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M21-1, Part III, Subpart v, Chapter 5, Section B – Preparing and Adjusting Awards in Military Retired Pay (MRP) Cases

Overview

In This Section
This section contains the following topics:
Topic
Topic Name
1
2
3
4
5
6
7

 

1.  General Information on Preparing an Award Affected by MRP

 

Introduction
This topic contains general information on preparing an award affected by MRP, including

Change Date
 
 May 21, 2018

III.v.5.B.1.a.  Identifying an Award Requiring a Waiver of MRP
The retired pay indicator in the corporate record identifies a compensation or Section 306 or Old Law Pension award of a Veteran who
  • must waive military retired pay (MRP) in order to receive compensation or pension, or
  • has waived MRP for the purpose of computation of civil service annuity, which is payable concurrently with Department of Veterans Affairs (VA) benefits.
Important:  Do not activate the retired pay indicator for a Veteran in receipt of current-law pension, per M21-1, Part III, Subpart v, 5.A.4.a.
References:  For more information on

III.v.5.B.1.b.Confirming the Retired Pay Indicator Is Active
When processing an award to a Veteran whose service department awarded or will award him/her MRP, confirm that the retired pay indicator is active by selecting the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen in the Veterans Benefits Management System — Awards (VBMS-A).
  • If data regarding the Veteran’s MRP is displayed on the RETIRED PAY tab, the retired pay indicator is active.
  • If no MRP data is displayed on the RETIRED PAY tab, update the record (thereby activating the indicator) by following the instructions in M21-1, Part III, Subpart v, 5.B.1.c.
Note:  Once the retired pay indicator is activated, the text Retired Pay Case will be displayed in the upper, right-hand corner of the RECORD DECISIONS and ALL AWARDS screens.
References:  For information on using

III.v.5.B.1.c.  Instructions for Activating the Retired Pay Indicator in the Corporate Record
Follow the instructions in the table below to activate the retired pay indicator in the corporate record.
Important:  Activate the retired pay indicator even if VA is not withholding or will not withhold benefits based on the Veteran’s receipt of MRP.
Step
Action
1
Select the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen.
Important:  Do not delete any historical information displayed on the RETIRED PAY tab unless it is inaccurate.
2
Click on the ADD button and manually enter the MRP data or click on the RETRIEVE BIRLS DATA button, which will automatically populate the fields on the tab with data pulled from the Beneficiary and Records Locator Subsystem.
Follow the instructions in the table below when a manual entry is required for any field on the RETIRED PAY tab.
Field
Instructions
RETIRED PAY TYPE
A variety of sources/means exist for determining the proper entry.  They include:
  • the Veteran’s DD Form 214, Certificate of Release or Discharge from Active Duty
  • the Veterans Information Solution (VIS)
  • the Defense Personnel Records Information Retrieval System (DPRIS)
  • the entry in the FAN CD (functional account number code) field on the ENTIT and MBRENT screens in Defense Finance and Accounting Service’s (DFAS’) Retired and Casualty Pay Subsystem (RCPS) (Army, Navy, Air Force, and Marine Corps only)
  • telephone contact with DFAS (Army, Navy, Air Force, and Marine Corps only) at
    • 800-321-1080
    • 888-332-7411, or
    • 216-522-5955, and/or
  • telephone contact with the Coast Guard Retiree and Annuitant Services Branch (CGRASB) (for all uniformed servicesother than the Army, Navy, Air Force, and Marine Corps) at
    • 800-772-8724, or
    • 785-339-3415.
GROSS AMOUNT
If the Veteran’s service department has not yet determined the amount of his/her MRP,
Important:  Do not enter 0.00, as doing sodeactivates the retired pay indicator.
EFFECTIVE DATE
Enter the date of entitlement to disability compensation (not the payment date) in the EFFECTIVE DATE field.
References:   For more information on

III.v.5.B.1.d.  Processing an Award to a Veteran in Receipt of MRP
Withhold benefits to prevent the concurrent payment of VA benefits and MRP when concurrent payment is prohibited.
To calculate the amount of benefits to withhold, use the Retired Pay Withholding Calculator, which is accessible on the Special Military Retirement Benefitswebpage.
References:  For more information on

III.v.5.B.1.e.  Removing the Retired Pay Indicator When Entitlement to MRP Is Terminated
If a service department discontinues the payment of MRP to a Veteran because, for example, it removed the Veteran from the Temporary Disability Retirement List (TDRL), deactivate the retired pay indicator by
  • selecting the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen
  • clicking the ADD button
  • entering the type of MRP that was terminated in the RETIRED PAY TYPE field
  • entering the date payment of MRP ended in the EFFECTIVE DATE field, and
  • entering 0.00 in the GROSS AMOUNT field.
Important:  If a service department awards a Veteran discharge pay after discontinuing his/her MRP, it will be necessary to update the fields on the DISCHARGE PAY tab, as well.
References:  For more information on taking the actions described in this block in

III.v.5.B.1.f.  Ensuring the Veteran’s Branch of Service and SSN Are Recorded in the Corporate Record
A Veteran’s branch of service and Social Security number (SSN) must be recorded in the corporate record to ensure the proper exchange of information between VA and retired pay centers (RPCs).
Ensure the branch of service in the corporate record is the same as the branch that is paying MRP.
Reference:  For more information about making entries and updates to the corporate record, see the Share User’s Guide.

III.v.5.B.1.g.  Data VA Provides to Military RPCs
The data VA provides to RPCs includes data pertaining to all original and reopened awards and any supplemental award actions if all of the following criteria are met:
  • the entitlement type is disability compensation or Dependency and Indemnity Compensation
  • an award transaction updated the corporate record in this cycle, and
  • the Veteran’s SSN is recorded in the corporate record.

III.v.5.B.1.h.  Tax Exemption of MRP
Anytime VA pays a Veteran less than the full rate of disability compensation because the Veteran was in receipt of MRP, VA must notify the Veteran that MRP in an amount equal to the amount of compensation VA withheld (because of the Veteran’s receipt of MRP) is tax exempt.
Examples:  The table below contains descriptions of scenarios in which VA must notify a Veteran that he/she is eligible for a tax exemption.
Scenario
Result
  • A Veteran in receipt of MRP files an original claim for compensation.
  • Rating activity grants service connection for a single disability and  assigns a disability rating of 10 percent, effective March 14, 2006.
  • Authorization activity promulgates the rating decision on September 2, 2006.  It withholds the benefits payable from April 1, 2006, through August 31, 2006, because of the Veteran’s receipt of MRP.
MRP in an amount equal to the amount of compensation VA withheld from April 1, 2006, through August 31, 2006, is tax exempt.
  • A Veteran in receipt of MRP files an original claim for compensation.
  • On her application for benefits, the Veteran checked the box that reads:  No, I do not want VA compensation in lieu of military retired pay.
  • Rating activity grants service connection for a single disability and  assigns a disability rating of 10 percent, effective March 14, 2006.
  • On September 2, 2006, authorization activity denies the Veteran’s claim for disability compensation because the Veteran elected MRP.  It attaches VA Form 21-651, Election of Compensation in Lieu of Retired Pay or Waiver of Retired Pay to Secure Compensation From Department of Veterans Affairs (38 U.S.C. 5304(a)-5305), to the decision notice and informs the Veteran in the decision notice that she must return the form within one year in order to retain entitlement to disability compensation from March 14, 2006.
  • On August 23, 2007, VA receives VA Form 21-651 from the Veteran.
  • On October 10, 2007, authorization activity grants the Veteran’s claim for disability compensation.  It withholds benefits payable from April 1, 2006, through September 30, 2007, because of the Veteran’s receipt of MRP.
MRP in an amount equal to the amount of compensation VA withheld from April 1, 2006, through September 30, 2007, is tax exempt.
  • A Veteran in receipt of MRP files a claim for an increased disability rating.
  • On April 7, 2008, rating activity increases the Veteran’s combined disability rating from 10 percent to 30 percent, effective December 21, 2007.
  • On April 10, 2008, authorization activity promulgates the rating decision.  It withholds the additional amount of benefits payable to the Veteran from January 1, 2008, through March 31, 2008.
 MRP in an amount equal to the amount of compensation VA withheld from January 1, 2008, through March 31, 2008, is tax exempt.
Reference:  M21-1, Part III, Subpart v, 5.B.1.i describes the information authorization activity must include in a decision notice to inform a Veteran of the tax exemption described in this block.

