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M21-1, Part IV, Subpart ii, Chapter 3, Section A – General Authorization and Claimant Notification Issues

Overview


In This Section

This section contains the following topics:

1.  Locations of Information Pertaining to General Authorization and Claimant Notification Issues


Introduction

This topic provides the location of information pertaining to general authorization and claimant notification issues, including

Change Date

July 17, 2015

IV.ii.3.A.1.a.  Award and Denial Process

For information on the award and denial process, see M21-1, Part III, Subpart v, 2.

IV.ii.3.A.1.b.  Due Process

For information on due process, see M21-1, Part I, 2.A.

IV.ii.3.A.1.c.  Effective Dates for New Awards and Increased Awards

For information on effective dates for new awards and increased awards, see

IV.ii.3.A.1.d.  Compensation for a Child Incapable of Self-Support

For information on compensation for a child incapable of self-support, see M21-1, Part III, Subpart iii, 7.

IV.ii.3.A.1.e.  SMC

For information on special monthly compensation (SMC), see M21-1, Part IV, Subpart ii, 2.H and I.

IV.ii.3.A.1.f.  Potential Entitlement to Vocational Rehabilitation Under 38 U.S.C. Chapter 31

For information on notifying Veterans of potential entitlement to vocational rehabilitation under 38 U.S.C. Chapter 31, see M21-1, Part IX, Subpart i, 1.A.3.

2.  Adverse Action Resulting From a CUE or Severance of SC


Introduction

This topic contains information on adverse action resulting from a CUE or severance of SC, including

Change Date

March 20, 2019

IV.ii.3.A.2.a.  Rating Activity Action to Correct a CUE

Upon identification of a clear and unmistakable error (CUE) in a rating decision that, when corrected, will result in the reduction or discontinuance of a Veteran’s award, the rating activity prepares a rating decision that
  • proposes the change
  • cites all the material facts and justification for the proposed action, and
  • includes the
    • legend PROPOSAL TO REDUCE UNDER 38 CFR 3.105(a) and 3.105(e)
    • proposed evaluation of the disability in question or other action being taken, and
    • proposed combined evaluation, if applicable.
Reference:  For more information on CUEs, see

IV.ii.3.A.2.b.  Authority to Sign Rating Decisions the Rating Activity Makes Under 38 CFR 3.105(a))

A rating decision proposing a reduction or discontinuance of benefits under 38 CFR 3.105(a) must be signed by the Veterans Service Center Manager (VSCM) or a supervisory designee no lower than a coach.
The final rating decision does not require the signature or approval of the VSCM or VSCM-designee unless the Department of Veterans Affairs (VA) received new evidence after the VSCM or VSCM-designee approved the proposed decision.

IV.ii.3.A.2.c.  Location of Relevant Information to Consider When Correcting a CUE

Use the information in M21-1, Part IV, Subpart ii, 3.A.3 when
  • determining the effective date of a correction of a CUE
  • considering evidence VA receives after issuing a notice of proposed adverse action
  • handling a request for a hearing, and
  • notifying the Veteran.

IV.ii.3.A.2.d.  Withdrawing a Proposal to Correct a CUE

The actions required to withdraw a proposal to correct a CUE depend upon who withdraws the proposal.
Use the table below to determine the actions that take place when the rating activity or a Decision Review Officer (DRO) withdraws a proposal to correct a CUE.
If …
Then the …
the rating activity withdraws the proposal
  • rating activity prepares a rating decision that confirms and continues the prior decision, and
  • VSCM or designee mustapprove the rating decision.
a DRO withdraws the proposal
  • DRO prepares a decision that confirms and continues the prior decision, and
  • VSCM or designee mustapprove the DRO decision,unless it is an issue on appeal.

