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M21-1, Part III, Subpart v, Chapter 4, Section D – Federal Employees’ Compensation (FEC)

Overview


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

1.  General Information on Concurrent FEC and VA Benefit Payments


Introduction

This topic contains general information on concurrent FEC and VA benefit payments, including

Change Date

October 3, 2018

III.v.4.D.1.a.  Definition:  FEC

Federal Employees’ Compensation (FEC) is paid by the Office of Workers’ Compensation Programs (OWCP) under the Federal Employee Compensation Act to Federal Government employees for disability or death due to either
  • military service, or
  • civilian employment.
Reference:  For regulatory information on FEC, see 38 CFR 3.708.

III.v.4.D.1.b.  Definition:  Same Disability or Death

The phrase same disability or death refers to a disability or death resulting from the same disease or injury, including the worsening of a preexisting disability caused by an on-the-job injury, for which both FEC and Department of Veterans Affairs (VA) benefits are payable.

III.v.4.D.1.c.  Restrictions on the Concurrent Payment of FEC and VA Benefits

The table below describes restrictions regarding the concurrent payment of FEC and VA benefits when the benefits are based on the same disability or death.
If an election is between FEC and …
And the basis for entitlement is death or disability due to …
Then …
  • disability compensation, or
  • Dependency and Indemnity Compensation (DIC)
military service priorto January 1, 1957
  • concurrent payment is barred, and
  • an election is required.
military service on or after January 1, 1957
  • concurrent entitlement does not exist, and
  • FEC is not payable.
civilian employmentprior to September 13, 1960
  • concurrent payment isnot barred, and
  • an election is notrequired.
Note: The person may continue to receive both benefits as long as entitlement exists per 38 CFR 3.708(b)(2).
civilian employmenton or afterSeptember 13, 1960
  • concurrent payment is barred, and
  • an election is required.
death or disability under 38 U.S.C. 1151
VA hospitalization or hospital care, medical or surgical treatment, examination, or training or rehabilitation services under 38 U.S.C. Chapter 31
  • concurrent payment is barred, and
  • an election is required.
  • Veterans Pension, or
  • Survivors Pension
military service priorto January 1, 1957
  • concurrent payment is barred, and
  • an election is required.
military service on or after January 1, 1957
  • concurrent entitlement does not exist, and
  • FEC is not payable.
civilian employmentprior to April 7, 1970
  • concurrent payment is barred, and
  • an election is required.
civilian employmenton or after April 7, 1970
  • concurrent payment is allowed, and
  • no election is required.
Note:  Use the provisions of 38 CFR 3.114(a) to determine the effective date of a VA pension award payable concurrently with FEC when authorized solely by reason of the liberalizing VA regulation
  • at the request of the claimant or his/her representative, or
  • during a routine review of the claimant’s claims folder.
Important:  There is no bar to concurrent payment of FEC and any VA benefit when entitlement is not based on the same disability or death per 38 CFR 3.708(b)(2).  However, FEC is countable as income for the purpose of determining entitlement to pension.
References:  For more information on

III.v.4.D.1.d.  Concurrent Payment of FEC and Vocational Rehabilitation and Training Benefits

There is no bar to concurrent payment of FEC and vocational rehabilitation and training benefits under 38 U.S.C. Chapter 31.

III.v.4.D.1.e.  Concurrent Payment of FEC and DEA

A Veteran’s spouse, son, or daughter has independent entitlement to Dependents’ Educational Assistance (DEA) under 38 U.S.C. Chapter 35.  Pay DEA regardless of the fact that the Veteran is receiving FEC.

2.  Elections Between FEC and VA Benefits


Introduction

This topic contains information about the rules that apply to various elections between FEC and VA benefits, including

Change Date

October 3, 2018

III.v.4.D.2.a.  How OWCP Determines Eligibility for FEC

OWCP does not assign disability ratings to the disabilities it evaluates, as VA does.  For FEC purposes, a claimant is either employable or unemployable.

