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M21-1, Part III, Subpart v, Chapter 8, Section A – Effects of a Beneficiary’s Incarceration on His or Her Department of Veterans Affairs (VA) Benefits

Overview

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

1.  General Information About Incarcerated Beneficiaries

Introduction
This topic contains general information about incarcerated beneficiaries, including

Change Date

 April 15, 2016

III.v.8.a.1.a.  Definition: Incarceration
For Department of Veterans Affairs (VA) purposes, the term incarceration refers to the confinement of an individual in a penal institution, even though the individual may be allowed outside the institution temporarily on furlough or for medical treatment.  It includes persons confined to medical facilities or other locations, such as work camps, forestry camps, or boot camps, as long as the individual is confined to the institution pursuant to a criminal sentence.

III.v.8.A.1.b.  Regulatory Requirements for Reducing or Discontinuing Benefits During Incarceration
38 CFR 3.665 requires the reduction of a beneficiary’s disability compensationor Dependency and Indemnity Compensation (DIC) when the beneficiary is incarcerated more than 60 days following conviction of a felony.
38 CFR 3.666 requires the discontinuance of a beneficiary’s pension when the beneficiary is incarcerated more than 60 days following conviction of a felony or misdemeanor.
Notes:
  • A “beneficiary,” for the purpose of this section, is limited to
    • Veterans entitled to disability compensation or pension
    • surviving spouses, children, and parents that are entitled to DIC, and
    • surviving spouses and children that are entitled to Survivors Pension.
  • The requirement to reduce or discontinue benefits applies to beneficiaries incarcerated in a Federal, State, or local penal institution or correctional facility, including privately owned correctional facilities that are operated under contract with a State.
  • The proper effective date for reducing or discontinuing benefits is the 61stday of incarceration.

References:

III.v.8.A.1.c.  Effect of a Dependent’s Incarceration on a Beneficiary’s Award
38 CFR 3.666 requires the removal of an incarcerated dependent from a beneficiary’s award if the beneficiary receives pension.  There is no such requirement, however, if the beneficiary is a
  • Veteran receiving disability compensation, or
  • surviving spouse receiving DIC.
References:  For more information on

III.v.8.A.1.d.  Periods During Which VA May Not Reduce or Discontinue Benefits
Do not reduce or discontinue benefits for any period during which a beneficiary is
  • participating in a work-release program
  • under community control (per VAOPGCPREC 59-1991)
  • incarcerated in a foreign penal institution, or
  • residing in a
    • halfway house
    • residential re-entry center, or
    • civil commitment center.
Notes:  “Residential re-entry center” is a term used by the Bureau of Prisons (BOP) in lieu of the traditional term “halfway house.”
Reference:  For information regarding beneficiaries that are transferred from a foreign penal institution to a Federal, State, or local penal institution to serve the remainder of their sentence for a foreign conviction, see M21-1, Part III, Subpart v, 8.A.4.b.

III.v.8.A.1.e.  Matching Programs for Identifying Incarcerated Beneficiaries
Beneficiaries who have been incarcerated in Federal or State penal institutions may be identified through computer-matching programs.
Through agreements between VA, BOP, and the Social Security Administration (SSA), periodic computer matches are run to compare VA beneficiaries’ identifying data with BOP and SSA records.
Note:  VA also receives notice of the incarceration of beneficiaries through other unofficial sources.
References:  For more information on the

III.v.8.A.1.f.  Beneficiaries and Dependents That Are Fugitive Felons
Disability compensation, DIC, and pension are not payable
  • to a beneficiary that is a fugitive felon, or
  • for a dependent that is a fugitive felon.
A fugitive felon is anyone that is
  • fleeing to avoid prosecution, being taken into custody, or confinement after conviction for, or an attempt to commit, an offense that is a felony, or
  • violating a condition of probation or parole imposed for commission of a felony.
References:

2.  Benefit-Specific Effects of a Beneficiary’s Incarceration

Introduction
This topic contains information regarding the benefit-specific effects of a beneficiary’s incarceration, including

