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M21-1, Part III, Subpart vi, Chapter 5, Section B – Forfeiture Discontinuance Provisions

Overview


In This Section

This section contains the following topics:

1.  General Information on Forfeiture of Benefits


Introduction

This topic contains general information on forfeiture of benefits, including information on

Change Date

September 24, 2015

III.vi.5.B.1.a.  When Forfeiture of Benefits Occurs

Forfeiture of benefits may be declared after September 1, 1959, for fraud or treasonable acts only in
  • foreign cases, or
  • cases in which the act was committed in the Republic of the Philippines.
Reference:  For more information on fraud and treasonable acts, see

III.vi.5.B.1.b.  Definition: Foreign Case

foreign case is a case in which the beneficiary
  • was not residing in a State when the fraudulent or treasonable act or acts occurred, or
  • ceased to be a resident of or domiciled in a State before the expiration of the period during which criminal prosecution could be instituted.
Note:  38 CFR 3.1(i) defines “State” for Department of Veterans Affairs (VA) purposes.

III.vi.5.B.1.c.  Activities That Result in the Automatic Forfeiture of Benefits

The table below shows the activities that would result in the automatic forfeiture of benefits depending on when the claim was filed.
If the claim was filed …
Then the beneficiary would forfeit benefits upon conviction of …
before December 17, 2003
any of the subversive activities specified in 38 CFR 3.903(a)(1), (3), (4), or (5).
on or after December 17, 2003
  • any of the subversive activities specified in 38 CFR 3.903(a)(1), (2), (3), (4), or (5)
  • prohibited activities involving
    • biological weapons
    • chemical weapons, or
    • nuclear materials
  • genocide
  • use of certain weapons of mass destruction, and
  • acts of terrorism transcending national boundaries.

III.vi.5.B.1.d.  Entitlement to Benefits Based on Subsequent Service

Forfeiture of benefits based on one period of service does not affect entitlement to benefits based on a period of service beginning after the offense causing the forfeiture.
Important:  Process a claim of this type based on the nonforfeiture period of service only.
Reference:  For information on forfeiture of benefits based on one period of service, see 38 CFR 3.900(a).

III.vi.5.B.1.e.  Presidential Pardon Petitions

Persons whose benefits have been forfeited may apply through the Department of Justice for a pardon from the President of the United States.
Important:  The effective date of the resumption of benefits based on a presidential pardon (after discontinuation based on forfeiture) is the date of the pardon.
Reference:  For more information on the resumption of benefits based on a presidential pardon, see

2.  Handling Forfeiture of Benefits


Introduction

This topic describes the processes for handling forfeiture of benefits, including

Change Date

December 7, 2018

III.vi.5.B.2.a.  Handling Forfeiture of Benefits Based on Fraud or Treasonable Acts

The table below
  • describes the stages in the process for handling forfeiture of benefits based on fraud or treasonable acts, and
  • indicates the activity responsible for each stage.
Stage
Description
1
The development activity
  • determines the credibility of evidence submitted in connection with all claims, and
  • develops for sufficient evidence to establish the probability that the information submitted in connection with a claim is
    • false or fraudulent, and
    • material to the question of eligibility for the particular benefit.
Note:  The development activity is also responsible for reviewing evidence developed by field examination.
2
The development and/or authorization activity prepares a proposed decision if the evidence presented indicates forfeiture. The decision should include
  • the specific charges against the person
  • a detailed statement of the evidence supporting the charges, subject to regulatory limitations on disclosure of information
  • citation and discussion of the applicable statute(s), and
  • notification of
    • the right to submit a statement or evidence within 60 days, either to rebut the charges or to explain the person’s position, and
    • the right to a hearing within 60 days, with representation by counsel of the person’s own choosing.
3
The development and/or authorization activity submits the proposed decision to
  • an authorizer for concurrence, and
  • the Veterans Service Center Manager (VSCM) or Pension Management Center Manager (PMCM) or his/her supervisory designee for approval.
4
The VSCM or PMCM approves or rejects the proposed decision.
5
The development and/or authorization activity
  • refers the claims folder and proposed decision to the Regional Counsel, and
  • establishes a suspense date to trigger the review of the status of the Regional Counsel referral.
6
The Regional Counsel
  • furnishes the claimant with due process as provided in 38 CFR 3.905, and
  • returns the claims folder to the regional office (RO).
7
At the end of the 60-day due process period, if the Regional Counsel still recommends forfeiture, the development and/or authorization activity
  • prepares a final administrative decision, and
  • submits the decision to
    • an authorizer for concurrence, and
    • the VSCM or PMCM or his/her designee for approval.
8
The VSCM, PMCM, or designee approves the final decision.
9
The authorization activity refers the claims folder and final decision to the Regional Counsel to determine whether or not it will submit the case to Compensation Service or Pension and Fiduciary (P&F) Service for consideration of forfeiture.
10
The Regional Counsel determines whether or not it will submit the case to Compensation Service or P&F Service for consideration of forfeiture.
  • If the Regional Counsel decides to submit the case to Compensation Service or P&F Service, the process continues with Stage 1 of the process described in M21-1, Part III, Subpart vi, 5.B.2.b.
  • If the Regional Counsel decides not to submit the case to Compensation Service or P&F Service, it returns the case to the authorization activity by memorandum setting forth the basis for the decision.
11
The authorization activity advises the beneficiary that the case is not being submitted to Compensation Service or P&F Service.
Note:  In the Manila RO, the title Regional Counsel also includes the VSCM because the VSCM in the Manila RO performs the Regional Counsel functions for forfeiture cases under jurisdiction of that office.
References:  For more information on