III.v.5.B.1.i.  Notifying a Veteran of His/Her Eligibility for a Tax Exemption
When a Veteran is entitled to the tax exemption referenced in M21-1, Part III, Subpart v, 5.B.1.h, include the following text in the corresponding decision notice:
Because VA compensation is not taxable, you may be entitled to a tax exemption during the period VA withheld your compensation; the amount of the exemption would be the amount of compensation VA withheld based on your receipt of military retired pay.
Subsequent changes in the amount of compensation VA withholds based on your receipt of military retired pay may affect the tax exemption.  Please contact the Internal Revenue Service with questions about your tax liability.

 

2.  Determining the Effective Date for an Award Affected by MRP

 

Introduction

 This topic contains information on determining effective dates for awards that are affected by MRP, including

Change Date
July 11, 2016

III.v.5.B.2.a.  Determining the Effective Date of Entitlement and the Effective Date of Payment

 Apply the provisions of

  • 38 CFR 3.400 when determining the effective date of entitlement to a benefit, and
  • 38 CFR 3.31 when determining the effective date of payment of a benefit.

Reference:  For an explanation of the difference between the effective date of payment and effective date of entitlement, see M21-1, Part III, Subpart v, 2.A.2.b.

III.v.5.B.2.b.  Deadline for Authorizing Awards
On Compensation Service’s online calendar, the following entry will appear monthly, usually around the middle of each month:
Stop retired pay withholding effective [month/day/year], if award authorized before [cutoff time].  Awards with a retired pay withholding shall not be authorized from [cutoff time] to [one hour following cutoff time] on[month/day/year].  On or after [one hour following cutoff time] on[month/day/year] stop retired pay withholding with a [month/day/year]effective date.
All awards that increase a Veteran’s compensation effective the first day of the current month, based on a corresponding reduction in the Veteran’s MRP, must be authorized by the cutoff time on the date referenced in the above paragraph.
If authorization is not accomplished by the cutoff time on the referenced date, the award must be regenerated to reflect the increase in compensation (and reduction in MRP) from the first day of the following month.
Rationale:  If the award is authorized after the cutoff time on the referenced date without regenerating the award as described, the RPCs will not have sufficient time to reduce the Veteran’s MRP from the first day of the current month.  The one-hour moratorium allows the Hines Information Technology Center time to start the file that is used by the RPCs for this purpose.
Note:  For quality review purposes, the timestamp on award prints is shown as Eastern Standard Time (or Eastern Daylight Time, when in effect).

III.v.5.B.2.c.  RPC Action When the Rate of Compensation Exceeds the Rate of MRP

 Any time RPCs receive data showing a Veteran’s monthly rate of compensation exceeds his/her monthly rate of MRP, the RPC automatically releases to the station of origination (SOO)

  • a certification of the gross MRP, and
  • the effective dates of any rate changes in the Veteran’s MRP for the previous two years.

Upon receipt of the notice described above from an RPC, the SOO must

  • review the military payment history, and
  • initiate payment of any previously withheld compensation that exceeds the amount of MRP for the same period.

Note:  If the information referenced in this block does not exist in the claims folder but is relevant to award processing, it may be obtained

  • through RCPS (for Air Force, Army, Navy, and Marine Corps retirees only)
  • by calling CGRASB at 1-800-772-8724, or
  • through VIS.

Reference:  For information on using

III.v.5.B.2.d.  Processing an Award When the Rate of Compensation Exceeds the Rate of MRP

 When processing an award and the monthly rate of compensation exceeds the monthly rate of MRP,

  • begin the award effective the earliest date that entitlement is established, as determined under the basic rules of 38 CFR 3.400 and 38 CFR 3.31, and
  • pay the difference between the rate of compensation and the rate of MRP from the start of the award until the date that the payment of compensation at the full rate may be authorized, as determined by M21-1, Part III, Subpart v, 5.B.2.b.

For the periods authorizing the differential rate,

  • show the amount not paid because of receipt of MRP as a retired pay withholding, and
  • zero out the MRP withholding on the award line that reflects payment of compensation at the full rate.

References:  For information on making award adjustments involving MRP in

III.v.5.B.2.e.  Determining the Effective Date for a Reduced Award

 Retroactively reduce benefits in accordance with existing laws and regulations (38 CFR 3.501).

3.  Handling Cases in Which a Service Department Has Not Yet Calculated the Amount of MRP It Will Pay a Veteran

Introduction
This topic contains instructions for handling cases in which a service department has not yet calculated the amount of MRP it will pay a Veteran, including

Change Date
October 19, 2018

III.v.5.B.3.a.  Actions to Take Prior to Authorization When the Amount of a Veteran’s MRP Is Unknown
Follow the instructions in the table below immediately prior to authorization of an award to a Veteran when the amount of MRP to which the Veteran is entitled is unknown.
Step
Action
1
Follow the instructions in the table below.
If the Veteran retired from the …
Then proceed to …
  • Army
  • Navy
  • Air Force, or
  • Marine Corps
Step 4.
  • Coast Guard,
  • National Oceanic and Atmospheric Administration (NOAA), or
  • U.S. Public Health Service (PHS)
the next step.
2
Contact CGRASB at one of the numbers listed below and ask whether the amount of the Veteran’s MRP has been calculated:
  • 800-772-8724, or
  • 785-339-3415.
3
Has the amount of the Veteran’s MRP been calculated?
  • If yes,
    • ask CGRASB for the amount(s) and the effective date(s) of payment(s) of MRP
    • document the information obtained from CGRASB on VA Form 27-0820, Report of General Information, and upload the form into the Veteran’s electronic claims folder (eFolder)
    • update the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen in VBMS-A based on information CGRASB provided, and
    • disregard the remaining steps in this table.
  • If no,
4
5
Once RCPS opens, enter the following text in the upper, left-hand corner of the screen:  HUNT[enter a space or comma, the Veteran’s nine-digit SSN, and a comma]ENTIT.
Example:  HUNT 999999999,ENTIT
6
Press Enter on the keyboard.
7
Does the SELECTED ENTITLEMENT DATA screen appear after pressing Enter?
  • If yes, the Veteran’s service department has calculated the amount of MRP it will pay the Veteran.
  • If no, the Veteran’s service department has not yet calculated the amount of MRP it will pay the Veteran.  Follow the instructions in the table below.
If the message …
Then …
THE REQUESTED DATA FIELDS ARE BLANK FOR THIS SSNappears at the bottom of the NRPS INQUIRY DIRECTORY screen
follow the instructions in Step 2 of the procedure outlined in M21-1, Part III, Subpart v, 5.B.3.b.
THE REQUESTED INFORMATION DOES NOT EXIST FOR THIS SSN appears at the bottom of the NRPS INQUIRY DIRECTORY screen
  • request the Veteran’s retirement orders through DPRIS
  • upload the orders into the Veteran’s eFolder when they arrive
  • notify Compensation Service’s Military Pay Staff by e-mail (milpay.vbaco@va.gov) of the “no record” case, and
  • follow the instructions inStep 2 of the procedure outlined in M21-1, Part III, Subpart v, 5.B.3.b.
Notes:
  • A Trusted Agent in each regional office (RO) is responsible for managing employee access to RCPS.
  • Users may reset RCPS, when necessary, by pressing the Pause/Breakkey on their keyboard.
  • Periodic reentry from the DISA MIAP might be necessary if a user intends to maintain access to RCPS throughout the day.  Do not log out of the DISA MIAP in order to maintain access from this point.
  • RO employees may also obtain RCPS data by contacting DFAS at one of the following telephone numbers:
    • 800-321-1080, or
    • 888-332-7411.
References:  For more information about using

