionment’s impact on theclaimant’s financial status.
  • 38 CFR 3.451 suggests that apportionment of less than 20 percent of a Veteran’s benefits may not constitute a “reasonable amount.”
The Veteran’s spouse, who is requesting an apportionment, has been found guilty of conjugal infidelity by a court having proper jurisdiction.

The Veteran’s spouse, who is requesting an apportionment, has lived with another person and held himself/herself out openly to the public to be the spouse of another person.
Exception:  The spouse entered into the relationship with the other person in good faith, believing that the marriage to the Veteran had been legally terminated.  Under this set of circumstances, however, VA may apportion benefits to the spouse only if
  • there has been a reconciliation between the Veteran and his/her spouse, and
  • later the Veteran and his/her spouse become estranged.
  • A Veteran entitled to disability compensation, who is estranged but not divorced from his/her spouse, remains entitled to benefits as a married Veteran
  • A Veteran entitled to pension, who is estranged but not divorced from his/her spouse, remains entitled to benefits as a married Veteran as long as he/she is contributing to the spouse’s support.
  • Special attention must be paid to claims for an apportionment from an estranged spouse or a spouse for whom a Veteran entitled to Veterans Pension is not receiving additional benefits, as it could adversely affect the rate of the Veteran’s benefits, as explained in M21-1, Part V, Subpart iii, 1.F.2.n.
The Veteran has given up a child for adoption.
Exception:  In certain, limited situations, VA may apportion Veterans Pension to a child whom a Veteran has given up for adoption.
  • 38 CFR 3.458(d) prohibits the apportioning of a Veteran’s benefits to a child that the Veteran has given up for adoption.
  • See M21-1, Part III, Subpart iii, 5.G.5.b regarding the effect of the adoption of a Veteran’s child on the Veteran’s entitlement to Veterans Pension.
  • VAOPGCPREC 16-1994describes conditions that may warrant an apportionment of Veterans Pension to a child that a Veteran has given up for adoption.
  • 38 CFR 3.58 prohibits the payment of additional disability compensation for a child that a Veteran has given up for adoption.
  • See M21-1, Part III, Subpart iii, 5.G.5 for more information about cases involving a child that has been given up for adoption.
Note:  According to 38 CFR 3.450(c), a claim for an apportionment must be submitted by or on behalf of a dependent for whom the primary beneficiary is notproviding reasonable support.  VA does not apportion benefits to a dependent as a convenience on the part of the primary beneficiary.  Per 38 CFR 3.106, the primary beneficiary may not request a portion of his or her benefits not be paid in order to allocate those benefits to another person.

III.v.3.A.1.d.Requesting an Apportionment Application From a Claimant

The table below contains instructions for requesting an apportionment application from a claimant.
Step
Action
1
Can the Veterans Benefits Management System (VBMS) or Letter Creator tool be used to generate the letter that requests completion of an application for an apportionment?
  • If yes, proceed to the next step.
  • If no, proceed to Step 8.
2
  • If VBMS will be used to generate the letter, proceed to the next step.
  • If Letter Creator will be used to generate the letter, proceed to Step 6.
3
Use VBMS to establish end product (EP) 400, with the claim labelRequest for Application – Apportionment.
4
When the RFA LETTER INFORMATION dialog box appears, select the Request for Application – Apportionment letter template from the drop-down list at the bottom of the dialog box.
Reference:  For more information about generating letters in VBMS, see the VBMS User Guide.
5
  • Finalize the letter and submit it for centralized printing and mailing via Package Manager, according to the instructions in the Talent Management System (TMS) course titledCentralized Benefits Communications Management(4415957).
  • Disregard the remaining steps in this table.
6
Use Share to establish EP 400, with the claim label Request for Application.
7
Use Letter Creator to generate the letter titled Request for Application – Apportionment then proceed to Step 11.
8
Use Share to establish EP 400, with the claim label Request for Application.
9
Copy all of the text from the letter shown in M21-1, Part III, Subpart v, 3.A.1.e.
10
Paste the text referenced in Step 9 into a blank letter.
11
Does the Veteran from whose benefits the claimant is seeking an apportionment have an electronic claims folder (eFolder)?
  • If yes, proceed to Step 14.
  • If no, proceed to the next step.
12
Print and mail the letter to the claimant and, if necessary, his/her authorized representative.
13
  • File a copy of the letter in the Veteran’s paper claims folder.
  • Disregard the remaining steps in this table.
14
Access the Veteran’s eFolder in VBMS.
15
Upload the letter referenced in Step 7 or Step 10 (whichever applies) into the Veteran’s eFolder.
Note:  When uploading the letter, leave the SUBJECT field blank and enter
  • Correspondence – Miscellaneous: Report of Contact in the CATEGORY TYPE field
  • VBMS in the SOURCE field
  • EP 400 Request for Application in the ASSOCIATE TO field, and
  • the date of receipt of the request for an apportionment in the DATE OF RECEIPT field.
Reference:  For more information about uploading documents into an eFolder, see the VBMS User Guide.
16
Submit the letter for centralized printing and mailing via Package Manager, according to the instructions in the TMS course titledCentralized Benefits Communications Management (4415957).