IV.ii.3.A.2.e.  Jurisdiction of the Rating Activity Over the Severance of SC

As indicated in M21-1, Part III, Subpart iv, 8.E.2, the rating activity typically initiates action to sever service connection (SC).  However, the authorization activity may do so under certain circumstances, per M21-1, Part IV, Subpart ii, 3.A.2.f.
The rating activity may reverse a previous award of SC under 38 CFR 3.105(d) if it finds that SC was awarded based on a CUE.  This means that the original award had no plausible basis in the law or particular facts of the case.  The error must be undebatable and not a mere difference in judgment between decision makers.

IV.ii.3.A.2.f.  Jurisdiction of the Authorization Activity Over the Severance of SC

The authorization activity
  • initiates action to sever SC if a CUE was made in a decision concerning
    • character of discharge (COD)
    • line of duty (LOD), or
    • willful misconduct, and
  • refers the case to the rating activity for appropriate action under M21-1, Part III, Subpart iv, 8.E.3.
Note:  Take action as shown in M21-1, Part III, Subpart iv, 8.E.2 even if severance of SC would not result in a reduction or discontinuance of benefits.
References:  For more information on decisions concerning

IV.ii.3.A.2.g.  Requirement for VSCM Approval of Proposals to Sever SC

As indicated in M21-1, Part III, Subpart iv, 8.E.2.d, the VSCM must approve any proposal to sever SC.
Important:  Do not inform the Veteran or Veteran’s power of attorney of a proposed severance before it is approved by the VSCM.

IV.ii.3.A.2.h.  Time Periods to Remember When Proposing a Reduction or Discontinuance of Benefits

When proposing a reduction or discontinuance of benefits, VA must
  • allow the Veteran a minimum of 60 days to respond to the notice of proposed reduction or discontinuance (referred to as the “due process period”), and
  • wait a minimum of 60 days after making a final rating decision and sending a decision notice before effectuating the reduction or discontinuance.

IV.ii.3.A.2.i.  Process for Severing SC After VSCM Approval

The table below describes the process for severing SC after VSCM approval.
Stage
Description
1
The authorization activity
  • sends a notice of proposed adverse action to the Veteran
  • clears the existing end product (EP) control, and
  • establishes an EP 600 with a suspense date that is 65 days from the date the notice is released.
Note:  M21-1, Part IV, Subpart ii, 3.A.2.j describes the information to include in the notice of proposed adverse action.
2
The authorization activity refers the case to the rating activity after the earlier of the following occur:
  • Veteran submits evidence in response to the notice of proposed adverse action, or
  • the suspense date referenced in Stage 1 passes.
3
The rating activity
  • makes a determination
  • prepares a final rating decision, and
  • forwards the decision to the authorization activity for promulgation.

IV.ii.3.A.2.j.  Information to Include in the Notice of Proposed Adverse Action to Sever SC

After the VSCM approves a proposal to sever SC, notify the Veteran by locally-generated letter of the proposed adverse action.  The letter must
  • thoroughly explain the
  • contain statements concerning the Veteran’s rights to
    • present evidence
    • request a hearing, and
    • have representation
  • advise the Veteran that the present payment will continue during the time allowed for him/her to exercise those rights
  • include information concerning possible pension entitlement if the evidence shows such entitlement may exist, and
  • request any necessary information regarding the Veteran’s dependents, employment, and income if basic eligibility for pension exists.

References:  For more information about


IV.ii.3.A.2.k.  Effective Date of a Decision to Sever SC

The effective date of a rating decision to sever SC is the first day of the month following a 60-day period that begins on the date on the notice of the final rating action.
Example:  Given a final decision notice date of April 22,
  • 60 days following that date is June 21, and
  • the first day of the next month is July 1.

