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M21-1, Part III, Subpart v, Chapter 6, Section B – Adjustments Under 38 CFR 3.551 and 3.556

Overview


In This Section

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

1.  General Information on Reducing Pension Under 38 CFR 3.551 and 38 CFR 3.556


Introduction

This topic contains general information on reducing pension awards under 38 CFR 3.551 and 38 CFR 3.556, including

Change Date

December 14, 2018

III.v.6.B.1.a.  Criteria for Reducing Pension of a Hospitalized Veteran

Generally, the provisions of 38 CFR 3.551 require a reduction of pension payments for a Veteran who
  • has not established dependents for Department of Veterans Affairs (VA) purposes, and
  • is being furnished hospital, domiciliary or nursing home care by VA or at VA expense.
Note:  A therapeutic residence is considered domiciliary care for the purposes of reduction of benefits under 38 CFR 3.551(e).
The following table summarizes the criteria for reduction of current-law, Section 306, and Old-Law Pension.
Type of Pension
Reduction for Inpatient Care at VA Expense
Current-law pension if the Veteran
  • is admitted on or after 2/1/1990, to a
    • VA domiciliary or nursing home, or
    • private domiciliary or nursing home at VA expense
  • has no dependents, or
  • has a spouse or child, but is being paid pension as a Veteran with no dependents
Note:  A Veteran is considered to have a dependent if he or she has a child but does not receive pension for the child because it was determined reasonable that some of the child’s estate be consumed for maintenance under 38 CFR 3.274(b).
Reduce pension to $90 effective the
  • first day of the fourth month after the date of admission to domiciliary or nursing home care, or
  • the first day of the month following readmission if readmitted within six months of a previous admission requiring reduction.
Notes:
  • Pension is not reduced for admission to hospital care.
  • If transferred from hospital care to nursing home or domiciliary care, the period of hospital care is not considered as nursing home or domiciliary care.
  • If transferred from nursing home or domiciliary care to hospital care and issued a complete discharge from the hospital, or if hospitalized for more than six months, domiciliary or nursing home care is considered to have stopped effective the date of transfer to the hospital care.
  • If transferred from a nursing home or domiciliary to hospital care, then back to nursing home or domiciliary care, the entire period is considered nursing home or domiciliary care.
  • If transferred from domiciliary or nursing home care to hospital care and death occurs while hospitalized, the entire period is considered nursing home or domiciliary care.
  • If a Veteran is married but paid as a Veteran with no dependents, the withheld amount may be apportioned to the spouse under 38 CFR 3.454(b)(3).
Reference:  For more information about reduction of current-law pension for periods of hospitalization on or after February 1, 1990, see 38 CFR 3.551(e).
306 Pension if a Veteran
  • is admitted to a
    • VA hospital, domiciliary, or nursing home, or
    • private hospital, domiciliary, or nursing home at VA expense
  • has no dependents, or
  • has dependents, but receives pension as a Veteran with no dependents
Reduce pension to $50 effective the
  • first day of the third month after admission to hospital, nursing home, or domiciliary care, or
  • first day of the month following readmission if admitted within six months of a previous admission requiring reduction.
Note:  If the Veteran is married, but receives pension as a Veteran without dependents, the pension withheld may be apportioned to the Veteran’s spouse under 38 CFR 3.454(b)(1).
Reference:  For more information about reduction of Section 306 Pension for periods of hospitalization, see 38 CFR 3.551(c).
Old Law Pension if a Veteran
  • is admitted to a
    • VA hospital, domiciliary, or nursing home, or
    • private hospital, domiciliary, or nursing home at VA expense, and
  • has no dependent spouse, child, or parent
Reduce pension effective the first day of the seventh month after admission for hospitalization.
The reduced rate will be the greater of
  • $30, or
  • 50 percent of the amount payable during the first six months of hospitalization.
Notes:
  • Readmission following a regular discharge is considered a new period of hospitalization.
  • Readmission within six months of an irregular discharge is considered continuous hospitalization from the previous period of hospitalization.
Reference:  For more information about reduction of Old-Law Pension for periods of hospitalization, see38 CFR 3.551(b).

