Apportionments
| Published date | 14 October 2021 |
| Record Number | 2021-21816 |
| Section | Proposed rules |
| Court | Veterans Affairs Department |
Federal Register, Volume 86 Issue 196 (Thursday, October 14, 2021)
[Federal Register Volume 86, Number 196 (Thursday, October 14, 2021)]
[Proposed Rules]
[Pages 57084-57094]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21816]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Parts 3 and 21
RIN 2900-AP67
Apportionments
AGENCY: Department of Veterans Affairs.
ACTION: Proposed rule.
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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its
regulations to limit the circumstances in which benefits will be
apportioned and to stop apportioning certain benefits. Currently, in
limited situations, VA may pay a portion of a VA beneficiary's monetary
benefits directly to the
[[Page 57085]]
beneficiary's dependents. This is referred to as apportionment of
benefits. Most claims for apportionment involve complex issues of
family law, issues that are best suited to the expertise and authority
of state courts. VA claims adjudicators have limited ability to analyze
these complex and fact-intensive claims, to include both technical
expertise as well as an ability to compel participation in necessary
accounting measures. When VA awards apportionments, decisions rendered
can disturb state court support awards, requiring a state court to
expend additional resources to revisit a prior determination. Finally,
due to their intricacy, a significant amount of information is needed
to properly adjudicate apportionment claims. While this information is
typically already available to state courts, VA must attempt to gather
this information from the VA beneficiary and beneficiary's dependent,
which is unavoidably a time-consuming process and often cannot result
in a comprehensive evidentiary picture. The additional time and effort
needed to gather this information increases VA workloads and results in
the potential for delays of all VA claims processes, to include
apportionment awards. Because VA apportionment awards often conflict
with the awards of better-situated state family courts and because VA
lacks the authority and expertise to make fully-informed, accurate, and
economically appropriate awards, VA is proposing to amend its
regulations to discontinue making apportionment awards in most
circumstances and to stop apportioning certain benefits.
DATES: Comments must be received on or before December 13, 2021.
ADDRESSES: Written comments may be submitted through
www.Regulations.gov. Comments should indicate that they are submitted
in response to ``RIN 2900-AP67--Apportionments''. Comments received
will be available at regulations.gov for public viewing, inspection or
copies.
FOR FURTHER INFORMATION CONTACT: Korrie Shivers, Policy Analyst, Part 3
Regulations & Forms Staff (211D), Compensation Service (21C), Veterans
Benefits Administration, Department of Veterans Affairs, 810 Vermont
Avenue NW, Washington, DC 20420, (202) 461-9700. (This is not a toll-
free telephone number.)
SUPPLEMENTARY INFORMATION:
General
VA proposes to discontinue awarding apportionments of the
compensation and pension benefits of veterans and surviving spouses in
most circumstances by removing most of its apportionment-specific
regulations and amending other regulations that have apportionment
provisions. VA intends to continue making apportionment awards where a
veteran or surviving spouse is incarcerated or where an incompetent
veteran, who does not have a fiduciary, is institutionalized at
government expense, without regard to financial contributions to the
claimant. VA does not intend to discontinue as a result of this
rulemaking any apportionments currently being paid.
Apportionment Authority
Congress has provided VA broad discretionary authority under
several statutes to pay apportionments out of a VA beneficiary's
monetary benefits. In 38 U.S.C. 5307, Apportionment of benefits,
Congress provided that VA may apportion compensation and pension
benefits, including dependency and indemnity compensation (DIC) and
rehabilitation subsistence allowances paid under 38 U.S.C. Chapter 31.
This authority was at the discretion of the Secretary of Veterans
Affairs. In 38 U.S.C. 5313(b)(1), Limitation on payment of compensation
and dependency and indemnity compensation to persons incarcerated for
conviction of a felony, Congress provided that the Secretary may
apportion benefits. Similarly, in 38 U.S.C. 5502(d), Payment to and
supervision of fiduciaries, and 38 U.S.C. 5503(a)(2), Hospitalized
veterans and estates of incompetent institutionalized veterans,
Congress provided that VA may apportion benefits. Notably, each
apportionment authority in title 38 of the United States Code is
permissive, but not required, as shown by the use of the word ``may''
or the phrase ``may be apportioned as prescribed by the Secretary''.
The statutory authority shows that Congress has given VA
significant discretion on whether to apportion VA benefits. After
reviewing the apportionment procedures and the impact of apportionment
on veterans and surviving spouses, VA has determined that some types of
its apportionments undermine the processes established in state courts
for distributing resources when an individual is not contributing to
the support of his or her dependents. When viewed alongside the
significant employee work-hours VA expends to process these requests,
VA proposes to exercise the discretionary authority Congress gave it by
discontinuing awarding new apportionments in most situations.
Current Procedure
When VA receives a claim for an apportionment from a spouse, child,
or dependent parent, VA must first determine if the apportionment
claimant is a proper claimant. This requires VA to request evidence of
the claimed relationship from the VA beneficiary and the apportionment
claimant, unless the evidence is already in VA's possession or the
dependent is already established on the beneficiary's award.
Concurrently, VA must develop for evidence of the financial situation
of both the VA beneficiary and the apportionment claimant. Developing
for this evidence provides both the VA beneficiary and the
apportionment claimant the opportunity to support their claims with
financial records and data. In addition, developing for certain
evidence provides the VA beneficiary with due process, as he or she has
a property interest in the VA compensation benefit. VA requests this
information from the beneficiary and the claimant, giving both 65 days
to respond. Frequently, the information provided is not complete
because either the claimant or the beneficiary does not submit all the
requested information. Once financial information development is
complete, or the 65-day development period has lapsed, VA then
determines if the claimant needs the apportionment and if the
beneficiary can afford an apportionment without undue hardship. As part
of the determination of whether the claimant needs the apportionment,
VA must determine if the VA beneficiary is currently reasonably
contributing to the support of the claimant. If the beneficiary is
already reasonably contributing to the support of the claimant, then
there is no need to apportion the VA beneficiary's monetary award and
the apportionment claim is denied. However, if the VA beneficiary is
not reasonably contributing to the claimant's support, then an
apportionment is justified if it does not cause undue hardship to the
beneficiary. In the cases where an apportionment is justified, VA must
determine the amount of apportionment to be taken from the VA
beneficiary's award.
To determine the amount of the apportionment, VA first compares the
relative economic hardship of an apportionment on the beneficiary with
the economic circumstances of the claimant. VA then considers factors
such as the amount of compensation or pension the veteran or surviving
spouse is paid; the number of dependents who would receive the
apportionment; other
[[Page 57086]]
resources, income, and benefits available to the veteran or surviving
spouse and apportionee; and any special needs of the veteran or
surviving spouse and apportionee. All of these factors are weighed
against the regulatory limit and consistency requirements found in 38
CFR 3.451. This section provides that the amount apportioned ``should
be generally consistent with the total number of dependents involved.''
In addition, Sec. 3.451 provides that, ordinarily, an apportionment of
more than 50 percent of the veteran's or surviving spouse's
compensation or pension would constitute undue hardship, while
apportionment of less than 20 percent of the compensation or pension
would not provide a reasonable amount for the apportionee.
Once the amount of the apportionment is decided, the apportionment
is processed and the beneficiary and apportionee are notified of the
decision. Following notification, both the beneficiary and the
apportionee have the opportunity to appeal the decision to award an
apportionment, the amount of the apportionment, or the effective date
of the apportionment.