IV.ii.3.A.2.l.  Actions to Take on a Rating Decision to Sever SC Under 38 CFR 3.105(a)

Use the table below to determine what actions to take after the rating activity makes a final decision to sever SC.
References:  For information on making award adjustments in the
If SC is severed under 38 CFR 3.105(a) …
And …
Then …
  • for the only service-connected (SC) disability, or
  • for all SC disabilities
  • discontinue the payment of compensation (assuming the disability(ies) is(are) compensable) effective the first day of the month, following a 60-day period that begins on the date VA will notify the Veteran of the action taken, per 38 CFR 3.500(r), and
  • follow the instructions inM21-1, Part III, Subpart v, 2.B for providing decision notice to the Veteran.
for one or more compensable disabilities, but not for all compensable disabilities
the Veteran’s benefits are reduced (perhaps including a conversion to pension in accordance with M21-1, Part III, Subpart v, 4.A.2)
  • reduce the Veteran’s award effective the first day of the month following a 60-day period that begins on the date VA will notify the Veteran of the action taken, per 38 CFR 3.500(r), and
  • follow the instructions inM21-1, Part III, Subpart v, 2.B for providing decision notice to the Veteran.
Reference:  For more information on the final rating decision, seeM21-1, Part III, Subpart iv, 8.E.2.g.
for one or more SC disabilities
the combined evaluation of the remaining disabilities (for which SC remains in effect) is increased based on a claim for increased compensation
  • grant entitlement to increased benefits effective the date of receipt of the claim for increase or the date entitlement arose, whichever is later, per 38 CFR 3.400(o), and
  • follow the instructions inM21-1, Part III, Subpart v, 2.B for notifying the Veteran of the
    • severance action, and
    • increased disability evaluation(s).
an increased evaluation of the remaining SC disabilities does notchange the combined disability evaluation
  • enter the rating data by amended award action, and
  • follow the instructions inM21-1, Part III, Subpart v, 2.B for notifying the Veteran of the
    • severance action, and
    • increased disability evaluation(s).

IV.ii.3.A.2.m.  Action to Take If a Proposed Adverse Action Would Affect a Veteran’s Entitlement to Benefits Under Another VA Program

When a proposed adverse action, if taken, would affect a Veteran’s entitlement to benefits under another VA program, send a copy of the notice of proposed adverse action to the appropriate point of contact for that program.
Example:  When proposing to sever SC, send a copy of the notice of proposed adverse action to the local vocational rehabilitation and employment (VR&E) activity, if the record shows the Veteran receives training under 38 U.S.C. Chapter 31.
Exception:  Although correction of a CUE might affect a Veteran’s eligibility for VA health care, never send notice of a proposed adverse action to a VA medical center.

3.  Reductions in Disability Evaluations Under 38 CFR 3.105(e)


IV.ii.3.A.3.a.  Role of the Rating Activity

The rating activity
  • decides whether a reduction in the evaluation of an SC disability under 38 CFR 3.105(e) is in order, and
  • dictates (via a rating decision) the type of award adjustment, if any, the authorization activity must make.
Reference:  For more information on rating procedures for reducing a previously assigned disability evaluation, see M21-1, Part III, Subpart iv, 8.BC, and D.

IV.ii.3.A.3.b.  Application of 38 CFR 3.105(e)

38 CFR 3.105(e) and the information in this topic apply only when a reduction or discontinuance of a running award of disability compensation is necessary as a result of
  • a reduction in the evaluation of an SC disability, or
  • loss of entitlement to a total disability rating based on individual unemployability.
Example:  If the rating activity increases the evaluation of one or more SC disabilities or grants SC for a new disability, but the combined disability evaluation decreases because of a reduction in the evaluation of another disability, then
  • award the increase from the applicable effective date, and
  • apply the provisions of 38 CFR 3.105(e) to propose reduction of the combined disability evaluation.
Reference:  For more information on notification requirements for reduced disability evaluations, see Stelzel v. Mansfield, No. 2007-7109 (2007).

IV.ii.3.A.3.c.  Initial Rating Activity Action Proposing a Reduction in a Disability Evaluation

The rating activity prepares a rating decision proposing changes in the evaluation(s) assigned to SC disabilities that will result in the reduction or discontinuance of benefits.  This rating decision sets forth all material facts and reasons for the action.
The legend PROPOSAL TO REDUCE EVALUATION(S)–38 CFR 3.105(e) in the rating decision identifies the proposed disability evaluation and (if applicable) the proposed combined disability evaluation.