III.v.6.B.1.b.  Benefits Not Subject to Reduction Under 38 CFR 3.551

The provisions of 38 CFR 3.551 prohibit VA from reducing the following pension benefits due to hospitalization at VA expense:
  • current-law pension if the Veteran is an inpatient at a VA hospital or hospitalized at VA expense on or after February 1, 1990 (pension is still reduced due to admission to a VA domiciliary or nursing home)
  • pension for any period during which a Veteran is
    • hospitalized for Hansen’s disease
    • maintained in a State soldiers’ home
    • furnished hospital, domiciliary, or nursing home care in a State home for which the only payment made by VA is the per diem rate pursuant to 38 U.S.C. 1741, or
    • admitted to hospital or nursing home care for rehabilitation after October 16, 1981, as outlined in M21-1, Part III, Subpart v, 6.B.2.f
  • pension for any period if the Veteran establishes the existence of a dependent
  • current-law pension if the Veteran has a child, but is receiving pension as a Veteran without a dependent because it was determined to be reasonable that a portion of the child’s estate be consumed for the child’s maintenance under 38 CFR 3.274(b), or
  • Medal of Honor Special Pension recipient.
Reference:  For information on Medal of Honor Special Pension, see M21-1, Part IX, Subpart ii, 3.1.b.

III.v.6.B.1.c.  Electing the Greater Benefit of Pension or Compensation

If a Veteran in receipt of pension subject to reduction under 38 CFR 3.551 is also entitled to compensation, he/she may
  • elect to receive either benefit, and
  • change the election to either benefit at any time, under the authority of 38 CFR 3.701(a).
Note:  If Old-Law or 306 Pension is reduced under 38 CFR 3.551, review the evidence of record to determine if it might be advantageous for the payee to elect current-law pension.  If so, inform the payee accordingly.
Reference:  For more information about elections between compensation and pension, see M21-1, Part III, Subpart v, 4.A.2.a.

III.v.6.B.1.d.  Screening CAPRI Reports to Determine if Adjustment Is Required

Use Options 7 (Discharge Report) and 11 (Special Report for A&A/Pension) on the Compensation and Pension Records Interchange (CAPRI) system to generate reports for Veteran pension beneficiaries who
  • are still active patients, or
  • have been discharged at government expense.
Screen each report across the corporate record to determine if an adjustment under 38 CFR 3.551 is required.
Reference:  For more information on using the CAPRI system, see the CAPRI Desk Reference Guide.

III.v.6.B.1.e.  Due Process and Controls for Hospital Adjustments

Notice of proposed adverse action is required prior to any award adjustment.  In order to provide proper notification and establish proper controls,
  • prepare duplicate notices of proposed adverse action, sending
    • one notice to the Veteran’s address of record, and
    • one to the Veteran at the medical facility
  • clear an end product (EP) 135 with date of admission as date of claim, and
  • establish an EP 600 control to mature 65 days from the date the notice of proposed adverse action is sent.
References:  For information on notice of proposed adverse action requirements, see

III.v.6.B.1.f.  VETSNET Adjustments of Pension Awards for Hospitalization

Take the following actions in the (Veterans Service Network) VETSNET to adjust pension awards due to hospitalization:
  • use the INSTITUTIONALIZATION screen to record basic information, such as the
    • facility where institutionalized, and
    • inclusive dates of institutionalization, and
  • use the INSTITUTIONALIZATION ADJUSTMENTS screen to record the type of benefit or type of adjustment involved, such as
    • special monthly compensation adjustment, or
    • incarceration.
Reference:  For more detailed information on adjusting awards using VETSNET, see the VETSNET Awards User Guide.

III.v.6.B.1.g.  Provisions of PL 102-568 for Current-Law Pension

Under Public Law (PL) 102-568, any current-law pension in excess of the $90 per month and withheld due to nursing home care must be deposited in a revolving fund at the VA medical facility furnishing nursing home care.
These funds are made available to help defray the operating expenses of the medical facility.
Reference:  For more information on the authority to apply the withheld funds, see38 U.S.C. 5503(a)(1)(B).

III.v.6.B.1.h.  Adjusting Awards Involving Additional Allowance for A&A

For information on adjustments to compensation or pension involving an aid and attendance (A&A) allowance, see M21-1, Part III, Subpart v, 6.C.1.a.

III.v.6.B.1.i.  Adjusting Pension of Incompetent Veterans

The procedures in this section apply equally to cases of competent and incompetent Veterans.  However, for additional actions required for hospitalized incompetent Veterans, see

III.v.6.B.1.j.  Cases Involving Entitlement to MRP

For adjustment of pension awards for Veterans who are receiving, or eligible to receive, MRP, see M21-1, Part III, Subpart v, 5.B.7.

