October 21, 2005
38 CFR Part 5
Dependency and Indemnity
Compensation Benefits; Proposed Rule
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61326 Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules
DEPARTMENT OF VETERANS 2001 ‘‘VA Claims Processing Task Dependency and Indemnity Compensation—
AFFAIRS Force: Report to the Secretary of Eligibility Requirements and Payment Rules
Veterans Affairs.’’ The Task Force for Parents
38 CFR Part 5 recommended that the Compensation 5.530—Eligibility for, and payment of,
and Pension regulations be rewritten parents’ dependency and indemnity
RIN 2900–AL89 compensation.
and reorganized in order to improve
5.531 General income rules.
Dependency and Indemnity VA’s claims adjudication process. 5.532 Deductions from income.
Compensation Benefits Therefore, the Project began its efforts 5.533 Exclusions from income.
by reviewing, reorganizing and 5.534 When VA counts parents’ income.
AGENCY: Department of Veterans Affairs. redrafting the content of the regulations 5.535 Adjustments to parents’ DIC when
ACTION: Proposed rule. in 38 CFR part 3 governing the income is less than anticipated.
compensation and pension program of 5.536 Parents’ dependency and indemnity
SUMMARY: The Department of Veterans the Veterans Benefits Administration. compensation rates.
Affairs (VA) has published a series of These regulations are among the most 5.537 Payment intervals.
Notices of Proposed Rulemaking difficult VA regulations for readers to Effective Dates
(NPRM)s setting out new proposed understand and apply.
regulations governing VA Note: For information concerning proposed
Once rewritten, the proposed §§ 5.550 through 5.572, see 69 FR 59072 (Oct.
compensation, pension, burial and regulations will be published in several
related benefits that would be located in 1, 2004).
portions for public review and 5.573 Effective date for dependency and
a new part of the Code of Federal comment. This is one such portion. It
Regulations. This NPRM adds proposed indemnity compensation rate
includes proposed rules regarding DIC adjustments when an additional survivor
regulations concerning dependency and for a veteran’s surviving spouse, files an application.
indemnity compensation (DIC) for a children, and parents and proposed 5.574 Effective dates of awards and
veteran’s surviving spouse, children, rules relating to proof of death and discontinuances of special monthly
and parents and general rules relating to service-connected cause of death. After dependency and indemnity
proof of death and service-connected review and consideration of public compensation.
cause of death to that proposed new Omission of rule in 38 CFR 3.22(h).
comments, final versions of these Endnote Regarding Amendatory Language
part. The intended effect of the proposed regulations will ultimately be
proposed revisions is to assist claimants Paperwork Reduction Act
published in a new part 5 in 38 CFR. Regulatory Flexibility Act
and VA personnel in locating and
Outline Executive Order 12866
understanding these provisions. Unfunded Mandates
DATES: Comments must be received by Overview of New Part 5 Organization Catalog of Federal Domestic Assistance
VA on or before December 20, 2005. Overview of Proposed Subpart G Numbers
Organization List of Subjects in 38 CFR Part 5
ADDRESSES: Written comments may be
Table Comparing Current Part 3 Rules With
submitted by: mail or hand-delivery to Proposed Part 5 Rules Overview of New Part 5 Organization
Director, Regulations Management Content of Proposed Regulations
(00REG1), Department of Veterans We plan to organize the part 5
Affairs, 810 Vermont Ave., NW., Room General Provisions regulations so that all provisions
1068, Washington, DC 20420; fax to 5.500 Proof of death. governing a specific benefit are located
(202) 273–9026; e-mail to 5.501 Proving death by other means. in the same subpart, with general
VAregulations@va.gov or through http:// 5.502 Proving death after 7 years of provisions pertaining to all
continuous, unexplained absence. compensation and pension benefits also
5.503 Establishing the date of death. grouped together. We believe this
should indicate that they are submitted 5.504 Service-connected cause of death.
in response to ‘‘RIN 2900–AL89.’’ All organization will allow claimants,
comments received will be available for Dependency and Indemnity Compensation— beneficiaries, and their representatives,
public inspection in the Office of General as well as VA personnel, to find
Regulation Policy and Management, 5.510 Dependency and indemnity information relating to a specific benefit
Room 1063B, between the hours of 8 compensation—basic entitlement. more quickly than the organization
a.m. and 4:30 p.m., Monday through 5.511 Special monthly dependency and provided in current part 3.
indemnity compensation. The first major subdivision would be
Friday (except holidays). Please call 5.512 Eligibility for death compensation or ‘‘Subpart A—General Provisions.’’ It
(202) 273–9515 for an appointment. death pension instead of dependency would include information regarding
FOR FURTHER INFORMATION CONTACT: Clay and indemnity compensation. the scope of the regulations in new part
Witt, Chief, Regulations Rewrite Project 5, delegations of authority, general
Dependency and Indemnity Compensation—
(00REG2), Department of Veterans Eligibility Requirements and Payment Rules definitions, and general policy
Affairs, 810 Vermont Avenue, NW., for Surviving Spouses and Children provisions for this part.
