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M21-1, Part IV, Subpart iii, Chapter 1, Section A – Overview of Death Compensation and Dependency and Indemnity Compensation (DIC)


In This Section

This section contains the following topics:
Topic Name

1.  Overview of Death Compensation


This topic contains general information on Death Compensation, including

Change Date

July 12, 2015

IV.iii.1.A.1.a.  Definition:  Death Compensation

Death Compensation is a monthly payment made to a surviving spouse, child, or parent because
  • of a service-connected (SC) death occurring before January 1, 1957, or
  • an in-service waiver of National Service Life Insurance (NSLI) or United States Government Life Insurance (USGLI) under 38 U.S.C. 1924 was in effect at the time of death, and death occurred
    • on or after May 1, 1957, but
    • prior to January 1, 1972.
Important:  The parent(s) of a deceased Veteran must also meet the requirements set forth in 38 CFR 3.250 in order to establish entitlement to Death Compensation.
References:  For more information on

IV.iii.1.A.1.b. Action to Take if Death Compensation Is the Greater Benefit for a Surviving Parent

  • the circumstances described in M21-1, Part IV, Subpart iii, 1.A.1.a exist, and
  • the rate of Dependency and Indemnity Compensation (DIC) payable to the parent is less than the rate of Death Compensation payable.
Use the information the parent provides on the form to determine whether, based on the criteria in 38 CFR 3.250, the parent was dependent on the Veteran prior to the Veteran’s death.

IV.iii.1.A.1.c.  Election of DIC in Lieu of Death Compensation

Claimants and beneficiaries with entitlement to Death Compensation have the right to elect DIC under certain circumstances.
Follow the steps in the table below upon receipt of an application from a claimant/beneficiary that is in receipt of Death Compensation.
Is the claimant/beneficiary entitled to DIC?
  • If yes, proceed to the next step.
  • If no,
    • pay/continue paying Death Compensation, and
    • proceed no further.
Did VA receive the application on or after January 1, 1972?
  • If yes, proceed to the next step.
  • If no,
    • pay/continue paying Death Compensation, and
    • proceed no further. (The claimant/beneficiary maynot elect DIC.)
Is the amount of DIC that is payable greater than the amount of Death Compensation that is payable?
  • If yes, proceed to the next step.
  • If no, take the actions described in the table below.
Pay/Continue paying Death Compensation.
Notify the claimant/beneficiary that
  • VA is paying Death Compensation because it is the greater benefit, and
  • the claimant/beneficiary still has the right to elect DIC.
Proceed no further.
Assume the claimant/beneficiary is electing DIC in lieu of Death Compensation and award benefits accordingly. In the decision notice, inform the claimant/beneficiary
  • VA awarded DIC as the greater benefit, and
  • the claimant/beneficiary still has the right to elect Death Compensation.
Did the claimant/beneficiary ask VA to cancel the election of DIC before his/her financial institution received the second payment of DIC?
  • If yes, award Death Compensation from the same date VA awarded DIC (minus the amount of DIC VA previously paid).
  • If no, the election of DIC becomes final.

IV.iii.1.A.1.d. Who to Contact When an Election of DIC Is Received

If an election from Death Compensation to DIC is received, contact Pension Policy & Procedures at VAVBAWAS/CO/PENSION POL & PROC to obtain procedural information.

IV.iii.1.A.1.e. Considering In-Service Waiver of Insurance Premium Cases

Situation:  Cases may be encountered in which the beneficiaries are receiving Death Compensation because the Veteran died on or after May 1, 1957, and prior to January 1, 1972, with insurance in force by waiver of premiums under 38 U.S.C. 1924.
Pursuant to Public Law (PL) 92-197, effective January 1, 1972, these beneficiaries have an unrestricted right to elect DIC.
  • Provide notice to all affected Death Compensation beneficiaries of their right to elect DIC.
  • If cases are encountered during routine handling, in which the beneficiaries have not elected DIC, furnish a reminder of the right of election and take related actions as provided in this section.

2.  Overview of DIC


This topic contains general information on DIC, including

Change Date

January 8, 2016

IV.iii.1.A.2.a.  Definition:  DIC

Dependency and Indemnity Compensation (DIC) is a monthly payment made
  • to a surviving spouse, child, or parent because of an SC death that occurred
    • on or after January 1, 1957 or
    • before January 1, 1957, if the survivor elects to receive DIC in lieu of Death Compensation, per 38 U.S.C. 1310
  • to a surviving spouse or child because the Veteran had been rated as totally disabled due to an SC disability prior to his/her death, typically for at least ten years, per 38 U.S.C. 1318, or
  • to a surviving spouse, child, or parent because of death due to VA medical treatment, per 38 U.S.C. 1151.
Reference:  For more information about DIC, see

IV.iii.1.A.2.b.  When the Pay Grade Code Is Required

A pay grade code is a required input for all DIC awards to surviving spouses in which the Veteran died before January 1, 1993.
If the Veteran died prior to January 1, 1993, DIC is paid to a surviving spouse based on whichever of the following provisions provides the greater 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 because the Veteran was rated as totally disabled for at least eight continuous years and married to the surviving spouse for the same period of time.
Note:  If the Veteran died after December 31, 1992, verification of the pay grade is not required because the surviving spouse’s rate of DIC is not based on the Veteran’s pay grade.