Change Date

 April 15, 2016

III.v.8.A.2.a.Effect of Incarceration on Payments of Disability Compensation
The table below shows the amount to which VA must reduce a Veteran’s disability compensation when the Veteran is incarcerated for more than 60 days following conviction for a felony.
Important:  Reduction is necessary only if the Veteran
  • committed the felony after October 7, 1980
  • was incarcerated on October 1, 1980 (regardless of the date the Veteran committed the felony), and VA granted entitlement to disability compensation with an effective date that is after September 30, 1980, or
  • was incarcerated on or before October 7, 1980, for a felony he/she committed prior to that date, and the Veteran remained incarcerated for the same conviction through December 27, 2001.  (Reductions under this last condition take effect beginning with the payment of disability compensation VA makes for the month of April 2002.)
If the Veteran’s combined disability evaluation is …
Then …
0 percent, but the Veteran is entitled to
38 CFR 3.665(d)(2) requires VA to reduce the Veteran’s monthly award to one half of the amount payable for a service-connected (SC) disability evaluated as 10-percent disabling.
10 percent
20 percent or higher
38 CFR 3.665(d)(1) requires VA to reduce the Veteran’s monthly award to the amount payable for an SC disability evaluated as 10-percent disabling.
Note:  Pay the Veteran the full amount of any benefit due him/her for periods priorto October 1, 1980.
References:  For more information on

III.v.8.A.2.b.Effect of Incarceration on Ratings of TDIU
38 CFR 3.341(b) prohibits the assignment of an initial or reinstated rating of total disability due to individual unemployability (TDIU) during a period of incarceration.  There is no requirement, however, to discontinue a rating of TDIU solely because a Veteran was incarcerated and, thereby, removed from the work-possible environment.
Important:  Although a rating of TDIU may remain in effect during a Veteran’s incarceration, the Veteran’s disability compensation is still subject to the reduction described in M21-1, Part III, Subpart v, 8.A.2.a.
References:  For more information on

III.v.8.A.2.c.Increased Disability Evaluations During Incarceration
Follow the instructions in the table below if VA increases a Veteran’s combined disability evaluation from an effective date that falls within a period during which VA reduced the Veteran’s disability compensation due to incarceration.
If …
Then …
VA increased the combined disability evaluation from a level of 10 percent to a level of 20 percent or higher
increase the Veteran’s benefits to the rate payable for a combined disability evaluation of 10 percent during his/her period of incarceration.
the Veteran’s combined disability evaluation was 20 percent or higherbefore VA granted entitlement to an increased evaluation.
process the corresponding rating decision but do not increase the Veteran’s benefits to reflect the increased evaluation until incarceration ends.
Important:  As stated in M21-1, Part III, Subpart v, 8.A.2.b, 38 CFR 3.341(b)prohibits the assignment of an initial or reinstated rating of TDIU during a period of incarceration.
Reference:  For more information on handling increased disability evaluations during incarceration, see 38 CFR 3.665(j).

III.v.8.A.2.d.Effect of Incarceration on Payment of the Clothing Allowance
38 CFR 3.810(d) requires a reduction in VA’s clothing allowance if
  • a Veteran entitled to this benefit is incarcerated for more than 60 days, and
  • the Veteran receives clothing at no cost from his/her penal institution.

Reference:  For more information on VA’s clothing allowance, see M21-1, Part IX, Subpart i, 7.

III.v.8.A.2.e.Effect of Incarceration on Payments of DIC
When a beneficiary entitled to DIC is incarcerated for more than 60 days following conviction of a felony, 38 CFR 3.665(d)(3) requires VA to reduce the beneficiary’s monthly award to an amount equal to one half of the amount payable for an SC disability evaluated as 10-percent disabling.
Important:
  • Reduction of DIC due to incarceration is necessary only if the beneficiary
    • committed the felony after October 7, 1980, or
    • was incarcerated on October 1, 1980 (regardless of the date the beneficiary committed the felony), and VA granted entitlement to DIC with an effective date that is after September 30, 1980.
  • Pay beneficiaries the full amount of any benefit due them for periods priorto October 1, 1980.
  • If a parent’s DIC award is less than half of the amount payable for an SC disability evaluated as 10-percent disabling, do not adjust the award.
References:  For more information on

III.v.8.A.2.f. Effect of Incarceration on Pension Awards
When a beneficiary entitled to pension is incarcerated for more than 60 days following conviction of a felony or misdemeanor, 38 CFR 3.666 requires VA to discontinue his/her payments of pension.
Before discontinuing Veterans Pension due to incarceration, review the Veteran’s claims folder to determine whether he/she is also entitled to disability compensation.  If entitlement to both benefits exists, follow the instructions in M21-1, Part III, Subpart v, 8.B.3.
References:  For more information on

