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M21-1, Part V, Subpart iii, Chapter 4 – Pension Adjustments in Unusual Situations

Overview


In This Chapter

This chapter contains the following topics:

1.  Handling Decisions to Reduce or Discontinue Pension, Including Awards Involving SMP


Introduction

This topic contains information on handling decisions to reduce or discontinue pension, including pension awards involving SMP, including

Change Date

February 19, 2019

V.iii.4.1.a.  Awarding Retroactive Pension After Entitlement Ceases

If entitlement to Veterans Pension ends based on a decision that the Veteran is no longer permanently and totally (P&T) disabled, retroactive Veterans Pension may be awarded for any period of entitlement during which a P&T rating was in effect, as long as that rating decision was not in error.
Similarly, if eligibility for the higher maximum annual pension rate (MAPR) for aid and attendance (A&A) or housebound ends, retroactive pension or increased pension may be awarded for any period in which the A&A or housebound rating was in effect and was not in error.
Note:  In Section 306 and Old-Law Pension cases discontinued because the Veteran is no longer P&T, current-law pension is the only pension benefit that can be authorized if entitlement is later re-established.
Reference:  For more information on pension and Parent’s Dependency and Indemnity Compensation award effective dates and payments, see M21-1, Part V, Subpart iii, 1.A.4.

V.iii.4.1.b.  Authorizing Adjustments in Cases Involving Discontinued or Suspended Awards

For adjustments involving discontinued or suspended pension awards, if pension was
  • reduced or discontinued under a reduction in evaluation per 38 CFR 3.105(f), authorize an adjustment through the last day of the month in which you adjust the benefit (reduce or discontinue as of the first day of the following month), or
  • suspended, and there is no eligibility for pension beyond the date of suspense, limit the adjustment to the period prior to the date of suspense.
Note:  All pension adjustments are subject to the beneficiary’s income, net worth, and dependency status.
Reference:  For information on handling situations in which an administrative error is involved, see M21-1, Part III, Subpart v, 1.l.

V.iii.4.1.c.  Providing Notice to the Beneficiary Upon Receipt of a Rating Decision Proposing to Discontinue P&T, A&A, or Housebound Status

Upon receipt of a rating decision proposing to discontinue P&T, A&A, or housebound status, send the beneficiary a notice of proposed adverse action.
Important:  For “Not P&T” cases, this notice of proposed adverse action mustinclude the citation of 38 CFR 4.17, the regulation that sets forth the requirements for a permanent and total disability determination.

V.iii.4.1.d.  Content for a Locally-Generated Notice Proposing to Discontinue P&T, A&A, or Housebound Status

When furnishing a locally-generated notice proposing to discontinue P&T, A&A or housebound status, advise the beneficiary of the proposed reduction or discontinuance as follows:
Your present payment will continue for 60 days to allow you to submit additional evidence.  At the expiration of that 60day period (or after a personal hearing is held, if VA receives such a hearing request from you within 30 days), all available evidence in the file will be reviewed once more and a final decision made.  If this proposed decision to discontinue your[pension] and [aid and attendance] [housebound] entitlement is affirmed, your payments will be [discontinued] [reduced] when a final decision is made.”

V.iii.4.1.e.  Action to Take When the Notice of Proposed Adverse Action Period to Discontinue P&T, A&A, or Housebound Status Expires

Control cases involving a proposal to discontinue P&T, A&A, or housebound status, so that rating activity action may be taken immediately at the end of the 65-day notice of proposed adverse action period.
Route the case to the rating activity after
  • the 65-day due process period expires, or
  • all development associated with a personal hearing is completed, if the Department of Veterans Affairs (VA) receives a hearing request from the beneficiary within 30 days of the notice of proposed adverse action, whichever is later.

V.iii.4.1.f.  Action to Take Upon Receipt of a Final Rating Decision From a Proposal to Discontinue P&T, A&A, or Housebound Status

Upon receipt of a final rating decision from a proposal to discontinue P&T, A&A, or housebound status
  • continue, reduce, or discontinue pension, as appropriate, and
  • send the beneficiary a letter that fully and clearly informs him/her of the decision reached.
If the proposed “Not P&T” decision is affirmed, the letter must contain the

V.iii.4.1.g.  Action to Take When an Award to Discontinue P&T, A&A, or Housebound Status Cannot Be Completed by the Effective Date Shown on the Rating Decision Codesheet