III.v.3.A.1.e.  Text for Letters That Request an Apportionment Application From a Claimant

Use the text below when preparing a letter (without using VBMS or Letter Creator) that requests an apportionment application from a claimant.
Dear [Enter claimant’s first and last name.]:
We received your correspondence indicating that you would like to file a claim for an apportionment. VA regulations now require all claims to be submitted on a standardized form.
What Should You Do?
In order for us to begin processing your apportionment claim, you must submit a VA Form 21-0788, Information Regarding Apportionment of Beneficiary’s Award. We will take no further action until we receive your completed application. To locate the appropriate form(s), please visit the following website: http://www.va.gov/vaforms.
If You Have Questions or Need Assistance
[Add the domestic or foreign address table.]
[Add the Veterans service organization paragraph.]
Thank you,
Regional Office Director
Enclosure(s): Where to Send Your Written Correspondence

III.v.3.A.1.f.  Handling a Beneficiary’s Assertion That a Child Does Not Meet the Definition of a Child Under 38 CFR 3.57

If a claim for an apportionment involving a child is pending, and the beneficiary from whose benefits an apportionment may be paid asserts the child does not meet the definition of “child” under 38 CFR 3.57, follow the instructions in the table below.
Example:  A male Veteran whose benefits are subject to apportionment for a child submits a statement asserting that he did not father the child.
Step
Action
1
Is additional evidence required to establish that the child cannot be recognized as a child for VA purposes?
  • If yes, proceed to the next step.
  • If no, proceed to Step 5.
Examples:
  • Additional evidence might be required if the only evidence of record is a statement from a male Veteran that he did not father a child-apportionee.
  • Additional evidence might not be required if the evidence of record includes the results of a paternity test.
2
Ask the beneficiary to provide additional evidence that supports his/her assertion. Allow the beneficiary 30 days to respond.
3
Did the beneficiary respond within 30 days?
  • If yes, proceed to the next step.
  • If no,
    • continue processing the claim for apportionment, and
    • disregard the remaining steps in this table.
4
Did the beneficiary provide evidence that is sufficient to establish that the child in question does not meet the definition of “child” under 38 CFR 3.57?
  • If yes, proceed to the next step.
  • If no,
    • continue processing the claim for apportionment, and
    • disregard the remaining steps in this table.
5
Deny the claim for apportionment of benefits to or for the child.
6
Notify both the beneficiary and claimant of the decision, according to the instructions in M21-1, Part III, Subpart v, 3.A.3.k.
Note:  If VA is already apportioning benefits to or for a child, and the primary beneficiary asserts the child does not meet the definition of “child” under 38 CFR 3.57, follow the instructions in M21-1, Part III, Subpart v, 3.B.6.g.

III.v.3.A.1.g.  Apportionment of Survivors Benefits

In addition to Veterans disability benefits, VA may also apportion survivors benefits (if the evidence of record supports such an action).
The provisions in M21-1, Part III, Subpart v, 3.A.3 for awarding or denying an apportionment claim and notifying the primary beneficiary and claimant apply equally to Survivors Pension cases.  M21-1, Part III, Subpart v, 3.C.1 outlines special provisions for handling apportionments of other types of survivors benefits.
Notes:
  • According to M21-1, Part IV, Subpart iii, 3.A.1.b, VA may pay survivors benefits to children of a Veteran, as an apportionment, pending resolution of the issue of of a surviving spouse’s eligibility.
  • Children that are not in a surviving spouse’s custody are not eligible for an apportionment.  They may, however, be entitled to Survivor’s Pension in their own right, according to M21-1, Part V, Subpart iii, 1.E.4.a.