State Judicial Systems
When VA's apportionment system is compared to existing state
courts, it highlights the inefficiencies of the VA apportionment system
and shows why the VA system is redundant and unnecessary in most
apportionment cases.
State family courts already provide the same, and arguably better,
avenues for claimants as the VA apportionment system. For example, each
state's judicial system already has a procedure for determining the
allocation of financial resources when a veteran and veteran's spouse
are estranged; this is commonly termed ``spousal support.'' In
addition, each state's judicial system also has a procedure for
determining the allocation of financial resources when a veteran and
veteran's child are not living in the same household; this is commonly
termed ``child support.''
We are aware that state courts do not have the authority to order
VA to pay compensation directly to dependents. However, state courts
can adequately take account of the interrelationship between veterans,
their dependents, and VA benefits in other ways. In determining the
level or monetary amount of support, the state court will examine the
relative financial needs and abilities of the parties to determine the
amount of child support or spousal support when the married couple
separates or when the child resides with someone other than the veteran
or surviving spouse. To do this, the judge or magistrate may compel the
production of financial records which include information concerning
the amount of compensation, pension, dependency and indemnity
compensation (DIC), or vocational rehabilitation subsistence allowance
the veteran or surviving spouse receives from VA. The judge or
magistrate makes a decision based on more complete information of the
available assets and the needs of the party than is realistically
available to VA.
Usually, by the time VA has received the information necessary to
determine if an apportionment is appropriate, and if so, how much
should be apportioned, the state court system has already determined an
allocation of the primary beneficiary's assets and the apportionment
claimant's assets. VA's subsequent apportionment determination, often
based on less complete evidence than is available to the state court,
may disturb the court's asset allocation by taking assets assumed by
the state court to be for the benefit of the primary beneficiary and
allocating those assets to the apportionment claimant. When this
occurs, the parties must either go back to court to re-allocate the
assets or appeal VA's apportionment determination. These conflicting
systems typically result in inconvenient and unfair results to the
primary beneficiary and the apportionment claimant and workload
increases for both the state's court system and VA.
Furthermore, 42 U.S.C. 666(f) requires that each state have in
effect the Uniform Interstate Family Support Act (UIFSA), which
establishes a ``one-order'' nationwide enforcement model to preclude
conflicting orders in multiple jurisdictions. See Construction and
Application of Uniform Interstate Family Support Act, 90 A.L.R. 5th
1,2. UIFSA, adopted by each state, provides the mechanisms and
procedures for modifying state support orders. See Unif. Interstate
Fam. Support Act sections 205, 211, 613; https://www.acf.hhs.gov/css/parents.
In comparing state family court support determinations to VA's
apportionment system, the state court system provides for a far more
accurate and complete determination. State courts already make
determinations for the same kinds of claims that the VA apportionment
system does, but state courts do so with more consistent and fair
results.
Furthermore, a state court's allocation of resources is enforceable
across state lines. The Social Security Act, codified in pertinent part
at 42 U.S.C. Chapter 7, subchapter IV, sections 651 through 669B,
provides for enforcement of another state's child and spousal support
payments either through direct levy of the assets held by a financial
institution or levy through that state's enforcement organization
(Title IV-D agencies, named after subchapter IV-D of the Social
Security Act). See also Direct Imposition of Liens and Levies Across
State Lines, PIQ-99-06, U.S. Department of Health and Human Service,
Administration for Children and Families, Office of Child Support
Enforcement, August 16, 1999, http://www.acf.hhs.gov/programs/css/resource/direct-imposition-of-liens-and-levies-across-state-lines, last
viewed March 2, 2021. Specifically, 42 U.S.C. 666(f) requires all
states to adopt the UIFSA. The UIFSA establishes a ``one-order''
nationwide enforcement model to preclude conflicting orders in multiple
jurisdictions. See Construction and Application of Uniform Interstate
Family Support Act, 90 A.L.R.5th 1, 2.
Although 38 U.S.C. 5301(a)(1) generally exempts VA benefits from
any legal or equitable process, such as garnishment, Congress created
an exception to section 5301(a) for alimony and child support
obligations by enacting the Child Support Enforcement Act under 42
U.S.C. 659. Under section 659, VA disability compensation payable to a
veteran who has waived a portion of his or her military retired pay to
receive the VA benefit could be subject to garnishment for alimony or
child support obligations. This means that section 659 authorizes VA,
pursuant to proper service of a valid state court order, to withhold,
or garnish, a portion of a veteran's disability compensation for
alimony or child support when a veteran has waived a portion of his or
her military retired or retainer pay to receive the VA benefit.
Additionally, the United States Supreme Court in Rose v. Rose, 481 U.S.
619 (1987), held that state courts may consider the availability of VA
benefits in determining the amount of a veteran's child support
obligation and, in fact, may set a support award in an amount that
would necessarily require that part of the support award be paid out of
VA benefits once they have been received by the veteran. See id.
Further, the majority of courts considering the issue of spousal
support have applied Rose to hold that ``veterans' disability benefits
are not exempt from claims for alimony, spousal support and child
support.'' Case v. Dubaj, C.A. No. 08-347 Erie, 2011 U.S. Dist. LEXIS
96808 at *4 (W.D. Pa. Aug. 29, 2011) (citing 52 A.L.R.5th 221 section
28[a] (``With few exceptions,
[[Page 57087]]
the cases hold that payments arising from service in the Armed Forces .
. . , though exempt as to the claims of ordinary creditors, are not
exempt from a claim for alimony, support, or maintenance . . .'').
Apportionment Expenditure
As noted previously, many claims for apportionment involve complex
issues of family law, and are often very fact-intensive. Due to the
complex nature of these claims, they require significant adjudicative
processing time. For example, in fiscal year (FY) 2013, the Veterans
Benefits Administration completed 6,570 apportionment claims. VA's
Automated Standardized Performance Elements Nationwide (ASPEN) work
actions credit shows that it required 13 full-time equivalent (FTE)
employees per year to process those claims (6,570 claims times 3.26
hours per claim (per M21-4) divided by 1,645 hours, which VA estimates
is the number of available work hours for a full-time employee in one
year based on the Office of Personnel Management's total hours of 2,087
for a general schedule employee (5 U.S.C. 5504(b)(1))).
By discontinuing adjudication of most VA apportionment claims, VA
would avoid possible conflict with state court determinations and free
up existing employees to process other claim actions. By only
processing apportionment claims for incarcerated veterans and
incompetent veterans hospitalized at government expense, without
consideration of financial contributions to the claimant, these
proposed rules will reduce the number of FTE needed each year for
apportionment claims from 13 to two. The time of the additional 11 FTEs
could then be dedicated to processing other claims.
Alternatives Considered
1. Maintain the current apportionment provisions unchanged.
VA considered maintaining the current apportionment provisions
without change. However, in VA's view, the expertise of state courts
undercuts the need for a dual VA apportionment system, and, as
discussed above, VA apportionment actions may create unnecessary
disruption to the decisions made by state courts. Accordingly, VA
believes that a change is needed in the 115-year old apportionment
system.
2. Set the apportionment amount to be equal to that additional
amount which the veteran receives for the apportionee as a dependent.
If a veteran furnishes VA with evidence showing that he/she has a
dependent (spouse, child, or parent) and the veteran is in receipt of
compensation at the 30-percent disabled level or above, the veteran may
receive additional compensation for their dependents. The additional
amount paid for a dependent is in recognition that a veteran with an
impaired earning capacity, who also has dependents, needs additional
money to make up the difference between what the veteran is earning and
what the veteran could earn without the disability and still care for
his or her dependents.