2.  Reducing Pension Upon the Initial Admission of a Veteran


Introduction

This topic contains information on reducing an award upon the initial admission of a Veteran for treatment or care, including

Change Date

July 29, 2011

III.v.6.B.2.a.  Establishing a Date of Reduction for an Initial Grant of Pension

When a claim for pension is filed after admission for treatment or care, the date controlling the date of reduction is the date of admission, not the inception date of entitlement to monetary benefits.  The effective date of reduction due to hospitalization is determined independently of the effective date for award of benefits.
References:  For more information about the effective date of

III.v.6.B.2.b.  Reducing Current-Law Pension:  Admission After January 31, 1990

Use the following table to reduce a Veteran’s current-law pension when he/she is receiving inpatient treatment or care at VA expense after January 31, 1990.
When a Veteran …
Then …
having neither a dependent spouse nor child is being furnished domiciliary or nursing home care by VA
under the provisions of 38 CFR 3.551(e), reduce pension to $90 effective the first day of the fourth calendar month following the month of admission.
is furnished hospital care by VA
effective February 1, 1990, the basic pension is no longer reduced. However, special monthly pension for A&A is still reduced under 38 CFR 3.552.

III.v.6.B.2.c.  How to Consider Care When a Veteran Is Transferred

For current-law pension reductions because of domiciliary or nursing home care, use the table below to determine how to consider treatment or care for reduction purposes when a Veteran is transferred between VA institutions.
Reference:  For more information on current-law pension reductions, see 38 CFR 3.551(e)(4).
If a Veteran …
Then …
  • is furnished hospital care by VA, and
  • is transferred to VA-furnished nursing home or domiciliary care
do not consider the period of hospital care as nursing home or domiciliary care.
  • is transferred from VA-furnished nursing home or domiciliary care to hospital care, and
  • is transferred back to nursing home or domiciliary care
consider the care as continuous nursing home or domiciliary care, provided the period of hospitalization does not exceed six months.
  • is transferred from VA-furnished domiciliary or nursing home care to VA-furnished hospital care, and
  • dies while under VA-furnished hospital care
consider the entire period of VA care as domiciliary or nursing home care.
is transferred from VA-furnished nursing home or domiciliary care to hospital care and
  • is completely discharged from VA care following a period of hospitalization, or
  • is hospitalized for a period that exceeds six months
consider any nursing home or domiciliary care as terminated effective the date of transfer to the VA medical center (VAMC).

III.v.6.B.2.d.  Reducing Section 306 Pension Cases for Hospitalization

When a Veteran in receipt of Section 306 Pension, having neither dependent spouse nor child, has received two full months of VA treatment or care, reduce the award to $50 effective the first day of the third calendar month following admission (see 38 CFR 3.551(c)).
Note:  Consider treatment of
  • 60 total days as two calendar months of hospitalization, and
  • 90 total days as three calendar months of hospitalization (see 38 CFR 3.551(f)).

III.v.6.B.2.e.  Applying PL 101-237 to Section 306 Pension Cases

Prior to the enactment of PL 101-237, the procedures used for reducing Section 306 Pension cases were the same as the procedures used for reducing current-law pension cases before February 1, 1990.
VAOPGCPREC 19-1990, dated June 15, 1990, held that the
  • provisions of PL 101-237, which amended 38 U.S.C. 5503(a), apply onlyto current-law pension recipients
  • provisions of PL 95-588, Section 307, were incorrectly applied to Veterans receiving Section 306 Pension, and
  • laws in effect before January 1, 1979, applied to Section 306 Pension cases.
Apply the regulations in effect before January 1, 1979, to all retroactive, current, and future reductions of Section 306 Pension.  However, if Section 306 Pension was previously adjusted using current-law pension regulations, do not create an overpayment if applying the regulations in effect before January 1, 1979, would result in a lower rate.

III.v.6.B.2.f.  Requesting Certification When a Veteran Is Admitted to a Nursing Home for Rehabilitation

Upon receipt of a report of nursing home admission for a current-law pension case subject to reduction under 38 CFR 3.551(e), follow the procedures in M21-1, Part III, Subpart v, 6.A.2.b.  In addition to those procedures
  • request certification of participation in a prescribed rehabilitation program, and
  • ask the VAMC to certify the beginning date of care under the 38 U.S.C. 1718 rehabilitation program.
The VAMC should furnish the appropriate certification of discontinuance of participation in such a rehabilitation program, if discontinuance occurs prior to discharge.
Consider status under the rehabilitation program as continuing until the VAMC reports that the Veteran’s participation in the rehabilitation program has ended.