Reference:  For more information on the apportionment of survivors benefits, see


III.v.3.A.1.h.  References to Information About Unique Types of Apportionment Cases

Subject to the restrictions of 38 CFR 3.458, all or part of a primary beneficiary’s benefits may be apportioned in the unique types of cases listed in the table below.
If the case involves …
Then refer to …
an incompetent Veteran
a Veteran who has disappeared
an incarcerated Veteran
an incarcerated surviving spouse
forfeiture

III.v.3.A.1.i.  Restriction on the Concurrent Payment of Education Benefits and Apportioned Benefits

Use the table below to determine if the payment of VA education benefits (under 38 U.S.C. Chapter 33 or Chapter 35) to an apportionee precludes him/her from receiving an apportionment of the primary beneficiary’s benefits.
If the apportionee is a …
Then the payment of VA education benefits …
Reference
spouse
does not preclude the spouse from concurrently receiving an apportionment of a Veteran’s benefits.
See
  • child under age 18, or
  • child age 18 or older who is permanently incapable of self-support
does not preclude the child from concurrently receiving an apportionment of the primary beneficiary’s benefits, if the individual case warrants this action.
Note:  A special restorative training allowance may also be paid concurrently with compensation, DIC, or pension.
See

child age 18 or older who is capable of self-support
precludes the child from concurrently receiving an apportionment of the primary beneficiary’s benefits.
Note:  The child must elect which benefit he/she wants to receive. If the child elects VA education benefits, he/she is no longer eligible for an apportionment of the primary beneficiary’s benefits.
Exception:  There is noprohibition against the concurrent payment of an apportionment and VA education benefits under 38 U.S.C. 3319. There was also no prohibition if
  • the education benefit was payable under 38 U.S.C. 3311and
  • the child began a program of education under this statute priorto August 1, 2011.
See


III.v.3.A.1.j.  Disclosing Information in the Claims Folder to the Primary Beneficiary and/or Claimant

Upon request of either of the following individuals, disclose information in the claims folder that affects the payment or potential payment to a claimant for apportionment:
  • the primary beneficiary, and/or
  • the claimant for an apportionment of the primary beneficiary’s benefits.
However, when the Privacy Act forbids a total disclosure of correspondence or other submissions from either party to the other, separately furnish the information that is vital to the decision to be made.
Example:  “Information that is vital to the decision” usually includes the income and expenses of each party.

2.  Developing an Apportionment Claim


Introduction

This topic contains information on developing for evidence in order to make a decision as to whether an apportionment is appropriate, including

Change Date

December 17, 2018

III.v.3.A.2.a.  Determining Whether a Bar to Apportionment Exists

Following receipt of a claim for apportionment,
Notes:
 Reference:  Bars to apportionments are discussed in

III.v.3.A.2.b.  Actions to Take When No Bar to Apportionment Exists

If there is no bar to apportionment,
  • establish EP 600, Apportionment Due Process, under the primary beneficiary’s name, with a suspense date that expires 65 days in the future
  • follow the instructions in M21-1, Part III, Subpart v, 3.A.2.c, and
  • send development letters that include the content described in M21-1, Part III, Subpart v, 3.A.2.d to the
    • primary beneficiary, and
    • apportionment claimant.
Note:  Do not deny a claim for apportionment without undertaking developmentsimply because the Veteran has only a 10- or 20-percent disability rating.  Without knowing the income and expenses of the claimant and the Veteran, it is practically impossible to determine whether a reasonable amount of benefits may be apportioned to the claimant.