By automatically limiting apportionments to the additional amount
paid to the veteran because of the existence of a dependent, the
veteran would still receive that amount which Congress intended the
veteran to have. However, the dependent would receive that additional
amount which was intended for the veteran to use for the dependent. For
those veterans not in receipt of an additional allowance for
dependent(s) (i.e., a veteran rated 0-, 10-, or 20-percent disabled),
VA would deny any apportionment claim, as an apportionment would be
considered an undue hardship on the veteran. The advantage of this
option is that it would make VA apportionments simple and consistent.
With this option, no consideration would be given to support orders
that are currently in place in which the veteran or surviving spouse is
making regular payments. As a result, it would still be possible for
the apportionee to receive both an apportionment from the VA and the
payments made as a result of the court order which already considered
the benefits provided by VA in determining the amount of that court-
ordered payment.
After considering this option, VA determined that this option also
has the potential to disturb a state court's allocation of resources
and also would require some expenditure of VA assets in processing the
apportionment. An apportionee would generally receive a relatively low
amount of benefits, set without regard to an apportionee's actual
financial need. This option would still result in the problems
presented by the current regulations, namely that VA will duplicate and
potentially disturb state court efforts and unnecessarily occupy FTE
that could be used to serve other claimants. For these reasons, VA
chose not to propose this option.
3. Eliminate all apportionments.
VA considered eliminating all apportionments. Despite the
advantages, if VA eliminated all apportionments there would be some
inequitable results. Specifically, it would have negative consequences
in two situations where VA currently pays benefits that are generally
outside the scope of state courts. These two situations are
incarcerated veterans and veterans institutionalized at government
expense.
VA beneficiaries who are incarcerated will have their payment
amounts reduced beginning with the 61st day of imprisonment for a
felony. Due to imprisonment, the VA beneficiary is often not able to
continue to financially care for his or her family. VA currently allows
for the family members of an incarcerated beneficiary to apply for an
apportionment of the beneficiary's benefit, ensuring that the
incarceration does not interfere with continuation of prior financial
support. This means that although the incarcerated beneficiary will
have his or her payments reduced or terminated while incarcerated, the
family could apply to have the benefits paid to them instead. To
eliminate this kind of apportionment would hurt the families of
incarcerated beneficiaries. In addition, very few work-hours (e.g., two
FTE per year) would be saved by not processing apportionments to an
incarcerated veteran's or incarcerated surviving spouse's dependents.
Additionally, if VA eliminated all apportionments, the amount of
the benefit not paid to the administrator of the institution caring for
an incompetent veteran who is institutionalized at government expense
would be unavailable to assist in supporting the institution caring for
the veteran or the institutionalized veteran's dependents. Since a
fiduciary is appointed in almost all of these situations, the time
expended in processing the few remaining claims would be minimal.
After carefully considering all options, VA determined that
elimination of all apportionments is not the best option and that
apportionment of benefits to the dependents of an incarcerated
beneficiary and to an incompetent veteran institutionalized at
government expense should be continued, with slight modification.
Specifically, VA determined it should remove consideration of financial
need for an apportionment of an incarcerated beneficiary's award. In
removing the financial need requirement for claims for apportionments
of an incarcerated beneficiary's award, VA remains consistent with
discontinuing needs-based apportionments for the same reasons set forth
above. Additionally, this amendment to apportionments involving
incarcerated beneficiaries better aligns with Congressional intent in
establishing statutory authority for
[[Page 57088]]
VA to apportion certain benefits in 38 U.S.C. 5313(b)(1).
These amendments ensure that the veteran's or surviving spouse's
benefits are used to support the veteran's or surviving spouse's
dependents in those two instances where the state court system does not
provide a mechanism to support a veteran's or surviving spouse's
beneficiaries.
Form for Requesting an Apportionment
In conjunction with this rulemaking, VA also proposes amendments to
current VA Form 21-0788, Information Regarding Apportionment of
Beneficiary's Award. In accordance with 38 CFR 3.155, use of this
standard form is required for all requests for an apportionment. While
apportioned dollars are ``derivative benefits'' in the sense that they
deal with the distribution of money VA already owes to a claimant
rather than a separate assertion of entitlement to payment for, e.g., a
service-connected disability, apportionment is also a ``claim'' in the
sense that it is an assertion of entitlement to receive funds from the
government. Further, 38 CFR 3.400(e) explicitly recognizes
apportionment as a ``claim.'' Accordingly, the claim initiation
structure of 38 CFR 3.155 applies to apportionments. VA proposes to
amend the current form by removing all sections requesting information
that pertain to income, net worth, or financial contributions, as this
information will no longer be used to render a decision. VA also
proposes to add a section allowing the claimant to identify which
status qualifies him/her for an apportionment award. Finally, VA
proposes non-substantive amendments to the form with regard to
identifying the Veteran, claimant, and beneficiary.
VA believes the proposed amendments to this form will assist
beneficiaries in defining what information is necessary for VA to make
its decision, improve VA's administrative efficiency in processing
requests, and help provide timely decisions to those who request an
apportionment of a beneficiary's award.
Mechanics of the Amendments
On November 27, 2013, VA published in the Federal Register (78 FR
71042) a proposed regulation titled ``VA Compensation and Pension
Regulation Rewrite Project; Proposed Rule.'' Among other things, the
rule proposed a rewritten and reorganized version of apportionment
regulations. VA is using that proposed rule's reorganizational
structure and much of the revised wording of those proposed regulations
in this new proposed rule. The wording is changed to reflect the
proposed policy to eliminate all need-based apportionments and to
retain only apportionments where the primary beneficiary is
incarcerated or where an incompetent veteran without a fiduciary is
institutionalized at government expense.
Section 3.31 Commencement of the Period of Payment
In 38 CFR 3.31(c)(3), VA proposes removing the words ``original or
increased'' because with this amendment there are only original claims
for apportionments. For the reasons discussed above, no increases in
current or future apportionments will be allowed under the proposed
regulatory change.
Section 3.210 Child's Relationship
In 38 CFR 3.210(c)(1)(ii), VA proposes removing the last sentence
of the paragraph. This amendment proposes to eliminate apportionment
eligibility in the situation of a child adopted out of a veteran's
family, so this reference to apportionment would no longer be correct.
Section 3.252 Annual Income; Pension; Mexican Border Period and Later
War Periods
In 38 CFR 3.252(d), VA proposes to remove the last sentence of
3.252(d) to reflect the proposed change of the removal of 38 CFR 3.451.
Section 3.400 General
Section 3.400(e) contains effective date rules for beginning
apportionments. In revised Sec. 3.400(e), VA proposes to update this
paragraph by stating, in simpler terminology, the rules for effective
dates for apportionments. VA intends no substantive changes from the
current rules, only to reword the provisions to provide greater detail
and clarity. VA proposes removing the terminology referencing original
and other than original claims since the proposed rules only provide
for original claims. In subparagraph (e)(1), VA proposes to provide the
general rule that apportionments are effective the first day of the
month after the month in which VA receives an apportionment claim.
Subparagraph (e)(2) provides three exceptions to the general rule.
Subparagraph (e)(2)(i) proposes to provide that where a primary
beneficiary's claim for benefits is pending, the effective date of any
apportionment will be either the date of the primary beneficiary's
award or the date entitlement arose, whichever is later. In
subparagraph (e)(2)(ii), VA proposes to provide that if the
apportionment claimant has not yet been established as a primary
beneficiary's dependent or as the veteran's dependent, the effective
date will be the date of the primary beneficiary's award or the date
entitlement arose, whichever is later. In subparagraph (e)(2)(iii), VA
proposes to refer to Sec. Sec. 3.665 or 3.666 for the effective date
rules for when the primary beneficiary is incarcerated.
