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

In This Section

Introduction

• criteria for reducing pension of a hospitalized Veteran
• benefits not subject to reduction under 38 CFR 3.551
• electing the greater benefit of pension or compensation
• screening Compensation and Pension Records Interchange (CAPRI) reports to determine if adjustment is required
• due process and controls for hospital adjustments
• Veterans Service Network (VETSNET) adjustments of pension awards for hospitalization
• provisions of Public Law (PL) 102-568 for current-law pension
• adjusting awards involving additional allowance for aid and attendance (A&A)
• adjusting pension of incompetent Veterans, and
• cases involving entitlement to military retired pay (MRP).

Change Date

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

• 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.

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

• 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.

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

• elect to receive either benefit, and
• change the election to either benefit at any time, under the authority of 38 CFR 3.701(a).

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

• are still active patients, or
• have been discharged at government expense.

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

• 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.

• VA’s policy on due process notification at M21-1, Part I, 2.A.1.b
• due process notification elements at M21-1, Part I, 2.B.2
• information on military retired pay (MRP) election notification at M21-1, Part III, Subpart v, 5.A.3.b, and
• information on due process for competency determinations at M21-1, Part III, Subpart v, 9.B.3.

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

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

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

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

• M21-1, Part III, Subpart v, 6.E.1.a, and
• M21-1, Part III, Subpart v, 6.F.1.

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

Introduction

• establishing a date of reduction for an initial grant of pension
• reducing current-law pension: admission after January 31, 1990
• how to consider care when a Veteran is transferred
• reducing Section 306 Pension cases for hospitalization
• applying PL 101-237 to Section 306 Pension cases
• requesting certification when a Veteran is admitted to a nursing home for rehabilitation
• establishing controls for future adjustment in rehabilitation cases
• allowing for an extension of the rehabilitation period
• application of 38 CFR 3.551(h) when initial admission is for other than rehabilitation
• considering readmission after discharge, and
• reducing Old-Law Pension cases.

Change Date

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

• an award of benefits, see 38 CFR 3.400(b), and
• a reduction of pension due to hospitalization, see 38 CFR 3.501(i).

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

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

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

• 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

• 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.

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

• 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.

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

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

• 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.

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

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

• 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

• 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.

Introduction

• reducing current-law pension: readmission after January 31, 1990
• reducing Section 306 Pension cases
• handling an Old-Law Pension case: regular discharge or discharge to outpatient care, and
• handling an Old-Law Pension case: irregular discharge.

Change Date

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

• 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.

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

• 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.

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

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

Introduction

• adjusting for authorized absences in Section 306 Pension cases
• restoring the full rate for absences of 30 days or more
• reducing Section 306 or Old-Law Pension upon a Veteran’s return from an authorized absence
• adjusting an award for absences of less than 30 days, and
• restoring full pension rates because of hardship.

Change Date

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

• of 96 hours or less are included as periods of hospitalization, and
• in excess of 96 hours are excluded.

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

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

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

• restoring awards upon discharge, see M21-1, Part III, Subpart v, 6.B.6.a, and
• adjustments in A&A cases, see M21-1, Part III, Subpart v, 6.C.4.

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

• 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).

Introduction

• establishing the relationship of an alleged dependent
• action to take based on whether evidence is received
• apportionment to an estranged spouse
• loss of a dependent when the only dependent is a child
• unexpected loss of a dependent in Section 306 and Old-Law Pension cases
• acquisition of dependents during hospitalization, and
• awards to dependents of incompetent Veterans.

Change Date

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

• the importance of establishing the existence of dependents, see M21-1, Part III, Subpart iii, 5.A.1.c, and
• establishing an individual as a Veteran’s dependent, see M21-1, Part III, Subpart iii, 5.A.2.

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

• 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

• 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.

• 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.

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

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

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

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

Introduction

• in Section 306 or current-law pension cases
• in Old-Law Pension cases, and
• to incompetent Veterans.

Change Date

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

• 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

• a regular discharge or discharge to outpatient care, or
• an irregular discharge.

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