III.v.6.B.2.g.  Establishing Controls for Future Adjustment in Rehabilitation Cases

Upon receipt of certification of participation in a 38 U.S.C. 1718, program, establish a control for 90 days from the date of admission to review for a later reduction of current-law pension.
References:  For more information on

III.v.6.B.2.h.  Allowing for an Extension of the Rehabilitation Period

If a VAMC certifies that a current-law pension recipient is participating in a prescribed rehabilitation program under 38 U.S.C. 1718, do not reduce pension due to VA-furnished nursing home care for a period of up to three additional calendar months after
  • the last day of the third month following the month of admission, or
  • the last day of the month of readmission to the hospital or nursing home.
After 90 days from admission, send a follow-up inquiry through CAPRI to verify the status of the Veteran’s rehabilitation program.
Note:  Generally, rehabilitation services should not take more than the additional three months.  Under 38 CFR 3.551(h)(2), if the Veteran remains hospitalized or in a nursing home for rehabilitation beyond this time period, the Chief Medical Director or designee must certify that the need for furnishing continued care is to provide the Veteran with a program of rehabilitation designed to restore the Veteran’s ability to function within the Veteran’s family and community.
Reference:  For more information about hospitalization for rehabilitation, see 38 CFR 3.551(h).

III.v.6.B.2.i.  Application of 38 CFR 3.551(h) When Initial Admission Is for Other Than Rehabilitation

When a current-law pension recipient is admitted to VA-furnished nursing home care for purposes other than rehabilitation, the provisions of 38 CFR 3.551(h) apply if, at a later time during the continuous period of care, the primary purpose of care becomes that of rehabilitation.

III.v.6.B.2.j.  Considering Readmission After Discharge

After discharge from a rehabilitation program, consider a readmission within six months that is
  • for additional rehabilitation, as an extension of the initial period of rehabilitation, and
  • for purposes other than that of further rehabilitation, as an initial admission to the nursing home.

III.v.6.B.2.k.  Reducing Old-Law Pension Cases

Under 38 CFR 3.551(b), when a Veteran in receipt of Old-Law Pension, having neither spouse, child, nor dependent parent, has received six full months of treatment or care
  • reduce the award effective the first day of the seventh calendar month following admission, and
  • pay a maximum monthly amount of $30 or 50 percent of the amount payable during the six-month period, whichever is greater.

3.  Reducing Pension Upon the Readmission of a Veteran


Introduction

This topic contains information on reducing an award when a Veteran is readmitted for treatment or care, including

Change Date

December 14, 2018

III.v.6.B.3.a.  Reducing Current-Law Pension:  Readmission After January 31, 1990

Use the table below to take appropriate action when
  • a prior period of VA-furnished nursing home or domiciliary care was terminated for any reason, and
  • a notice of readmission of a current-law pension recipient subject to reduction under 38 CFR 3.551(e) is received.
If the readmission occurs …
Then …
within the six-month period following termination of a prior three-, full-calendar-month period of treatment or care by VA in a nursing home or domiciliary
reduce payments to $90 under 38 CFR 3.551(e)(2) effective the first day of the month following the month of readmission.
after six months have elapsed following a prior period of treatment or care by VA in a nursing home or domiciliary
reduce payments effective the first day of the month following the third full month after readmission.
Example:  A Veteran readmitted to a VA domiciliary May 20, 2006, would have the current-law pension reduced September 1, 2006.
after a period of treatment or care by VA of less than three full-calendar months in a nursing home or domiciliary (before reduction action under 38 CFR 3.551(e))
  • consider the readmission an initial admission, regardless of the reason for termination of the prior period of care, and
  • reduce payments effective the first day of the month following the third full month after readmission.