Washington, DC 20420, (202) 273–9515. ‘‘Subpart B—Service Requirements for
5.520 Dependency and indemnity
SUPPLEMENTARY INFORMATION: The compensation—time of marriage Veterans’’ would include information
Secretary of Veterans Affairs has requirements for surviving spouses. regarding a veteran’s military service,
established an Office of Regulation 5.521 [Reserved] including the minimum service
Policy and Management to provide 5.522 Dependency and indemnity requirement, types of service, periods of
centralized management and compensation benefits for survivors of war, and service evidence requirements.
coordination of VA’s rulemaking certain veterans rated totally disabled at This subpart was published as proposed
process. One of the major functions of time of death—offset of wrongful death
on January 30, 2004. See 69 FR 4820.
this office is to oversee a Regulation 5.523 [Reserved]
‘‘Subpart C—Adjudicative Process,
Rewrite Project (the Project) to improve 5.524 Awards of dependency and General’’ would inform readers about
the clarity and consistency of existing indemnity compensation benefits to claims and benefit application filing
VA regulations. The Project responds to children when there is a retroactive procedures, VA’s duties, rights and
a recommendation made in the October award to a schoolchild. responsibilities of claimants and
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Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules 61327
beneficiaries, general evidence two separate NPRMs due to its size. The future Notice of Proposed Rulemaking]’’
requirements, and general effective portion concerning accrued benefits, where the part 5 regulation citation
dates for new awards, as well as special rules applicable upon the death would be placed.
revision of decisions and protection of of a beneficiary, and several effective In connection with this rulemaking,
VA ratings. This subpart will be date rules, was published as proposed VA will accept comments relating to a
published as three separate NPRMs due on October 1, 2004. See 69 FR 59072. prior rulemaking issued as a part of the
to its size. The first, concerning the The portion concerning DIC benefits Project, if the matter being commented
duties of VA and the rights and and general provisions relating to proof on relates to both Notices of Proposed
responsibilities of claimants and of death and service-connected cause of Rulemaking. VA will provide a separate
beneficiaries, was published on May 10, death is the subject of this NPRM. opportunity for public comment on each
2005. See 70 FR 24680. ‘‘Subpart H—Special and Ancillary segment of proposed part 5 regulations
‘‘Subpart D—Dependents and Benefits for Veterans, Dependents, and before adopting a final version of part 5.
Survivors’’ would inform readers how Survivors’’ would pertain to special and
VA determines whether an individual is ancillary benefits available, including Overview of Proposed Subpart G
a dependent or a survivor for purposes benefits for children with various birth Organization
of determining eligibility for VA defects. As its title, ‘‘Dependency and
benefits. It would also provide the ‘‘Subpart I—Benefits for Filipino Indemnity Compensation, Accrued
evidence requirements for these Veterans and Survivors’’ would pertain Benefits, Death Compensation Benefits,
determinations. to the various benefits available to and Special Rules Applicable Upon
‘‘Subpart E—Claims for Service Filipino veterans and their survivors. Death of a Beneficiary,’’ suggests,
Connection and Disability ‘‘Subpart J—Burial Benefits’’ would proposed subpart G will address a broad
Compensation’’ would define service- pertain to burial allowances. range of VA death benefits. Because of
connected compensation, including ‘‘Subpart K—Matters Affecting its length, subpart G will be published
direct and secondary service Receipt of Benefits’’ would contain in two separate NPRMs. This NPRM
connection. This subpart would inform provisions regarding bars to benefits, pertains to those regulations governing
readers how VA determines entitlement forfeiture of benefits, and renouncement DIC benefits and general provisions
to service connection. The subpart of benefits. relating to proof of death and service-
would also contain those provisions ‘‘Subpart L—Payments and connected cause of death. Although
governing presumptions related to Adjustments to Payments’’ would these regulations have been
service connection, rating principles, include general rate-setting rules, substantially restructured and rewritten
and effective dates, as well as several several adjustment and resumption for greater clarity and ease of use, most
special ratings. This subpart will be regulations, and election-of-benefit of the basic concepts contained in these
published as three separate NPRMs due rules. Because of its size, proposed proposed regulations are the same as in
to its size. The first, concerning regulations in subpart L will be their existing counterparts in 38 CFR
presumptions related to service published in two separate NPRMs. part 3. However, a few substantive
connection, was published on July 27, The final subpart, ‘‘Subpart M— changes are proposed.