III.v.3.A.2.c.  Estimating the Amount of Benefits VA Should Withhold for an Apportionment

Before taking the actions described in the remaining blocks of this topic, it is necessary to estimate the amount of benefits VA should apportion to the claimant.  As discussed in M21-1, Part III, Subpart v, 3.A.2.f, the estimated amount of the apportionment will tentatively be withheld from the primary beneficiary’s award pending a final decision on the apportionment claim.
Claims processors must make the estimate described in the above paragraphwithout the benefit of the evidence and information they request from the claimant and primary beneficiary per the instructions in M21-1, Part III, Subpart v, 3.A.2.dand e.
When making the estimate, claims processors must
  • consider the additional amount VA pays the primary beneficiary for dependents
  • apply the provisions of 38 CFR 3.451, which recommends apportionments in an amount between 20 percent and 50 percent of a Veteran’s benefits, and
  • bear in mind that when making a final decision on an apportionment claim, claims processors may only apportion an amount that is equal to or less than the estimated amount.  They may not apportion a greater amount without
    • issuing another notice of proposed adverse action to the primary beneficiary, and
    • allowing the primary beneficiary 65 days to respond.
Reference:  For information on making a final decision on an apportionment claim, see M21-1, Part III, Subpart v, 3.A.3.a.

III.v.3.A.2.d.  Required Development Following Receipt of an Apportionment Claim

Following receipt of an apportionment claim, prepare development letters for both the claimant and the primary beneficiary that include the content described in the table below.
Recipient
Required Content
primary beneficiary
  • Inform the beneficiary of the allegations of need that the claimant made.
  • Ask the beneficiary to
    • complete and return VA Form 21-0788, and
    • explain any hardship he/she would suffer if VA granted an apportionment.
  • Inform the beneficiary that if he/she is not contributing to the support of the claimant, the beneficiary must provide an explanation for making no contributions.
Notes:
  • If the beneficiary is providing no support and fails to provide an explanation for not doing so, make a decision that is based on the other evidence of record.
  • If a conflict arises regarding the amount of support the primary beneficiary provides to the claimant, ask the primary beneficiary to submit proof of his/her contributions, such as cancelled checks and/or receipts.
claimant (or claimant’s custodian, if applicable)
  • If a completed VA Form 21-0788 from the claimant is not already of record (because the claimant filed his/her claim prior to March 24, 2015), ask the claimant to complete and submit the form.
  • Ask the claimant to describe what hardships he/she would suffer if VA denied the apportionment.
Notes:
  • Once completed, VA Form 21-0788 provides VA with information about the net worth and monthly income and expenses of the
    • primary beneficiary
    • claimant, and
    • claimant’s custodian, if applicable.
  • Consider individual household income and expenses when determining
    • whether an apportionment would create a financial hardship on the primary beneficiary
    • whether the claimant has a financial need for the apportionment, and
    • (if the claim for apportionment is granted) the amount of benefits VA should apportion.
Reference:  For more information about the evidence VA considers when deciding an apportionment claim, see 38 CFR 3.451.

III.v.3.A.2.e.  Time Limits for Responding to a VA Request for Evidence/ Information From the Primary Beneficiary and Claimant

Concurrent with the actions described in M21-1, Part III, Subpart v, 3.A.2.d, notify
  • the claimant that he or she must respond within 30 days
  • the primary beneficiary that he or she must respond within 60 days, and
  • both the claimant and primary beneficiary that a decision will be made after expiration of the specified time limit based on the evidence of record, unless an extension of the time limit is required for good cause.
In addition, inform the primary beneficiary
  • of the amount and effective date of any interim withholding
  • of the statutory authority for granting an apportionment (38 U.S.C. 5307)
  • of the effective date from which an apportionment may be made on the basis of the pending claim (38 CFR 3.400(e)), and
  • that the amount of his/her award will be reduced by the monthly amount of the apportionment authorized.
Note:  Consider the following when choosing an effective date under 38 CFR 3.400(e):
  • The granting of an apportionment on an original claim occurs when VA receives the request for an apportionment before it begins paying disability or survivors benefits to the primary beneficiary.
  • The granting of an apportionment on an other-than-original claim occurs when VA receives the request for an apportionment after it begins paying disability or survivors benefits to the primary beneficiary.

III.v.3.A.2.f.  Establishing the Estimated Withholding

After taking the actions described in the previous blocks of this topic, amend the primary beneficiary’s award by establishing a withholding of the estimated amount of the apportionment, effective the first of the month following the month in which the primary beneficiary’s response period (for the notice described in M21-1, Part III, Subpart v, 3.A.2.d and e) ends.
Example:  An estranged spouse files an apportionment claim on April 17.  The development letters are released on May 22.  The withholding is effective August 1.
Note:  Do not change the dependency status in the corporate record until final action is taken to grant the apportionment.
Reference:  For detailed instructions on processing awards and adjustments in

III.v.3.A.2.g.  Handling a Request for a Hearing

If, within 30 days of the release of the notice of VA’s proposal to withhold benefits from a primary beneficiary’s award, the primary beneficiary requests a hearing, and a final decision cannot be made before the end of the 65-day control period, amend the effective date of the withholding so that payments to the primary beneficiary are not reduced until after a final decision on the apportionment claim is made.
Note:  Since a hearing is a form of development for evidence in conjunction with a claim, leave the controlling EPs pending until the final decision is made.