III.v.5.B.3.b.  Updating VBMS-A/ VETSNET Based on Data Displayed in RCPS
The table below contains instructions for updating the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen in VBMS-A or VETSNET based on data displayed on the SELECTED ENTITLEMENT DATA screen in RCPS.
Step
Action
1
Has the Veteran’s service department calculated the amount of MRP it will pay the Veteran?
  • If yes, proceed to Step 3.
  • If no, proceed to the next step.
2
  • On the RETIRED PAY tab in VBMS-A or VETSNET,
    • enter the retirement date (separation date plus one day) in the EFFECTIVE DATE field, and
    • leave the GROSS AMOUNT field blank.
  • Disregard the remaining steps in this table and follow the instructions in M21-1, Part III, Subpart v, 5.B.3.c.
Important:  Do not enter 0.00 in the GROSS AMOUNT field, as doing so deactivates the retired pay indicator.
3
Look at the fields that appear along the right side of the SELECTED ENTITLEMENT DATA screen in RCPS.  Is the amount displayed in the PR GP (prior gross pay) field $0.00?
  • If yes,
    • enter the date displayed in the CURR GP EFF DT (current gross pay effective date) field and the amount displayed in the CURR GP (current gross pay) field into the EFFECTIVE DATE and GROSS AMOUNT fields, respectively, on the RETIRED PAY tab, and
    • disregard the remaining step in this table.
  • If no, proceed to the next step.
4
Follow the instructions in the table below.
If …
Then …
the same date is displayed in the CURR GP EFF DT and PR GP EFF DT (prior gross pay effective date) fields
enter the date displayed in the CURR GP EFF DT field and the amount displayed in the CURR GP field into the EFFECTIVE DATE and GROSS AMOUNT fields, respectively, on the RETIRED PAY tab.
different dates are displayed in the CURR GP EFF DT and PR GP EFF DT fields
  • enter the date displayed in the PR GP EFF DT field and the amount displayed in the PR GP field into the EFFECTIVE DATE and GROSS AMOUNT fields, respectively, on the RETIRED PAY tab
  • click on the ADD button on the RETIRED PAY tab
  • enter the date displayed in the CURR GP EFF DT field and the amount displayed in the CURR GP field into the EFFECTIVE DATE and GROSS AMOUNT fields, respectively, on the RETIRED PAY tab, and
  • click on the DONE button on the RETIRED PAY tab.
References:  For more information about using

III.v.5.B.3.c.  Awarding Benefits After Determining the Amount of a Veteran’s MRP Has Not Yet Been Calculated
The table below contains instructions for awarding disability compensation after determining (through the procedure described in M21-1, Part III, Subpart v, 5.B.3.a) that a Veteran’s service department has not yet calculated the amount of the Veteran’s MRP.
If …
Then …
  • six months have passed since a Veteran retired, and
  • the Veteran’s service department has not yet calculated his/her MRP
it is unnecessary to establish a withholding for MRP.
  • the effective date of the award is the first day of the current month, and
  • VA is authorizing the awardbefore the retired pay cutoff date/time for the current month
  • award disability compensation without a withholding for MRP, and
  • after authorizing the award, send an e-mail tomilpay.vbaco@va.gov that includes (in the body of the e-mail message)
    • the Veteran’s claim number, and
    • the statement Sending per instructions in M21-1III.v.5.B.3.c.
Example:  No withholding for MRP is necessary if
  • a Veteran retires on February 26, 2017
  • disability compensation is payable from March 1, 2017
  • the current month is March 2017, and
  • VA authorizes the award before 6:00 p.m. Central Daylight Time (CDT) on March 15 2017.
  • the effective date of the award islater than the first day of the current month butnot later than the retired pay cutoff date for the current month, and
  • VA is authorizing the awardbefore the retired pay cutoff date/time for the current month
  • award disability compensation without a withholding for MRP, and
  • after authorizing the award, send an e-mail tomilpay.vbaco@va.gov that includes (in the body of the e-mail message)
    • the Veteran’s claim number, and
    • the statement Sending per instructions in M21-1III.v.5.B.3.c.
Example:  No withholding for MRP is necessary if
  • a Veteran retires on March 1, 2017
  • disability compensation is payable from April 1, 2017
  • the current month is March 2017, and
  • VA authorizes the award before 6:00 p.m. CDT on March 15, 2017.
the effective date of the award is earlierthan the first day of the current month
  • withhold all disability compensation from the effective date of the award until the
    • first day of the current month if VA is authorizing the award before the retired pay cutoff date/time for the current month, or
    • first day of the next month if VA is authorizing the award after the retired pay cutoff date for the current month
  • establish EP 290 after authorizing the award, using the current date as the date of claim and the claim label
    • DRAS Retired Pay Waiver/Election when processing an Integrated Disability Evaluation System (IDES) case, or
    • BDD Retired Pay Waiver/Election when processing any other type of case
  • enter Awaiting MRP Information as an associated contention
  • add a custom tracked item labeled MRP Information with a suspense date that is 10 days from the current date, and
  • send an e-mail to milpay.vbaco@va.gov that includes (in the body of the e-mail message)
    • the Veteran’s claim number, and
    • the statement Sending per instructions in M21-1III.v.5.B.3.c.
Example:  A withholding of all disability compensation from February 1, 2017, to March 1, 2017, is necessary if
  • a Veteran retires on January 21, 2017
  • disability compensation is payable from February 1, 2017
  • the current month is March 2017, and
  • VA authorizes the award before 6:00 p.m. CDT on March 15, 2017.
Exception:  Do not withhold all disability compensation if a Veteran is already receiving disability compensation on the date he/she retires.  Under such circumstances, withhold only the amount of any increase in compensation to which the Veteran is entitled.
Notes:
  • Jurisdiction over EP 290, DRAS Retired Pay Waiver/Election, remains with the RO that established the EP until the RO is able to complete all the actions required to close out the EP, as described in M21-1, Part III, Subpart v, 5.B.3.d.
  • National Work Queue (NWQ) routing rules dictate which RO will process EP 290, BDD Retired Pay Waiver/Election.
the provisions of 38 CFR 3.31 do notapply to the assignment of an effective date based on the policy expressed in
follow the instructions in the table below.
If …
Then …
  • the effective date of the award is the first day of the current month, and
  • VA is authorizing the award before the retired pay cutoff date/time for the current month
follow the instructions in the second row of this table.
Example:  No withholding for MRP is necessary if
  • a Veteran retires on March 1, 2017
  • disability compensation is payable from March 1, 2017
  • the current month is March 2017, and
  • VA authorizes the award beforebefore 6:00 p.m. CDT on March 15, 2017.
  • the effective date of the award is laterthan the first day of the current month but not later than the retired pay cutoff date for the current month, and
  • VA is authorizing the award before the retired pay cutoff date/time for the current month
follow the instructions in thethird row of this table.
Example: No withholding for MRP is necessary if
  • a Veteran retires on March 6, 2017
  • disability compensation is payable from March 6, 2017
  • the current month is March 2017, and
  • VA authorizes the award before 6:00 p.m. CDT on March 15, 2017.
the effective date of the award is earlier than the first day of the current month
follow the instructions in the fourth row of this table.
Example:  A withholding of all disability compensation from February 10, 2017, to March 1, 2017, is necessary if
  • a Veteran retires on February 10, 2017
  • disability compensation is payable from February 10, 2017
  • the current month is March 2017, and
  • VA authorizes the award before 6:00 p.m. CDT on March 15, 2017.
Note:  When an EP 290 must be established, authorizing an award as described in the table above between the day after the retired pay cutoff date and a few days prior to the last day of the month increases the likelihood that the EP 290 may be adjudicated in a more expeditious manner.
Reference:  For more information about retired pay cutoff dates, see M21-1, Part III, Subpart v, 5.B.2.b.