2004. See 69 FR 44614. Apportionments and Payments to
‘‘Subpart F—Nonservice-Connected Fiduciaries or Incarcerated Table Comparing Current Part 3 Rules
Disability Pensions and Death Beneficiaries,’’ would include With Proposed Part 5 Rules
Pensions’’ would include information regulations governing apportionments, The following table shows the
regarding the three types of nonservice- benefits for incarcerated beneficiaries, relationship between the current
connected pension: Improved Pension, and guardianship. regulations in part 3 and the proposed
Old-Law Pension, and Section 306 Some of the regulations in this NPRM regulations contained in this NPRM:
Pension. This subpart would also cross-reference other compensation and
include those provisions that state how pension regulations. If those regulations Based in whole or in
Proposed part 5 sec-
to establish entitlement to each pension, have been published in this or earlier tion or paragraph part on 38 CFR part 3
and the effective dates governing each NPRMs, we cite the proposed part 5 section or paragraph
pension. This subpart will be published section. We also include, in the relevant
5.500(a) ..................... New.
as two separate NPRMs due to its size. portion of the Supplementary 5.500(b) ..................... 3.211(a).
The portion concerning Old-Law Information, the Federal Register page 5.500(c)(1) ................. 3.211(d)(1).
Pension, Section 306 Pension, and where a proposed part 5 section 5.500(c)(2) ................. 3.211(d)(2).
elections of Improved Pension was published in an earlier NPRM may be 5.500(c)(3) ................. 3.211(d)(3).
published as proposed on December 27, found. However, where a regulation 5.500(d) ..................... 3.211(b).
2004. See 69 FR 77578. proposed in this NPRM would cross- 5.500(e) ..................... 3.211(c).
‘‘Subpart G—Dependency and reference a proposed part 5 regulation 5.501(a) ..................... New.
5.501(b) ..................... 3.211(e), first sen-
Indemnity Compensation, Death that has not yet been published, we cite
Compensation, Accrued Benefits, and to the current part 3 regulation that 5.501(c) ..................... 3.211(e), second sen-
Special Rules Applicable Upon Death of deals with the same subject matter. The tence.
a Beneficiary’’ would contain current part 3 section we cite may differ 5.501(d) ..................... 3.211(f) and (g).
regulations governing claims for DIC; from its eventual part 5 counterpart in 5.502(a) ..................... 3.212(a).
death compensation; accrued benefits; some respects, but we believe this 5.502(b) ..................... 3.212(b).
benefits awarded, but unpaid at death; method will assist readers in 5.502(c) ..................... 3.212(b) and (c).
and various special rules that apply to understanding these proposed 5.503(a) ..................... New.
the disposition of VA benefits, or regulations where no part 5 counterpart 5.503(b) ..................... 3.212(a).
5.503(c) ..................... New.
proceeds of VA benefits, when a has yet been published. If there is no 5.504(a) ..................... New.
beneficiary dies. This subpart would part 3 counterpart to a proposed part 5 5.504(b) ..................... New.
also include related definitions, regulation that has not yet been 5.504(c)(1) ................. New.
effective-date rules, and rate-of-payment published, we have inserted 5.504(c)(2) ................. 3.312(c)(3) and (c)(4).
rules. This subpart will be published as ‘‘[regulation that will be published in a 5.510(a) ..................... 3.5(a).
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61328 Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules
Based in whole or in Based in whole or in Content of Proposed Regulations
Proposed part 5 sec- Proposed part 5 sec-
part on 38 CFR part 3 part on 38 CFR part 3
tion or paragraph section or paragraph tion or paragraph section or paragraph General Provisions
5.500 Proof of death.
5.510(b), except for New. 5.534(a) ..................... 3.251(b) and Intro-
(b)(1)(ii). duction to 3.260. Proposed § 5.500 is a reorganization of
5.510(b)(1)(ii) ............ 3.5(b). 5.534(b) ..................... 3.260(c), (d), and (f). rules in current § 3.211(a) through (d),
5.510(c) ..................... 3.5(d). 5.534(c) ..................... 3.260(f). which describe the kinds of evidence
5.510(d) ..................... 3.251(a)(1). 5.535 ......................... 3.660(b), Introduction that would suffice as proof of death
5.511(a) ..................... 3.351(a)(3), (a)(4), and (b)(1). applicable in most cases. Section
(b), and (c)(3). 5.536(a) ..................... 3.25. 5.500(a) is new. Section 5.500(a)(1)
5.511(b) ..................... 3.351(c)(1) and (c)(2). 5.536(b) ..................... 3.25, 3.27(b) and (d). states the purpose of § 5.500. Section
5.511(c) ..................... 3.351(e). 5.536(c) ..................... 3.251(a)(2).