III.v.8.A.2.g. Determining Whether VA Is Paying Education Benefits to an Incarcerated Beneficiary
When reducing or discontinuing benefits because of incarceration, review the TINQ (treasury inquiry) screen or education master record in the Benefits Delivery Network (BDN) to determine whether VA is paying education benefits to the incarcerated beneficiary, as these benefits might also require adjustment.
If VA is paying education benefits, e-mail a copy of the official notice of incarceration to the regional processing office (RPO) of jurisdiction.
Note:  Access to BDN is limited.  Inquire with local management to identify individuals with access.
References:  For more information on

3. Handling Notice of a Beneficiary’s Incarceration

Introduction
This topic contains instructions for handling notice of a beneficiary’s incarceration, including

Change Date

 September 7, 2018

III.v.8.A.3.a.  Action to Take Upon Receipt of Notice of Incarceration
Follow the steps in the table below upon receipt of notice of the incarceration of a beneficiary or a beneficiary’s dependent.
Exception:  When processing an SSA Prison Match case, follow the instructions inM21-1, Part X, 15.2 instead of the procedures described in the table below.
Step
Action
1
Establish end product (EP) 290.
Notes:
  •  Apply the claim label
    • Bureau of Prisons if notice of incarceration was obtained via the BOP matching program discussed in M21-1, Part X, 12, or
    • Incarceration Adjustment in all other instances.
  • If an 800 series work item served as the notice of the beneficiary’s or dependent’s incarceration, use the date of the work item as the date of claim.  For other types of notice, use the date of receipt as the date of claim.
2
If the beneficiary is in receipt of disability compensation, add Potential Under/Overpayment as a special issue.
3
Did VA receive the notice of incarceration from the beneficiary?
  • If yes, proceed to Step 6.
  • If no, proceed to the next step.
4
Is the notice VA received “official,” as discussed in M21-1, Part III, Subpart v, 8.A.3.c?
  • If yes, proceed to the next step.
  • If no, proceed to Step 7.
5
Has VA obtained the information referenced in M21-1, Part III, Subpart v, 8.A.3.d from an official source identified in M21-1, Part III, Subpart v, 8.A.3.b?
  • If yes, proceed to Step 16.
  • If no, proceed to the next step.
6
Request/obtain the information referenced in M21-1, Part III, Subpart v, 8.A.3.d from an official source.
  • If VA requests the information (by letter, for example), proceed to Step 13.
  • If VA obtains the information without issuing a request (through telephone contact or by accessing a correctional facility’s website, for example), proceed to Step 16.
Note:  Allow entities from which VA requests information concerning a beneficiary’s incarceration 30 days to respond.
Reference:  For a discussion of the available means for requesting/obtaining information from an official source, see M21-1, Part III, Subpart v, 8.A.3.e.
7
Attempt to corroborate the unofficial notice and request/obtain the information referenced in M21-1, Part III, Subpart v, 8.A.3.d through official sources.
Note:  Allow entities from which VA requests corroboration of and information concerning a beneficiary’s or dependent’s incarceration 30 days to respond.
Reference:  For a discussion of the available means for requesting/obtaining information/corroboration from official sources, see M21-1, Part III, Subpart v, 8.A.3.e.
8
Follow the instructions in the table below.
If VA …
Then …
requests the information/corroboration referenced in Step 7 (by letter, for example)
proceed to the next step.
obtains the information/corroboration referenced in Step 7 without issuing a request (through telephone contact or by accessing a correctional facility’s website, for example)
proceed to Step 16.
confirms through official sources – without issuing a request – that the beneficiary or dependent is/was not incarcerated

