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M21-1, Part III, Subpart vi, Chapter 3, Section B – Awards to Foreign Resident Beneficiaries

Overview


In This Section

This section contains the following topics:
Topic
Topic Name
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1.  General Information on Awards to Foreign Resident Beneficiaries


Introduction

This topic contains general information on awards to foreign resident beneficiaries, including

Change Date

March 14, 2019

III.vi.3.B.1.a.  Prohibition on the Release of Payments

31 U.S.C. 3329 prohibits the release of payments to persons who live in a foreign country if the Secretary of the Treasury decides that local conditions in the foreign country do not reasonably ensure that the payee will
  • receive the payment, or
  • be able to negotiate a payment for full value.
Note:  The Department of Veterans Affairs (VA) may develop claims filed by and authorize awards to residents of listed countries, except citizens of the U.S.
References:  For more information on

III.vi.3.B.1.b.  Department of Treasury Listed Countries

The Department of Treasury list of countries to which the prohibition against delivery of payments currently applies are
  • Democratic People’s Republic of Korea (North Korea), and
  • Republic of Cuba (Cuba).
Note:  The Department of State does not maintain offices in the Democratic People’s Republic of Korea (North Korea).

III.vi.3.B.1.c.  Corresponding With Claimants in Listed Countries

Although sending payments to listed countries is prohibited, correspondence may be sent to claimants living in these countries; however, there is reasonable doubt they will receive it.
In correspondence outside VA, do not use the term “blocked countries.”  Instead, use “listed countries.”

III.vi.3.B.1.d.  Special Account Called Secretary of the Treasury, Proceeds of Withheld Foreign Checks

31 U.S.C. 3329(b)(4) provides for a special account called Secretary of the Treasury, Proceeds of Withheld Foreign Checks, which was established to preserve the rights of
  • persons to whom awards had been made before October 9, 1940 (when the law prohibiting payments to listed countries was enacted), and
  • those subsequently taking residence in listed countries.

2.  Services Offered by the Department of State


Introduction

This topic contains information on the services offered by the Department of State, including

Change Date

August 14, 2006

III.vi.3.B.2.a.  Expenses for Services Offered by the Department of State

Services by the Department of State through consular officers at U.S. embassies and consulates, including investigations in foreign countries, generally are without cost to VA.

III.vi.3.B.2.b.  Services Offered by Consular Officers

The consular officers at U.S. embassies and consulates offer the services listed below:
  • Furnish general information and assistance, including assistance to claimants, beneficiaries, and apportionees in the preparation of applications for benefits
  • Inspect and approve institutions for pursuit of courses of instruction by children between the ages of 18 and 23
  • If requested by VA, investigate and develop claims
  • Administer oaths for VA purposes
  • Take action as requested by the Under Secretary for Benefits or designee on matters involving guardianship, and
  • Make arrangements for physical examinations as requested by the appropriate VA regional office.

 3.  Developing Claims Filed by and Authorizing Awards to Foreign Residents


Introduction

This topic contains information on developing claims filed by and authorizing awards to foreign residents, including

Change Date

March 14, 2019

III.vi.3.B.3.a.  When to Develop Claims From and Authorize Awards to Foreign Residents

Develop initial or supplemental claims and authorize corresponding awards for a claimant residing in a listed country only when the claimant, on his/her own initiative,
  • requests that benefit payments show a U.S. Foreign Service post address in an unlisted country
  • specifies the U.S. Foreign Service post address to which the payments are to be forwarded, and
  • indicates that he/she will take delivery at that U.S. Foreign Service post in person.
Note:  Limit claims development in countries without Department of State offices to direct correspondence with the claimant.

III.vi.3.B.3.b.  When Not to Develop Claims From and Authorize Awards to Foreign Residents

Deny initial and supplemental claims filed by claimants residing in listed countries without further development as provided in 38 CFR 3.653(c) when
  • the claimant fails to request delivery of payments to a U.S. Foreign Service post address in an unlisted country, and/or
  • full development of the case requires the services of the Department of State.

4.  Discontinuing Awards to Foreign Resident Beneficiaries


Introduction

This topic contains information on discontinuing awards to foreign resident beneficiaries, including

Change Date

March 14, 2019

III.vi.3.B.4.a.  Notification by the Department of Treasury

The Department of Treasury returns payments for pension, compensation, or Dependency and Indemnity Compensation (DIC) to VA for cancellation when beneficiaries reside in countries that have been added to the Department of Treasury list.
VA Form 20-6560Notice of Benefit Payment Transaction, is received in each case under message code 611, CHECK RETURNED – DEATH OF PERS ENT.

III.vi.3.B.4.b.  Handling Adjustments for Returned Payments

If the returned payment is a regular monthly payment and
  • does not include adjustments for periods prior to the month for which it was issued, discontinue the award effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share, or
  • includes adjustment payments for periods prior to the month of issuance, adjust/reduce and discontinue the award so as to cancel the retroactive adjustment.