III.v.4.D.2.b.  Elections Involving Increases in VA Compensation

When a Veteran receives compensation for a service-connected (SC) disability and OWCP later awards FEC because the same disability was aggravated by an on-the-job injury,
  • the Veteran must make an election between FEC and any future increases in compensation that are attributable to the same disability, and
  • it is not necessary to determine whether or not future increases in the disability rating of the disability at issue is related to the on-the-job injury.
Note:  Once FEC has been awarded for a disability, all subsequent increases in compensation related to the same disability are subject to election.
Reference:  For examples of cases involving increases in VA compensation, seeM21-1, Part III, Subpart v, 4.D.4.bd and f.

III.v.4.D.2.c.  Elections Involving a Combined Disability Rating

When a Veteran elects FEC that is based on one or more, but not all, of his/her SC disabilities, limit the payment of VA compensation to the rate that is supported by the disability rating(s) in effect for the SC disability(ies) that is(are) unrelated to the FEC award.
When a Veteran aggravates an SC disability as a result of an on-the-job injury and becomes eligible for a higher rate of VA compensation because of the injury, the Veteran must make an election between FEC and the higher rate of VA compensation if OWCP awards FEC for the same disability.
If the Veteran elects FEC, determine the rate of VA compensation payable to the Veteran by combining
  • the disability rating of the aggravated disability that was in effect immediately prior to the on-the-job injury, and
  • the disability rating(s) in effect for the SC disability(ies) that is(are)unrelated to the FEC award.
Reference:  For examples of cases involving a combined disability rating, seeM21-1, Part III, Subpart v, 4.D.4.e and f.

III.v.4.D.2.d.  Elections Involving FEC and VA Benefits Based on Military Service

If FEC entitlement is based on a service-related disability incurred prior to January 1, 1957, or a disability resulting from VA medical treatment under 38 U.S.C. 1151, and the beneficiary elects VA disability compensation or pension, the election is irrevocable.
If a beneficiary who is eligible for both FEC and DIC elects FEC, he/she may revoke the election by reelecting DIC.  The reelection becomes final, however, once VA awards DIC, per 38 CFR 3.708(a)(2).
Exception:  OWCP, in concurrence with VA General Counsel, determined the finality-of-election provision of 5 U.S.C. 8116(b) does not apply to cases in which OWCP is paying FEC based on death during military service.  Accordingly, 38 CFR 3.708(a) was amended to delete the provision concerning the finality of elections made after September 13, 1960.  However, the statutory provision under 38 U.S.C. 1316 continues to prohibit any reelection of FEC once VA has awarded DIC.
Reference:  For more information on processing elections for FEC or VA benefits based on death during military service, see M21-1, Part III, Subpart v, 4.D.3.g.

III.v.4.D.2.e.  Elections Involving FEC and VA Benefits for a Reservist’s Disability or Death

Prior to January 1, 1957, FEC was payable for
  • a disability a reservist incurred while on active duty during peacetime, or
  • the death of a reservist while on active duty during peacetime.
When disability or death compensation is also payable by VA, the beneficiary mustmake an election between benefits.
Note:  For the purpose of determining eligibility for FEC, OWCP considers service during the Korean Conflict peacetime service.
Reference:  For more information on processing elections for FEC or VA benefits based on death during military service, see M21-1, Part III, Subpart v, 4.D.3.g.

III.v.4.D.2.f.  Elections Involving FEC and VA Benefits Based on Civilian Employment

If FEC entitlement is based on disability or death resulting from civilian employment, and the beneficiary elected to receive
  • FEC or VA compensation, death compensation, or DIC (on or afterSeptember 13, 1960) based on the same disability or death, the election is irrevocable, or
  • FEC in lieu of VA pension prior to April 7, 1970, the beneficiary may now concurrently receive VA pension and FEC.

III.v.4.D.2.g.  Elections Involving the Discontinuance of FEC

VA may start or resume the payment of VA benefits at the full rate payable for the disability on which entitlement to FEC was predicated after the FEC award ends.
Example:
Scenario:
  • An on-the-job back injury warrants an increase in the disability rating for an SC back disorder from 20 to 40 percent.
  • OWCP awards FEC for the on-the-job back injury for the period March 15, 1993, through April 14, 1994.
  • The Veteran elects FEC.
Results:
  • The Veteran may receive FEC while concurrently receiving VA compensation for the back disorder at the rate payable for the pre-injury disability rating of 20 percent.
  • VA may increase the Veteran’s compensation to the rate payable for the disability rating of 40 percent (if an increase is otherwise in order), effective April 15, 1994, the day following the last date of entitlement to FEC.
Note:  Do not apply the provisions of 38 CFR 3.31(a) and (b) when determining the effective date of payment of the increased rate of VA compensation referenced in the preceding paragraph.