III.v.6.B.3.b.  Reducing Section 306 Pension Cases

Use the table below to determine the appropriate action in a Section 306 Pension case when a
  • prior period of VA-furnished care was terminated for any reason, and
  • notice of readmission of a Veteran receiving pension subject to reduction under 38 CFR 3.551(c) is received.
If the readmission occurs …
Then …
within the six-month period following termination of a prior two-, full-calendar-month period of care by VA in a hospital, nursing home, or domiciliary
reduce payments to $50 under the provisions of 38 CFR 3.551(c)effective the first of the month following the month of readmission.
after six months have elapsed following a prior period of treatment or care by VA in a hospital, nursing home, or domiciliary
reduce payments effective the first day of the third month following the month of readmission.
after a period of treatment or care by VA of less than two full-calendar months in a hospital, nursing home, or domiciliary (before reduction action under 38 CFR 3.551(c))
consider the readmission an initial admission, regardless of the reason for termination of the prior period of care.

III.v.6.B.3.c.  Handling an Old-Law Pension Case:  Regular Discharge or Discharge to Outpatient Care

Under 38 CFR 3.551(b)(2), in an Old-Law Pension case, when the prior period of treatment or care was terminated by a regular discharge or a discharge to outpatient care, a readmission the next day to the same or any other VA institution begins a new period of hospitalization, unless the Veteran was released for purposes of admission to another VA institution.

III.v.6.B.3.d.  Handling an Old-Law Pension Case:  Irregular Discharge

Use the following table to take appropriate action on an award in an Old-Law Pension case when there has been an irregular discharge
If …
Then …
  • the readmission occurs withinsix months from the date of the previous admission
  • the prior hospitalization was terminated by an irregular discharge, and
  • payments have been restored at the full rate under 38 CFR 3.556(d)
  • consider the readmission a continuation of that prior period of hospitalization, and
  • do not reduce benefits from an effective date earlier than the first day of the seventh calendar month following the month of original admission, exclusive of authorized absences.
  • the readmission occurs six months or more after the date of the previous admission
  • the prior hospitalization was terminated by an irregular discharge, and
  • payments have been restored at the full rate under 38 CFR 3.556(d)
consider the readmission a new admission, per 38 CFR 3.551(b)(3).
the readmission occurs
  • within six months from the date of the initial admission, and
  • before reduction action under38 CFR 3.551(b)(1)
  • consider the period, while in an irregular discharge status, as a continuing period of treatment or care, and
  • reduce the award effective the first day of the seventh calendar month following the month of the initial admission, exclusive of only authorized absences.
the readmission occurs six months or more after the irregular discharge
follow the procedures provided for an initial admission in M21-1, Part III, Subpart v, 6.B.2.

4.  Adjusting Pension for Authorized Absences and Non-Bed Care Status


Introduction

This topic contains information on adjusting an award for authorized absences and non-bed care status, including

Change Date

December 14, 2018

III.v.6.B.4.a.  Adjusting for Authorized Absences in Section 306 Pension Cases

For the purpose of computing periods of hospitalization for Section 306 Pension cases, under the provisions of 38 CFR 3.551(f), authorized absences
  • of 96 hours or less are included as periods of hospitalization, and
  • in excess of 96 hours are excluded.
Note:  Absences of 96 hours or less are not reported to regional offices.

III.v.6.B.4.b.  Restoring the Full Rate for Absences of 30 Days or More

Upon receipt of notice showing that an authorized absence of 30 days or more has been granted to a competent Veteran, take action without awaiting expiration of the 30 days, per 38 CFR 3.556(a).
Use the table below to determine the appropriate action to take.
If the award involves …
Then amend the award to …
Section 306 Pension
authorize the full monthly rate, including, if payable, the housebound rate or allowance for A&A, effective the date of departure.
Note:  This applies unless it is determined that an apportionment for an estranged spouse should be continued.
Old-Law Pension
  • retroactively restore the full rate, excluding any allowance for A&A, effective the date of reduction, and
  • restore the allowance for regular A&A, effective the date of departure.

III.v.6.B.4.c.  Reducing Section 306 or Old-Law Pension Upon a Veteran’s Return From an Authorized Absence

Upon receipt of notice that a Veteran has returned to the hospital, reduce either a Section 306 Pension award (if still in order) or an Old-Law Pension award effective the date of return.
Reference:  For information on adjustment of awards for incompetent Veterans, see M21-1, Part III, Subpart v, 6.E.7.