3.  Deciding an Apportionment Claim and Notification of a Decision on an Apportionment Claim


Introduction

This topic contains information on deciding an apportionment claim and notifying the primary beneficiary and claimant of the decision, including

Change Date

February 19, 2019

III.v.3.A.3.a.
Actions to Take Following Expiration of the Claimant’s 30-Day Response Period

After sending a claimant a request for evidence or information, follow the instructions in the table below after the claimant’s 30-day response period expires.
If the claimant…
Then …
responds within 30 days, but the evidence fails to demonstrate a hardship on the part of the claimant
  • make an administrative decision based on the claimant’s response and any other pertinent evidence of record
  • deny the pending claim
  • clear the pending EPs, and
  • send notification of the decision to the claimant and beneficiary.
does not respond within 30 days and/or the evidence of record fails to demonstrate a hardship on the part of the claimant
  • make an administrative decision based on the evidence of record
  • deny the pending claim
  • clear the pending EPs, and
  • send notification of the decision to the claimant and beneficiary.
provides evidence demonstrating a hardship on the part of the claimant but
  • the suspense date of the EP 600 has not passed, and
  • the beneficiary has not yet responded to the corresponding notice of proposed adverse action
  • adjust the suspense date of the EP 130 so it matches the suspense date of the EP 600, and
  • take no further action until the earlier of the following events:
    • the beneficiary responds to the notice of proposed adverse action, or
    • the suspense date of the EP 600 passes.
furnishes evidence of a hardship but payment of an apportionment will create a hardship for the beneficiary (Veteran or surviving spouse)
  • make an administrative decision based on
    • the evidence received (if bothparties respond within 65 days), or
    • the evidence of record (if only one or neither party responds within 65 days)
  • deny the pending claim
  • clear the pending EPs, and
  • send notification of the decision to the claimant and beneficiary.
Important:  Do not deny an apportionment claim on the basis that granting the claim would create a hardship for the primary beneficiary unless the primary beneficiary completed and returned VA Form 21-0788.
furnishes evidence of a hardship and the evidence of record fails to demonstrate a hardship on the part of the beneficiary (Veteran or surviving spouse)
  • make an administrative decision based on
    • the evidence received (if bothparties respond within 65 days), or
    • the evidence of record (if only one or neither party responds within 65 days)
  • grant the pending claim
  • clear the pending EPs, and
  • send notification of the decision to the claimant and beneficiary.
Note:  VA may pay an apportionment to a claimant before expiration of the 65-day period referenced in the table above as long as doing so will not adversely impact benefits to which the beneficiary (Veteran or surviving spouse) is entitled.

III.v.3.A.3.b.  Considering Evidence VA Receives After Making a Decision But Before the Due-Process Period Ends

Follow the instructions in the table below when
  • VA decides an apportionment claim before the end of the 65-day due-process period that is afforded the beneficiary, and
  • VA receives new evidence after making the decision but before the end of the 65-day due-process period.
If the new evidence …
Then …
will change the outcome of the decision
prepare a new apportionment decision.
will not change the outcome of the decision
  • annotate the evidence to reflect that it does not affect the decision, and
  • notify the beneficiary and claimant that VA considered the new evidence but did not conclude that a revision of the prior decision was in order.
Note:  To annotate the evidence in VBMS, add the annotation in the SUBJECT field under DOCUMENT PROPERTIES.