 
  • clear the EP 290, and
  • take no further action.
9
Did the entity from which VA requested information/corroboration respond within 30 days?
  • If yes, proceed to Step 12.
  • If no, proceed to the next step.
10
Send a follow-up request and allow 30 days for a response.
11
Did the entity to which VA sent a follow-up request respond within 30 days?
  • If yes, proceed to the next step.
  • If no,
    • clear the EP 290, and
    • take no further action.
12
Follow the instructions in the table below.
If the unofficial notice of incarceration …
Then …
is corroborated
proceed to Step 16.
is not corroborated
  • clear the EP 290, and
  • take no further action.
13
Did the entity from which VA requested the information referenced in M21-1, Part III, Subpart v, 8.A.3.d respond within 30 days?
  • If yes, proceed to Step 16.
  • If no, proceed to the next step.
14
Send a follow-up request for the information and allow 30 days for a response.
15
Did the entity to which VA sent a follow-up request respond within 30 days?
  • If yes, proceed to the next step.
  • If no,
    • attempt to obtain the information through different means, and
    • take no further action until VA obtains the information.
16
Follow the instructions in the table below.
If information obtained from official sources shows …
Then …
the beneficiary or dependent was incarcerated
  • for reasons other thanconviction of a
    • felony (if the beneficiary receives disability compensation or DIC), or
    • felony or misdemeanor (if the beneficiary receives pension)
  • less than 60 days after conviction for a felony or misdemeanor, or
  • for an offense that, due to delays in criminal justice processing (pending the assignment of a trial date, for example), has yet to result in conviction or acquittal/dismissal
  • clear the EP 290, and
  • take no further action.
Important:  If the beneficiary was the source of the notice of incarceration, notify him/her of the reason no award adjustment is necessary.
the beneficiary was incarcerated at least 60 days after conviction for a
  • felony (if the beneficiary receives disability compensation or DIC), or
  • felony or misdemeanor (if the beneficiary receives pension)
  • clear the EP 290
  • establish EP 600, using the current date as the date of claim and the Bur[eau] of Prisons claim label, if applicable
  • add Potential Under/Overpayment as a special issue, if the beneficiary is in receipt of disability compensation, and
  • proceed to the next step.
17
Prepare notice of proposed adverse action, according to instructions in M21-1, Part III, Subpart v, 8.A.3.f, and send the notice to the beneficiary.
18
Did the beneficiary respond to the notice of proposed adverse action within 65 days of the date VA sent the notice?
  • If yes, proceed to the next step.
  • If no, proceed to Step 20.
19
Did the beneficiary submit evidence showing an adjustment of his/her award due to incarceration is not in order?
  • If yes,
    • clear the EP 600
    • notify the beneficiary that VA will not reduce or discontinue (whichever applies) his/her benefits, and
    • disregard the remaining steps in this table.
  • If no, proceed to the next step.
20
Reduce or discontinue benefits under the EP 600 as proposed in the notice of proposed adverse action.
Reference:  To execute the reduction or discontinuance in the claims-processing system, follow the instructions in M21-1, Part III, Subpart v, 8.A.3.g.
21
Notify the beneficiary of the action taken.
Reference:  For more information on issuing decision notices, see M21-1, Part III, Subpart v, 2.B.

III.v.8.A.3.b. Identifying Official Sources of Information Regarding a Beneficiary’s Incarceration
An official source, for the purpose of this section, includes
  • Federal, State, and local government authorities, such as
    • law enforcement officials
    • officials at correctional facilities
    • prosecutors, and
    • parole officers
  • BOP’s website (http://www.bop.gov/)
  • official websites of individual correctional facilities, and
  • Vine (http://www.vinelink.com/), a privately operated, online inmate locator service.

III.v.8.A.3.c. Identifying Official Notice of a Beneficiary’s Incarceration
Each of the following constitute official notice of a beneficiary’s incarceration:
Important:  Statements affirming incarceration from a private attorney or a member of a beneficiary’s family do not constitute official notice.

III.v.8.A.3.d.  Verifying the Details of Incarceration
Prior to issuing due process for a reduction or discontinuance of benefits based on incarceration, obtain the following information from an official source:
  • type of conviction (such as felony, misdemeanor, or infraction)
  • date (month, day, year) of conviction
  • date (month, day, year) of incarceration following conviction, and
  • an indication the beneficiary was incarcerated for more than 60 days following the date of conviction.
Note:  M21-1, Part III, Subpart v, 8.A.3.e describes the available means for obtaining the information referenced in this block.
Reference:  For a definition of official source, see M21-1, Part III, Subpart v, 8.A.3.b.