III.v.5.B.3.d.  Review and Processing of EPs 290
Follow the instructions in the table below for every EP 290 that was established in accordance with the instructions in M21-1, Part III, Subpart v, 5.B.3.c.
Step
Action
1
Follow the instructions in the table below.
If the Veteran retired from the …
Then …
  • Army
  • Navy
  • Air Force, or
  • Marine Corps
proceed to the next step.
  • Coast Guard
  • NOAA, or
  • PHS
2
Access RCPS by logging into the DISA MIAP.
3
Once RCPS opens, enter the following text in the upper, left-hand corner of the screen:  HUNT[enter a space or comma, the Veteran’s nine-digit SSN, and a comma]ENTIT.
Example:  HUNT 999999999,ENTIT
4
Press Enter on the keyboard.
5
Does the SELECTED ENTITLEMENT DATA screen appear after pressing Enter?
  • If yes,
    • follow the instructions in M21-1, Part III, Subpart v, 5.B.3.b to update the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen in VBMS-A or VETSNET, and
    • proceed to Step 11.
  • If no, proceed to the next step.
6
Has the EP 290 been pending more than six months from the date of separation?
  • If yes, proceed to the next step.
  • If no, proceed to Step 10.
7
Remove the withholding for MRP effective the date the withholding first began on or after the last retirement date.
Important:  Do not enter 0.00 in the GROSS AMOUNT field when updating the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen in VBMS-A or VETSNET, as doing so deactivates the retired pay indicator.  Leave the field blank instead.
8
Notify the Veteran of the action taken.
9
  • Send an e-mail to milpay.vbaco@va.gov that includes (in the body of the e-mail message)
    • the Veteran’s claim number, and
    • the statement Sending per instructions in Step 9 of the procedure outlined in M21-1III.v.5.B.3.d.
  • Disregard the remaining steps in this table.
10
Follow the instructions in the table below.
If the message …
Then …
THE REQUESTED INFORMATION DOES NOT EXIST FOR THIS SSNappears at the bottom of the NRPS INQUIRY DIRECTORY screen
  • disregard the remaining steps in this table
  • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
  • repeat the steps in this table during the next review of the EPs 290 that were established in accordance with the instructions in M21-1, Part III, Subpart v, 5.B.3.c.
THE REQUESTED DATA FIELDS ARE BLANK FOR THIS SSN appears at the bottom of the NRPS INQUIRY DIRECTORY screen
proceed to the next step.
11
In RCPS, enter the following text in the upper, left-hand corner of the screen:  HUNT[enter a space or comma, the Veteran’s nine-digit SSN, and a comma]VA.
Example:  HUNT 999999999,VA
12
Are the ACTUAL DED DT (actual deduction date) and ACTUAL AMT (actual amount) fields on the VA WAIVER screen populated with data?
  • If yes, proceed to Step 17.
  • If no, proceed to the next step.
Notes:
  • The amount displayed in the ACTUAL AMT field represents the amount of MRP waived.  If the amount in this field equals or exceeds the amount of the Veteran’s MRP, then the Veteran’s MRP has been waived in full.
  • The number displayed in the ACTUAL DED DT field represents the effective date (YYYYMMDD) of the waiver.
  • If 0.00 appears in the ACTUAL AMT field, the MRP waiver was $0.00 as of the date displayed in the ACTUAL DED DT field.
  • If two or more columns of data are displayed on the VA WAIVER screen,
    • disregard the data in all but the first column of data if the date displayed in the ACTUAL DED DT field is the same in all columns, or
    • use the data displayed in all of the columns if at least one of the dates displayed in the ACTUAL DED DT field does not match.
13
Have 10 working days passed since the award action described inM21-1, Part III, Subpart v, 5.B.3.c, was authorized?
  • If yes, proceed to Step 16.
  • If no, proceed to the next step.
14
Did the SELECTED ENTITLEMENT DATA screen referenced in Step 5 appear after taking the actions described in Steps 3 and 4?
  • If yes, proceed to the next step.
  • If no,
    • stop here
    • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
    • repeat the steps in this table during the next review of the EPs 290 that were established in accordance with the instructions in M21-1, Part III, Subpart v, 5.B.3.c.
15
Does the amount of MRP the Veteran receives exceed the gross monthly amount of the Veteran’s disability compensation?
  • If yes,
    • clear the EP 290, and
    • disregard the remaining steps in this table.
  • If no,
    • withhold from the Veteran’s award the gross monthly amount of his/her MRP from the date compensation is payable following separation to the date the withholding for MRP ended
    • notify the Veteran of the action taken, and
    • disregard the remaining steps in this table.
16
  • Send an e-mail to milpay.vbaco@va.gov that includes (in the body of the e-mail message) the
    • Veteran’s claim number, and
    • statement Sending per instructions in Step 16 of the procedure outlined in M21-1III.v.5.B.3.d.
  • Take no further action until the Military Pay Staff responds with further instructions.
17
Follow the instructions in the table below.
If …
Then …
  • the date in the ACTUAL DED DT field matches the date the withholding of disability compensation (as referenced inM21-1, Part III, Subpart v, 5.B.3.c) ceased, and
  • the amount of the Veteran’s MRP is unknown
  • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
  • repeat the steps in this table during the next review of the EPs 290 that were established in accordance with the instructions in M21-1, Part III, Subpart v, 5.B.3.c.
  • the date in the ACTUAL DED DT field matches an effective date of the award of disability compensation, and
  • the amount in the ACTUAL AMT field is greater than $0.00
  • make the appropriate entries on the RETIRED PAY tab of the AWARD ADJUSTMENTS screen in VBMS-A to reduce the amount of disability compensation VA withheld by the amount displayed in the ACTUAL AMT field, effective the date displayed in the ACTUAL DED DT field, and
  • notify the Veteran of the action taken.
Caution:  Do not adjust the Veteran’s award for any periods prior to the date displayed in the ACTUAL DED DT field.
Notes:
  • After making the award adjustment described in this cell,
    • paste a copy of a screenshot of the VA WAIVER screen into a Word document
    • follow the instructions in M21-1, Part III, Subpart ii, 4.G.2.b, for converting the Word document into a portable document format (PDF) file
    • index the PDF file by entering,
      • Retired Pay Screen in the DOCUMENT CATEGORY – TYPE field, and
      • VA Waiver in the SUBJECT field, and
    • upload the file into the Veteran’s eFolder.
  • The award adjustment described in this cell releases to the Veteran disability compensation VA withheld from the date displayed in the ACTUAL DED DT field up to the amount displayed in the ACTUAL AMT field.
  • If the amount of MRP is unknown and the amount displayed in the ACTUAL AMT field is less than the amount of disability compensation VA withheld for MRP, or if VA cannot release to the Veteran all the disability compensation it withheld for MRP,
    • continue the EP 290 at authorization
    • notify the Veteran of the action taken
    • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
    • repeat the steps inM21-1, Part III, Subpart v, 5.B.3.d, until the RO is able to complete all the actions required to close out the EP.
  • the date in the ACTUAL DED DT field matches the date the withholding of disability compensation (as referenced inM21-1, Part III, Subpart v, 5.B.3.c) ceased
  • the amount in the ACTUAL AMT field matches the amount of disability compensation VA paid from the date in the ACTUAL DED DT field, and
  • the Veteran’s MRP is less than the amount of disability compensation to which the Veteran is entitled
  • make the appropriate entries on the RETIRED PAY tab of the AWARD ADJUSTMENTS screen in VBMS-A to reduce the amount(s) of disability compensation withheld for MRP to the gross monthly amount(s) of MRP the Veteran received prior to the date in the ACTUAL DED DT field, and
  • notify the Veteran of the action taken.
Note:  The award adjustment described in this cell releases to the Veteran all disability compensation that exceeds the amount of gross monthly MRP.
  • the date in the ACTUAL DED DT field matches the date the withholding of disability compensation (as referenced inM21-1, Part III, Subpart v, 5.B.3.c) ceased
  • the amount in the ACTUAL AMT field matches the amount of disability compensation VA paid from the date in the ACTUAL DED DT field, and
  • the Veteran’s MRP is equal to or exceeds the gross amount of disability compensation to which the Veteran is entitled
no further action is necessary except to clear the pending EP 290.
the date in the ACTUAL DED DT field is later than the date the withholding of disability compensation (as referenced in M21-1, Part III, Subpart v, 5.B.3.c) ceased
Note:  VA may have overpaid the Veteran in this case.
  • send an e-mail tomilpay.vbaco@va.gov that includes (in the body of the e-mail message) the
    • Veteran’s claim number, and
    • statement Sending per instructions in Step 17 of the procedure outlined in M21-1III.v.5.B.3.d, and
  • take no further action until the Military Pay Staff responds to the e-mail.