III.v.6.B.4.d.  Adjusting an Award for Absences of Less Than 30 Days

Except as provided in M21-1, Part III, Subpart v, 6.B.4.e, do not restore the Veteran’s full pension rate if the Veteran has not been discharged from VA-furnished hospitalization and has been absent less than 30 days, counting the day of departure, per 38 CFR 3.556(b).
Note:  Current-law pension is not adjusted for inpatient hospital care at VA expense after January 31, 1990.  It is subject to reduction, however, for nursing home or domiciliary care.
References:  For information on

III.v.6.B.4.e.  Restoring Full Pension Rates Because of Hardship

As an exception to the requirement outlined in M21-1, Part III, Subpart v, 6.B.4.d, restore the Veteran’s full pension rate prior to discharge to authorize the full rate covering the cumulative number of days of absences of less than 30 days if the following conditions are met:
  • the Veteran has been receiving treatment or care for more than six months
  • the periods of absence for which adjustment is claimed cumulatively exceed a total of 30 days, and
  • a request for such an adjustment over the signature of the Chief, Medical Administration Sepecialist, has been received stating
    • the inclusive dates of each period of absence, and
    • that the adjustment is necessary to meet the financial needs of the Veteran, per 38 CFR 3.556(c).

5.  Adjusting Pension When a Veteran Has Dependents


Introduction

This topic contains information on adjusting an award when the Veteran has dependents, including

Change Date

 December 14, 2018

III.v.6.B.5.a.  Establishing the Relationship of an Alleged Dependent

If records indicate a Veteran has a dependent that has not been established as a dependent for VA purposes, ask the Veteran to complete and return to VA
References:  For more information about

III.v.6.B.5.b.  Action to Take Based on Whether Evidence Is Received

Use the table below to determine the appropriate action to take based on whether evidence that constitutes proof of relationship is received.
If the evidence establishing a dependent …
Then …
is received
  • after reduction, and
  • within one year of the date of request
authorize the full rate effective the date of reduction.
is received
  • after reduction, and
  • one year or more than from the date of request
authorize the full-rate effective the date of receipt of such evidence, per 38 CFR 3.551(g).
is not received
reduce the award, as appropriate, under
Notes:
  • In current-law pension cases, authorize the additional amounts payable for dependents.
  • Although an additional amount may not be paid under Section 306 Pension for a dependent who cannot be established on or before December 31, 1978, the existence of such a dependent is controlling for purposes of reduction under 38 CFR 3.551(c).
  • An apportionment may be payable to an unestablished dependent, even if additional pension is not being paid for that dependent.

III.v.6.B.5.c.  Apportionment to an Estranged Spouse

Per 38 CFR 3.454(b), apportion all or part of the money retained under a withholding to an estranged spouse when
  • the Veteran’s pension under 38 U.S.C. 1521(b) (the rate for a Veteran with no dependents) is reduced because of VA-furnished care
  • a claim for apportionment is received on behalf of an estranged spouse, and
  • there is an affirmative showing of hardship.
When adjusting the Veteran’s award,
  • do not make the effective date of the apportionment before the date of claim
  • if the total hospitalization withholding is not apportioned, annotate the award document to show the amount of withholding attributable to the apportionment and hospitalization, and
  • input the difference between the hospitalized rate and the full pension rate into the withholding amount field, even if the total amount withheld is not apportioned.
When the Veteran is discharged, review the apportionment based on all the facts and equities to determine if it should be continued, modified or discontinued.  If the apportionment is continued or modified on the basis of establishing dependency of the apportionee, a readmission may not necessitate a reduction under 38 CFR 3.551(c)38 CFR 3.551(d), or 38 CFR 3.551(e).
Reference:  For information about selecting a withholding reason and amount if using VETSNET, see the VETSNET Awards User Guide.

III.v.6.B.5.d.  Loss of a Dependent When the Only Dependent Is a Child

Reduce a Veteran’s award under 38 CFR 3.551 after expiration of the required period of time if the Veteran was receiving additional benefits for a dependent child who
  • was under age 18, or over age 18 and attending an approved course of instruction, and
  • reaches the age of 18 or completes the course of instruction.
Use the table below to determine the appropriate expiration of the required period of time.
If the benefit is …
Then reduce pension effective the first day of the …
Section 306 Pension
third month following the month in which the Veteran is without a dependent.
current-law pension
fourth month following the month in which the Veteran is without a dependent.
Old Law Pension
seventh month following the month in which the Veteran is without a dependent.