Sections 3.450 to 3.461
VA proposes to remove and replace 38 CFR 3.450 to 3.461 with
revised sections that change the wording of the concepts that it
intends to keep for processing apportionments and that eliminate the
need-based apportionment provisions. In addition to replacing these
sections, VA proposes to renumber the sections, leaving some regulation
paragraph numbers reserved so as to be able to insert additional
regulations at a later time, if needed. The renamed and renumbered
regulations are as follows:
Sec. 3.450 General apportionment
Sec. 3.451 Apportionment claims
Sec. 3.452 Veteran's benefits apportionable
Sec. 3.453 Veterans benefits not apportionable
Sec. 3.454 Apportionment of pension
Sec. 3.455 Apportionment of a surviving spouse's dependency and
indemnity compensation
Sec. Sec. 3.456-3.461 [Reserved]
Section 3.450 is a new regulation, not derived from any current
regulation. VA proposes titling this regulation, General apportionment.
VA is proposing to include two new provisions and to restate a previous
provision concerning submission of an application that was implied, but
not specifically stated, in the proposed-to-be-replaced regulations. In
the proposed first paragraph, titled (a) Applicability, VA states that
these changes to the apportionment provisions are applicable to all
claims for apportionment received on or after the effective date of the
rule, i.e., 60 days after the date of publication in the Federal
Register. In the proposed second paragraph, (b) Existing
apportionments, VA states that apportionments being paid as of the
effective date of the changes will continue until the circumstances
providing entitlement to the apportionment no longer exist. In the
third paragraph, (c) Apportionment application, VA states that claims
for apportionment must be on a form prescribed by the Secretary.
VA proposes removing current Sec. 3.451. This section contains
provisions for determining relative hardship
[[Page 57089]]
between a primary beneficiary and an apportionment claimant. Because VA
proposes to no longer apportion benefits in this manner, this section
would no longer be applicable.
VA proposes titling the new Sec. 3.451, Apportionment claims. In
revised Sec. 3.451, VA proposes to state the basic provisions for when
a veteran's pension or compensation or a surviving spouse's DIC or
pension may be apportioned. Proposed Sec. 3.451 will explain that all
or a portion of a pension or disability compensation award may be
apportioned if the veteran is incompetent and hospitalized at
government expense or is incarcerated and meets any of the conditions
of Sec. Sec. 3.665 or 3.666. Similarly, proposed Sec. 3.451 explains
that an award to a surviving spouse may be apportioned if the surviving
spouse is incarcerated and meets the conditions of Sec. 3.665 or
3.666. Furthermore, this proposed section will address when a child
enters active duty and either claims or is in receipt of an
apportionment, how certain death benefits will be apportioned amongst
surviving children, and apportionment of death benefits for children
not residing with a surviving spouse. While the concepts in this
section are generally taken from current Sec. Sec. 3.450 and 3.452
concerning what benefits may be apportioned, from whom, and to whom, VA
proposes to remove those provisions relating to determining
apportionments based on the relative need of the beneficiary and
apportionment claimant and has rewritten the rest to improve clarity.
VA proposes removing the provisions concerning apportionments from
a surviving spouse's compensation. Paragraph (a)(2) of current Sec.
3.450 refers to apportioning the ``compensation . . . payable to the
surviving spouse.'' Paragraph (d) of current Sec. 3.450 states, ``Any
amounts payable for children under Sec. Sec. 3.459, 3.460, and 3.461
will be equally divided among the children.'' Given that Sec. 3.459
explicitly governs death compensation, and the reference to
``compensation . . . payable to the surviving spouse'' in Sec.
3.450(a)(2) appears in a sentence that separately lists dependency and
indemnity compensation, the reference to compensation in current Sec.
3.450(a)(2) and the reference to the current Sec. 3.459 in Sec.
3.450(d) both pertain to the apportionment of death compensation. VA is
not referring to compensation payable to a surviving spouse in Sec.
3.451. VA is also not including an equivalent to current Sec. 3.459 or
any reference thereto. There are less than 300 beneficiaries currently
receiving death compensation. Except for one small group of
beneficiaries, death compensation is payable only if the veteran died
prior to January 1, 1957. VA has not received a claim for death
compensation in more than 10 years and does not expect to receive any
claims for apportionment of death compensation. DIC is a much greater
benefit than death compensation. Because of the small number of
beneficiaries of death compensation and the unlikelihood of a claim for
apportionment of such benefits, the provisions concerning apportionment
of death compensation do not need to be carried forward.
In revised Sec. 3.451(a), VA proposes retaining from the previous
version of Sec. 3.450(a) the provision that all or part of a veteran's
pension or compensation or all or part of a surviving spouse's DIC may
be apportioned to the spouse, child, or dependent parents. VA is also
proposing to specify the two situations where VA will, on receipt of an
application, apportion a veteran's or surviving spouse's benefits.
VA proposes retaining, in revised Sec. 3.451(b), the provision
from current Sec. 3.450(b) that no apportionment will be made or
changed solely because a child has entered active duty in the Armed
Forces. VA proposes incorporating the provisions from current Sec.
3.458(e) into this section to keep similar issues together.
VA proposes removing the provision from Sec. 3.450(c) that no
apportionment will be made when the veteran, veteran's spouse (when
paid ``as wife'' or ``as husband''), surviving spouse, or fiduciary is
providing for the dependents. Under this proposed rule, VA would no
longer be basing apportionment determinations on whether the primary VA
beneficiary is providing for the dependents.
VA proposes retaining the provision from Sec. 3.450(d) and
renumbering it as Sec. 3.451(c), concerning division of apportionments
paid to children of the veteran, but rewording the provision for
clarity and revising the cross-reference to reference the revised,
applicable regulations.
VA proposes revising the provisions from Sec. 3.450(e) and
renumbering it as Sec. 3.451(a)(2). VA proposes removing the provision
that provides that amounts payable to a surviving spouse for a child
may be apportioned if the child or children are not residing with the
surviving spouse and the surviving spouse is not reasonably
contributing to the child's support. For reasons previously stated,
state court processes are best suited to assess and address the
surviving spouse's support obligations in such situations.
VA proposes removing current Sec. 3.450(f) and not including it in
these revised regulations. This section is redundant of provisions
already found in the entirety of Sec. 3.250 and does not need to be
repeated.
VA proposes also removing the provisions of current Sec. 3.450(g),
which provide for apportionment of death pension by reference, because
this section is no longer needed. VA is removing all the death pension
provisions for the reasons stated earlier.
VA proposes renaming current Sec. 3.452 from ``Situations when
benefits may be apportioned'' to ``Veteran's benefits apportionable.''
VA proposes rewording some of the provisions for clarity, removing
paragraphs (a) and (d), and re-designating the remaining paragraphs.
Current paragraph (a) provides for apportionment when the veteran is
not residing with the spouse and children, or not residing with his or
her children. Under this proposed rule, the only two situations where
VA would apportion benefits are when the primary beneficiary is
incarcerated or when an incompetent veteran without a fiduciary is
institutionalized at government expense. Therefore, this paragraph
would no longer be necessary. Section 3.452(d) concerns apportionments
to a dependent parent or parents when the veteran does not contribute
to the support of the dependent parent or parents. As discussed above,
VA proposes no longer apportioning benefits in situations requiring a
need-based determination, so this paragraph is also proposed to be
removed.