5.512 ......................... 3.5(c).
5.500(a)(2) provides a rule for applying
5.536(d) ..................... 3.251(a)(4). § 5.500, specifically that VA will accept
5.520(a) ..................... New.
5.536(e) ..................... 3.251(a)(5). the evidence described in any relevant
5.520(b)(1)(i) ............. Introduction to 3.54.
5.520(b)(1)(ii) ............ 3.54(c)(2). 5.536(f)(1) ................. 3.25(a), (c), and (d). paragraph of § 5.500 as proof of death.
5.520(b)(1)(iii) ............ 3.54(c)(3). 5.536(f)(2) ................. 3.25(e). This rule reflects current VA practice
5.520(b)(1)(iv) ........... 3.54(c)(1) 5.536(g) ..................... 3.260(f). and clarifies that the various methods of
5.520(b)(2) ................ New. 5.536(h) ..................... 3.704(b). proving death set out in § 5.500 are
5.521 ......................... Reserved. 5.537 ......................... Introduction to 3.30 alternatives.
5.522(a) and (b) ........ 3.22(e). and 3.30(e). Current § 3.211(d) describes various
5.522(c)(1) ................. New. 5.573(a) ..................... Introduction to forms of proof of death VA will accept
5.522(c)(2) ................. 3.22(g). 3.650(a).
when an individual dies abroad. Section
5.522(c)(3) ................. New. 5.573(b)(1) ................ 3.650(a)(1).
5.522(c)(4) ................. 3.22(f). 3.211(d)(3) lists ‘‘[a]n official report of
5.573(b)(2) ................ 3.650(a)(2).
5.522(c)(5) ................. 3.22(g). death from the head of the department
5.573(c) ..................... 3.650(b).
5.522(d) ..................... 3.22(g). 5.573(d) ..................... Unnumbered para-
concerned, where the deceased person
5.523 ......................... Reserved. graph in 3.650(a). was, at the time of death, a civilian
5.524(a), except for 3.650(c)(2). 5.573(e) ..................... Introduction to employee of such department.’’ We
(a)(1). 3.650(a). propose instead to describe this
5.524(a)(1) ................ 3.650(c)(1). 5.574(a) ..................... 3.402(c) and 3.404. acceptable form of proof of death, in
5.524(b) and (c) ........ 3.650(c)(1). § 5.500(c)(3), as ‘‘[a]n official report of
5.574(b)(1) ................ 3.502(e)(1) and
5.530 ......................... New. death of a civilian employee of the U.S.
5.531(a) ..................... 3.251(b), Introduction
5.574(b)(2) ................ New. Government from the employing U.S.
5.531(b)(1) ................ Introduction to Government entity.’’ This revision
3.262(a). Readers who use this table to compare serves to clarify that the rule applies to
5.531(b)(2)(i) ............. 3.261(a)(7). existing regulatory provisions with the a U.S. Government employee and that it
5.531(b)(2)(ii) ............ 3.261(a)(26). proposed provisions, and who observe a is not limited to employing Federal
5.531(b)(2)(iii) ............ 3.262(h). entities that are cabinet departments.
substantive difference between them,
5.531(c) ..................... Introduction to Further, reports of death need not
3.262(b) and should consult the text that appears
necessarily come from the head of the
3.262(b)(1). later in this document for an employing entity. VA’s concern is that
5.531(d)(1) and (d)(2) 3.262(k)(1) and (k)(2). explanation of significant changes in such a report is an authentic official
5.531(d)(3) ................ New. each regulation. Not every paragraph of report of the Federal entity. Implicit in
5.531(d)(4) ................ 3.262(k)(1). every current part 3 section regarding
5.531(e) ..................... 3.260(b). the requirement for an official report is
the subject matter of this rulemaking is that the report will have been issued by
5.532(a) ..................... 3.262(a)(2) and
accounted for in the table. In some a person authorized to issue it, but that
5.532(b) ..................... 3.262(j)(4). instances other portions of the part 3 person will not necessarily be the
5.532(c) ..................... 3.262(o) and (p). sections that are addressed in these person who is the head of the
5.532(d) ..................... Introduction to proposed regulations will appear in employing entity.
3.262(l), 3.262(l)(4). subparts of part 5 that are being
5.532(e) ..................... 3.261(a)(22), and 5.501 Proving death by other means.
published separately for public
3.262(a)(1). comment. For example, a reader might Proposed § 5.501 is based on current
5.533(a) ..................... 3.261(a)(12). § 3.211(e) through (g) and long-standing
5.533(b) ..................... 3.262(c), (d), and (f). find a reference to paragraph (a) of a
5.533(c) and (d) ........ 3.261(a)(20). part 3 section in the table, but no VA practice. It states the rules on how
5.533(e) ..................... 3.262(f). reference to paragraph (b) of that section to prove death where the evidence
5.533(f) ...................... 3.261(a)(13). because paragraph (b) will be addressed described in proposed § 5.500 is not
5.533(g) ..................... Introduction to in a separate NPRM. The table also does available. It includes new § 5.501(a),
3.262(e), (e)(4), (f), not include provisions from part 3 which describes the scope of the
(g), (i)(2), (j)(1),
regulations that will not be repeated in section.