III.v.6.B.5.e.  Unexpected Loss of a Dependent in Section 306 and Old-Law Pension Cases

Follow the steps in this table when a Veteran has an unexpected loss of a dependent in a Section 306 or Old-Law Pension case.
Step
Action
1
Upon the loss of the dependent, apply the provisions of 38 CFR 3.551(b) and 38 CFR 3.551(c) on the basis of the Veteran’s factual status as “without a dependent” at the time of admission or at the time of loss of the dependent, whichever is later.
Note:  If a Section 306 or Old-Law Pension recipient entitled to end-of-year protection for loss of a dependent is discharged prior to the end of the calendar year, the Veteran’s pension award will be treated as if the dependent continues to exist to the end of the year.
  • Adjustment for hospitalization will not take effect until the first day of the next year, when the dependent is removed and the reduction for hospitalization is made.
  • If the Veteran is discharged from hospitalization before the end of the year, no hospitalization adjustment will be made.
2
Prepare the award under standard procedures,
  • reducing payment, using a withholding, and
  • showing the reduced rate for a Veteran without a dependent.
3
Make the appropriate change in VETSNET to remove the spouse or child and implement the hospital reduction effective the first day of the following year.
4
Is income now excessive for a Veteran without a dependent?
  • If yes, provide for termination of the award at the end of the year
  • If no, go to Step 5.
5
If the Veteran is released from hospitalization before either the end of the calendar year of loss, or an earlier scheduled reduction for an only dependent child reaching age 18 or terminating school,
  • consider the Veteran as having this dependent until the end of that year (or earlier scheduled date), and
  • be sure, in protected pension cases, to
    • zero out the hospitalization withholding
    • not reduce the pension to the hospitalized rate, and
    • reflect the existence of a dependent subject to the end-of-year rule.
Note:  For information about selecting a withholding reason and amount if using VETSNET, see the VETSNET Awards User Guide.

III.v.6.B.5.f.  Acquisition of Dependents During Hospitalization

When a Veteran without dependents is hospitalized and, following admission to the institution, gains a dependent(s), authorize the appropriate payment rate of current-law pension or restore the full December 31, 1978, amount of Section 306 or Old-Law Pension, as appropriate, effective the date that he/she acquired the dependent(s), but not prior to the date of acquisition of such a dependent.
Example:  The effective date would not be prior to the date of marriage or the birth of a child.
Note:  The reduction under 38 CFR 3.551 would be removed effective the date the dependent was acquired.  However, the effective date of payment of additional benefits for the dependent would be controlled by 38 CFR 3.31.

III.v.6.B.5.g.  Awards to Dependents of Incompetent Veterans

For information on awards to dependents of incompetent Veterans, See M21-1, Part III, Subpart v, 6.E.5.

6.  Restoring Previous Pension Rate Upon the Discharge of a Veteran


Introduction

This topic contains information on restoring an award when a Veteran is discharged from treatment or care, including restoring awards

Change Date

July 29, 2011

III.v.6.B.6.a.  Restoring Awards in Section 306 or Current-Law Pension Cases

Upon receipt of a discharge report showing termination of hospitalization, domiciliary, or nursing home care in a Section 306 or current-law pension case,
  • discontinue the withholding effective the date of release, and
  • restore full pension, including A&A, effective the date of release.

III.v.6.B.6.b.  Restoring Awards in Old-Law Pension Cases

Use the table below to determine the appropriate action to take to restore an award in an Old-Law Pension case when the Veteran has received
  • a regular discharge or discharge to outpatient care, or
  • an irregular discharge.
If the Veteran has received …
Then …
  • a regular discharge, or
  • a discharge to outpatient care
an irregular discharge
Note:  An irregular discharge is a release from inpatient treatment against medical advice.
  • amend the award to pay the full monthly rate effective the date of release
  • do not restore amounts withheld prior to the expiration of six months following an irregular discharge, unless the Veteran’s hospitalization is resumed and terminated by a regular discharge prior to the expiration of such a period per 38 CFR 3.556(d), and
  • establish a diary control for this purpose.

III.v.6.B.6.c.  Restoring Awards to Incompetent Veterans

Do not restore amounts withheld prior to the expiration of six months following a rating of competency, per 38 CFR 3.556(e).
Reference:  For more information on restoring awards after a rating of competency when there is a court-appointed fiduciary, see M21-1, Part III, Subpart v, 9.B.6.a.
Historical_M21-1III_v_6_SecB_5-11-15.doc May 16, 2019 225 KB
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