Overview
In This Section |
This section contains the following topics:
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1. General Information on the Prohibition Against Duplication of Benefits
Introduction |
This topic contains general information on the prohibition against duplication of benefits, including
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Change Date |
September 5, 2008
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IV.ii.3.D.1.a. Applicability of Prohibition Against Duplication of Benefits |
The prohibition against duplication of benefits applies whenever a claimant receives a sum of money or property to settle a legal claim arising from the injury or death of a Veteran and then files a claim for compensation with the Department of Veterans Affairs (VA) for that same injury or death.
Reference: For information on the adjudication of death claims involving 38 U.S.C. 1151, see M21-1, Part IV, Subpart iii, 1.B.2.
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IV.ii.3.D.1.b. Considering the Consequences of Civil Action |
When a Veteran is injured under circumstances that result in possible entitlement to benefits under 38 U.S.C. 1151, the Veteran may also seek a judgment against the U.S. in a civil action, called a tort claim. The Veteran may sue and recover damages after
Note: When a Veteran agrees to a settlement or compromise, he/she signs away the right to sue in court in return for payment of an agreed-upon amount for damages.
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IV.ii.3.D.1.c. Definition: Judgment |
A judgment includes all of the following:
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IV.ii.3.D.1.d. Considering Different Types of Judgments |
It makes no difference
Note: Attorney’s fees, contracts, and other expenses incident to the claim are not deductible from the total amount awarded per VAOGCPREC 7-1994.
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2. Award Actions Involving the Prohibition Against Duplication of Benefits
Introduction |
This topic contains general information on handling award actions involving the prohibition against duplication of benefits, including
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Change Date |
May 19, 2015
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IV.ii.3.D.2.a. Deferring the Award Action |
Disability compensation awards under 38 U.S.C. 1151 are subject to offset effective the first of the month after the month during which the judgment becomes final. Because of this
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IV.ii.3.D.2.b. Effect of Prohibition on Pension Beneficiaries |
No offset is required if a tort claim is concluded in favor of a Veteran who is
However, the net proceeds of the settlement or judgment are considered countable income for pension purposes under 38 CFR 3.262(i) and 38 CFR 3.271(g).
Note: Do not adjust a pension award to count the proceeds of a settlement or judgment without a notice of proposed adverse action unless the Veteran
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IV.ii.3.D.2.c. Tort Claims Concluded Before December 1, 1962 |
An administrative award or settlement that became final before December 1, 1962, is a bar to all further payments of compensation under 38 U.S.C. 1151.
A court judgment that became final before December 1, 1962, is not
Important: When a case is encountered in which payments were continued despite an administrative award or settlement that became final before December 1, 1962, stop or reduce the award on the first of the month following the month for which VA last paid the beneficiary under 38 CFR 3.500(b)(2).
Note: For claims received before October 1, 1997, the offset of benefits under 38 U.S.C. 1151 was governed by 38 CFR 3.800.
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3. Determining Offset Effective Dates and Amounts
Introduction |
This topic contains information on determining offset effective dates and amounts, including
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Change Date |
May 19, 2015
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IV.ii.3.D.3.a. Principles for Determining the Offset Amount Under 38 U.S.C. 1151 |
The amount of offset must not deprive a Veteran of any part of the compensation payable to him/her if a claim under 38 U.S.C. 1151 had not been filed.
Do not offset any amount if the disability compensable under 38 U.S.C. 1151 does not increase the total amount of compensation.
The offset provisions are applicable if compensation for a particular disability is payable solely under 38 U.S.C. 1151. If compensation is otherwise payable for that particular disability, regardless of previous evaluation, then no offset is required.
Reference: For an example of a situation in which an offset is not required, seeM21-1, Part IV, Subpart ii, 3.D.3.i.
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IV.ii.3.D.3.b. Effect of State Laws on Offset Decisions |
Under Federal Tort Claims Act (FTCA), liability is determined by the law of the state where the negligence or wrongful act or omission occurred.
Damages recovered under a state survival statute are subject to claims of the decedent’s creditors; therefore, the amounts recovered are not subject to Dependency and Indemnity Compensation (DIC) offset under 38 U.S.C. 1151. This includes cases in which the personal representative is the surviving spouse.
Damages recovered under a wrongful death statute are survivors’ benefits and are not subject to estate claims; therefore, amounts recovered may be offset against DIC. This includes cases in which a wrongful death claim is filed by a personal representative for the survivors.
Reference: For more information on determining an offset amount, seeVAOPGCPREC 79-1990.
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IV.ii.3.D.3.c. Damages Recovered under the FTCA |
The full amount of damages recovered by an individual under the FTCA is subject to offset against benefits payable to that individual under section 38 U.S.C. 1151, regardless of whether those damages compensate for economic or noneconomic loss.
Reference: For more information on determining an offset amount, see VAOPGCPREC 52-1991.
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IV.ii.3.D.3.d. Determining the Offset Amount Under 38 U.S.C. 1151 |
If an increase in the evaluation of a service-connected (SC) disability is awarded, such that the existence of the disability compensable under 38 U.S.C. 1151 no longer increases the total amount of compensation payable, then
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IV.ii.3.D.3.e. Determining the Final Date of a Judgment |
The effective date of the offset is the first of the month after the month during which the judgment becomes final when a withholding is required.
Use the information in the table below to determine when various judgments are considered final.