III.v.3.A.3.c.  Determining the Amount of an Apportionment

After making a decision to apportion benefits, determine the amount to apportion from an equitable assessment of any hardship or demonstrated need on the part of the primary beneficiary and the claimant.  Consider such factors as
  • the amount of VA benefits available
  • other resources and income of the primary beneficiary and the claimant, and
  • special needs of the primary beneficiary and the claimant.
Consider the criteria in the table below when evaluating an apportionment claim under different benefit programs.
Benefit Program
Criteria
compensation and Survivors Pension
Authority:  See 38 CFR 3.453 and 3.460.
Veterans Pension
Note:  The Court of Appeals for Veterans Claims, in Hall v. Brown, No. 92-532, distinguished adjudication under one regulation as being independent of the other regulation. This decision did not identify a need for hardship to apportion Veterans Pension.
DIC
Veterans benefits adjusted for a hospitalized or incompetent Veteran
Important:  When the primary beneficiary is receiving additional benefits for dependents, and the evidence shows he/she is not reasonably contributing to their support, hardship for the primary beneficiary would not normally result from apportionment of the additional amount payable for such dependents.

III.v.3.A.3.d. Preparing VA Form 21-441 for a Favorable or Unfavorable Apportionment Decision

Document both favorable and unfavorable decisions on claims for apportionment using VA Form 21-441, Special Apportionment Decision.
Exception:  Disregard the instructions in the previous paragraph if an apportionment claim is denied because a bar to an apportionment exists.
Important:
  • If a decision is made to grant an apportionment for a child that is under the age of 18, indicate on VA Form 21-441 that the apportionment for the child will end when the child turns 18.
  • Do not attach a copy of the VA Form 21-441 to decision notices for the primary beneficiary and claimant.

III.v.3.A.3.e.  Effect of Deferred Awards on Pending Apportionment Claims

Use the table below to determine what award actions may be taken while one or more awards are deferred.
If an award is deferred for …
Then process the …
one or more pending apportionment claims
primary beneficiary’s award for the required withheld amount either
  • alone, or
  • with the award to any other apportionee.
Note:  The pending apportionee award may be processed at any time after the primary beneficiary’s corporate record is established, without the need to process another primary beneficiary award.
an incompetent primary beneficiary due to the appointment of a fiduciary
apportionee’s award without waiting for resolution of the deferred issue.

III.v.3.A.3.f.  Determining the Effective Date of an Apportionment and the Appropriate Award Action to Take After Making an Apportionment Decision

After making a decision to grant an apportionment, use the table below to determine the
  • effective date for the apportioned award, and
  • appropriate award action to take.
If the apportionment is …
Then …
granted, and the primary beneficiary’s award was running at the time the apportionment claim was received
  • retroactively adjust the award of the primary beneficiary effective the first day of the month after the date the apportionment claim was received, creating any resulting overpayment against the primary beneficiary, and
  • make the apportionee award effective from the first day of the month after the date the apportionment claim was received.

Exception:  Follow the instructions in M21-1, Part III, Subpart v, 3.A.3.g if

  • the apportionment is to a child for whom VA was previously apportioning benefits until the child turned 18, and
  • VA received the child’s apportionment claim within one year of the child’s 18thbirthday.
Reference:  For more information on the actions described in the bullets above, see
granted, and the apportionment claim was received with or before the primary beneficiary’s original claim
pay the apportionment on the basis of the facts found.
Note:  Payment of the apportionment may be from the same effective date as the effective date of the primary beneficiary’s award.
granted and the apportioned amount is greater than the withheld amount
  • pay the apportionment for the amount previously withheld
  • determine the additional amount to be apportioned, as well as the effective date, and
  • send the primary beneficiary a notice of proposed adverse action covering the additional amount.
denied
restore all funds that were withheld in anticipation of an apportionment to the primary beneficiary.
Note:  An apportionment award for a child that is under the age of 18 must reflect termination of the apportionment on the date the child turns 18.

III.v.3.A.3.g.  Commencing an Apportionment to a Child For Whom VA Was Previously Apportioning Benefits Until the Child Turned 18  