IV.ii.3.A.3.d.  When 38 CFR 3.105(e) Does Not Apply

Use the table below to determine when 38 CFR 3.105(e) does not apply.
If …
Then …
the award is suspended
  • reduce or discontinue the award in accordance with facts found, but not earlier than the date of suspension, and
  • notify the Veteran of the change in the evaluation of the SC disability(ies).
  • the evaluation of one or more SC disabilities is decreased, but
  • the combined disability evaluation remains the same
  • take no further award action, and
  • notify the Veteran of the change in the evaluation of the SC disability(ies).
  • the evaluation of one or more SC disabilities is decreased, but
  • the combined disability evaluation is increased because of an offsetting increase in the evaluation of another SC disability
  • award the increase from the appropriate effective date, and
  • notify the Veteran of the change in the evaluation of the SC disability(ies).
a disability evaluation is reduced as part
of a staged rating
  • reduce the award in accordance with facts found, and
  • notify the Veteran of the change in the evaluation of the SC disability(ies) in the staged rating.
Note:  Tatum v. Shinseki held that notice under 38 CFR 3.105(e) is only required when there is a reduction in compensation payments currently being made.
Important:  In cases in which the rating schedule provides for a period of convalescence, the reduction may not take effect prior the end of that period.
Example:  A malignant neoplasm of the genitourinary system evaluated under 38 CFR 4.115b, diagnostic code 7528 must be evaluated as 100-percent disabling for a minimum of six months from the time that treatment for the malignancy ceases.
Reference:  For more information about circumstances under which 38 CFR 3.105(e) does not apply to a change in a disability evaluation, see VAOPGCPREC 71-1991.

IV.ii.3.A.3.e.  Process for Handling a Rating Decision That Proposes a Reduction Under 38 CFR 3.105(e)

The process for handling a rating decision that proposes a reduction in a disability evaluation under 38 CFR 3.105(e) is the same as the process described in M21-1, Part IV, Subpart ii, 3.A.2.iexcept that pre-approval by the VSCM is not required.
Important:  If the Veteran is eligible for pension, and the evidence of record suggests pension would be the greater or the only disability benefit to which the Veteran is entitled if VA takes the proposed action,
 References:  For more information on

IV.ii.3.A.3.f.  Initial Notification of the Proposed Adverse Action

Send a notice of proposed adverse action with a rating decision that proposes a reduction in a disability evaluation under 38 CFR 3.105(e) to a Veteran at his/her current address of record.  The notice must inform the Veteran of the
  • proposed action and detailed reasons for it
  • 60-day period during which he/she may present new evidence showing why VA should not take the proposed action, and
  • proposed date of the reduction, which is the last day of the month, 60 days after the date VA will notify the Veteran of the final rating decision.
Notes:
  • VBMS-A and VETSNET require entry of the first day of the month following a 60-day period that begins on the date VA notifies the Veteran of the final rating decision as the effective date of an award adjustment under 38 CFR 3.105(e).
  • Do not include in the notice language about minimizing an overpayment, because no overpayment will be created by the proposed award adjustment.
References:  For information on

IV.ii.3.A.3.g.  Action to Take if a Veteran Expresses Disagreement Before VA Makes a Final Decision

Follow the instructions in M21-1, Part III, Subpart ii, 3.E.1.e, if a Veteran expresses disagreement before VA makes a final decision.

