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M21-1, Part V, Subpart iii, Chapter 5 – Elections Between Pension Programs

Overview 


In This Chapter

This chapter contains the following topics:

1.  General Information on Entitlement to Old Law or Section 306 Pension and Current-Law Pension

 


Introduction

This topic contains general information on entitlement to Old-Law or Section 306 Pension and current-law pension, including

Change Date

December 21, 2016

V.iii.5.1.a.  Election Rights of a Veteran Entitled to Old-Law or Section 306 Pension

Per 38 CFR 3.711 and 38 CFR 3.960, those persons who were receiving or were entitled to receive pension on December 31, 1978, under laws then in effect, have a right to
  • continue such pension, if otherwise entitled, or
  • elect to receive current-law pension under Public Law (PL) 95-588.

V.iii.5.1.b.  Provisions of PL 95-588 Regarding NSC Survivor Benefits

Under the provisions of PL 95-588, effective January 1, 1979, beneficiaries entitled to receive Old-Law or Section 306 Pension may only elect Survivors Pension.
Note:  Spanish-American War surviving spouses entitled to pension under 38 U.S.C. 1536 may elect payments at the rates provided by current-law pension under the conditions (other than service requirements) prescribed by 38 U.S.C. 1541.

V.iii.5.1.c.  When the Right of Continued Entitlement to Old-Law or Section 306 Pension Is Not Protected

Circumstances in which continued entitlement to Section 306 or Old-Law Pension is not protected include when
  • a Veteran in receipt of pension on December 31, 1978, is found not to be permanently and totally (P&T) disabled after that date, but is again found entitled at a later date
  • income (or net worth for Section 306 beneficiaries) becomes a bar after December 31, 1978, unless entitlement is later reestablished from the date of discontinuance, and
  • it is determined that Section 306 or Old-Law pension was awarded based on a fraudulent claim.
Reference:  For more information on protection of Section 306 and Old-Law Pension, see 38 CFR 3.960.

V.iii.5.1.d.  Changing a Beneficiary’s Benefit Type

The table below shows the location of instructions for changing a beneficiary’s entitlement from one type of benefit to another.
If the change in entitlement is due to …
Then see …
an election from Death Compensation to DIC
the payment of DIC or death compensation after a prior award of Survivors Pension
a possible change in the entitlement of a child in receipt of an apportioned share of Section 306 or Old-Law Pension to Survivors Pension upon the discontinuance of the surviving spouse’s entitlement
Note:  A child can continue to receive an apportioned share of Section 306 or Old-Law Pension even if the surviving spouse elects current-law pension.
an election by the surviving spouse or child, if there is no surviving spouse entitled, from Section 306 or Old-Law Pension to current-law pension

V.iii.5.1.e.   Where to Find Additional Information on Elections

For additional information on elections between pension programs, see M21-1, Part III, Subpart v, 4.
Reference:  For information on when to void an election, see M21-1, Part V, Subpart iii, 5.3.d.

2.  Exercising the Right of Pension Election

 


Introduction

This topic contains information on exercising the right of pension election, including

Change Date

June 29, 2015

V.iii.5.2.a.  Applicability of a Veteran’s Exercise of Right of Election

An election by a Veteran or on a Veteran’s behalf under M21-1, Part III, Subpart v, 4.A.3, is binding on his/her dependents, including an estranged spouse or children not in his/her custody.
If an election is received, defer award action if
  • the monthly rate of current-law pension would be less than the current monthly rate under the prior law, or
  • the election is not otherwise in the Veteran’s financial interest.
Reference:  For more information on the action to take when an election is not in a claimant’s best interest, see M21-1, Part V, Subpart iii, 5.2.b.

V.iii.5.2.b.   Action to Take When an Election Is Not in the Claimant’s Interest

If electing current-law pension may not be in the claimant’s best financial interest
  • inform the claimant
    • by locally-generated letter of the exact monthly rates payable under each law for the periods indicated
    • that because of the possible adverse result, the Department of Veterans Affairs (VA) will not take further action on the election until the claimant furnishes a signed statement expressing a desire to receive the possible lesser benefit, and
    • if appropriate, that the election may be deferred and of the effective date of a later beneficial election, and
  • do not maintain a control.