III.v.4.D.2.h.  Elections Involving  a Surviving Spouse With a Child

The table below describes policies that apply to cases in which a surviving spouse with a child elects FEC instead of VA benefits.
If the child is …
Then …
  • under age 18, and
  • included as a dependent on the surviving spouse’s award
the surviving spouse’s election controls the benefit payable since the child has no independent entitlement to VA benefits.
  • over age 18, and
  • eligible for one of the following combinations of benefits:
    • FEC and DIC
    • FEC and DEA, or
    • FEC and DIC and is permanently incapable of self-support from a time prior to reaching age 18
the child
  • may receive DIC while the surviving spouse is concurrently receiving FEC, and
  • must elect between FEC and VA benefits because the child has
    • independent entitlement to VA benefits, and
    • a right of election that is independent of and not affected by the surviving spouse’s election.
Note:  When there is an eligible surviving spouse, the DIC rate payable to or for such a child is the rate payable under 38 U.S.C. 1314(b) or c, as shown in the DIC rate table.
  • under age 18
  • included as a dependent on the surviving spouse’s award, and
  • eligible for one of the following:
a separate election for the child is required to pay VA benefits to the child concurrently with the payment of FEC to the surviving spouse because the child has
  • independent entitlement to VA benefits, and
  • a right of election that is independent of and not affected by the surviving spouse’s election.
Reference:  For more information on FEC and the rights of children, see 38 CFR 3.708(a)(3).

III.v.4.D.2.i.  Elections Involving Children or Parents

The table below describes rules for elections by children or parents.
If …
Then …
  • there are two or more persons within a class (children or parents), and
  • some but not all members of the same class elect FEC
the entitlement of others in the class to VA benefits is not affected.
Note:  The VA death benefit payable to a child or parent not electing FEC maynot exceed the amount that would be payable to him/her if all children or both parents had filed claims for VA benefits.
FEC is elected for a child under age 18 who is the primary beneficiary
entitlement to VA benefits is barred when the child reaches age 18.
  • a surviving spouse elects FEC
  • his/her children receive FEC because of the election, and
  • the surviving spouse remarries or dies
an election may be filed on behalf of the children.
Notes:
  • An election is final only for periods of concurrent eligibility.
  • In claims based on school attendance, concurrent eligibility extends from the date eligibility arises to the earliest occurrence of any of the following events:
    • child’s 23rd birthday
    • child’s marriage, or
    • child’s completion of four years of education beyond high school.
  • Eligibility for FEC that is based on school attendance ends when any of  the events listed in the previous paragraph occur.
  • When an FEC award ends, VA benefits are payable effective the day following the last date of entitlement to FEC if entitlement to VA benefits still exists.
Important:  When resuming the payment of VA benefits following a loss of entitlement to FEC, do not apply the provisions of 38 CFR 3.31(a) and (b) when determining the effective date of payment.
Reference:  For more information on VA’s authority to pay VA benefits when an FEC award ends, see

3.  Processing Cases That Require an Election of FEC or VA Benefits


Introduction

This topic contains instructions for processing cases that require an election of FEC or VA benefits, including

Change Date

February 27, 2019

III.v.4.D.3.a.  Responsibility for Requesting an Election

It is always the responsibility of OWCP to ask a claimant to furnish an election in order to receive VA benefits.
Reference:  For more information on restrictions on the concurrent payment of FEC and VA benefits, see M21-1, Part III, Subpart v, 4.D.1.c.