After deciding to grant an apportionment to a child for whom VA was previously apportioning benefits until the child turned 18,
  • follow the instructions in the table below if VA received the child’s apportionment claim within one year of his/her 18th birthday, or
  • follow the instructions in M21-1, Part III, Subpart v, 3.A.3.f if VA received the child’s apportionment claim one or more years after his/her 18thbirthday.
If the child …
Then …
continuously attended school after turning 18
Reference:  For a discussion about routine breaks in school attendance that do notaffect the continuity of a child’s school attendance, see M21-1, Part III, Subpart iii, 6.A.4.b and d.
  • begin paying the apportionment to the child effective the first of the month following the child’s 18th birthday, and
  • adjust the primary beneficiary’s award to reflect payment of the apportionment from the same effective date.
Reference:  M21-1, Part III, Subpart iii, 6.B.1.acontains instructions for adjusting a primary beneficiary’s award when a child turns 18 and continues to attend school.
did not attend school for a period of time after he/she turned 18
  • begin paying the apportionment to the child effective the first of the month following the date the child began attending school, and
  • adjust the primary beneficiary’s award to reflect payment of the apportionment from the same effective date.
Important:  It might be necessary, under the circumstances described in this block, to require separate VA Forms 21-674, Request for Approval of School Attendance, from the primary beneficiary and the child.
  • The primary beneficiary must submit VA Form 21-674 as certification of school attendance for the purpose of establishing his/her entitlement to additional benefits for the child.  VA may use the same VA Form 21-674to establish the child’s eligibility for an apportionment as a school child.
  • Unless the primary beneficiary submits VA Form 21-674, the child must submit VA Form 21-674 to establish eligibility for an apportionment as a school child.  VA may not use a VA Form 21-674 that a child submits to establish the primary beneficiary’s entitlement to additional benefits for the child.

III.v.3.A.3.h.  Rounding the Apportioned Amount

Choose an even dollar amount (no cents) when determining the amount of an apportionment.
Important:  If multiple apportionees are sharing a single apportionment, and dividing the single apportionment among the apportionees results in an apportionment to each apportionee that includes a fraction of a cent, drop the fraction of a cent, per 38 CFR 3.112.  Do not, however, round the amount of theindividual apportionments in such a case to an even dollar amount.
Example:  An apportionment of $550.00 to three children would result in an apportionment of $183.33 to each child.

III.v.3.A.3.i.  Distributing the Available Amount for an Institutionalized Veteran

Withhold the difference between the total award and the monthly rate payable on behalf of the Veteran when
  • an institutionalized Veteran is to be paid only a portion of the total award, and
  • less than the full balance is apportioned to a dependent.
Note:  The situation described in this block may be encountered when VA receives a claim for apportionment from a parent or estranged spouse while the Veteran resides in a VA nursing home or domiciliary.
Reference:  For more information concerning adjustments due to hospitalization, see

III.v.3.A.3.j.  Effect of Rate Changes on the Primary Award

A Veteran’s award may be subject to future rate changes that will not be reflected in an apportionee’s award.
Example:  The Veteran’s award (total award) will be prospectively reduced from 100 percent to 80 percent.  However, there is no change in the apportioned amount.
An apportionee award must not provide for any future rate change for any period beyond the last future rate provided for by the Veteran’s award.

III.v.3.A.3.k.  Notifying the Primary Beneficiary and Claimant of the Apportionment Decision

Advise both the primary beneficiary and the claimant of the apportionment decision and furnish them notice of
  • the effective date of payment, if the apportionment is granted
  • the amount of the apportionment, if granted
  • the reasons for the decision
  • the evidence used to make the decision
  • their rights to representation, and
  • the right to appeal the decision by filing a notice of disagreement (NOD) with the Board of Veterans Appeals (BVA) within 60 days from the date of the decision notice, as provided in
Important:
  • If a decision is made to grant an apportionment for a child that is under the age of 18, inform the claimant in the decision notice that the apportionment to that child will automatically end when the child turns 18.  At that point in time, if the child wishes to continue receiving the apportionment, he/she must submit a claim, using VA Form 21-0788, and certify his/her school attendance, using VA Form 21-674.
  • An apportionment claim is a contested claim.
    • Attach VA Form 0998, Your Rights to Seek Further Review of Our Decision, to decision notices involving an apportionment claim.
    • Claimants have 60 days – not one year – to appeal a decision to BVA on a contested claim.
    • Decision review options outside of an appeal to BVA do not exist for decisions on contested claims.
  • Because contested claims commonly involve specific, factual findings that are favorable to one party but not the other, decision notices communicating the outcome of a contested claim, such as an apportionment claim, need not identify or discuss
    • findings found favorable to the claimant under 38 CFR 3.104(c), or
    • elements required to grant the claim that were not met.
Reference:  For more information about handling a legacy appeal of a decision on ancontested claim, see M21-1, Part III, Subpart vi, 6.C.6.