V.iii.5.2.c.  Example:  Deferring an Election Until a Future Beneficial Effective Date

Situation:
  • A Veteran in receipt of Section 306 Pension reports in August 2015 that his wife died on July 15, 2015.  At that time, he also elects current-law pension.
  • The Veteran’s Section 306 Pension rate as a married Veteran is greater than his current-law pension rate as a married Veteran would be.
  • However, his current-law pension rate as a single Veteran rate will be greater than his Section 306 Pension rate as a single Veteran will be.
Result:
  • Continue the Veteran’s Section 306 Pension rate as a married Veteran through December 31, 2015, and
  • award the current-law pension rate for a single Veteran from January 1, 2016.
Note:  Under 38 CFR 3.3660(a)(2), the effective date for removing a dependent from a Section 306 Pension award due to marriage, annulment, divorce, death, or income change is the end of the year that dependency ceases.

3.  Finality and Irrevocability of Pension Elections

 


Introduction

This topic contains information on the finality and irrevocability of pension elections, including

Change Date

June 29, 2015

V.iii.5.3.a.  Persons Authorized to Make Elections

An election of current-law pension must be a positive act of
  • the claimant
  • the fiduciary designated by a Fiduciary Hub Manager (FHM), including

V.iii.5.3.b.  Discounting the Requirements of SSI or Other Non-VA Benefits When Considering the Validity of an Election

Do not consider, as a basis for revocation of an otherwise valid election, the fact that an election may have been prompted by the requirements of Supplemental Security Income (SSI) or other agencies, which require that a person applying for or receiving SSI or other non-VA benefits also apply for current-law pension as a greater benefit.
This applies to any institutionalized persons receiving Medicaid assistance without regard to the State of residence

V.iii.5.3.c.  Finality of an Election

Unless one of the circumstances shown in M21-1, Part V, Subpart iii, 5.3.dapplies, an election is final and irrevocable after the claimant
  • negotiates the first pension check, or
  • receives the second pension payment via Direct Deposit – Electronic Funds Transfer (DD-EFT).

V.iii.5.3.d.  Circumstances in Which an Election May Be Voided

Any claimant may void an election of current-law pension when
  • the claimant makes the election and is subsequently found to have been mentally incompetent at the time the election was made
  • VA mistakenly awarded a higher rate than was justified by the evidence then of record in the claims folder, and VA subsequently finds that, on the basis of the same evidence, the claimant was entitled only to a lower rate, or
  • the claimant made the election based on erroneous information that VA furnished.

4.  Effect of a Surviving Spouse’s Current-Law Pension Election

 


Introduction

This topic contains information on the effect of a surviving spouse’s current-law pension election, including

Change Date

June 29, 2015

V.iii.5.4.a.  Effect of a Surviving Spouse’s Election on the Rights of Children

A surviving spouse’s election also controls the rights of all children involved in the case, except for those children outside the surviving spouse’s custody who are receiving an apportioned share of the surviving spouse’s Section 306 or Old-Law Pension award.

V.iii.5.4.b.  How 38 CFR 3.701(a) Applies to Children Not in Custody

Under 38 CFR 3.701(a), a surviving spouse’s election of current-law pension doesnot affect the rights of an out-of-custody child to continue receiving any apportioned amount of Old-Law or Section 306 Pension in effect on December 31, 1978.
Such a child may elect current-law pension if it is to the child’s advantage.
Notes:
  • Under 38 CFR 3.24, a child has independent current-law pension eligibility if the child is not in the custody of a surviving spouse who is eligible for current-law pension.
  •  “Custody” for current-law pension purposes is defined in 38 CFR 3.57(d).

V.iii.5.4.c.  Action to Take When a Surviving Spouse Elects Current-Law Pension and an Out-of-Custody Child Is Receiving a Protected Apportionment

When a surviving spouse elects current-law pension and an out-of-custody child is receiving a protected apportionment of Old-Law or Section 306 Pension
  • continue the protected apportionment rate to the child
  • award benefits to the surviving spouse without regard to the protected apportionment rate awarded to the child
  • do not reflect the child’s dependency in the surviving spouse’s award, and
  • do not
    • increase the surviving spouse’s maximum pension rate on account of the child, or
    • reduce the surviving spouse’s rate because of the apportionment rate awarded an out-of-custody child, per VAOPGCPREC 01-1995.
Note:  The protected Old-Law or Section 306 Pension rate paid to the child is separate, rather than an apportionment of the surviving spouse’s current-law pension.