III.v.4.D.3.b.  Determining Whether a Claimant Might Be Entitled to FEC

Carefully examine the content of the claims folder to determine if the claimant has applied for or is receiving FEC from OWCP.
Pay the full amount of VA benefits to which the claimant is entitled
  • unless one of the following documents is in the claimant’s claims folder:
    • VA Form 21-526, Veterans Application for Compensation and/or Pension, on which the Veteran indicated (by making an affirmative entry in Block 10A, 10B, and/or 10C) that he/she has applied for or is receiving FEC
    • a copy of the claimant’s election to receive FEC, or
    • notice from either OWCP, the claimant, or his/her representative, that a claim has been filed with OWCP, or
  • when OWCP asks VA to proceed with payment of the full amount of VA benefits.
Notes:
  • OWCP may ask VA to pay the full amount of VA benefits to which a claimant is entitled if OWCP anticipates a considerable delay in adjudicating a specific FEC claim.
  • VA discontinued the use of VA Form 21-526 on February 19, 2019.
    • Waivers/elections Veterans made on the form prior to this date remain valid.
    • Continue to accept waivers/elections Veterans make on the formafter this date if any of the exceptions described in M21-1, Part III, Subpart ii, 1.C.8.a, apply.
  • In cases where the Veteran did not complete Blocks 10A, 10B, and 10C ofVA Form 21-526, no additional development is required unless there is evidence in the claims folder that indicates the Veteran applied for or is receiving FEC.
  • VA Form 21-526EZ, Application for Disability Compensation and Related Compensation Benefits does not contain blocks requesting information relating to potential claims for compensation from OWCP.

III.v.4.D.3.c.  Processing a Claim for VA Benefits When the Claimant Has Also Filed a Claim for FEC

The table below contains instructions for processing a claim for VA benefits when
  • concurrent payment of FEC and the claimed VA benefit is prohibited, and
  • the evidence of record indicates the claimant has filed a claim for FEC with OWCP.
Step
Action
1
Develop and/or adjudicate the claim to determine whether VA disability or survivors benefits are potentially payable.
Note:  While development is pending, leave a claim note in the system that warns other claims processors against paying benefits because of the FEC claim.
2
Are VA disability or survivors benefits potentially payable?
  • If yes, proceed to the next step.
  • If no,
    • deny the claim
    • notify the claimant of the denial, and
    • disregard the remaining steps in this table.
3
  • Prepare a letter to OWCP that advises the office of the
    • VA benefit that is potentially payable
    • disability(ies) on which the claimant’s eligibility is based (if applicable)
    • effective date of the award
    • monthly rate payable
    • effect of an election on overall VA entitlement, and
    • name and address of the claimant.
  • Ask OWCP (in the letter) to obtain the claimant’s election and return a copy of it to VA.
Notes:
  • In order to enable OWCP to fully inform a claimant of the effect of an election in death cases, the letter to OWCP mustfully explain the VA benefits that are potentially payable, including notice regarding the
    • additional VA benefits that might be payable for a child who is over age 18 and attending school, and
    • future eligibility of children that are
      • under or over age 18, and
      • currently barred from benefits because of an election of FEC.
  • The notice referenced in the preceding paragraph is particularly important in cases in which a child
    • is approaching his/her 18th birthday, and
    • may be eligible for DIC or DEA for periods after that date.
4
Send the letter to the following address:
U.S. Department of Labor
The Office of Workers’ Compensation Programs
P.O. Box 8300 – Region 2
London, KY  40742-8300
5
  • If the claim for VA benefits is based on a Veteran’s disability(ies), proceed to the next step.
  • If the claim for VA benefits is based on a Veteran’s death, proceed to Step 11.
6
Is the disability on which the FEC claim is based known?
  • If yes, proceed to the next step.
  • If no, proceed to Step 11.
7
Is the claimant eligible for VA benefits based on a disability or disabilities other than the disability on which the FEC claim is based?
  • If yes, proceed to the next step.
  • If no, proceed to Step 11.
8
Take award action to pay the claimant for those disabilities that areunrelated to his/her FEC claim.
9
Deny the claim for benefits for the disability on which the FEC claim is based.
10
  • Prepare a decision notice.
  • With regard to the disability for which VA benefits were denied because of the FEC claim, inform the claimant of the following:
    • the referral to OWCP
    • concurrent payment of FEC and VA benefits for the disability at issue is prohibited, and
    • OWCP will contact the claimant and inform the claimant of his/her
      • eligibility for both FEC and VA benefits, and
      • right of election.
  • Proceed to Step 13.
11
Deny the claim for VA benefits.
12
Prepare a decision notice that informs the claimant of the following:
  • the referral to OWCP
  • concurrent payment of FEC and VA benefits is prohibited, and
  • OWCP will contact the claimant and inform the claimant of his/her
    • eligibility for both FEC and VA benefits, and
    • right of election.
Important:  Do not inform the claimant of his/her review rights in the decision notice.
13
Send the decision notice and a copy of the rating decision to the claimant.
Reference:  For more information about notifying claimants of a VA decision, seeM21-1, Part III, Subpart v, 2.B.