(j)(2), and (j)(4). Proposed § 5.501(d)(2) clarifies how
5.533(h) ..................... Introduction to part 5. Such provisions are discussed
VA determines whether death has
3.262(t), (t)(1). specifically under the appropriate part 5
occurred in those cases where a body
5.533(i) ...................... 3.262(k)(5). heading in this preamble. Readers are
has not been recovered, or the body
5.533(j) ...................... 3.261(a)(31). invited to comment on the proposed
5.533(k) ..................... 3.262(w).
cannot be identified. Current § 3.211(f)
part 5 provisions and also on our provides that ‘‘[w]here it is indicated
5.533(l) through (n) ... New. proposals to omit those part 3
5.533(o) ..................... 3.262(a)(2), last sen- that the veteran died under
provisions from part 5. circumstances which precluded
5.533(p) ..................... 3.261(a)(22). recovery or identification of the body,
5.533(q) ..................... New. the fact of death should be established
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Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules 61329
by the best evidence, which from the 5.503 Establishing the date of death. determines whether a veteran’s death
nature of the case must be supposed to The fact of death, that is that a person was service connected.
exist.’’ The ‘‘best evidence’’ requirement Proposed paragraph (b) defines
died, may be established through the
is not explained. However, it is long- ‘‘service-connected disability’’ for
evidence described in §§ 5.500 and
standing VA practice to consider purposes of proposed § 5.504. An
5.501, but that evidence may not show
statements from the claimant and other examination of 38 U.S.C. 1310(a), the
exactly when death occurred. The exact
witnesses describing the facts that led basic authorizing statute for the award
date of death may never be known when
them to believe that the person in of DIC for service-connected deaths, is
the fact of death is established using the
question died. We also note that this instructive. The statute provides:
presumption in § 5.502 when there has
portion of the regulation should provide (a) When any veteran dies after December
been a 7-year unexplained absence.
information regarding what to do when 31, 1956, from a service-connected or
Proposed § 5.503 sets out rules for
the death of any person, not just a compensable disability, the Secretary shall
establishing the date of death for VA pay dependency and indemnity
veteran, is relevant and the body cannot
purposes in such circumstances. compensation to such veteran’s surviving
be recovered or identified. Proposed
The current regulation concerning the spouse, children, and parents. The standards
§ 5.501(d)(2) addresses these issues by
7-year-absence death presumption, and criteria for determining whether or not
broadening the scope of this portion of
§ 3.212(a), refers to an individual who a disability is service-connected shall be
the regulation to cover the death of any those applicable under chapter 11 of this
has been absent ‘‘from his or her home
person whose body cannot be recovered title.
and family for a period of 7 years or
or identified and by clarifying the kinds
more.’’ It provides that in such cases Chapter 11 of Title 38, United States
of evidence VA considers in this
death occurred ‘‘as of the expiration of Code, referenced in 38 U.S.C. 1310(a),
Current § 3.211(f) refers to ‘‘an such period.’’ It is not entirely clear contains the provisions for determining
official’’ authorized to approve a finding from the language used whether the ‘‘or whether living veterans are entitled to
of the fact of death. Proposed more’’ is part of ‘‘such period.’’ VA’s service connection for disabilities. In
§ 5.501(d)(3) clarifies that this means an practice has been to presume that death other words, VA determines whether a
authorized VA official. occurred seven years after the person disability is service connected in death
Current § 3.211(e) requires the was last known to be alive in cases cases using the same principles it
submission of affidavits to prove the fact where the fact of death is established applies in determining service
of death. In line with VA’s current under current § 3.212 (proposed connection for the disabilities of living
practice of accepting somewhat less § 5.502). This date of death presumption veterans. Therefore, § 5.504(b)(1) defines
formal means of proof in most instances, is set out more clearly in proposed service-connected disability, in the
proposed § 5.501 permits the § 5.503(b). context of service-connected cause of
submission of either certified statements In cases where the fact of death is death, as ‘‘(i) * * * a disability that was
or affidavits. (We note that ‘‘certified proven by the evidence described in service connected at the time of the
statement’’ will be defined in subpart A proposed § 5.500 or § 5.501, and not the veteran’s death, or (ii) [a] disability that
of part 5, which will be the subject of 7-year-absence rule, but the exact date is service connectable under the
a separate NPRM.) of death is unknown, long-standing VA provisions of subpart E of this part,
practice is that the date of death can be ‘Claims for service connection and
5.502 Proving death after 7 years of established as the date the deceased disability compensation.’ ’’ (Subpart E
continuous, unexplained absence. person was last seen alive, the date the will be the subject of a separate NPRM.)