III.v.5.B.3.e.  Review and Processing of EPs 290 That Involve a Veteran Who Retired From the Coast Guard, NOAA, or PHS
Follow the instructions in the table below for every EP 290 that
Step
Action
1
Contact CGRASB at 800-772-8724 or 785-339-3415 and ask whether
  • the amount of the Veteran’s MRP has been calculated, and/or
  • a VA waiver has been posted.
2
Has the amount of the Veteran’s MRP been calculated, or has a VA waiver been posted?
  • If yes,
    • ask CGRASB for the amount(s) and effective date(s) of
      • payment(s) of MRP, and/or
      • the VA waiver
    • document the information obtained from CGRASB on VA Form 27-0820 and upload the form into the Veteran’s eFolder, and
    • proceed to Step 7.
  • If no, proceed to the next step.
3
Has the EP 290 been pending more than six months from the date of separation?
  • If yes, proceed to the next step.
  • If no,
    • stop here
    • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
    • repeat the steps in this table during the next review of the EPs 290 that were established in accordance with the instructions in M21-1, Part III, Subpart v, 5.B.3.c.
4
Remove the withholding for MRP effective the date the withholding first began on or after the last retirement date.
Important:  Do not enter 0.00 in the GROSS AMOUNT field when updating the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen in VBMS-A or VETSNET, as doing so deactivates the retired pay indicator.  Leave the field blank instead.
5
Notify the Veteran of the action taken.
6
  • Send an e-mail to milpay.vbaco@va.gov that includes (in the body of the e-mail message) the
    • Veteran’s claim number, and
    • statement Sending per instructions in Step 6 of the procedure outlined in M21-1III.v.5.B.3.e.
  • Disregard the remaining steps in this table.
7
Has the amount of the Veteran’s MRP been calculated?
  • If yes,
    • follow the instructions in M21-1, Part III, Subpart v, 5.B.3.b, for updating the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION SCREEN in VBMS-A or VETSNET, and
    • proceed to the next step.
  • If no, proceed to the next step.
8
Was VA waiver information received from CGRASB as described in Step 2?
  • If yes, proceed to Step 12.
  • If no, proceed to the next step.
9
Have 10 working days passed since the award action described inM21-1, Part III, Subpart v, 5.B.3.c, was authorized?
  • If yes, proceed to the next step.
  • If no, proceed to Step 11.
10
  • Send an e-mail to milpay.vbaco@va.gov that includes (in the body of the e-mail message) the
    • Veteran’s claim number, and
    • statement Sending per instructions in Step 10 of the procedure outlined in M21-1III.v.5.B.3.e.
  • Take no further action until the Military Pay Staff responds with further instructions.
11
Does the amount of MRP the Veteran receives exceed the gross monthly amount of the Veteran’s disability compensation?
  • If yes,
    • clear the EP 290, and
    • disregard the remaining steps in this table.
  • If no,
    • withhold from the Veteran’s award the gross monthly amount of his/her MRP from the date compensation is payable following separation to the date the withholding for MRP ended
    • notify the Veteran of the action taken, and
    • disregard the remaining steps in this table.
12
Follow the instructions in the table below.
If …
Then …
  • the effective date of the VA waiver matches the date the withholding of disability compensation (as referenced in M21-1, Part III, Subpart v, 5.B.3.c) ceased, and
  • the amount of the Veteran’s MRP is unknown
  • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
  • repeat the steps in this table during the next review of the EPs 290 that were established in accordance with the instructions in M21-1, Part III, Subpart v, 5.B.3.c.
  • the effective date of the VA waiver matches an effective date of the award of disability compensation, and
  • the amount of the VA waiver is greater than $0.00
  • make the appropriate entries on the RETIRED PAY tab of the AWARD ADJUSTMENTS screen in VBMS-A to reduce the amount of disability compensation VA withheld by the amount of the VA waiver from the effective date of the VA waiver, and
  • notify the Veteran of the action taken.
Caution:  Do not adjust the Veteran’s award for any periodsprior to the effective date of the VA waiver.
Notes:
  • The award adjustment described in this cell releases to the Veteran disability compensation VA withheld from the effective date of the VA waiver in the amount of the VA waiver.
  • If the amount of the VA waiver is less than the amount of disability compensation VA withheld for MRP,
    • continue the EP 290 at authorization
    • notify the Veteran of the action taken
    • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
    • repeat the steps described inM21-1, Part III, Subpart v, 5.B.3.e, until the RO is able to complete all the actions required to close out the EP.
  • the effective date of the VA waiver matches the date the withholding of disability compensation (as referenced in M21-1, Part III, Subpart v, 5.B.3.c) ceased
  • the amount of the VA waiver matches the amount of disability compensation VA paid from the effective date of the VA waiver, and
  • the Veteran’s MRP isless than the gross amount of disability compensation to which the Veteran is entitled
  • make the appropriate entries on the RETIRED PAY tab of the AWARD ADJUSTMENTS screen in VBMS-A to reduce the amount(s) of disability compensation VA withheld for MRP to the gross monthly amount(s) of MRP the Veteran received prior to the effective date of the VA waiver, and
  • notify the Veteran of the action taken.
Notes:  The award adjustment described in this cell releases to the Veteran all disability compensation that exceeds the amount of gross monthly MRP.
  • the effective date of the VA waiver matches the date the withholding of disability compensation (as referenced in M21-1, Part III, Subpart v, 5.B.3.c) ceased
  • the amount of the VA waiver matches the amount of disability compensation VA paid from the effective date of the VA waiver, and
  • the Veteran’s MRP is equal to or exceeds the gross amount of disability compensation to which the Veteran is entitled
no further action is necessary except to clear the pending EP 290.
the effective date of the VA waiver is later than the date the withholding of disability compensation (as referenced inM21-1, Part III, Subpart v, 5.B.3.c) ceased
Note:  VA may have overpaid the Veteran in this case.
  • send an e-mail tomilpay.vbaco@va.govthat includes (in the body of the e-mail message) the
    • Veteran’s claim number, and
    • statementSending per instructions in Step 12 of the procedure outlined in M21-1III.v.5.B.3.e, and
  • take no further action until the Military Pay Staff responds to the e-mail.