III.v.4.D.3.d.  Processing an Election of FEC That Becomes Available Prior to Authorization of a Decision on a Claim for VA Benefits

When a copy of a claimant’s election of FEC becomes available prior to authorization of his/her claim,
  • discontinue the adjudicative action
  • deny the claim
  • notify the claimant of the fact(s) and reason(s) for denial, and
  • do not include notice of the claimant’s review rights in the decision notice.
Important:  The instructions in this block are based on an assumption that the claim for VA benefits is based on a Veteran’s death or, if based on disability, the only disability referenced in the claim is the same one on which the FEC award is based.

III.v.4.D.3.e.  Adjusting a Running Award Because a Beneficiary Elected FEC

The table below contains instructions for adjusting a running award after receiving notice a beneficiary has elected to receive FEC based on the same disability or death for which he/she is currently receiving VA benefits.
If …
Then …
the beneficiary reported the election
reduce (if FEC is based on an SC disability, and the Veteran is entitled to disability compensation for a disability or disabilities that are unrelated to the FEC award) or discontinue the award effective the same day that the FEC award became effective.
Example:  If the effective date of the FEC award is March 23, 2018, the effective date of the reduction or discontinuation of VA benefits is also March 23, 2018.
Note:  Per 38 CFR 3.500(e), the last date of entitlement to the VA benefit affected by the beneficiary’s election of FEC is the day preceding the date the FEC award became effective.
a source other than the beneficiary reported the election
follow the instructions in the table below.
Step
Action
1
Send the beneficiary a notice of proposed adverse action and allow him/her 60 days to respond.
Important:  If the beneficiary has an electronic claims folder in the Veterans Benefits Management System (VBMS), and the notice of proposed adverse action was created outside of VBMS, upload the notice into VMBS.
2
Did the beneficiary submit evidence showing VA should not adjust his/her award?
  • If yes,
    • notify the beneficiary of VA’s decision, and
    • disregard the remaining instructions in this table.
  • If no, make the appropriate adjustment to the beneficiary’s award.
3
  • Use Routing and Transmittal Slip, Optional Form 41, or similar electronic method to route the Veteran’s claims folder to the finance activity.
  • Ask the finance activity to send a letter to OWCP that identifies
    • all periods covered by the award action
    • the beneficiary’s rate of paymentbefore VA adjusted his/her award, and
    • the amount of any overpayment that is attributable to the beneficiary’s concurrent receipt of FEC and VA benefits.

III.v.4.D.3.f.  Process for Handling an Election of VA Disability Compensation After OWCP Awarded FEC

The table below describes the process for handling an election of VA disability compensation after OWCP awarded FEC.
Stage
Description
1
OWCP
  • typically discontinues payments after the last day of the month following the month during which OWCP received the claimant’s election of VA benefits, and
  • furnishes VA with information regarding FEC that OWCP has already paid.
2
A VA claims processor
  • determines the proper effective date of the award of VA benefits and
  • annotates the award Subject to FEC payments of [insert amount].
3
A VA claims processor
  • awards benefits at the rate payable for all SC disabilities that are unrelated to the FEC award, and
  • establishes a withholding by entering into the OTHER WITHHOLDING field on the AWARD ADJUSTMENTS screen in VBMS Awards (VBMS-A) the difference between the
    • the rate of VA disability compensation payable for allSC disabilities, and
    • the rate of VA disability compensation payable for any SC disabilities that are unrelated to the FEC award.
Notes:
  • If the amount of the withholding (per the calculation described in the preceding paragraph) and the amount of FEC payments are the same, the claims processor zeroes out the withholding.
  • If it appears future rate changes may occur before the withholding is zeroed out, the claims processor establishes a diary under reason code 30, Local Regional Office Special UseOnly, for the month after that during which the withholding will zero out.  When the diary matures, a claims processor determines whether an adjustment of the zero-out date is necessary because of a legislative or other rate change.
Rationale:  The objective is to withhold from VA benefits the amount of FEC the Veteran received for disabilities on which the FEC award was based.  Claims processors may e-mail and request assistance from the finance activity in calculating the zero-out date.
Reference:  For more information on adding diaries in VBMS-A, see theVBMS Awards User Guide.