Proposed § 5.502 provides rules body was found, or any time between To preclude an interpretation that a
regarding how a claimant may establish those dates, depending on the traumatic death in service was so
the fact of a person’s death if that person circumstances. Proposed § 5.503(c) sudden that it did not produce a
has been missing for 7 years or more incorporates and clarifies this practice. ‘‘disability’’ before death and that the
and his or her absence is unexplained. It includes standards for setting the date death was therefore not service-
It is derived from current § 3.212. of death when the body of the deceased connectable, we also propose to state in
Current § 3.212 includes a is found and a presumption that, if no § 5.504(b)(1)(ii) that ‘‘[f]or purposes of
requirement that ‘‘satisfactory evidence’’ identifiable body is found, the date of this section, VA will deem a sudden
be produced to show a person’s death is the date the deceased was last death in service from trauma to have
continued and unexplained absence. In known to be alive in the absence of been preceded by disability from the
order to clarify what evidence is evidence to the contrary. trauma.’’
necessary to establish the death of a There is an important exception to the
5.504 Service-connected cause of
missing person, we propose to replace principle stated in proposed
the phrase ‘‘satisfactory evidence’’ with § 5.504(b)(1)(i) that (for purposes of
‘‘competent, credible evidence’’ because The next regulation in this NPRM determining service-connected causes of
this term more appropriately describes concerns how VA determines whether a death) service-connected disabilities
the qualities that make such evidence veteran’s death was service connected. include disabilities that were service
‘‘satisfactory.’’ VA will propose a This determination is important to a connected at the time of the veteran’s
definition of ‘‘competent evidence’’ in a veteran’s survivors because a veteran’s death. Congress has precluded VA from
separate NPRM. ‘‘Credible’’ evidence is service-connected death is a foundation granting service connection for the
just evidence that is believable. for awarding several types of VA cause of a veteran’s death in some cases,
(‘‘Credible testimony is that which is benefits. For example, see proposed even though the disability in question
plausible or capable of being believed.’’ § 5.510, ‘‘Dependency and indemnity may have been service connected at the
Caluza v. Brown, 7 Vet. App. 498, 511 compensation—basic entitlement,’’ and time of the veteran’s death.
(1995).) § 3.1600(a) (concerning the service- One such case results from 38 U.S.C.
All other proposed revisions to the connected burial allowance). Proposed 1103(a), which provides that
language of § 3.212 are structural in paragraph (a) of § 5.504 sets this context ‘‘[n]otwithstanding any other provision
nature and do not change the substance and explains that the purpose of the of law, a veteran’s disability or death
of the regulation. section is to provide rules on how VA shall not be considered to have resulted
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61330 Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules
from personal injury suffered or disease Cir. 2001) (concluding that 38 U.S.C. injuries sustained in the accident or fire,
contracted in the line of duty in the 1110 does not preclude compensation but the evidence might show that the
active military, naval, or air service for for an alcohol or drug abuse disability impaired mobility due to the service-
purposes of this title on the basis that secondary to a service-connected connected disabilities caused the
it resulted from injury or disease disability). However, we anticipated accident in one case and prevented the
attributable to the use of tobacco that we will address that issue in the veteran from escaping from the fire in
products by the veteran during the part 5 equivalent of § 3.301(d) and that the other. In both cases, the veteran
veteran’s service.’’ See also Kane v. part 5 regulation would be the one would not have died in the absence of
Principi, 17 Vet. App. 97, 101 (2003) cross-referenced in the final version of the service-connected disability and
(‘‘Thus, the plain language of 38 U.S.C. proposed 5.504. determining that the death is service
§ 1103 expresses the Congressional Proposed § 5.504(c) addresses the connected would be appropriate under
intent to no longer award service kind of link that must exist between a the proposed test.
connection for a veteran’s death that service-connected disability and the However, there are circumstances
results from a service connected disease veteran’s death in order for VA to where death would be service
that was ‘capable of being attributed’ to determine that the death was service connected under the provisions in
the use of tobacco products during the connected. It is based on the provisions current § 3.312(c) even though such
veteran’s service.’’). of current § 3.312(c). Current § 3.312(c) death would not satisfy the ‘‘in the
Another case in which service distinguishes between ‘‘principal’’ and absence of’’ test described above.