V.iii.5.4.d.  Example:  Surviving Spouse Elects Current-Law Pension and Out-of-Custody Child Receives Protected Apportionment

Situation:
  • A surviving spouse of a World War II Veteran is receiving Section 306 Pension at the rate of $129 per month ($159 – $30).
  • Monthly pension has been apportioned to the Veteran’s child from a previous marriage at the rate of $30 per month since prior to December 31, 1978.  (The child has been rated incapable of self-support.)
  • In January 2015
    • the surviving spouse elects current-law pension, and
    • the child does not make such an election.
  • The surviving spouse has no income for VA purposes (IVAP).
Result:
  • Pay the surviving spouse $719.00 in monthly current-law pension from February 1, 2015 (the first day of the month after the effective date of the election, per 38 CFR 3.31).  This is the maximum basic current-law pension rate for a surviving spouse with no dependents in 2015.
  • Continue to pay the child the monthly protected rate of $30.
Reference:  For current-law pension rate information, see 38 U.S.C. 1541(b).

5.  Pension Election Rights of Children of Veterans

 


Introduction

This topic contains information on the pension election rights of the children of Veterans, including

Change Date

June 29, 2015

V.iii.5.5.a.  Elective Rights of Children When There Is or Is Not a Surviving Spouse Entitled to Pension on December 31, 1978

Use the table below for information on the rights of election of children when there is or is not a surviving spouse entitled to pension on December 31, 1978.
If there is …
Then …
  • a surviving spouse receiving pension on December 31, 1978, and
  • the children are in the spouse’s custody
  • the children in custody have no separate right of election, and
  • on discontinuance of the surviving spouse’s entitlement for any reason, the children’s only entitlement is to current-law pension.
  • a surviving spouse receiving pension on December 31, 1978, and
  • the children are not in the spouse’s custody
out-of-custody children who were receiving pension on December 31, 1978
  • have a separate right of election if the surviving spouse’s Old-Law or Section 306 Pension is discontinued for any reason, and
  • have separate eligibility as surviving children if the surviving spouse elects current-law pension.
Notes:
  • For current-law pension purposes, a child who is not in the custody of a surviving spouse may not be considered a dependent of the surviving spouse.
  • “Custody” for current-law pension purposes is defined in 38 CFR 3.57(d).
no surviving spouse entitled to pension on December 31, 1978
children have the same elective rights as Veterans and surviving spouses.
  • no surviving spouse entitled to pension on December 31, 1978, but
  • the surviving spouse reestablishes entitlement after 1978
  • the entitlement of the surviving spouse is under the current-law pension program
  • the children in the surviving spouse’s custody have entitlement to current-law pension only
  • the children not in custody of the surviving spouse have their Old-Law or Section 306 Pension rates protected, and
  • children not in the custody of the surviving spouse have independent eligibility to current-law pension.
Reference:  For an example of eligibility in this type of situation, see M21-1, Part V, Subpart iii, 5.5.c.

V.iii.5.5.b.  Example:  Effect of the Discontinuance of a Surviving Spouse’s Award on an Out-of-Custody Child’s Protected Rate

Situation:
  • A surviving spouse is receiving pension on December 31, 1978.
  • A child is receiving an apportioned Section 306 Pension rate of $28.
  • The surviving spouse’s award is discontinued.
Result:  Continue to pay the child the rate of $28.

V.iii.5.5.c.  Example:  Surviving Spouse Reestablishes Entitlement After 1978

Situation:
  • A child incapable of self-support alone not in the surviving spouse’s custody is receiving $61 under Section 306 Pension.
  • The surviving spouse’s eligibility is restored after 1978 under current-law pension.
Result:
  • For current-law pension purposes, the child is not a dependent of the surviving spouse.  Do not reflect the child on the surviving spouse’s award.
  • Determine the current-law pension amount payable to the surviving spouse.
  • Continue to pay the child the $61 Section 306 Pension rate.