III.v.4.D.3.g.  Processing an Election of VA Benefits Based on Death During Military Service

Use the table below when processing an election of VA benefits based on death during military service.
If the monthly rate of the VA benefit …
Then …
exceeds the monthly rate of FEC
  • process an award of VA benefits, if otherwise in order
  • for the period of time during which OWCP paid FEC to the claimant, enter the monthly rate of FEC in the OTHER WITHOLDING field on the AWARD ADUSTMENTS screen in VBMS-A, and
  • discontinue the withholding effective the date OWCP received the election.
Note:  Apply the provisions of 38 CFR 3.400(j)(1) when determining the effective date of the award of VA benefits.
Exception:  If the award is based on an original claim for VA benefits, apply the provisions of 38 CFR 3.400(c)(1) when determining the effective date of the award.
does notexceed the monthly rate of FEC
  • inform the claimant and OWCP (in separate letters) that
    • VA will not take action on the election, and
    • the claimant must furnish a signed statement indicating that he/she prefers the lesser benefit, and
  • provide a full explanation (to both OWCP and the claimant) as to why VA did not accept the election.
Note:  The letter to OWCP requesting that an election be obtained from the claimant must contain sufficient information about the claimant’s entitlement to VA benefits to enable OWCP to inform the claimant fully of the effect of an election.

III.v.4.D.3.h.  Adjusting an FEC Award When the Veteran Is in Receipt of MRP

If VA is withholding benefits based on a Veteran’s receipt of FEC, and the Veteran is also receiving military retired pay (MRP), claims processors must prepare and send a letter to the appropriate retired pay center (RPC) any time they make an adjustment to the Veteran’s award.
The letter to the RPC must
  • explain that VA is notifying the RPC of the award adjustment because VA is withholding all or part of the Veteran’s compensation based on his/her receipt of FEC, and
  • contain the following information:
    • reason for the award adjustment
    • effective date of the adjustment
    • total amount of benefits to which the Veteran is entitled
    • net amount of benefits payable to the Veteran (the total amount minus withholdings for MRP and FEC)
    • amount VA withheld based on the Veteran’s receipt of MRP, and
    • amount VA withheld based on the Veteran’s receipt of FEC.
Reference:  For a list of RPCs and their mailing address, see M21-1, Part III, Subpart v, 5.C.2.f.

4.  Exhibit 1:  Examples of FEC and VA Benefit Elections


Introduction

This exhibit contains six examples of situations that could require an election between FEC and VA benefits, including situations when an election is

Change Date

October 3, 2018

III.v.4.D.4.a.  Election Is Required Between FEC and VA Compensation for the Same Disability

Situation:
  • A Veteran who is a Federal Government employee is disabled by active pulmonary tuberculosis.
  • VA determines the disease was manifest within the presumptive period after service and grants service connection.
  • OWCP finds the disease is related to the Veteran’s employment and awards FEC.
Result:  An election is required because the Veteran is eligible for both FEC and VA compensation for the same disability.
Reference:  For more information on the restriction of payment of FEC and VA compensation, see M21-1, Part III, Subpart v, 4.D.1.c.

III.v.4.D.4.b.Election Is Required Between FEC and an Increased Rate of VA Compensation Due to On-the-Job Aggravation of an SC Disability

Situation:
  • A Veteran who is a Federal Government employee has an SC back disorder that VA has rated 20-percent disabling.
  • An on-the-job injury aggravates the back disorder.
  • VA increases the disability rating for the back disorder to 40 percent.
  • OWCP awards FEC for the back injury.
Results:
  • An election is required between FEC and the increased rate of VA compensation.  However, VA may continue paying compensation at the rate payable for a disability that is 20-percent disabling.
  • If the Veteran elects FEC,
    • promulgate the new rating decision, and
    • continue paying compensation at the rate payable for a disability that is 20-percent disabling by entering the difference between the rate payable for a disability that is 40-percent disabling and the rate payable for a disability that is 20-percent disabling into the OTHER WITHHOLDING field on the AWARD ADJUSTMENTS screen in VBMS-A.
Reference:  For more information on award adjustments in VBMS-A, see VBMS Awards User Guide.