III.v.8.A.3.e. Available Means for Requesting/ Obtaining Information From Official Sources
The available means for requesting/obtaining information from official sources consist of the following:
  • contacting (by telephone or e-mail) the correctional facility where the beneficiary is/was incarcerated
  • accessing BOP’s website (http://www.bop.gov/)
  • using Vine (http://www.vinelink.com), a privately operated, online, inmate locator service, and/or
  • asking the correctional facility where the beneficiary is/was incarcerated to complete and return VA Form 21-4193.
Note:  Many correctional facilities have websites that
  • display telephone numbers and/or e-mail addresses of facility officials, and/or
  • allow visitors to access inmate locator data.
Follow the instructions in the table below to document information obtained from an official source regarding a beneficiary’s or dependent’s incarceration.
If information is obtained …
Then …
by telephone
by e-mail or fax
save a copy of the e-mail or fax in the beneficiary’s claims folder.
from a website
  • make a screen print of the relevant webpage, and
  • associate a copy of the screen print with the beneficiary’s claims folder.
Reference:  For more information on uploading documents to electronic claims folders (eFolders), see

III.v.8.A.3.f.  Notifying a Beneficiary of VA’s Intent to Reduce or Discontinue Benefits Due to Incarceration
An incarcerated beneficiary is entitled to due process before VA reduces or discontinues his/her benefits.  When notifying the beneficiary of the proposed action,
  • cite the statutory authority for the proposed action, which is
    • 38 U.S.C. 5313 if the beneficiary is receiving disability compensation or DIC, or
    • 38 U.S.C. 1505 if the beneficiary is receiving pension
  • inform the beneficiary that VA proposes to reduce or discontinue (whichever applies) his/her benefits effective the 61st day of incarceration
  • provide the amount to which VA proposes reducing the beneficiary’s award (only if the beneficiary receives disability compensation or DIC)
  • include information about the right of eligible family members to
    • an apportionment of the beneficiary’s disability compensation or DIC, or
    • an allotment of the pension to which the beneficiary is otherwise entitled
  • attach VA Form 21-0788, Information Regarding Apportionment of Beneficiary’s Award, to the notice, and
  • inform the beneficiary that VA may resume benefits effective the date incarceration ends if it receives notice within one year of that date.  Otherwise, VA may resume benefits no earlier than the date it receives notice.
Important:
  • If the address of family members that are eligible for an apportionment or allotment of the incarcerated beneficiary’s benefits is known, send VA Form 21-0788 to them at the same time the notice described above is sent to the beneficiary.
  • A beneficiary is entitled to due process and the notice described in this block each time he/she is incarcerated.  This includes re-incarceration (following a resumption of benefits after incarceration ends) because of
    • a parole violation, or
    • dismissal from a halfway house or work-release program.
  • Send notice of proposed adverse action to a beneficiary at his/her current address of record, regardless of whether the incarcerated individual is the beneficiary or a dependent.
  • Do not send notice of proposed adverse action to the address of a prison unless that address happens to be a beneficiary’s current address of record.
 References:  For more information on

III.v.8.A.3.g.  Adjusting a Beneficiary’s Award in the Claims-Processing System
Follow the steps in the table below to adjust a beneficiary’s award based on incarceration.
Step
Action
1
Access the INSTITUTIONALIZATIONS tab in the appropriate claims processing system.
2
Click on the ADD button.
3
Select Incarceration Period from the INSTITUTION TYPE/EVENT drop-down menu.
4
Enter the
  • name of the facility where the beneficiary is incarcerated in the INSTITUTION field
  • date of the first full day of incarceration in the FROM field, and
  • date incarceration ended (if applicable) in the TO field.
5
Click on the ACCEPT button.
6
Click on the ADJUST button.
7
Click on the ADD button.
8
Select Incarceration Adjustment from the ADJUSTMENT TYPE drop-down menu.
Note:  Performance of this step will automate population of the FROM field with a date representative of the 61st day of incarceration.
9
Enter the date incarceration ended (if applicable) in the TO field.
10
Click on the ACCEPT button.
11
Click on the DONE button.
References:  For more information on adjusting awards in the

III.v.8.A.3.h.  Re-incarceration for the Same Conviction Following a Period of Release
The instructions contained in M21-1, Part III, Subpart v, 8.A.3.a apply equally to instances of re-incarceration for the same conviction following a period of release.
Re-incarceration may occur, for example, following a parole violation or dismissal from a halfway house or work-release program.
Example:
  • VA begins paying a Veteran the full amount of disability compensation to which he is entitled after he is released from prison and placed on parole.
  • Three months later, the Veteran violates his parole and is re-incarcerated.