IV.ii.3.A.3.h.  Action to Take After a Veteran Responds or Fails to Respond to a Notice of Proposed Adverse Action

Use the table below to determine the action to take after a Veteran responds or fails to respond to a notice of proposed action.
If the Veteran …
Then …
  • presents new evidence, or
  • requests a hearing within 30 days of the date of the notice of proposed adverse action
the rating activity will
  • not prepare a final rating decision until the evidence is considered, the hearing is held, or the 60-day due process period elapses (whichever is later), and
  • take final rating action to reduce the evaluation(s) effective the last day of the month following a 60-day period that begins on the date VA will notify the Veteran of the final rating action, if a reduction is still warranted.
Note:  VBMS-A and VETSNET require entry of the first day of the month following a 60-day period that begins on the date VA notified the Veteran of the final rating decision as the effective date of an award adjustment under 38 CFR 3.105(e).
submits evidence that establishes a reasonable basis for reexamination
  • request the examination, and
  • wait until the examination report has been received and considered before taking final rating action under M21-1, Part III, Subpart iv, 8.D.1.
  • does not submit additional evidence within 60 days, and
  • does not request a hearing
take final rating action.

IV.ii.3.A.3.i.  Withdrawing a Proposal to Reduce a Disability Evaluation Under 38 CFR 3.105(e)

Either the rating activity or a DRO may withdraw a proposal to reduce a disability evaluation under 38 CFR 3.105(e).  This is accomplished by preparing a rating decision that confirms and continues the current disability evaluation.

IV.ii.3.A.3.j.  Action to Take on Final Rating Decisions Prepared Under 38 CFR 3.105(e)

Promulgate final rating decisions prepared under 38 CFR 3.105(e) by
  • ensuring rating decision data is correctly reflected in the award application, and
  • making any necessary award adjustments.
References:  For more information on promulgating rating decisions in

IV.ii.3.A.3.k.  Providing Notification of a Final Rating Decision

After promulgating a final rating decision,
  • follow the instructions in M21-1, Part III, Subpart v, 2.B.1, for preparing and sending a decision notice to the Veteran, even if the proposed action is not taken, and
  • send a copy of the decision notice to the VR&E activity for appropriate action if evidence of record indicates the Veteran is receiving training under 38 U.S.C. Chapter 31.

IV.ii.3.A.3.l.  Handling Evidence Received After Preparation of a Final Rating Decision but Prior to the Effective Date of Reduction

Use the table below to determine what steps to take if VA receives evidence aftermaking a final rating decision under 38 CFR 3.105(e) but prior to the effective date of a corresponding reduction in benefits.
If the rating activity …
Then …
decides the evidence establishes a need for a reexamination
  • prepare an amended award to continue the rate previously in effect, and
  • maintain EP control for receipt of the examination report.
prepares a new rating decision restoring the prior disability evaluation(s)
  • prepare an amended award to cancel the scheduled reduction
  • use as the effective date the earlier of either the first day of the
    • current month, or
    • month the canceled reduction was scheduled, and
  • annotate the award document New rating [date] cancels prior rating[date].
prepares a new rating decision partially restoring the prior disability evaluation(s)
reduce the award effective the last day of the month, 60 days after the date VA notifies the Veteran of the final rating decision.
Note:  VBMS-A and VETSNET require entry of the first day of the month following a 60-day period that begins on the date VA notified the Veteran of the final rating decision as the effective date of an award adjustment under38 CFR 3.105(e).

IV.ii.3.A.3.m.  MRP Adjustment Following a Reduction in Disability Compensation

When VA reduces a Veteran’s disability compensation to reflect a reduced disability evaluation, the Veteran’s retired pay center receives notification (via a computerized data exchange) of the reduction and makes corresponding changes to the Veteran’s military retired pay (MRP) if the Veteran waived all or a portion of his/her MRP to receive disability compensation.

4.  Award Adjustments Under Graduated TB Ratings


Introduction

This topic contains information on award adjustments under graduated TB ratings, including

Change Date

May 17, 2018

IV.ii.3.A.4.a.  Repeal of Graduated Ratings for Inactive TB

Public Law 90-493 repealed sections 38 U.S.C. 314(q) and 38 U.S.C. 356 that provided graduated ratings for inactive tuberculosis (TB).
Important:  The repealed sections still apply to any Veteran who was receiving, or was entitled to receive, disability compensation for TB on August 19, 1968, under38 CFR 3.959.