III.v.5.B.3.f.  Handling Cases In Which the Date of Retirement or Separation Falls on the 31st Day of a Month
If the date of a Veteran’s retirement (the day following the date of separation) falls on the 31st day of a month, enter the first day of the month that follows the date of retirement in the EFFECTIVE DATE field on the RETIRED PAY tab of the MILITARY PAYMENT INFORMATION screen in VBMS-A or VETSNET.
Rationale:  The 31st day of a month is not a pay date for MRP purposes.  Therefore, when the retirement date falls on this day, MRP starts on the first day of the following month.

III.v.5.B.3.g. Adjusting a Running Award of Disability Compensation When the Amount of a  Veteran’s MRP Was PreviouslyUnknown
The table below contains instructions that are unique to the adjustment of a running award of disability compensation when the amount of a Veteran’s MRP was unknown on the most recent award.
Important:
  • Before taking the actions described in the table below, follow the instructions in M21-1, Part III, Subpart v, 5.B.3.a, to ensure the amount of MRP to which the Veteran is entitled remains unknown.
  • If six months have passed since the Veteran retired, and the Veteran’s service department has not yet calculated his/her MRP, it is unnecessary to establish a withholding for MRP.
Step
Action
1
Follow the instructions in the table below.
If the Veteran retired from the …
Then proceed to …
  • Army
  • Navy
  • Air Force, or
  • Marine Corps
the next step.
  • Coast Guard
  • NOAA, or
  • PHS
Step 3.
2
  • Follow the instructions in the table below.
  • Disregard the remaining steps in this table.
If the ACTUAL DED DT and ACTUAL AMT fields on the VA WAIVER screen in RCPS …
Then …
  • contain no data, and
  • the amount of MRP isknown
withhold any increase in disability compensation – up to the gross monthly amount of the Veteran’s MRP – from the effective date of the award until the
  • first day of the currentmonth if VA authorizes the award prior to the retired pay cutoff date/time for the current month, or
  • first day of the next month if VA authorizes the awardafter the retired pay cutoff date/time for the current month.
  • contain no data, and
  • the amount of MRP isunknown
Important:  In the body of the e-mail to milpay.vbaco@va.gov, include the statement Sending per instructions in M21-1III.v.5.B.3.g.
  • contain data, and
  • the amount of MRP isknown
  • pay disability compensation in the amount displayed in the ACTUAL AMT field from the date in the ACTUAL DED DT field, and
  • withhold the remaining amount – up to the amount of the Veteran’s MRP – from the effective date of the award until the
    • first day of thecurrent month if VA authorizes the award prior to the retired pay cutoff date/time for the current month, or
    • first day of thenext month if VA authorizes the award after the retired pay cutoff date/time for the current month.
Important:  Do not withhold disability compensation that VA paidprior to the date displayed in the ACTUAL DED DT field.
  • contain data, and
  • the amount of MRP isunknown
  • follow the instructions in the preceding row
  • establish EP 290 after authorizing the award, using the current date as the date of claim and the claim label
    • DRAS Retired Pay Waiver/Electionwhen processing an IDES case, or
    • BDD Retired Pay Waiver/Electionwhen processing any other type of case
  • enter Awaiting MRP Information as an associated contention
  • add a custom tracked item labeled MRP Informationwith a suspense date that is 10 days from the current date, and
  • send an e-mail tomilpay.vbaco@va.govthat includes (in the body of the e-mail message) the
    • Veteran’s claim number, and
    • statementSending per instructions in M21-1III.v.5.B.3.g.
Notes:
  • Jurisdiction over EP 290,DRAS Retired Pay Waiver/Election, remains with the RO that established the EP until the RO is able to complete all the actions required to close out the EP, as described in M21-1, Part III, Subpart v, 5.B.3.d.
  • NWQ routing rules dictate which RO will process EP 290, BDD Retired Pay Waiver/Election.
3
Contact CGRASB at 800-772-8724 or 785-339-3415 and ask whether
  • the amount of the Veteran’s MRP has been calculated, and/or
  • a VA waiver has been posted.
4
Has the amount of the Veteran’s MRP been calculated, or has a VA waiver been posted?
  • If yes,
    • ask CGRASB for the amount(s) and effective date(s) of
      • payment(s) of MRP, and/or
      • the VA waiver
    • document the information obtained from CGRASB on VA Form 27-0820 and upload the form into the Veteran’s eFolder, and
    • proceed to Step 6.
  • If no, proceed to the next step.
5
  • Withhold any increase in disability compensation and follow the instructions in the fourth row of the table under M21-1, Part III, Subpart v, 5.B.3.c.
  • Disregard the remaining step in this table.
Important:  In the body of the e-mail to milpay.vbaco@va.gov, include the statement Sending per instructions in M21-1 III.v.5.B.3.g.
6
Follow the instructions in the table below.
If the …
Then …
amount and effective date of MRP is known, but CGRASB reports no VA waiver has posted
withhold any increase in disability compensation – up to the gross monthly amount of the Veteran’s MRP – from the effective date of the award until the
  • first day of the current month if VA authorizes the award prior to the retired pay cutoff date/time for the current month, or
  • first day of the next month if VA authorizes the award after the retired pay cutoff date/time for the current month.
  • amount and effective date of MRP are known, and
  • amount of the VA waiver is known
  • pay disability compensation in the amount of the VA waiver from the effective date of the VA waiver, and
  • withhold the remaining amount – up to the amount of the Veteran’s MRP – from the effective date of the award until the
    • first day of the currentmonth if VA authorizes the award prior to the retired pay cutoff date/time for the current month, or
    • first day of the nextmonth if VA authorizes the award after the retired pay cutoff date/time for the current month.
Important:  Do not withhold disability compensation that VA paid prior to the effective date of the VA waiver.
amount and effective date of the VA waiver are known, but the amount of MRP is unknown
  • follow the instructions in the preceding row
  • establish EP 290 after authorizing the award, using the current date as the date of claim and the claim label
    • DRAS Retired Pay Waiver/Election when processing an IDES case, or
    • BDD Retired Pay Waiver/Election when processing any other type of case
  • enter Awaiting MRP Informationas an associated contention
  • add a custom tracked item labeled MRP Information with a suspense date that is 10 days from the current date, and
  • send an e-mail tomilpay.vbaco@va.gov that includes (in the body of the e-mail message) the
    • Veteran’s claim number, and
    • statement Sending per instructions in M21-1III.v.5.B.3.g.
Notes:
  • Jurisdiction over EP 290, DRAS Retired Pay Waiver/Election, remains with the RO that established the EP until the RO is able to complete all the actions required to close out the EP, as described in M21-1, Part III, Subpart v, 5.B.3.e.
  • NWQ routing rules dictate which RO will process EP 290,BDD Retired Pay Waiver/Election.

4.  VA, Service Department, and RPC Responsibility for Avoiding and Collecting Overpayments

Introduction

 This topic contains information on VA’s, the service departments’, and the RPCs’ responsibility for

Change Date

 March 6, 2017

III.v.5.B.4.a.  Responsibility for Avoiding Overpayments

 To avoid the creation of an overpayment in a Veteran’s account,

  • VA is responsible for processing awards that use effective dates determined in accordance with M21-1, Part III, Subpart v, 5.B.2
  • the service department is responsible for contacting VA to inquire whether or not a Veteran eligible for MRP is already in receipt of VA benefits, and
  • the RPCs are responsible for the timely processing of waivers based on VA awards.