In Sec. 3.452(a), formerly Sec. 3.452(b), VA proposes restating
without change that apportionment may be made pending appointment of a
guardian or fiduciary.
In Sec. 3.452(b), formerly Sec. 3.452(c), VA has rewritten the
proposed provisions for clarity, but retained the principles of the
previous provisions concerning apportionments when a veteran is
receiving hospital, domiciliary, or nursing home care, and added a
provision that if a veteran's dependent parents are the only relations
eligible for the apportionment, the parent or parents may receive the
apportionment. These provisions are derived from Sec. 3.454, which
would be replaced.
VA proposes removing current Sec. 3.453. This section referred the
user to the previous Sec. 3.451, which is also proposed to be removed.
VA proposes replacing Sec. 3.453 with a new Sec. 3.453 titled,
``Veterans benefits not apportionable.'' The provisions in the proposed
Sec. 3.453 are derived from current Sec. 3.458. In paragraph (a) VA
proposes stating that no apportionment will be made unless an
application for
[[Page 57090]]
an apportionment is received by VA. In Sec. 3.453(c), VA has included
a cross reference to the provisions on forfeiture for fraud (Sec.
3.901), treasonable acts (Sec. 3.902), and subversive activity (Sec.
3.903). Those regulations contain the complete rules on forfeiture and
apportionments when benefits have been forfeited. In Sec. 3.453(b) VA
proposes combining the provisions contained in current Sec. Sec.
3.458(f)(1), 3.901, and 3.902. Current Sec. 3.458(f)(1) prohibits an
apportionment for forfeitures declared before September 2, 1959, if a
veteran's dependent ``is determined by [VA] to have been guilty of
mutiny, treason, sabotage, or rendering assistance to an enemy of the
United States or its allies.'' Current Sec. Sec. 3.901 (forfeiture for
fraud) and 3.902 (forfeiture for treason), both permit apportionments
to a beneficiary's dependents under certain circumstances if the
forfeiture was declared prior to September 2, 1959, but prohibit an
apportionment to any dependent who themself was guilty of mutiny,
treason, sabotage, or rendering assistance to an enemy of the United
States or its allies. Accordingly, proposed Sec. 3.453(b) states that
benefits will not be apportioned to any beneficiary's dependent who is
determined by VA to have been guilty of mutiny, treason, sabotage, or
rendering assistance to an enemy of the United States or its allies. In
paragraph (c), VA proposes providing that after September 1, 1959, no
apportionment will be made for any dependent of a veteran or surviving
spouse where benefits were forfeited due to fraud or a treasonable act,
or where there was a conviction for subversive activity after September
1, 1959.
VA proposes replacing Sec. 3.454 with a new section titled,
``Apportionment of pension.'' The provisions of this section are
derived from the current Sec. 3.454. Current Sec. 3.454(a) specifies
that if an incompetent veteran is receiving care in a government
institution and is entitled to pension, VA will pay $25 per month as an
institutional award and pay the balance of the pension to the veteran's
spouse or child or, if the veteran has no spouse or child but has a
dependent parent, apportion pension to the dependent parent as a
special apportionment. VA has not included this specific information in
proposed Sec. 3.454 because it is outdated. To the extent that it
provides that the balance of pension will be apportioned to a veteran's
spouse or child, it is inconsistent with the approach VA would adopt
through these proposed rules since it is based on a determination of
hardship. VA is eliminating the hardship-based apportionments, so this
provision is no longer needed. Because the amount of the institutional
award is not fixed by regulation, VA determines the amount of the
apportionment on a case-by-case basis.
Finally, VA does not apportion a veteran's pension to a dependent
parent. A parent may not be a dependent for disability pension. Whereas
a veteran receiving disability compensation may receive an additional
allowance for dependent parents, Congress authorizes an increased
maximum annual pension rate only for a spouse or child, not for a
dependent parent. See 38 U.S.C. 1542.
VA would also not include Sec. 3.454(b)(2). To the extent that
Sec. 3.454(b)(2) is based on a reduction under current Sec. 3.551(d)
(reducing Improved Pension for veterans receiving care before February
1, 1990), it is unnecessary. To the extent that Sec. 3.454(b)(2) is
purportedly based on a reduction under Sec. 3.551(e), it is obsolete.
VA no longer reduces Improved Pension to $60 under current Sec.
3.551(e). The $60 amount was increased to $90, effective February 1,
1990, by Public Law 101-237, section 111, 103 Stat. 2062, 2064-65
(1989). VA proposes that Sec. 3.454, in paragraph (a), would provide
that a veteran's disability pension will be apportioned to the
veteran's spouse, child or children, or dependent parents. In paragraph
(b), VA proposes providing for payment of an apportionment for the
three types of death pension: Old Law Death Pension, Section 306 Death
Pension, and Improved Death Pension. These types of death pension may
be apportioned to the veteran's child or children.
VA proposes adding Sec. 3.455, ``Apportionment of a surviving
spouse's dependency and indemnity compensation.'' The provisions in
this section are derived from current Sec. 3.461 but have been
rewritten for clarity. In paragraph (a), VA proposes providing that the
surviving spouse's DIC will only be apportioned if the surviving spouse
is incarcerated and will only be apportioned for a child or children
under 18 years of age, unless the child or children became permanently
incapable of self-support before reaching the age of 18 years.
In paragraph (b), VA proposes referring to Sec. 3.665 to determine
the amount of DIC which may be apportioned.
VA proposes removing and reserving Sec. Sec. 3.458-3.461 because
these provisions are either not being carried forward after this
proposed change or the provisions for those sections have been
incorporated into other sections.
Current Sec. 3.458 provides situations in which a veteran's
benefits will not be apportioned by VA, to include provisions
concerning not apportioning benefits where each of the apportionees
would not receive a reasonable amount, where the spouse of the veteran
had been found guilty of conjugal infidelity, where the spouse of the
veteran lived with or held himself or herself out to be the spouse of
another, and where the child of a veteran had been adopted, except for
the additional amount the veteran was paid for the child.
Current Sec. 3.458 also includes a provision concerning
apportionment when a child enters active duty, which is included in
proposed Sec. 3.451(b). Additionally, the provision concerning the
prohibition of paying an apportionment to a claimant where the
apportionment claimant was guilty of mutiny, treason, sabotage, or
rendering assistance to an enemy of the United States or its allies has
been included in proposed Sec. 3.453. Current Sec. 3.458 also
includes the provision requiring a formal claim for apportionment
before any apportionment may be paid, and this provision is included in
proposed Sec. 3.450(c).
Current Sec. 3.459 provides for apportionment of death
compensation. As explained above, VA proposes not carrying the
provisions for death compensation forward because there are fewer than
300 beneficiaries and it does not anticipate receiving any more claims
for this benefit.
Current Sec. 3.460 provides for apportionment of death pension. VA
proposes to incorporate these provisions into Sec. 3.454.
Current Sec. 3.461 provides for apportionment of DIC. These
provisions are proposed to be incorporated into Sec. 3.455.
Section 3.556 Adjustment on Discharge or Release
In 38 CFR 3.556(a)(1), VA proposes removing the phrase at the end
of the second sentence, ``unless it is determined that apportionment
for a spouse should be continued.'' VA proposes to no longer apportion
the veteran's benefits if the veteran is released from the hospital
because the full amount of the benefit will be paid to the veteran.