III.vi.3.B.4.c.  Adjusting Awards to Beneficiaries Affected by Termination of Payment

If discontinuation of an award to a beneficiary in a listed country affects the rate payable to another person, such as a dependent or an apportionee,
  • adjust the award(s) of the other person(s) under end product 130 as if the beneficiary residing in the listed country were deceased, effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share for the discontinued award, and
  • annotate the award(s) with Payee residing in a listed country.
Note:  If the claims folder is electronic, add the annotation in the SUBJECT field of the document properties of the award(s) in the Veterans Benefits Management System.

III.vi.3.B.4.d.  Adjusting Awards to Beneficiaries When Dependents Reside in Listed Countries

If the beneficiary resides in an unlisted country and is receiving additional compensation, pension, or increased pension because of a dependent who is or becomes a resident of a listed country, remove the dependent from the beneficiary’s award effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share.
Note:  If the beneficiary’s award is apportioned or apportionable, see M21-1, Part III, Subpart v, 3.C.3.

5.  Releasing Withheld Funds and Resuming a Discontinued Award


Introduction

This topic contains information on releasing withheld funds and resuming a discontinued award, including

Change Date

March 14, 2019

III.vi.3.B.5.a.  Requirements for Releasing Withheld Funds and Resuming Discontinued Awards

Release withheld funds or resume a discontinued award if
  • the country in which the beneficiary resides is removed from the Department of Treasury list
  • the beneficiary establishes residence in an unlisted country, or
  • the beneficiary has requested award payments be mailed to him/her in care of a U.S. Foreign Service post in an unlisted country.
References:  For more information on

III.vi.3.B.5.b.  Releasing Withheld Funds

Release pension and compensation payments formerly deposited in the special account referenced in M21-1, Part III, Subpart vi, 3.B.1.d
Notes:
  • Payment will be made from the Compensation and Pension appropriation, 36XO102.
  • There is no time limit for the filing of a claim by the Veteran or dependent beneficiary.  However, evidence of continued entitlement must be submitted within one year from the date of request.
Reference:  For more information on the payment of withheld funds as accrued benefits, see M21-1, Part VIII, 5.11.

III.vi.3.B.5.c.  Resuming a Discontinued Award

If an award was discontinued for the reason(s) VA prevented from obtaining necessary evidence or Payee residing in a listed country, pay the amount otherwise payable to the beneficiary effective the date of discontinuance.
Notes:
  • Payment is subject to proof of entitlement over the intervening period.
  • There is no time limit for the filing of a claim by the Veteran or dependent beneficiary.  However, evidence of continued entitlement must be submitted within one year from the date of request.
References:  For more information on

III.vi.3.B.5.d.  Resuming an Award When the Existence of the Beneficiary Could Not be Established

If payments were not made solely because the continued existence of the beneficiary was not established, apply 38 CFR 3.158(c), concerning whereabouts previously unknown.
The effective date of a resumed award under 38 CFR 3.158(c) is governed by 38 CFR 3.114(a).  However, the effective date cannot be prior to December 1, 1962.

III.vi.3.B.5.e.  Developing for Eligibility

Develop the claim to determine the beneficiary’s eligibility, including proof of identity, when releasing withheld funds or resuming a discontinued award.  Development includes
  • obtaining a loyalty clearance if required by M21-1, Part III, Subpart iii, 1.E.1, and
  • notifying the beneficiary of his/her right to elect the following:
    • Veterans Pension in Section 306 and Old-Law and Survivors Pension cases, or
    • DIC in death compensation cases.
Reinstate the benefit when development indicates that eligibility may be reestablished.
Note:  Proof of identity must be acceptable to the Department of State authorities in the country removed from the Department of Treasury list.

III.vi.3.B.5.f.  Actions to Release  Withheld Funds

To release withheld funds, prepare
  • a one-time payment to release funds for the retroactive part of the award, and
  • a second award processed in the normal manner to resume payments from the final date through which payment was withheld.

III.vi.3.B.5.g.  Deceased Beneficiaries

In some situations, information in the claims folder indicates
  • the beneficiary is deceased, and
  • a claim for accrued benefits has not been filed within one year after the reported date of death.
In this situation, notify the finance activity stating that the amount withheld is not payable to any living person.
Historical_M21-1III_vi_3_SecB_9-25-15.docx May 18, 2019 49 KB
3-14-19_Key-Changes_M21-1III_vi_3_SecB.docx May 18, 2019 51 KB
Change-May-28-2015-Transmittal-Sheet-M21-1III_vi._3_SecB_TS.docx May 18, 2019 39 KB
Transmittal-08_14_06.doc May 18, 2019 35 KB
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