III.v.4.D.4.c.  Election Is Not Required Between FEC and VA Compensation Following an On-the-Job Injury

Situation:
  • A Veteran who is a Federal Government employee has an SC knee disability that VA has rated 20-percent disabling.
  • The Veteran reinjures her knee in an on-the-job accident.
  • OWCP awards FEC for the knee injury.
  • VA determines the injury does not warrant any change in the 20-percent disability rating.
Result:  No election is required.  Since no change in the disability rating is warranted, the Veteran continues to receive VA compensation at the rate payable for a disability rated 20-percent disabling in addition to the FEC award.

III.v.4.D.4.d.  Election Is Required Between FEC and an Increased Rate of VA Compensation Following an On-the-Job Injury

Situation:
  • A Veteran who is a Federal Government employee has a back disorder and a knee disorder that are each rated 10 percent disabling.
  • The Veteran reinjures his knee in an on-the-job accident.
  • OWCP awards FEC for the knee injury.
  • VA increases the disability rating for the knee to
    • 20 percent, effective May 1, 2005, for a combined disability rating of 30 percent, and
    • 40 percent, effective May 1, 2006, for a combined disability rating of 50 percent.
Results:
  • An election is required between FEC and any VA compensation for the knee disorder that exceeds the rate payable for a disability rated 10-percent disabling.
  • Follow the instructions in the table below if the Veteran elects FEC.
Effective Date
Action
May 1, 2005
Pay compensation at the rate payable for a combined disability rating of 20 percent by entering into the OTHER WITHHOLDING field on the AWARD ADJUSTMENTS screen in VBMS-A the difference between
  • the rate payable for a combined disability rating of 30 percent, and
  • the rate payable for a combined disability rating of 20 percent.
May 1, 2006
Continue paying compensation at the rate payable for a combined disability rating of 20 percent rate but increase the withholding to the difference between
  • the rate payable for a combined disability rating of 50 percent, and
  • the rating payable for a combined disability rating of 20 percent.

III.v.4.D.4.e.  Election Is Required Between FEC and VA Compensation When a Combined Disability Rating Is in Effect

Situation:

  • A Veteran who is a Federal Government employee with a spouse and child has a combined disability rating of 30 percent as a result of an SC
    • knee disorder rated 20-percent disabling, and
    • back disorder rated 10-percent disabling.
  • OWCP determines the back disorder is related to the Veteran’s employment and awards FEC.

Result:

  • An election is required between FEC and VA compensation that exceeds the rate payable for the knee disorder alone.
  • If the Veteran elects FEC, pay compensation at the rate payable for a disability rated 20-percent disabling by entering into the OTHER WITHHOLDING field on the AWARD ADJUSTMENTS screen in VBMS-A the difference between
    • the rate payable for a combined disability rating of 30 percent,including the additional amount payable for the Veteran’s dependents, and
    • the rate payable for a disability rated 20-percent disabling.

III.v.4.D.4.f.  Election Is Required Between FEC and an Increased Rate of VA Compensation When a Combined Disability Rating Is in Effect

Situation:
  • A Veteran who is a Federal Government employee has a combined disability rating of 60 percent as a result of an SC
    • back disorder rated 30-percent disabling
    • heart disorder rated 30-percent disabling, and
    • knee disorder rated 20-percent disabling.
  • The Veteran reinjures her back in an on-the-job accident.
  • OWCP awards FEC for the back injury.
  • VA increases the
    • disability rating for the back disorder to 40 percent, and
    • combined disability rating to 70 percent.
  • VA determines the Veteran is unemployable as a result of her SC disabilities.
Result:
  • An election is required between FEC and VA compensation that exceeds the rate payable for a combined disability rating of 60 percent.
  • If the Veteran elects FEC, she loses entitlement to a total disability rating under 38 CFR 4.16.  Continue paying compensation at the rate payable for a combined disability rating of 60 percent by entering into the OTHER WITHHOLDING field on the AWARD ADJUSTMENTS screen in VBMS-A the difference between the rate payable for a total (100–percent) disability rating and the rate payable for a combined disability rating of 60 percent.
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