III.v.5.B.4.b.  Responsibility for Collecting an Overpayment
Use the table below to determine who is responsible for collecting an overpayment.
If …
Then …
concurrent payments of MRP and compensation, Section 306 Pension, or Old Law Pension are made without
  • an election, or
  • the establishment of an effective waiver
VA is responsible for collecting the overpayment.
Important:  VA is responsible for collecting the overpayment even if VA received no notice that MRP had been awarded.
  • VA benefits have already been awarded, and
  • the Veteran later becomes entitled to MRP
the service department is responsible for sending an inquiry to VA and collecting any resulting overpayment.
VA fails to award benefits from the proper date, resulting in a duplicate payment of compensation and MRP
VA is responsible for collecting the overpayment.
  • VA processes an award correctly, and
  • the RPC fails to make a timely waiver adjustment
the RPC is responsible for collecting the resulting overpayment.
Note:  A General Counsel memorandum for file, dated September 18, 1972, determined that 38 U.S.C. 3104(a) (now 38 U.S.C. 5304(a)), prohibiting concurrent payment of VA benefits and MRP, does not preclude the application of 38 U.S.C. 3012(b)(10) (now 38 U.S.C. 5112(b)(10)), which permits a reduction of VA benefits effective the date last paid (the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share) if the previous payment was solely VA error. That General Counsel memorandum was found to be consistent with the decision inVAOPGCPREC 2-1990.

 

5.  Handling an Election of VA Benefits, a Relection of VA Benefits, and an Election of MRP

 

Introduction

 This topic contains instructions for handling an election of VA benefits, a reelection of VA benefits, and an election of MRP, including

Change Date

 September 6, 2018

III.v.5.B.5.a.  Handling an Election of MRP From a Veteran in Receipt of Section 306 Pension or Old Law Pension
A Veteran receiving Section 306 Pension or Old Law Pension may elect to receive MRP.
An election of MRP does not bar subsequent election of other benefits administered by VA.
Note:  The effective date of reelection of VA benefits is governed by 38 CFR 3.401(e)(3).
Reference:  For more information about a Veteran’s right to elect MRP and reelect VA benefits, see 38 CFR 3.750.

III.v.5.B.5.b. Determining Whether a Veteran May Reelect Section 306 Pension or Old Law Pension After Waiving the Benefit
Although a Veteran may waive Section 306 Pension or Old Law Pension in order to receive MRP, VA might not allow the Veteran to reelect the same VA benefit at a later date.
Entitlement to Section 306 Pension or Old Law Pension is not protected under 38 CFR 3.960 if the disability or annual income did not continuously meet protected pension eligibility criteria from the date pension was waived through the date of receipt of the reelection.
Before paying Section 306 Pension or Old Law Pension to a Veteran who waived his or her pension to receive MRP, request evidence to determine if the Veteran would have been continuously entitled to Section 306 Pension or Old Law Pension for the entire period that the pension payments were waived.
Absent evidence of continuous entitlement, the Veteran can no longer receive Section 306 Pension or Old Law Pension.  If entitlement to current-law pension exists, VA may pay this benefit to the Veteran.

III.v.5.B.5.c.  Handling an Election of MRP From a Veteran in Receipt of Disability Compensation

Follow the steps in the table below when a Veteran in receipt of disability compensation checks a box on one of the forms listed in the second row of the table under M21-1, Part III, Subpart ii, 2.B.1.b that is labeled

  • I want MRP instead of VA compensation, or
  • No, I do not want VA compensation in lieu of military retired pay.
Exception:  If a Veteran who is not eligible for MRP checks the box referenced in the preceding paragraph,
  • disregard the steps in the table below, and
  • notify the Veteran that VA cannot act on his/her election because he/she is not eligible for MRP.
Step
Action
1
  • Establish EP 290.
  • Add Potential Under/Overpayment as a special issue.
2
Attempt to contact the Veteran by telephone to confirm his/her election of MRP over disability compensation.
3
Were attempts to contact the Veteran by telephone successful?
  • If yes, proceed to the next step.
  • If no,
    • clear the EP 290, and
    • proceed to Step 9.
4
Did the Veteran confirm his/her election of MRP over disability compensation?
  • If yes,
    • discontinue the payment of disability compensation effective the date of receipt of the election
    • notify the Veteran of the action taken, and
    • disregard the remaining steps in this table.
  • If no, proceed to the next step.
5
  • Ask the Veteran to
    • complete VA Form 21-651, including Blocks 2 through 5 (even though the form indicates VA is responsible for completing those blocks), and
    • sign and return the form to VA within 24 hours.
  • Inform the Veteran that if he/she does not return the form within 24 hours, VA will initiate action to discontinue his/her disability compensation.
Note:  If the Veteran desires to fax the form, provide him/her with one of the following fax numbers:
  • 844-531-7818 (domestic), or
  • 248-524-4260 (outside the U.S.).
6
Create a custom tracked item for return of VA Form 21-651 with a suspense date that is five business days from the current date.
7
Did the Veteran indicate he/she would fax the form?
  • If yes,
    • check the Veteran’s eFolder for receipt of the VA Form 21-651 after the suspense date referenced in Step 6 expires, and
    • proceed to the next step.
  • If no, proceed to the next step.
8
Did the Veteran return VA Form 21-651 within the allotted time period?
  • If yes,
    • clear the pending EP 290
    • notify the Veteran that VA received his/her VA Form 21-651 and, accordingly, will make no adjustments to his/her award, and
    • disregard the remaining steps in this table.
  • If no,
    • clear the EP 290, and
    • proceed to the next step.
9
  • Establish EP 600.
  • Add Potential Under/Overpayment as a special issue.
10
Issue a notice of proposed adverse action that informs the Veteran that
  • VA intends to discontinue his/her disability compensation effective the date VA received his/her election
  • the Veteran’s election will result in the creation of an overpayment, and
  • if the Veteran desires to withdraw his/her election, he/she must complete, sign, and return VA Form 21-651 within 60 days.
Rationale for providing due process:
  • An election of MRP over VA benefits is not listed as an exception (in 38 CFR 3.103(b)(3)) to the requirement that VA provide due process before reducing a beneficiary’s award.
  • Veterans often mistakenly check the box on VA forms that is labeled I want MRP instead of VA compensation or No, I do not want VA compensation in lieu of military retired pay.  Providing due process ensures the Veteran has an opportunity to confirm that he/she does, indeed, desire to waive disability compensation in order to receive MRP.
Reference:  For more information about issuing notice of a proposed adverse action, see M21-1, Part I, 2.B.
11
Did the Veteran return VA Form 21-651 within 65 days?
  • If yes,
    • clear the pending EP 600, and
    • notify the Veteran that VA will not take the action it proposed in Step 10.
  • If no,
    • discontinue the payment of disability compensation effective the date of receipt of the election, and
    • notify the Veteran of the action taken..
Important:  Treat as a completed VA Form 21-651 any of the other forms (or the signed statement) referenced in M21-1, Part III, Subpart v, 5.A.2.d, that a Veteran submits at any point in the process described in the table above, as long as the Veteran does not check the box on the form he/she submits that is labeled
  • I want MRP instead of VA compensation, or
  • No, I do not want VA compensation in lieu of military retired pay.
References:
  • M21-1, Part VIII, 1.3, contains instructions for handling an election that is pending when a Veteran dies.
  • Follow the instructions in M21-1, Part III, Subpart v, 5.A.3.a, if a Veteran to whom VA has not yet awarded disability compensation files a claim for this benefit but elects MRP.

III.v.5.B.5.d.  Handling Reelection of Disability Compensation

When a Veteran, whose disability compensation VA discontinued because the Veteran elected MRP, later reelects disability compensation,

  • resume the payment of disability compensation, effective the date of receipt of the election, and
  • establish a withholding for the MRP according to the instructions in M21-1, Part III, Subpart v, 5.B.1.d.

Reference:  M21-1, Part VIII, 1.3, contains instructions for handling an election that is pending when a Veteran dies.