III.v.3.A.3.l.  Handling Evidence Received After the Appeal Period Ends

Treat additional evidence in support of a previously denied claim for an apportionment that a regional office receives after the 60-day appeal period ends as a new claim for an apportionment.  If the claimant did not include VA Form 21-0788 with the additional evidence, follow the instructions in M21-1, Part III, Subpart v, 3.A.1.d, for handling the claimant’s action as a request for an application.
Exception:  If an appeal of the prior decision on the apportionment claim is pending with BVA, forward the additional evidence to BVA according to the instructions in M21-1, Part III, Subpart ii, 1.E.

4.  Handling a Claim for Apportionment When a Veteran Is Receiving Less Than All of the Benefits Payable Because of an Offset or Withholding


Introduction

This topic contains information on handling a claim for apportionment when a Veteran’s award is subject to offset under 38 U.S.C. 1151 or withholding due to the receipt of separation pay, including


Change Date

December 17, 2018

III.v.3.A.4.a.  Effect of an Offset or Withholding of a Veteran’s Entire Award on a Claim for Apportionment

In some cases, a Veteran’s total award must be
  • offset under 38 U.S.C. 1151, or
  • withheld to recoup separation benefits the Veteran received.
In such cases, the Veteran’s award is not subject to apportionment until the offset or withholding ends.
Exception:  When a Veteran, whose disability compensation is being withheld in its entirety to recoup separation benefits, is incarcerated following conviction of a felony, VA must reduce the withholding to the amount specified in 38 CFR 3.665(d), effective the 61st day of incarceration.

Once VA makes the reduction, the remaining disability compensation (which wasunavailable for apportionment prior to incarceration because of the withholding) becomes available for apportionment.  When incarceration ends, the apportionment ends, as well, and withholding of the Veteran’s entire award resumes.

References:  For more information on


III.v.3.A.4.b.  Actions to Take Following Receipt of a Claim for Apportionment When a Veteran’s Entire Award Is Being Offset or Withheld

Follow the steps in the table below following receipt of an apportionment claim if a Veteran’s entire award is being
  • offset under 38 U.S.C. 1151, or
  • withheld to recoup separation benefits.
Step
Action
1
Establish a future diary control for 90 days prior to the approximate date the offset or withholding will end to ascertain at that time whether an apportionment is still in order.
Important:  Do not establish an EP.
Reference:  For information on future diaries, see the Share User Guide.
2
Inform any persons claiming an apportionment of the
  • reason for the deferral, and
  • anticipated length of delay.
3
When the diary matures, establish EP control, according to the instructions in M21-1, Part III, Subpart v, 3.A.2.a and b.
4
Inform the Veteran and the claimant of the
5
Establish a withholding in accordance with M21-1, Part III, Subpart v, 3.A.2.f.
Note:  Do not withhold benefits for any period prior to the first day of the month in which the recoupment or offset ended.

III.v.3.A.4.c.  Action to Take if Only Part of a Veteran’s Award Is Being Offset or Withheld

In some cases,
  • a Veteran is entitled to benefits for two or more disabilities, and
  • the amount to be recouped is only the amount payable for the disability(ies) which resulted in
    • an award under 38 U.S.C. 1151, or
    • the payment of disability severance pay.

In such cases,

  • determine the amount to be apportioned or withheld on the basis of the balance of compensation payable to the Veteran, not on the basis of the total award, and
  • do not make an apportionment if the balance of compensation does not permit payment of a reasonable amount to any apportionee.

References:

5-2-17_Key-Changes_M21-1III_v_3_SecA.doc.docx May 16, 2019 93 KB
3-2-16_Key-Changes_M21-1III_v_3_SecA.docx May 16, 2019 81 KB
1-28-16_Key-Changes_M21-1III_v_3_SecA.docx May 16, 2019 91 KB
Historical_M21-1III_v_3_SecA_3-2-16.doc May 16, 2019 288 KB
Historical_M21-1III_v_3_SecA_2-22-17.doc May 16, 2019 305 KB
Change-July-5-2015-Transmittal-Sheet-M21-1III_v_3_SecA_TS.docx May 16, 2019 43 KB
Transmittal-ch03_ts.doc May 16, 2019 54 KB
Change-March-24-2015-Transmittal-Sheet-M21-1MRIII_v_3_SecA_TS.docx May 16, 2019 39 KB
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