IV.ii.3.A.4.b.  Definition:  Graduated Rating

graduated rating is a gradual reduction in a disability evaluation for a disease that has moved from the active to the inactive stage.

IV.ii.3.A.4.c.  Handling Rating Decisions Involving a Reduced Disability Evaluation for Inactive TB

If a rating decision reduces a Veteran’s disability evaluation for SC TB because it is inactive,
  • prepare an amended award to input the
    • two-year, 100-percent evaluation, and
    • graduated or residual disability evaluations assigned for the future
  • use the first day of the current month for the first entry of current award data, and
  • inform the Veteran of the award action and that the 100-percent disability evaluation may be reduced effective an earlier date if he/she fails to
    • report for an examination scheduled by VA, and/or
    • follow the prescribed treatment.

IV.ii.3.A.4.d.  Action to Take When the Graduation Reaches 0 Percent

The monthly rate of disability compensation payable for TB drops to $67 (or to the peacetime-era rate of $54, if prior to July 1, 1973) on the effective date of graduation to the 0-percent disability evaluation.  Use SMC code 36 in the rating decision.
If other noncompensable disabilities exist, notify the Veteran that when the disability evaluation drops to 0 percent, he/she may submit evidence from a private physician to show that the TB warrants a compensable disability evaluation.
Rationale:  VA cannot award compensation in lieu of the protected amount unless the disabilities combine to provide an evaluation of at least 10 percent.

IV.ii.3.A.4.e.  Notifying VA Outpatient Clinics of Decisions Involving SC TB

If a Veteran is awarded the
  • two-year, 100-percent disability evaluation for inactive TB, notify the Chief, Medical Administration Services, or equivalent, of the outpatient clinic responsible for the Veteran’s follow-up care, or
  • one-year, 100-percent disability evaluation for inactive TB,
    • send the outpatient clinic responsible for the Veteran’s follow-up care a copy of the rating decision in which VA initially granted SC for TB, and
    • do not send any other notice to the Chief, Medical Administration Services, of the outpatient clinic responsible for the Veteran’s follow-up care.
Reference:  For more information on TB, see  M21-1, Part III, Subpart iv, 4.F.2.

5.  Awards Under the Nehmer Court Order


Introduction

This topic contains information on awards under the Nehmer court order, including

Change Date

May 17, 2018

IV.ii.3.A.5.a.  Determining the Proper Survivor of a Nehmer Class Member for Payment Purposes

If a Nehmer class member entitled to retroactive benefits under 38 CFR 3.816(c) and (d) dies before receiving the payment of retroactive benefits, VA will award the unpaid benefits to the first individual or entity in existence at the time of payment in the following order:
  • spouse at the time of death, regardless of current marital status
  • child or children, divided into equal shares if more than one child exists,regardless of age or marital status
  • parents, with half of the retroactive benefits owed paid to each parent, regardless of dependency status, or
  • the class member’s estate.
Note:  The survivor or estate of a Nehmer class member is not required to file an application in order to receive unpaid benefits.
Important:  Under the Nehmer claims process, if a Veteran dies while his/her claim is pending, the surviving spouse is automatically substituted as the claimant or payee by virtue of being a “class member” entitled to retroactive compensation.
Reference:  For more information on payment under the Nehmer stipulation, seeM21-1, Part IV, Subpart ii, 2.C.4.

IV.ii.3.A.5.b.  Identifying the Appropriate Survivor of a Nehmer Class Member

Review the entire claims folder to determine eligible survivor payees.  Some sources of this information include, but are not limited to,
  • benefit applications
  • statements from the Veteran
  • Compensation and Pension Record Interchange records
  • Share inquiries
  • Modern Awards Processing – Development notes, and
  • Participant Profile.