Results:

  • VA must complete each of the steps in the procedure outlined in M21-1, Part III, Subpart v, 8.A.3.a, to include the issuing of a new notice of proposed adverse action.
  • VA may not reduce the Veteran’s disability compensation any earlier than the 61st day of re-incarceration.

Reference:  See VAOPGCPREC 2-1996 for a discussion regarding

  • the payment of benefits while a beneficiary is on parole, and
  • re-incarceration of a beneficiary.

III.v.8.A.3.i.Handling Notice That Charges Were Dismissed or Overturned or the Type of Conviction Was Changed
Restore to a beneficiary whose benefits VA reduced or discontinued due to his/her incarceration all benefits to which he/she is otherwise entitled upon receipt of notice from an official source that
  • the charges that resulted in the beneficiary’s incarceration have been dismissed or were overturned, or
  • the type of conviction (felony or misdemeanor) that resulted in the beneficiary’s incarceration has changed such that a reduction or discontinuance of benefits is no longer required under
Restore benefits to the beneficiary effective the same date VA reduced or discontinued them as a result of the beneficiary’s incarceration.
Important:  Do not restore to the beneficiary benefits that VA apportioned (disability compensation/DIC) or paid (pension) to his/her dependents as a result of the incarceration.
References:

4.  Other Considerations When Adjusting an Award Due to Incarceration

Introduction
This topic contains information on effective dates and rates for the discontinuance or reduction of benefit awards due to incarceration, including

Change Date

 February 9, 2016

III.v.8.A.4.a.  Calculating the 61st Day of Incarceration
When calculating the 61st day of incarceration (or re-incarceration, as discussed inM21-1, Part III, Subpart v, 8.A.3.h), start with the first, full day of imprisonmentfollowing conviction.
Do not include in the calculation the number of days a beneficiary spent in confinement while awaiting trial, or for examination or treatment, even if the beneficiary is credited for those days as “time served” following conviction.
Reference:  For a discussion of the issue of time served prior to conviction, seeVAOPGCPREC 3-2005.

III.v.8.A.4.b.  Beneficiaries Transferred From a Foreign to a U.S. Penal Institution
There is no requirement to reduce or discontinue benefits when a beneficiary is incarcerated in a foreign penal institution.  VA must, however, reduce or discontinue the same beneficiary’s award if
  • the beneficiary is later transferred to a U.S. penal institution to serve the remainder of his/her sentence, and
  • the beneficiary was incarcerated in the foreign penal institution for conviction of an offense that is equivalent to a
    • felony (if the beneficiary receives disability compensation or DIC), or
    • felony or misdemeanor (if the beneficiary receives pension).
Important:  The effective date of the reduction or discontinuance is the 61st day of incarceration in the U.S. penal institution.

III.v.8.A.4.c.Recoupment ofSeparation Benefits During Incarceration
Follow the instructions in the table below when
  • VA is withholding all or part of a Veteran’s disability compensation to recoup separation benefits (including disability severance pay), and
  • the Veteran is incarcerated following conviction for a felony.
Exception:  If VA is withholding disability compensation to recoup voluntary separation pay from an Air Force Veteran, follow the instructions in M21-1, Part III, Subpart v, 4.B.4.c.
If VA is withholding …
Then, effective the 61st day of incarceration …
all of the Veteran’s disability compensation to recoup his/her separation benefits
limit the amount of the withholding to the rate specified inM21-1, Part III, Subpart v, 8.A.2.a until incarceration ends.  (The Veteran, in this case, receives no disability compensation while he/she is incarcerated.)
Note:  If entitlement exists, VA may apportion to the Veteran’s dependent(s) all or a part of the remainingdisability compensation that VA does not withhold during incarceration.  When incarceration ends, the apportionment ends, as well.
some but not all of the Veteran’s disability compensation to recoup his/her separation benefits
  • limit the amount of disability compensation that is payable to the Veteran during the period of incarceration to the rate specified in M21-1, Part III, Subpart v, 8.A.2.a, and
  • suspend the withholding for recoupment of separation benefits until incarceration ends.
Note:  If entitlement exists, VA may apportion all or a part of the remaining disability compensation – to include the amount VA was withholding to recoup separation benefits prior to incarceration – to the Veteran’s dependent(s) until incarceration ends.
References:  For more information on