Once the veteran is released from the hospital, apportionments would
only be made if the veteran is readmitted to the hospital or is
incarcerated. Need-based apportionments would no longer be adjudicated.
In Sec. 3.556(e), VA proposes amending the sentence providing for
the possible continuation of an apportionment when
[[Page 57091]]
the veteran is discharged from the hospital. VA proposes no longer
apportioning the veteran's benefits if the veteran is released from the
hospital because the full amount of the benefit will be paid to the
veteran. Once the veteran is released from the hospital, apportionments
would only be made if the veteran is readmitted to the hospital or is
incarcerated. Need-based apportionments would no longer be adjudicated.
VA also proposes to amend the third sentence to remove the
reference to a competent veteran and delete the fourth sentence of
paragraph (e) as these refer to obsolete provisions of former 38 CFR
3.551(b) (as in effect prior to December 27, 2001). See 38 CFR
3.558(b). Finally, VA proposes to delete the reference to adjustments
in the second-to-last sentence of paragraph (e) as this proposed rule
would eliminate any adjustments.
Section 3.665 Incarcerated Beneficiaries and Fugitive Felons--
Compensation
In Sec. 3.665(e)(1), VA proposes to remove the last part of the
first sentence and to strike the remainder of the paragraph so the
paragraph reads, ``Compensation. All of the compensation not paid to an
incarcerated veteran may be apportioned to the veteran's surviving
spouse, child or children (in equal shares), or dependent parent or
parents (in equal shares).'' This will remove the requirement that the
person in this situation requesting an apportionment demonstrate a need
for the funds. In subparagraph (2), VA proposes amending the
subparagraph to remove the wording that restricts the amount of
apportionment that may be made based on the need of the surviving
spouse or the veteran's child or children.
In paragraph (h), VA proposes to remove the last sentence which
provides for an apportionee to reapply for apportionment when the
primary beneficiary is released from incarceration. VA would no longer
apportion benefits in these situations. Similarly, in paragraph (i)(1)
and (2), VA is proposing to remove the language which implies that
apportionment may be continued in some situations where the primary
beneficiary is released from incarceration. VA would no longer
apportion benefits in these situations because the full amount of the
benefit will be paid to the primary beneficiary. Once the veteran is
released from incarceration, apportionments would only be made if the
veteran is again incarcerated. Need-based apportionments will no longer
be adjudicated.
Section 21.330 Apportionment
Section 21.330 concerns the apportionment of a veteran's vocational
rehabilitation subsistence allowance. This section provides that an
apportionment will, if in order, be made in accordance with the
provisions of part 3. Consistent with 38 U.S.C. 5307 and current
regulations, apportionment of a veteran's vocational rehabilitation
subsistence allowance is not authorized if a veteran is incarcerated
and participating in a vocational rehabilitation program during
incarceration. Because there are no longer any circumstances where a
veteran's vocational rehabilitation subsistence allowance would be
apportioned, VA is removing this entire section.
VA proposes removing Sec. 21.330 and reserving the paragraph
number. VA proposes to stop apportioning vocational rehabilitation
subsistence allowances for the same reasons given above. Because VA is
proposing to discontinue all apportionments except in situations
specified in 38 U.S.C. 5307(a)(1) and 5313(b), VA is also proposing to
discontinue apportionment of the vocational rehabilitation subsistence
allowance. The current regulation prohibits apportioning the
subsistence allowance when a veteran has been convicted of a felony and
is incarcerated. Because VA is proposing to discontinue all vocational
rehabilitation subsistence allowance apportionments, there will not be
any exceptions.
Executive Orders 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, and other advantages; distributive impacts;
and equity). Executive Order 13563 (Improving Regulation and Regulatory
Review) emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
The Office of Information and Regulatory Affairs has determined that
this rule is not a significant regulatory action under Executive Order
12866.
The Regulatory Impact Analysis associated with this rulemaking can
be found as a supporting document at www.regulations.gov.
Regulatory Flexibility Act
The Secretary hereby certifies that this proposed rule will not
have a significant economic impact on a substantial number of small
entities as they are defined in the Regulatory Flexibility Act (5
U.S.C. 601-612). Therefore, pursuant to 5 U.S.C. 605(b), the initial
and final regulatory flexibility analysis requirements of 5 U.S.C. 603
and 604 do not apply. The certification is based on the fact that no
small entities or businesses determine entitlement to VA apportionment
payments.''
Unfunded Mandates
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C.
1532, that agencies prepare an assessment of anticipated costs and
benefits before issuing any rule that may result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any one year. This proposed rule will have no such effect
on State, local, and tribal governments, or on the private sector.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (at 44 U.S.C. 3507) requires
that VA consider the impact of paperwork and other information
collection burdens imposed on the public. Under 44 U.S.C. 3507(a), an
agency may not collect or sponsor the collection of information, nor
may it impose an information collection requirement unless it displays
a currently valid Office of Management and Budget (OMB) control number.
See also 5 CFR 1320.8(b)(3)(vi).
As required by the Paperwork Reduction Act of 1995 (at 44 U.S.C.
3507(d)), VA has submitted these information collection amendments to
OMB for its review. Notice of OMB approval for this information
collection will be published in a future Federal Register document.
This rule will impose the following amended information collection
requirements:
Description of respondents: The respondent population is composed
of individuals who are requesting an apportionment of a beneficiary's
award amount when that beneficiary is incarcerated or is deemed
incompetent and hospitalized at government expense.
Estimated frequency of responses: Most claimants will use this form
one time. However, the frequency may vary slightly for apportionees of
incarcerated veterans dependent on the number of times the primary
beneficiary is incarcerated. For a veteran that is
[[Page 57092]]
incompetent and institutionalized at government expense, a fiduciary
will be appointed. Therefore, apportionment claims other than the
initial claim will not be needed.
Estimated number of respondents: VA anticipates the annual
estimated numbers of respondents for 2900-0666 (VA Form 21-0788) as
follows:
2900-0666 (VA Form 21-0788)--In FY 2014, VA processed just over 800
hospital adjustments for veterans in receipt of benefits that were
hospitalized or in a nursing home or in receipt of domiciliary care at
VA expense, or whose payment rates were adjusted based on such care.
Fewer than 800 of these veterans were incompetent and met the
requirements for payment of an apportionment to a dependent. VA also
completed 15 apportionments for incarcerated veterans. The
approximately 815 claims completed each year is considerably fewer than
was estimated in 2005 when VA Form 21-0788 was first approved, as
published in the Federal Register, 70 FR 39866 on July 11, 2005. At
that time it was estimated that VA would receive approximately 25,000
apportionment claims per year.
OMB Control Number 2900-0666 (VA Form 21-0788) is a collection of
information for a particular apportionment of a benefit which is
currently required by VA in order for these claims to be processed and
adjudicated. Since VA requires these forms to be submitted when filing
for an apportionment of a particular benefit, VA does not expect an
increase in the annual number of respondents; VA anticipates a decrease
in the number of claims. In addition, VA is reducing the substance of
the collection of information on this OMB-approved collection of
information and is not increasing the respondent burden.
Estimated total annual reporting and recordkeeping burden: 2900-
0666 (VA Form 21-0788)--The annual burden is reduced from approximately
12,500 hours per year (25,000 claims at 30 minutes per claim form) to
about 203 hours per year (815 claims per year at 15 minutes per claim
form). The total estimated cost to respondents is reduced to $4,843.58
(203 hours x $23.86/hour). This submission does not involve any
recordkeeping costs.