IV.ii.3.A.5.c.  Actions to Take When the Appropriate Survivor of a Nehmer Class Member Cannot Be Located

Use the table below to determine the actions to take when the appropriate survivor of a deceased Nehmer class member cannot be located.
If …
Then …
the claims folder does not contain sufficient information to identify an eligible survivor
  • send an initial Nehmerdevelopment letter to the last known address of the Veteran, and
  • wait 30 days for a response.
  • VA has identified an eligible survivor
  • the survivor’s address is unknown, and
  • the survivor’s phone number is of record
attempt to contact the survivor by telephone to obtain his/her address.
  • VA has identified an eligible survivor
  • the survivor’s address is unknown, and
  • attempts to obtain the address from the survivor have been unsuccessful
  • send an initial Nehmerdevelopment letter to the last known address of the Veteran and/or survivor, and
  • wait 30 days for a response.
Example:  If an authorized representative or relative is identified in the claims folder, contact this person for information on the existence of a surviving spouse, child(ren), parent(s), or the executor/administrator of the class member’s estate.  If this effort fails to identify an appropriate payee, annotate the rating decision, stating that it was not possible to locate any payee eligible for payment under Nehmer.
Reference:  For more information on documenting efforts taken to identify a potential Nehmer class member, see M21-1, Part IV, Subpart ii, 3.A.5.d.

IV.ii.3.A.5.d.  Requirement to Document Efforts Taken to Identify a Potential Payee

Document all efforts taken to identify a potential payee on VA Form 27-0820, Report of General Information, for inclusion in the claims folder.
  • On the VA Form 27-0820, summarize the actions taken to identify a potential payee.
  • If retroactive benefits are not payable to the potential payee, describe on the form the reason(s) why.
Important:
  • Prepare a separate VA Form 27-0820 for each potential payee with whom contact is attempted or made.
  • Claims processors must take the actions described in this block, as theNehmer court order mandates that VA notify class counsel for National Veterans Legal Services Program if VA is unable to identify a payee.

IV.ii.3.A.5.e.  Identifying Other Survivors of a Nehmer Class Member Before Awarding Benefits to an Identified Payee

Before awarding benefits to an identified payee, ask the payee to state whether or not there are any other survivors of the Nehmer class member who may have an equal or greater entitlement to unpaid benefits.
If it appears other survivors exist that may be eligible for unpaid benefits, send letters to all dependents of record, requesting their
  • names
  • addresses, and
  • telephone numbers.
If potential entitlement to burial benefits exists, send VA Form 21P-530, Application for Burial Benefits, to a survivor for completion.
Important:
  • Proof of a familial relationship to the Nehmer class member must be of record before VA may pay retroactive benefits to his/her survivor.  Undertake development to obtain birth certificates, marriage certificates, or other documentary proof of a familial relationship, as applicable.
  • Once benefits have been awarded in full to a payee, do not pay any portion of the benefits to any other individual, unless the payment previously released can be recovered.

IV.ii.3.A.5.f.  Considering Entitlement to Additional Allowances for a Surviving Spouse

When preparing an award of unpaid benefits to the surviving spouse of a deceasedNehmer class member, consider any additional allowances to which the surviving spouse may be entitled, including, but not limited to, an additional allowance
  • for dependents
  • because the class member was totally disabled due to SC disabilities for a continuous period of at least eight years prior to his/her death, and the surviving spouse was married to the class member during the same time period, and/or
  • because the surviving spouse requires the aid and attendance of another person.

IV.ii.3.A.5.g.  Payment of DIC to the Surviving Spouse of a Veteran Who Died Prior to January 1, 1993

If a Veteran died prior to January 1, 1993, VA pays Dependency and Indemnity Compensation (DIC) to his/her surviving spouse based on whichever of the following provisions provides the greatest benefit:
  • 38 U.S.C. 1311(a)(3), which is based on the Veteran’s pay grade, or
  • 38 U.S.C. 1311(a)(1) and 38 U.S.C. 1311(a)(2), which is based on
    • the basic rate of DIC, and
    • any additional allowance payable due to the Veteran being
      • rated as totally disabled for at least eight continuous years prior to his/her death, and
      • married to the surviving spouse for the same period of time.
Important:
  • Grant entitlement to DIC when a disability for which VA granted SC on a presumptive basis was the primary, secondary, or a contributory cause of death.
  • The pay grade of Veterans that died prior to December 31, 1992, must be verified with service documents.
  • Verification of a Veteran’s pay grade is not required when awarding DIC
    • to children or parents, or
    • if the Veteran died after December 31, 1992.