connection may not be granted for the ‘‘contributory’’ causes of death and Specifically, current § 3.312(c)(3) and
cause of death based on a disability includes elaborate provisions (4) provide:
service connected at the time of death concerning ‘‘contributory’’ causes of
(3) Service-connected diseases or injuries
is the result of 38 U.S.C. 105(a) which death. We believe that these provisions involving active processes affecting vital
provides, in part, that ‘‘[a]n injury or can be simplified considerably. organs should receive careful consideration
disease incurred during active military, The causation question can be as a contributory cause of death, the primary
naval, or air service will be deemed to adjudicated using two relatively simple cause being unrelated, from the viewpoint of
have been incurred in line of duty and standards that better reflect VA’s long- whether there were resulting debilitating
not the result of the veteran’s own standing practice and interpretation of effects and general impairment of health to
the authorizing statutes. The first an extent that would render the person
misconduct when the person on whose materially less capable of resisting the effects
account benefits are claimed was, at the standard would be to determine if the
of other disease or injury primarily causing
time the injury was suffered or disease veteran’s death would have occurred in death. Where the service-connected
contracted, in active military, naval, or the absence of the service-connected condition affects vital organs as
air service, whether on active duty or on disability, or the combined effects of distinguished from muscular or skeletal
authorized leave, unless such injury or multiple service-connected disabilities. functions and is evaluated as 100 percent
disease was a result of the person’s own If the answer is that the death would not disabling, debilitation may be assumed.
have occurred in the absence of the (4) There are primary causes of death
willful misconduct or abuse of alcohol which by their very nature are so
or drugs.’’ See also VAOPGCPREC 11– service-connected disability, or
disabilities, service connection should overwhelming that eventual death can be
96, 61 FR 66748, 66750 (1996), which anticipated irrespective of coexisting
held that ‘‘[s]ection 8052 of the be awarded for the cause of the veteran’s
conditions, but, even in such cases, there is
Omnibus Budget Reconciliation Act of death. for consideration whether there may be a
Answering this ‘‘in the absence of’’ reasonable basis for holding that a service-
1990, Pub. L. No. 101–508, § 8052, 104
question should resolve a broad connected condition was of such severity as
Stat. 1388, 1388–351, applicable to
spectrum of cases. Sometimes the to have a material influence in accelerating
claims filed after October 31, 1990,
answer to the question will depend death. In this situation, however, it would
precludes an injury or disease that is a
upon medical evidence. For example, if not generally be reasonable to hold that a
result of a person’s own abuse of alcohol service-connected condition accelerated
the medical evidence (such as autopsy
or drugs from being considered incurred death unless such condition affected a vital
reports, reports of the veteran’s final
in line of duty and, consequently, organ and was of itself of a progressive or
hospitalization, etc.) shows that the
precludes resulting disability or death veteran died of a particular kind of debilitating nature.
from being considered service cancer, then clearly the veteran would While stated in different ways, the
connected.’’ not have died in the absence of that basic concept in these provisions is the
We propose to provide for these same. Even though a veteran may have
cancer. If that cancer was service
Congressionally mandated exceptions, died of a nonservice-connected
connected or service connectable, the
and any such exceptions that may arise disability, VA may grant service
death should be service connected.
in the future, by stating the following in The ‘‘in the absence of’’ standard connection for the cause of death if the
proposed § 5.504(b)(2): should also work well in other types of service-connected disability was so
(2) Exception. For purposes of this section, cases that may involve fact finding debilitating that death was materially
‘‘service-connected disability’’ does not beyond the purely medical realm, such hastened. VA proposes to preserve this
include a disability that was service as cases involving service-connected or concept in § 5.504(c)(2), together with
connected at the time of the veteran’s death
if the law in effect at the time of a survivor’s
service-connectable disabilities that the presumption that such a degree of
claim precludes VA from establishing service produce impairment of balance or debilitation is presumed where a
connection for the cause of the veteran’s physical mobility that plays a role in the service-connected disability rated as
death. See § 3.300 of this chapter, ‘‘Claims death of a veteran. For example, a 100% disabling affects vital organs.
based on the effects of tobacco products,’’ veteran with a service-connected leg ‘‘Vital organs’’ are also defined in this
and § 3.301(d) of this chapter ‘‘Line of duty; amputation might have died as the proposed paragraph as ‘‘those organs
abuse of alcohol or drugs.’’ result of a slip and fall accident. A necessary to sustain life, including the
We note that current § 3.301(d), cross- veteran who was bedridden due to the heart, lungs, central nervous system,
referenced in proposed § 5.504(b)(2), service-connected residuals of a stroke liver, and kidneys.’’ (‘‘The word ‘vital’
does not yet include provisions based might have died in a home fire. The means necessary to life or essential.’’