5.  Resuming the Payment of Benefits When Incarceration Ends

Introduction
This topic contains instructions for resuming benefits to Veterans whose benefits have been reduced or discontinued due to incarceration, including

Change Date

 September 7, 2018

III.v.8.A.5.a.Handling Notice That Incarceration Has Ended
VA does not require beneficiaries to submit a specific form to report that incarceration has ended or to request a resumption of benefits after incarceration has ended.  A beneficiary may report release from incarceration
  • in writing
  • by telephone, e-mail, fax, or
  • through eBenefits.
Important:
  • Control a report of release from incarceration or a request for resumption of benefits withheld/discontinued due to incarceration with an EP 290 and the more appropriate of the following claim labels, depending upon the benefit adjusted:
    • Incarceration Adjustment (disability compensation), or
    • PMC-Incarceration Adjustment (DIC and pension).
  • Follow the instructions in M21-1, Part III, Subpart iii, 1.B.1.f for obtaining an oral statement (such as a statement obtained by telephone) from a beneficiary.
  • Do not resume benefits without confirming the beneficiary’s release through an official source, such as those referenced in M21-1, Part III, Subpart v, 8.A.3.b.  If confirmation of release is obtained by telephone, document the call on VA Form 27-0820e.
References:  For more information on

III.v.8.A.5.b. Determining the Date Incarceration Ended
 For VA purposes, incarceration ends when a beneficiary
  • is released from prison
  • is placed under community control (per VAOPGCPREC 59-1991)
  • begins participation in a work-release program, or
  • moves to a

III.v.8.A.5.c.  Principles That Apply to the Adjustment of a Beneficiary’s Award When Incarceration Ends
Resume the payment of benefits at the full rate to which a beneficiary is otherwise entitled upon receipt of notification (or confirmation) from an official source that incarceration has ended.
The effective date for adjusting the beneficiary’s award to reflect the change in status is the date incarceration ended if VA receives notice within one year of that date.  Otherwise, the effective date is the date VA first receives notice that incarceration has ended.
Exception:  The principle described in the preceding paragraph is based on the assumption that VA received notice incarceration had ended after VA had already discontinued or reduced benefits due to incarceration.  When discontinuing or reducing benefits and resuming them in a single award action (because, for example, VA was unaware of a beneficiary’s incarceration until it received notice that incarceration had ended), the proper effective date for resuming benefits is the date incarceration ended, regardless of how long after this date VA received notice.
The table below describes other principles that apply to the adjustment of a beneficiary’s award at the end of a period of incarceration.
If VA …
Then …
  • receives notice from a parole board or other official source that indicates a beneficiary’s incarceration will end on a specific date in the future, and
  • receives the notice no more than 30 days prior to the date incarceration will end
it is acceptable to adjust the beneficiary’s award while he/she is still incarcerated to reflect that incarceration will end on the future date.
Important:  Inform the beneficiary in the corresponding decision notice that if incarceration does not end on the specified date, VA will discontinue or reduce benefits without advance notice, effective the same date it had resumed them.
paid disability compensation in lieu of pension to a Veteran whose benefits were subject to discontinuance due to incarceration
award whichever benefit is more favorable to the Veteran when incarceration ends.
was paying the beneficiary either Section 306 or Old Law Pension prior to incarceration
resume payment of the same benefit when incarceration ends, as long as entitlement still exists.
Important:  Do not switch the beneficiary to current-law pension unless he/she specifically elects that benefit.
Important:
  • Some of the principles and instructions contained in this block apply only to beneficiaries whose disability compensation or DIC was not apportioned, or whose pension was not allotted, to eligible family members for the period of the beneficiary’s incarceration.
  • Before resuming the payment of benefits, read the instructions in
Historical_M21-1III_v_8_SecA_10-12-16.doc May 16, 2019 258 KB
4-29-19_Key-Changes_M21-1III_v_8_SecA.docx May 16, 2019 67 KB
Historical_M21-1III_v_8_SecA_9-7-18.docx May 16, 2019 87 KB
Change-July-22-2015-Transmittal-Sheet-M21-1III_v_8_SecA_TS.docx May 16, 2019 43 KB
in Chapter 8 Incarceration, Part III General Claims Process, Subpart v General Authorization Issues and Claimant Notification
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