IV.ii.3.A.5.h.  Authorization Activity Responsibility to Determine the Effective Date of an Award of DIC

The authorization activity has sole jurisdiction in determining the effective date for DIC awards.
If VA receives a claim for DIC within one year of the Veteran’s death, the proper effective date for the corresponding award is the first day of the month of the Veteran’s death.  Otherwise, the proper effective date is the first of the month following the date VA received the claim.
Exception:  Per 38 CFR 3.816(d)(2), if a survivor’s claim for DIC was either pending before VA on May 3, 1989, or was received by VA between that date and the effective date of the statute or regulation that established a presumption of SC for the covered herbicide disease that caused death, the effective date ofentitlement is the later of the following dates:
  • the date VA received the claim (making the first of the month following the date VA received the claim the effective date of the corresponding award, after the application of 38 CFR 3.31), or
  • the date of the Veteran’s death (making the first day of the month of the Veteran’s death the effective date of the corresponding award, according to 38 CFR 3.816(d)(3)).

IV.ii.3.A.5.i.  Awards of Retroactive Benefits of $25,000 or More to Incompetent Beneficiaries

Follow the steps in the table below upon identification of an award of retroactive benefits under the Nehmer court order that
  • is payable to an incompetent beneficiary (through a fiduciary or supervised direct pay), and
  • will equal or exceed $25,000.
Step
Action
1
Promulgate the rating decision but withhold all retroactive benefits.
2
Notify the beneficiary and his/her fiduciary (if applicable) of the decision.
Reference:  For more information about preparing and sending decision notices, see M21-1, Part III, Subpart v, 2.B.
3
Notify the fiduciary hub of jurisdiction of the decision and the withheld benefits.
Note:  The fiduciary hub will release the withheld benefits after performing a field examination.

IV.ii.3.A.5.j.  Applying a Retroactive Payment Under the Nehmer Court Order to a Debt

Prior to releasing a retroactive payment under the Nehmer court order, use the table below to determine whether it is appropriate to apply the payment to a debt.
If …
Then …
VA discharged the debt, either by
  • formally writing it off as uncollectable, or
  • failing to pursue the debt over an extended period of time
VA may not apply the retroactive payment to the debt, as it has waived its right to pursue collection of the debt.
  • the record shows VA has been pursuing the debt, regardless of whether VA has been successful, or
  • there is insufficient evidence to conclude the debt has been discharged
VA is obligated to collect the debt.
  • the Veteran is deceased
  • the debt was not recovered prior to the Veteran’s death, and
  • a claim was not filed against the Veteran’s estate within the required time period
VA may not apply the retroactive payment to the debt, as it may not impute a debt owed by one beneficiary to another beneficiary.
  • the Veteran is still alive, and
  • collection of the debt is not otherwise barred
review the corporate M01 record in Share and the Veteran’s claims folder to determine if there is an outstanding debt of record and, if so, send the claims folder to the finance activity prior to authorization of the award.
Note:  The finance activity will interact with the Debt Management Center to determine whether or not the debt is collectable.

IV.ii.3.A.5.k.  Annotating an Award of Retroactive Benefits Under the Nehmer Court Order

After generating an award of retroactive benefits under the Nehmer court order, claims processors must enter the following text in the Remarks section of the award print:
Nehmer retroactive payment based on [insert the name of the new presumptive condition].

IV.ii.3.A.5.l.  Second Signature Requirement for Award Actions Taken Under the Nehmer Court Order

All award actions taken and notices of decision prepared under the Nehmer court order require review by and the second signature of an authorizing subject matter expert prior to finalization.
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