This rulemaking is proposing to mandate the use of the VA form in
the processing and adjudication of apportionment claims. The proposed
amendment to Sec. 3.450 affects the estimated annual number of
respondents and consequently, the estimated total annual reporting and
recordkeeping burden, and reduces the effect of the existing collection
of information that has already been approved by OMB. The proposed use
of information and description of likely respondents will remain
unchanged for this form. The frequency of responses is less than the
previous number estimated. The estimated average burden per response is
reduced from 30 minutes per response to 15 minutes per response. VA
estimates the total incremental savings based on this revised
information collection to be $293,656.42 ($298,500 under the current
form--$4,834.58 for the revised form).
Methodology for Estimated Annual Number of Respondents for Affected
Forms
VA has formulated the estimated total number of annual responses
for apportionment claims by using the total number of apportionment
claims completed in FY 2014.
Catalog of Federal Domestic Assistance for 38 CFR Part 3
The Catalog of Federal Domestic Assistance numbers and titles for
the programs affected by this document are 64.102, Compensation for
Service-Connected Deaths for Veterans' Dependents; 64.104, Pension for
Non-Service-Connected Disability for Veterans; 64.105, Pension to
Veterans Surviving Spouses, and Children; 64.109, Veterans Compensation
for Service-Connected Disability; 64.110, Veterans Dependency and
Indemnity Compensation for Service-Connected Death.
Catalog of Federal Domestic Assistance for 38 CFR Part 21
The Catalog of Federal Domestic Assistance numbers and titles for
the programs that will be affected by this proposed rule are 64.116,
Vocational Rehabilitation for Disabled Veterans, and 64.128, Vocational
Training and Rehabilitation for Vietnam Veterans' Children with Spina
Bifida or Other Covered Defects.
List of Subjects
38 CFR Part 3
Administrative practice and procedure, Claims, Disability benefits,
Pensions, Veterans.
38 CFR Part 21
Administrative practice and procedure, Claims, Veterans, Vocational
education, Vocational rehabilitation.
Signing Authority
Denis McDonough, Secretary of Veterans Affairs, approved this
document on September 30, 2021, and authorized the undersigned to sign
and submit the document to the Office of the Federal Register for
publication electronically as an official document of the Department of
Veterans Affairs.
Jeffrey M. Martin,
Assistant Director, Office of Regulation Policy & Management, Office of
the Secretary, Department of Veterans Affairs.
For the reasons stated in the preamble, the Department of Veterans
Affairs proposes to amend 38 CFR parts 3 and 21 as follows:
PART 3--ADJUDICATION
Subpart A--Pension, Compensation, and Dependency and Indemnity
Compensation
0
1. The authority citation for part 3, subpart A continues to read as
follows:
Authority: 38 U.S.C. 501(a), unless otherwise noted.
Sec. 3.31 [Amended]
0
2. Amend Sec. 3.31(c)(3) introductory text by removing the words
``original or increased''.
Sec. 3.210 [Amended]
0
3. Amend Sec. 3.210(c)(1)(ii) by:
0
a. Removing the word ``apportionee,'' from the first sentence; and
0
b. Removing the last sentence.
Sec. 3.252 [Amended]
0
4. Amend Sec. 3.252 by removing the last sentence of paragraph (d).
0
5. Revise Sec. 3.400(e) to read as follows:
Sec. 3.400 General.
* * * * *
(e) Apportionment. (Sec. Sec. 3.450-3.455, 3.551). (1) General
rule. Except as provided in paragraph (2) of this section, the
effective date of an apportionment is the first day of the month after
the month in which VA receives an apportionment claim.
(2) Exceptions to general rule--(i) Claim for benefits is pending.
If a veteran or surviving spouse (primary beneficiary) has a claim for
benefits pending on the date that VA receives an apportionment claim,
the effective date of the apportionment will be the effective date of
the primary beneficiary's award, or the date the apportionment
claimant's entitlement arose, whichever is later.
(ii) Apportionment claimant not yet established as the
beneficiary's dependent. If VA receives an apportionment claim within 1
year of the award of benefits to the primary beneficiary and the
apportionment claimant has not been established as a dependent on the
primary beneficiary's
[[Page 57093]]
award, the effective date of the apportionment will be the effective
date of the primary beneficiary's award, or the date the apportionment
claimant's entitlement arose, whichever is later.
(iii) The primary beneficiary is incarcerated. The effective date
of an apportionment when the primary beneficiary is incarcerated is
specified in Sec. 3.665 or 3.666.
* * * * *
0
6. Revise Sec. 3.450 to read as follows:
Sec. 3.450 General apportionment.
(a) Applicability. Sections 3.450 through 3.459 apply to all claims
for apportionment VA receives on or after [EFFECTIVE DATE OF THE FINAL
RULE].
(b) Existing apportionments. All apportionments being paid as of
[EFFECTIVE DATE OF THE FINAL RULE] will continue to be paid until the
circumstances which provided entitlement to the apportionment no longer
exist, such as divorce of the veteran and spouse, death of the primary
beneficiary, death of an apportionee, or other such circumstances which
provided entitlement to the apportionment.
(c) Apportionment application. Claims for apportionment must be
submitted to VA on a form prescribed by the Secretary.
(Authority: 38 U.S.C. 501(a))
0
7. Revise Sec. 3.451 to read as follows:
Sec. 3.451 Apportionment claims.
(a) General--(1) Veteran. All or part of the pension or disability
compensation payable to any veteran may be apportioned if one of the
following conditions exist:
(i) For his or her spouse, child, or dependent parents if the
veteran is incompetent and is being furnished hospital treatment,
nursing home, or domiciliary care by the U.S., or any political
subdivision thereof.
(ii) The veteran is incarcerated and meets the conditions of Sec.
3.665 or 3.666.
(2) Surviving spouse. Where a child or children of a deceased
veteran is not living with the veteran's surviving spouse because the
surviving spouse is incarcerated and meets the conditions of Sec.
3.665 or 3.666, the dependency and indemnity compensation (DIC) or
pension otherwise payable to the surviving spouse may be apportioned to
the child or children. No apportionment shall be payable to a child who
did not reside with the surviving spouse prior to incarceration.
(b) Apportionment to a child on active duty. No apportionment of
disability or death benefits will be made or changed solely because a
child has entered active duty. If an apportionment is claimed for a
child on active duty on the date the apportionment claim is received by
VA, no apportionment will be made. If an apportionment is being paid to
the veteran's spouse and includes an amount for a child, and the child
enters active duty, no change in the apportionment will be made.
(c) Apportionment of death benefits. Any amounts payable for
children under Sec. Sec. 3.456, Eligibility for apportionment of
pension, and 3.458, Eligibility for apportionment of a surviving
spouse's dependency and indemnity compensation, will be equally divided
among the children.
(Authority: 38 U.S.C. 5307, 5502(d))
0
8. Revise Sec. 3.452 to read as follows:
Sec. 3.452 Veteran's benefits apportionable.
A veteran's benefits may be apportioned when the veteran is
receiving hospital treatment, nursing home, or domiciliary care
provided by the U.S. or a political subdivision, upon receipt by VA of
an application:
(a) Pending appointment of fiduciary. Pending the appointment of a
guardian or other fiduciary.
(b) Veteran receiving hospital, domiciliary, or nursing home care--
(1) Incompetent veteran--(i) Spouse or child. Where an incompetent
veteran without a fiduciary is receiving hospital treatment, nursing
home, or domiciliary care provided by the U.S. or a political
subdivision, his or her benefit may be apportioned for a spouse or
child.