III.vi.5.B.2.b.  Submitting Cases of Forfeiture Based on Fraud or Treasonable Acts to Compensation Service or P&F Service

The table below describes the process for submitting cases of forfeiture of benefits based on fraud, fraudulent evidence, or treasonable acts to the Compensation Service or P&F Service for consideration.
Stage
Description
1
The Regional Counsel notifies the RO that it is submitting the case to Compensation Service or P&F Service for consideration of forfeiture under the circumstances outlined in 38 CFR 3.901 or 38 CFR 3.902.
Note:  If the authorization activity has already suspended payments and furnished a notice of proposed adverse action and final decision notice to the beneficiary before referring the case to the Regional Counsel, no further action is required.
2
The authorization activity
  • suspends payments effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share
  • furnishes a final decision notice to the beneficiary, and
  • returns the claims folder to the Regional Counsel to submit to Compensation Service or P&F Service.
3
The Regional Counsel
  • prepares the submission letter to Compensation Service or P&F Service for consideration of forfeiture under the circumstances outlined in 38 CFR 3.901 or 38 CFR 3.902, and
  • notifies the RO when the claims folder is ready for transfer to Compensation Service or P&F Service
4
  • If the beneficiary has a paper claims folder, the RO transfers it to Compensation Service or P&F Service.
  • If the beneficiary has an electronic claims folder, the RO notifies either Compensation Service or P&F Service by e-mail of the case that is awaiting its review.
Important:  The period behind “Svc” must be included when addressing the e-mail to P&F Service.
Reference:  For more information on transferring claims folders, seeM21-1, Part III, Subpart ii, 5.
5
The Director of Compensation Service, the Director of P&F Service, or designated staff officials within these services
  • determine whether or not benefits will be forfeited
  • notify the Regional Counsel of the determination, and
  • return the case to the RO.
References:  For more information on the

III.vi.5.B.2.c.  Handling Forfeiture of Benefits Based on Claimant’s Subversive Activity Under 38 CFR 3.903

The Attorney General, Secretary of Defense, or Secretary of Treasury notifies VA when a person is indicted or convicted of subversive activity.
After notification of
  • an indictment, suspend payments pending disposition of the criminal proceedings, and
  • a conviction, the Regional Counsel forwards the case to Compensation Service or P&F Service for automatic forfeiture.
Important:  No other person will be entitled to receive any benefits due to the individual’s conviction for subversive activities.

III.vi.5.B.2.d.  Handling the Jurisdiction of the Claims Folder in Cases Invoking Forfeiture

Compensation Service or P&F Service refers cases to the RO identified in M21-1, Part III, Subpart ii, 5.A.1 as having jurisdiction based on the beneficiary’s foreign residence.  The RO will discontinue benefits under 38 CFR 3.669.
Note:  The Manila RO discontinues benefits for cases under its jurisdiction.

III.vi.5.B.2.e.  Resuming Payments in Cases With Non-Forfeiture Determinations

Resume payments effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share under 38 CFR 3.669, if the payment of benefits is otherwise in order and
  • Compensation Service or P&F Service returns the claims folder and the Regional Counsel provides notification that no forfeiture was declared, or
  • Regional Counsel provides notification that the beneficiary was acquitted of subversive activities.

III.vi.5.B.2.f.  Handling Disagreements With Forfeiture Decisions

When a legacy notice of disagreement (NOD) or decision review request regarding a forfeiture decision is timely filed, forward the following to Compensation Service or P&F Service:
  • the legacy NOD or decision review request, and
  • any material submitted with it.
Compensation Service or P&F Service will subsequently prepare a statement of the case or review decision, as appropriate.
References:  For more information on

III.vi.5.B.2.g.  Processing Apportionments in Forfeiture Cases

Use the table below to process apportionments when a forfeiture of benefits is invoked.
If forfeiture was invoked …
Then …
before September 2, 1959
continue apportionments in these cases as long as the dependents remain entitled.
The amount payable to the dependents is the lesser of
  • the applicable survivors benefit payable, which is either
    • death compensation or Dependency and Indemnity Compensation, if the Veteran was receiving compensation, or
    • Survivors Pension, if the Veteran was receiving non-service-connected disability pension, or
  • amount of compensation or pension being paid the Veteran at the time of the forfeiture.
Important:  Do not pay benefits to or for any person who participated in the fraud or treasonable act causing the forfeiture.
after September 1, 1959
do not make apportionment to any dependents.
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