V.iii.5.5.d.  Effect of One Child’s Election on Another Child When There Is No Surviving Spouse

If there is no surviving spouse, and a child who is entitled to Section 306 or Old-Law Pension elects to receive current-law pension, the election may not increase the rate payable to a child remaining under Section 306 or Old-Law Pension, per38 CFR 3.704(a).
The rate payable for each child remaining under Section 306 or Old-Law Pension may not exceed the amount that would be paid if all children were receiving under that law.

V.iii.5.5.e.  Example:  Effect of One Child’s Election on Another Child

Example:
  • Three children are receiving $37 each under Section 306 Pension.
  • Two children elect current-law pension.
Result:  Continue to pay the child remaining under Section 306 Pension as one of three children.
Rationale:  Under current-law pension, each child stands alone, and the existence of the other two children is not a factor (unless multiple children with a custodian other than the surviving spouse are entitled to current-law pension rates calculated under 38 CFR 3.24(c)(2)).

V.iii.5.5.f.  Adjustment of a Protected Rate When an Additional Child Is Established With Eligibility to Current-Law Pension Only

If an additional child is established with eligibility to only current-law pension, adjust the corresponding Section 306 or Old Law Pension award.

6.  A&A and Housebound Claims in Protected Pension Programs

 


Introduction

This topic contains information on A&A and housebound claims in protected pension programs.  It includes information on

Change Date

February 19, 2019

V.iii.5.6.a.  Referring Claims to the Rating Activity

Refer aid and attendance (A&A) and housebound claims filed by Section 306 and Old-Law pensioners to the rating activity unless prohibited by the information below.

V.iii.5.6.b.  Claims That Should Not Be Referred to the Rating Activity

Do not refer A&A and housebound and claims to the rating activity if
  • they are for A&A based on nursing home status
  • election of current-law pension is not in the claimant’s financial interest, even with A&A, or
  • the claimant did not submit current medical evidence on or with an appropriate prescribed claim form.

V.iii.5.6.c.  Denying a Claim Not in the Claimant’s Financial Interest

If election of current-law pension plus A&A is not in the claimant’s financial interest, deny the claim.
In the notification letter, provide information concerning the time limits in 38 CFR 3.660(b) so that claimants can claim deductible expenses if it appears that current-law pension would be a better benefit if deductible expenses were a factor.
Reference:  For more information on decision review options to include in notification letters, see M21-1, Part III, Subpart v, 2.B.5.b.

V.iii.5.6.d.  Requesting Medical Evidence

If the claimant has not submitted current medical evidence, and it appears that current-law pension would be the greater benefit
  • advise the claimant of the need for current medical evidence showing probable entitlement to A&A or housebound
  • explain the need to elect current-law pension in order to receive additional benefits
  • invite the claimant to elect current-law pension
  • develop for any other evidence necessary to adjudicate the claim, and
  • continue any control previously established as outlined in M21-1, Part III, Subpart iii, 1.B.3.

V.iii.5.6.e.  Actions to Take When the Rating Activity Determines That the Claimant Is or Is Not in Need of A&A or Is Not Housebound

Use the table below to determine the actions to take when the rating activity determines that the claimant is or is not in need of A&A or is not housebound.
If the rating activity determines that the claimant …
Then …
  • is in need of A&A or is housebound, and
  • current-law pension plus A&A or housebound is in the claimant’s financial interest
  • inform the claimant of the decision
  • explain the need to elect current-law pension in order to receive additional benefits
  • invite the claimant to elect current-law pension
  • develop for any other evidence necessary to adjudicate the claim, and
  • continue any control previously established as outlined in M21-1, Part III, Subpart iii, 1.B.3.
  • is in need of A&A or is housebound, and
  • current-law pension plus A&A or housebound benefits is notin the claimant’s financial interest
  • deny the claim, and
  • provide the current-law pension time limits.
is not in need of A&A or is not housebound
  • deny the claim
  • notify the claimant of the decision, and
  • provide procedural and appellate rights.
Reference:  For more information on decision review options to include in notification letters, see M21-1, Part III, Subpart v, 2.B.5.b.
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