(ii) Dependent parent. Where an incompetent veteran without a
fiduciary is receiving hospital treatment, nursing home, or domiciliary
care provided by the U.S. or a political subdivision, his or her
disability compensation may be apportioned for a dependent parent.
(2) Competent veteran--(i) Section 306 Pension. Where the amount of
Section 306 Pension payable to a married veteran is reduced to $50
monthly under Sec. 3.551, Reduction because of hospitalization, while
a veteran is receiving hospital, domiciliary, or nursing home care, an
apportionment may be made to such veteran's spouse. The amount of the
apportionment generally will be the difference between $50 and the
total amount of pension payable on December 31, 1978.
(ii) Improved Pension. Where the amount of Improved Pension payable
to a married veteran under 38 U.S.C. 1521(b) is reduced to $90 monthly
under Sec. 3.551, Reduction because of hospitalization, an
apportionment may be made to such veteran's spouse. The amount of the
apportionment generally will be the difference between $90 and the rate
payable if pension were being paid under 38 U.S.C. 1521(c), including
the additional amount payable under 38 U.S.C. 1521(e) if the veteran is
so entitled.
(Authority: 38 U.S.C. 501(a), 5307, 5502, 5503(a); Pub. L. 95-
588, section 306, 92 Stat. 2497)
0
9. Revise Sec. 3.453 to read as follows:
Sec. 3.453 Benefits not apportionable.
VA will not apportion benefits:
(a) Unless the spouse of a veteran files a claim for an
apportionment. If there is a child of the veteran, an apportionment
will not be authorized unless a claim for an apportionment is filed by
or for the child.
(b) To any beneficiary's dependent who is determined by VA to have
been guilty of mutiny, treason, sabotage, or rendering assistance to an
enemy of the U.S. or its allies.
(c) After September 1, 1959, if a veteran, spouse, child, or
dependent parent: or other primary beneficiary:
(1) Forfeited benefits due to fraud or a treasonable act; or
(2) Was convicted of subversive activity.
CROSS REFERENCE: Sec. Sec. 3.900, General, 3.901, Fraud, 3.902,
Treasonable acts, and 3.903, Subversive activity.
(Authority: 38 U.S.C. 5307, 6103(b), 6104(c), 6105(a))
0
10. Revise Sec. 3.454 to read as follows:
Sec. 3.454 Apportionment of pension.
(a) Disability pension. Disability pension will be apportioned to
the veteran's spouse, or child or children, or dependent parents.
(b) Death pension. Old-Law Death Pension, Section 306 Death Pension
and Improved Pension will be apportioned to the veteran's child or
children.
(Authority: 38 U.S.C. 5307)
0
11. Add Sec. 3.455 to read as follows:
Sec. 3.455 Apportionment of a surviving spouse's dependency and
indemnity compensation.
(a) Conditions under which apportionment may be made. The surviving
spouse's award of dependency and indemnity compensation (DIC) will be
apportioned where there is a child under 18 years of age and the
surviving spouse is incarcerated and meets the provisions of Sec.
3.665. DIC will not be apportioned under this paragraph (a) for a child
over age 18 years unless the child is permanently incapable of self-
support in accordance with the provisions of Sec. 3.57.
[[Page 57094]]
(b) Rates payable. The amount of apportionment of DIC will be
determined in accordance with the provisions of Sec. 3.665.
(Authority: 101(4)(A), 104(a), 5307)
Sec. Sec. 3.456 and 3.457 [Added and Reserved]
0
12. Add and reserve Sec. Sec. 3.456 and 3.457.
Sec. 3.456 Reserved.
Sec. 3.457 Reserved.
Sec. Sec. 3.458 through 3.461 [Removed and Reserved]
0
13. Remove and reserve Sec. Sec. 3.458 through 3.461.
Sec. Sec. 3.458-3.461 [Reserved]
0
14. Amend Sec. 3.556 as follows:
0
a. In paragraph (a)(1), remove the words ``unless it is determined that
apportionment for a spouse should be continued''; and
0
b. In paragraph (e):
0
1. Remove the words ``in the case of a competent veteran'' from the
second sentence, and remove the third sentence; and
0
2. Revise the fifth sentence.
The revision reads as follows:
Sec. 3.556 Adjustment on discharge or release.
* * * * *
(e) Regular discharge. * * * Where an apportionment was made under
Sec. 3.551(c), the apportionment will be discontinued effective the
day preceding the date of the veteran's release from the hospital,
unless an overpayment would result. In the excepted cases, the awards
to the veteran and apportionee will be adjusted as of date of last
payment. * * *
(Authority: 38 U.S.C. 5503)
* * * * *
0
15. Amend Sec. 3.665 by revising paragraphs (e), (h) and (i) to read
as follows:
Sec. 3.665 Incarcerated beneficiaries and fugitive felons--
compensation.
* * * * *
(e) Apportionment--(1) Compensation. All of the compensation not
paid to an incarcerated veteran may be apportioned to the veteran's
spouse, child or children (in equal shares), or dependent parent or
parents (in equal shares).
(2) DIC. All of the DIC not paid to an incarcerated surviving
spouse or other children not in the surviving spouse's custody may be
apportioned to another child or children. All of the DIC not paid to an
incarcerated child may be apportioned to the surviving spouse or other
children (in equal shares).
* * * * *
(h) Notice to dependent for whom apportionment granted. A dependent
for whom an apportionment is granted under this section shall be
informed that the apportionment is subject to immediate discontinuance
upon the incarcerated person's release or participation in a work
release or halfway house program.
(i) Resumption upon release--(1) No apportionment. If there was no
apportionment at the time of release from incarceration, the released
person's award shall be resumed the date of release from incarceration
if the Department of Veterans Affairs receives notice of release within
1 year following release; otherwise the award shall be resumed the date
of receipt of notice of release. If there was an apportionment award
during incarceration, it shall be discontinued date of last payment to
the apportionee upon receipt of notice of release of the incarcerated
person. Payment to the released person shall then be resumed at the
full rate from date of last payment to the apportionee. Payment to the
released person from date of release to date of last payment to the
apportionee shall be made at the rate which is the difference between
the released person's full rate and the sum of:
(i) The rate that was payable to the apportionee; and
(ii) The rate payable during incarceration.
(2) Apportionment to a dependent parent. An apportionment made to a
dependent parent under this section cannot be continued beyond the
veteran's release from incarceration unless the veteran is incompetent
and the provisions of Sec. 3.452(b)(1) are for application. When a
competent veteran is released from incarceration, an apportionment made
to a dependent parent shall be discontinued and the veteran's award
resumed as provided in paragraph (i)(1) of this section.
* * * * *
(Authority: 38 U.S.C. 501(a), 5313, 5313B; Sec. 506, Pub. L.
107-103, 115 Stat. 996-997)
PART 21--VOCATIONAL REHABILITATION AND EDUCATION
Subpart A--Vocational Rehabilitation and Employment Under 38 U.S.C.
Chapter 31
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16. The authority citation for part 21, subpart A continues to read as
follows:
Authority: 38 U.S.C. 501(a), chs. 18, 31, and as noted in
specific sections.
Sec. 21.330 [Removed and Reserved]
0
17. Remove and reserve Sec. 21.330.
Sec. 21.330 [Reserved]
[FR Doc. 2021-21816 Filed 10-13-21; 8:45 am]
BILLING CODE 8320-01-P