If an award to discontinue P&T, A&A, or housebound status cannot be completed in time to implement the effective date shown on the rating decision codesheet, return the case to the rating activity for preparation of a new decision with a later effective date.
Rationale:  38 CFR 3.105(f) prohibits reduction or discontinuance of a pension award retroactively, due to a change in disability or employability, unless the reduction is based on an erroneous award that is based on an act of commission or omission by a payee or with the payee’s knowledge, per 38 CFR 3.500(b).
Example:
Situation:
  • April 21, 2006:  The rating activity prepares a final rating decision to discontinue pension under 38 CFR 3.105(f).  The rating codesheet shows the reduction is effective May 1, 2006.
  • May 26, 2006:  The authorization activity reviews the case.  The Schedule of Operations shows that an effective date of May 1, 2006, will create an overpayment.  The case is returned to the rating activity to prepare a new decision with an effective date of June 1, 2006.
Rationale:  An award cannot be completed in time to implement the effective date of May 1, 2006, shown on the rating codesheet, without creating an overpayment.

2.  Making Payments in Veteran-Married-to-Veteran Pension Cases


Introduction

This topic contains information on making payments to Veterans in pension cases in which a Veteran is married to a Veteran, including

Change Date

June 15, 2015

V.iii.4.2.a.  Basis for a Pension Rate in Veteran-Married-to-Veteran Cases

The amount of pension paid to two Veterans married to each other is based on their joint income.
Also, if one Veteran spouse reports a change in income, either for the other Veteran spouse or for himself/herself
  • presume that the report was submitted on behalf of both Veterans, and
  • do not furnish notice of proposed adverse action to the second Veteran.

V.iii.4.2.b.  Exceptions to Authorizing Payment Under a Combined Award for Pension Veteran-Married-to-Veteran Cases

In current-law pension Veteran-married-to-Veteran cases, authorize payment under one combined award unless
  • one spouse requests separate payment
  • both Veterans have either A&A or housebound status, or
  • a Medal of Honor award is involved.

V.iii.4.2.c.  MAPRs for Pension Veteran-Married-to-Veteran Cases

The MAPR payable in Veteran-married-to-Veteran cases are found in the Veterans Pension Rate Table.
Note:  If one Veteran in a Veteran-married-to-Veteran case dies, the surviving Veteran may be entitled to Survivors Pension.  However, per 38 CFR 3.700(a)(4), the Veteran may receive only one benefit, either Veterans Pension or Survivors Pension.

V.iii.4.2.d.  Establishing a Combined Award Payment for Pension Veteran-Married-to-Veteran Cases

For a Veteran-married-to-Veteran case, use either file number to establish a combined award, except when one spouse is A&A or housebound.  In those cases
  • establish the award under the file number of the Veteran who is A&A or housebound, and
  • enter the names of both Veterans on the first address line if awarding benefits in a combined award
Notes:
  • Jurisdiction of the two claims folders in a Veteran-married-to-Veteran case remains in the same regional office or pension management center as long as a combined payment is made.
  • Cross-reference the two Veterans married to each other’s claims folders.
Reference:  For more information on cross-referencing folders, see M21-1, Part III, Subpart ii, 3.B.4.

V.iii.4.2.e.  Establishing Separate Award Payments for Pension Veteran-Married-to-Veteran Cases

When establishing separate award payments for pension Veteran-married-to-Veteran cases per M21-1, Part V, Subpart iii, 4.2.b
  • cross-reference the two Veterans married to each other’s claims folders, and
  • inform the two Veterans married to each other that all pension benefits, including additional benefits for children or SMP, are equally divided.
Important:  When preparing separate pension awards for each Veteran, do not count the other Veteran’s pension amount as income for VA purposes (IVAP).

V.iii.4.2.f.  Example:  Calculating Separate Award Payments in a Pension Veteran-Married-to-Veteran Case

Situation:
  • Veteran A who is eligible for pension, is a Veteran married to Veteran B, who is eligible for pension and the housebound allowance.
  • The combined IVAP of Veteran A and Veteran B is $8,000.
  • Separate checks are requested.
Result:  The calculation for the awards is shown below, using the pension rates effective December 1, 2006 in this example.
Maximum Housebound Rate:
$16,740
IVAP:
$8,000
$8,740 / 2 = 4370 / 12 = 364.17
Veteran A’s Award:
$364.00 per month
(effective 12-01-06)
Veteran B’s Award:
$364.00 per month
(effective 12-01-06)
Reference:  For more information on computing the monthly rate of payment, seeM21-1, Part V, Subpart iii, 1.E.1.
2-19-19_Key-Changes_M21-1V_iii_4.docx May 20, 2019 45 KB
Change-June-15-2015-Transmittal-Sheet-M21-1V_iii_4_TS.docx May 20, 2019 39 KB
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