III.v.5.B.5.e. Determining the Effective Date of an Award When VA Denied the Prior Claim Because the Veteran Elected MRP
Follow the instructions in the table below when
  • VA denies a Veteran’s claim for disability compensation because the Veteran elected MRP, and
  • the Veteran files a subsequent claim on a form that includes a waiver of MRP one year or more after VA notified the Veteran of the denial.
Note:  Follow the instructions in the last sub-bullet in M21-1, Part III, Subpart v, 5.A.3.c, if VA receives the new claim within one year of the date VA notified the Veteran of the denial.
If …
Then award compensation for the disability (if otherwise in order) effective the first of the month following the date …
the rating activity
  • granted service connection for a new disability based on the Veteran’s new claim, and
  • assigned a compensable disability rating to the disability
of entitlement shown on the new rating decision.
the initial rating decision included a grant of service connection for a disability with a compensable disability rating and
  • the rating activity determined in the  initial rating decision that the disability was static (no future examination was required), or
  • the rating activity reevaluated the disability based on the new claim but determined no change in the current disability rating is warranted.
VA received the new claim.
the rating activity granted an increase in the disability rating assigned to a disability based on the new claim
the new rating decision shows the Veteran is entitled to the increased disability rating.
Important:
  • The policies described in the table above also apply if
    • VA denies a Veteran’s claim for disability compensation because the Veteran elected MRP
    • the Veteran files a subsequent claim on a form that does notinclude a waiver of MRP one year or more after VA notified the Veteran of the denial, and
    • the Veteran waives MRP within one year of the decision notice regarding the subsequent claim.
  • Payments of disability compensation may be subject to the withholding referenced in M21-1, Part III, Subpart v, 5.B.1.d, until the Veteran’s RPC makes corresponding adjustments to his/her MRP.

III.v.5.B.5.f.  Special Consideration of Veterans Hospitalized for a Service-Connected Disability
When all of the conditions listed below are met, notify the Veteran of the VA benefits that are payable to him/her and tell the Veteran that if he/she files a formal election within one year of the date of the notice, he/she will be eligible for VA benefits from the date of hospitalization.
  • VA receives notice from a VA medical center or military treatment facility of a Veteran’s hospitalization for a service-connected disability
  • a waiver of the Veteran’s MRP is not currently in effect, and
  • it appears the VA benefits that are payable would be greater than the Veteran’s MRP.
Note:  If a rating under 38 CFR 4.29 or 4.30 is involved, inform the Veteran of the temporary nature of the VA benefits.
Reference:  For more information on the forms a Veteran may submit to waive his/her MRP, see M21-1, Part III, Subpart v, 5.A.2.

III.v.5.B.5.g.  Awarding Benefits When  VA Form 21-651 Is Timely Received From a Veteran in a VA or Service Hospital
If, after receiving the notice discussed in M21-1, Part III, Subpart v, 5.B.5.f, a Veteran submits VA Form 21-651 within one year of the date of the notice, award benefits effective the date of hospitalization.
Notes:
  • The award, in this case, is subject to a withholding for the MRP the Veteran received from the effective date of the award, as provided in M21-1, Part III, Subpart v, 5.B.1.d.
  • Apply the provisions of 38 CFR 3.31 when determining the effective date of payment.

 

6.  Removal of a Veteran From the TDRL

 

Introduction

 This topic contains information on the effect of a Veteran’s removal from the TDRL, including

Change Date
May 21, 2018

III.v.5.B.6.a.  General Information on the Removal of a Veteran From the TDRL

 VA may become aware of a Veteran’s removal from the TDRL through

  • notification from an RPC
  • notification from the Veteran, or
  • routine review of the Veteran’s claims folder.

In any case,

III.v.5.B.6.b.  Removal From the TDRL of a Veteran in Receipt of VA Benefits
If an RPC provides notice that a Veteran in receipt of compensation is no longer receiving MRP, follow the instructions in M21-1, Part III, Subpart v, 5.B.1.e for removing the retired pay indicator from the corporate record.

III.v.5.B.6.c.  Removal From the TDRL of a Veteran Who Is Not Receiving VA Benefits
Follow the instructions in the table below when a Veteran who never filed a claim for VA benefits, or whose claim VA denied due to the Veteran’s receipt of MRP, is removed from the TDRL.
If the Veteran’s claims folder is …
Then the RO that received the notice must …
  • entirely paperless, or
  • located at the RO that received notice of the Veteran’s removal from the TDRL
send a letter to the Veteran’s last known address of record that
Note:  If VA received the notice of the Veteran’s removal from the TDRL from an RPC, the Veteran’s address will be displayed in the lower left corner of the notice.
not located at the RO that received notice of the Veteran’s removal from the TDRL
forward the notice of the Veteran’s removal from the TDRL to the RO that has custody of the Veteran’s claims folder.
Note:  The RO having custody of the Veteran’s claims folder is responsible for taking the actions described in the previous row of this table.

III.v.5.B.6.d.  Awarding of Severance Pay Following Removal of a Veteran From the TDRL
RPCs occasionally notify VA that a Veteran in receipt of compensation has been
  • removed from the TDRL, and
  • awarded severance pay.
In these cases, send the Veteran notice of proposed adverse action before adjusting his/her benefits.  Unless the Veteran submits evidence within 65 days that demonstrates VA should not take the proposed action, follow the instructions in the table below.
Step
Action
1
Prepare an amended award in accordance with instructions in M21-1, Part III, Subpart v, 4.B.
2
Follow the instructions in M21-1, Part III, Subpart v, 5.B.1.e for removing the retired pay indicator from the corporate record.
3
Begin withholding VA benefits to recoup the severance pay effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share.
4
Send a decision notice to the Veteran that fully explains the actions taken.
References:  For more information about

 

7.  Effect of a Reduction of Benefits Under 38 CFR 3.551 on MRP

 

Introduction

 This topic contains information on the effect of a reduction of benefits under 38 CFR 3.551 on MRP, including

Change Date

 July 31, 2015

III.v.5.B.7.a.  Handling the Reduction of a Veteran’s Award Under 38 CFR 3.551
Unlike pension, MRP is not subject to reduction when a Veteran is hospitalized at VA expense.
If a Veteran is hospitalized and has waived a portion of his/her MRP to receive Section 306 or Old Law Pension,
  • VA reduces the Veteran’s award under 38 CFR 3.551, and
  • the Veteran’s RPC
    • makes the appropriate adjustment to the Veteran’s MRP based on the award data VA transmits to the RPC, and
    • notifies VA of changes in the Veteran’s hospitalization status if the RPC receives such information first.
Rationale:  This reciprocal action ensures the Veteran receives his/her full entitlement, but not in excess thereof, on each benefit, per 38 U.S.C. 5305.
Reference:  For more information about reducing a Veteran’s award under 38 CFR 3.551, see M21-1, Part III, Subpart v, 6.B.

III.v.5.B.7.b.  Notifying a Veteran’s RPC of a Reduction in the Veteran’s Old Law Pension

 After reducing a Veteran’s Old Law Pension under 38 CFR 3.551(b), inform the Veteran’s RPC, by locally generated letter, that VA has reduced the Veteran’s benefits under 38 U.S.C. 5503(a)(1).  The letter must also provide the RPC with

  • the rate and effective date of the Veteran’s award immediately prior to the reduction
  • the reduced rate and the effective date of the reduction under 38 CFR 3.551(b), and
  • any changes in the rate of payment and the effective date of each change through the first future date on the award.
Result:  Information contained in the letter will ensure the RPC makes no adjustments in the Veteran’s MRP.
Reference:  M21-1, Part III, Subpart v, 5.C.2.f provides the mailing address for each RPC.

III.v.5.B.7.c.  Notifying a Veteran’s RPC of a Restoration of the Veteran’s Old Law Pension to the Full Rate of Entitlement
If VA restores an Old Law Pension award under 38 CFR 3.556 after reducing it under 38 CFR 3.551(b), send a locally-generated letter to the Veteran’s RPC that
  • notifies the RPC that VA has restored the Veteran’s award to the full rate of entitlement, and
  • provides the rate of payment to which benefits were restored and the effective date of the corresponding award action.
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in Chapter 5 Military Retirement Pay, Part III General Claims Process, Subpart v General Authorization Issues and Claimant Notification
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