IV.iii.1.A.2.c. Basis for Pay Grade Codes

Determine the pay grade of the Veteran as follows:
  • for a Veteran who died in service, his/her rank as of the date of the Veteran’s death or as of the date of a promotion after death while in a missing status
  • for a Veteran who died after service, his/her rank on the date of last separation from service under conditions other than dishonorable, or
  • a higher rank held for a period of six months or more meeting the requirements of 38 U.S.C. 1302(d), if applicable.

IV.iii.1.A.2.d.  Verification of Data From a Service Department, for a Deceased Veteran Who Was Receiving Retired Pay

Requests for verification of pay grade data are not routinely submitted through the Personnel Information Exchange System (PIES) if the evidence of record shows the deceased Veteran was receiving retired pay from a service department.
Important:  If the Veteran died after December 31, 1992, verification of pay grade data is not required.
  • Service departments routinely furnish evidence showing the pay grade for retired personnel.
  • Pay grade information may also be found on DD Form 214, Certificate of Release or Discharge from Active Duty, or other discharge document.

IV.iii.1.A.2.e.  Action to Take if Pay Grade Data Is Not of Record

If award action is otherwise in order, but no pay grade data is of record, send an O17 PIES request to obtain the required data.
Reference:  For more information on PIES requests, see M21-1, Part III, Subpart iii, 2.D.

IV.iii.1.A.2.f. Action to Take if Payment of DIC Is Pending Verification of Pay Grade Data 

Use the table below to determine the action to take concerning payment of DIC when receipt of pay grade data is pending.
If …
Then …
  • the Veteran died before January 1, 1993
  • there is a reasonable probability that the Veteran’s death is SC, and
  • DIC will be payable to a surviving spouse
initiate a PIES request to obtain pay grade data before sending the claim to the rating activity.
death is subsequently held to be SC
  • do not defer award action pending receipt of pay grade data certification
  • award benefits at the minimum DIC rate, if otherwise in order, subject to a possible increase upon receipt of the response to the PIES request
  • notify the surviving spouse accordingly, and
  • maintain a 60-day control under end product 290.
DD Form 214 is of record
  • award DIC at the rate provided for the pay grade shown on the DD Form 214, and
  • do not verify the pay grade unless
    • information in the folder raises doubt
    • there is the possibility of certification of a higher pay grade under 38 U.S.C. 1302(d) based on a prior period of service, or
    • the payee specifically requests verification.
the Veteran died after December 31, 1992
  • verification of pay grade is not required, and
  • DIC should be awarded at the rates provided under 38 U.S.C. 1311.

IV.iii.1.A.2.g.  When the Pay Grade Code Is Not Required

A verified pay grade code is not required on
  • awards of DIC to children or parents
  • awards of any benefit other than DIC to any beneficiary, or
  • awards based on a Veteran’s death after December 31, 1992.

IV.iii.1.A.2.h.  DIC Under 38 U.S.C. 1318

Consider the issue of entitlement to benefits under 38 U.S.C. 1318 whenever the Veteran had a totally disabling SC condition at the time of death.

IV.iii.1.A.2.i.Automatic 38 U.S.C. 1318 DIC Payments to Eligible Surviving Spouse

Effective July 7, 2014, VA automatically pays 38 U.S.C. 1318 DIC to an eligible surviving spouse, without a claim, when VA is able to determine eligibility based on evidence of record as of the date of the Veteran’s death.
A surviving spouse must file a claim for other DIC benefits.
Note:  The automated payment is triggered by the First Notice of Death (FNOD) command and paid to the surviving spouse established on the award at the time of the Veteran’s death.
Reference:  For more information on automatic burial payments to eligible surviving spouses, see M21-1, Part VII, 1.A.3.a.

IV.iii.1.A.2.j.  DIC Under 38 U.S.C. 1151

38 U.S.C. 1151 provides for the payment of DIC  for death that is
  • not the result of the Veteran’s willful misconduct, and
  • attributable to
    • hospital care, medical or surgical treatment, or examination furnished the Veteran under any law administered by the Secretary, either by a VA employee or in a VA facility as defined in 38 U.S.C. 1701(3)(A)
    • participation in vocational rehabilitation training under 38 U.S.C. Chapter 31, or
    • participation in compensated work therapy.
Award benefits for qualifying death under 38 U.S.C. 1151 in the same manner as if the death was SC.
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