Note: If, after reviewing the evidence of record, there is any question as to the date the judgment became final, request clarification from Regional Counsel.
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IV.ii.3.D.3.f. Handling Retroactive Adjustments |
Do not offset compensation for any period before the month following the date on which the settlement or judgment becomes final.
Note: If an accounts receivable amount is declared invalid or waived, do not apply the invalid or waived portion of the debt to reduce the amount required to be offset from future VA benefits.
Reference: For more information, see VAOPGCPREC 1-2010.
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IV.ii.3.D.3.g. Example: Retroactive Adjustment |
Situation: A judgment is final on June 15, 2014. The rating activity later awards entitlement to compensation effective March 16, 2014.
Action: Do not offset any portion of the Veteran’s compensation benefits prior to July 1, 2014, the month following the date the judgment became final.
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IV.ii.3.D.3.h. Example: Unchanged Combined Evaluation |
Situation: A Veteran has two SC disabilities, each evaluated as 60-percent disabling, and disability compensable under 38 U.S.C. 1151 that is evaluated as 30-percent disabling. The combined evaluation of all disabilities is 90 percent. The combined evaluation of the SC disabilities alone is 80 percent.
Result: VA offsets the difference between the rate payable for disabilities rated 90-percent disabling and the rate payable for disabilities rated 80-percent disabling.
Effect on offset: If one of the SC disabilities increases from a 60-percent to 70-percent evaluation, then the combined evaluation for the SC disabilities alone is increased to 90 percent, even though the combined evaluation for all the disabilities still remains 90 percent. In this situation, discontinue the offset.
Note: If the situation were reversed so that the 70-percent evaluation was reduced to 60 percent, the offset would recommence.
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IV.ii.3.D.3.i. Example 1: Situation in Which an Offset Is Not Required |
Situation: A Veteran
The evaluation is increased to 30 percent due to an aggravation of the injury as a result of the medical or surgical treatment. The Veteran successfully sues the hospital and recovers damages.
Result: No offset is required because the foot disability is SC without regard to 38 U.S.C. 1151.
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IV.ii.3.D.3.j. Example 2: Situation in Which an Offset Is Not Required |
Situation: A Veteran
Result: The rating activity should consider whether the cataracts are proximately due to, or the result of, an SC disability. If the rating activity does award service connection for cataracts under 38 CFR 3.310, no offset is required.
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4. Preparation of Awards
Introduction |
This topic contains information on the preparation of awards, including
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Change Date |
May 19, 2015
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IV.ii.3.D.4.a. Location of Instructions for the Preparation of Awards |
The instructions in M21-1, Part III, Subpart v, 4.B concerning the preparation of awards involving readjustment and disability severance pay, generally apply to the preparation of awards under 38 U.S.C. 1151.
The provisions in this topic apply specifically to the preparation of awards under 38 U.S.C. 1151.
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IV.ii.3.D.4.b. Instructions for the Preparation of Awards Under 38 U.S.C. 1151 With an Offset |
Follow the steps in the table below concerning the preparation of awards under 38 U.S.C. 1151 with an offset.
References: For more information on processing awards under 38 U.S.C. 1151 in
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IV.ii.3.D.4.c. Entitlement to Ancillary Benefits if Compensation Is Awarded for a Disability Under 38 U.S.C. 1151 |
If compensation is awarded for a disability under 38 U.S.C. 1151, the Veteran, if otherwise eligible, may receive
There is no entitlement to the following ancillary benefits unless the Veteran is entitled based on disabilities for which compensation is payable without regard to the provisions of 38 U.S.C. 1151:
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5. Providing Notice of Awards
Introduction |
This topic contains information on providing notice of awards, including
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Change Date |
March 1, 2019
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IV.ii.3.D.5.a. Preparing a Locally-Generated Letter for Claims Filed Under 38 U.S.C. 1151 |
When required, prepare a locally-generated letter, referring to the benefit as “compensation under 38 U.S.C. 1151” and not “service connection.”
When using a locally-generated letter to inform a claimant of the formal denial of a claim filed under 38 U.S.C. 1151, include all required notification elements as detailed in M21-1, Part III, Subpart v, 2.B.1.b.
Important: Do not refer to entitlement under 38 U.S.C. 1151 as “service connection.”
References: For more information on
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IV.ii.3.D.5.b. Providing Notice of an Offset Requirement |
Use the information below to provide the notice of an offset and the related requirements.
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Historical_M21-1MRIV_ii_3_SecD_3-24-15.doc | May 21, 2019 | 131 KB |
Change-March-24-2015-Transmittal-Sheet-M21-1MRIV_ii_3_SecD_TS.docx | May 21, 2019 | 39 KB |
Change-May-19-2015-Transmittal-Sheet-M21-1IV_ii_3_SecD.docx | May 21, 2019 | 42 KB |
3-1-19_Key-Changes_M21-1IV_ii_3_SecD.docx | May 21, 2019 | 52 KB |
Historical_M21-1IV_ii_3_SecD_5-19-15.doc | May 21, 2019 | 145 KB |
Transmittal-Sheet-12_13_05.doc | May 21, 2019 | 62 KB |
Transmittal-Sheet-pt04_sp02_TS_10-05-10.doc | May 21, 2019 | 92 KB |
in Chapter 3 Authorization Issues and Claimant Notification, Part IV Compensation, DIC, and Death Compensation Benefits, Subpart ii Compensation
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