on Allen v. Principi, 237 F.3d 1368 (Fed. literal cause of death might be the Federal Tel. & Radio Corp. v. Associated
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Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules 61331
Tel. & Tel. Co., 169 F.2nd 1012, 1015 compensation rules in a portion of 5.511 Special monthly dependency
(3rd Cir. 1948). ‘‘[V]ital * * * 1. Of or subpart G dealing with death and indemnity compensation.
characteristic of life: vital processes. 2. compensation (published as part of a
Necessary to the continuation of life; life separate NPRM, see 69 FR 59072, Oct. Proposed § 5.511, based on current 38
sustaining: vital functions.’’ The 1, 2004) and include only essential CFR 3.351(a)(3), (a)(4), (b), (c), and (e),
American Heritage Dictionary of the information about the relationship provides for payment of increased DIC
English Language 1433 (New College between DIC and death compensation in benefits to a surviving spouse or parent
Ed. 1976). ‘‘[V]ital * * * necessary to or VA’s DIC regulations, such as proposed based on the need for regular aid and
pertaining to life.’’ Dorland’s Illustrated § 5.510. attendance or being permanently
Medical Dictionary 1834 (28th ed. Specifically, we state in proposed housebound.
1994).) § 5.510(b)(1)(ii) that ‘‘DIC is not payable
unless the service-connected death 5.512 Eligibility for death
Dependency and Indemnity occurred after December 31, 1956, compensation or death pension instead
Compensation—General except in the case of certain individuals of dependency and indemnity
5.510 Dependency and indemnity receiving or eligible to receive death compensation.
compensation—basic entitlement. compensation who elect to receive DIC
in lieu of death compensation.’’. The Proposed § 5.512 explains that VA
Proposed § 5.510 is the first of several few users seeking more information may not pay death compensation or
sequential proposed regulations about death compensation and the death pension to a person eligible for
explaining DIC benefits for a veteran’s election of DIC in lieu of death DIC based upon a death occurring after
surviving spouse, children, and parents. compensation would be referred to December 31, 1956, subject to the right
It serves as an introduction to the DIC other sections that address those topics. of a surviving spouse to elect death
program and outlines basic In keeping with the simplification of pension in lieu of DIC. This proposed
requirements for DIC entitlement. It § 5.510 in comparison with current section is based on current § 3.5(c),
includes provisions from current 38 § 3.5, we have intentionally not repeated which is, in turn, based on 38 U.S.C.
CFR 3.5(a), (b), and (d). in § 5.510 some of the details in current 1317, ‘‘Restriction on payments under
Proposed paragraph (a) defines DIC § 3.5(b)(2) concerning entitlement to this chapter.’’
and is derived from current § 3.5(a). elect DIC in lieu of death compensation.
Proposed § 5.510(b) sets out the three Current § 3.5(b)(2) provides that one of Current § 3.5(c) states:
statutory bases for the award of DIC: (1) the bases for DIC entitlement is that No person eligible for dependency and
Service-connected death during or after ‘‘[d]eath occurred prior to January 1, indemnity compensation by reason of a death
service (38 U.S.C. 1310, ‘‘Deaths 1957, and the claimant was receiving or occurring on or after January 1, 1957, shall
entitling survivors to dependency and eligible to receive death compensation be eligible by reason of such death for death
indemnity compensation’’); (2) service- on December 31, 1956 (or, as to a parent, pension or compensation under any other
connected disability that had been rated would have been eligible except for law administered by the Department of
as totally disabling for certain specified income), under laws in effect on that Veterans Affairs, except that, effective
periods of time prior to the veteran’s date or who subsequently becomes November 2, 1994, a surviving spouse who
death (38 U.S.C. 1318, ‘‘Benefits for eligible by reason of a death which is receiving dependency and indemnity
survivors of certain veterans rated occurred prior to January 1, 1957.’’ compensation may elect to receive death
totally disabled at time of death’’); and Instead, as previously indicated, we pension instead of such compensation.
(3) death due to incidents occurring propose to merely state in
during certain VA-furnished medical, § 5.510(b)(1)(ii) that ‘‘DIC is not payable The November 2, 1994, date
training, rehabilitation, or compensated unless the service-connected death referenced in current § 3.5(c) is the
work therapy services (38 U.S.C. 1151, occurred after December 31, 1956, effective date of Pub. L. 103–446, which
‘‘Benefits for persons disabled by except in the case of certain individuals added subsection (b) to 38 U.S.C. 1317,
treatment or vocational rehabilitation’’). receiving or eligible to receive death thereby permitting DIC recipients to
Proposed paragraph (b) also includes compensation who elect to receive DIC elect to receive death pension instead of
provisions from current § 3.5(b). Current in lieu of death compensation.’’ We DIC. See Veterans’ Benefits
§ 3.5(b) includes three different date of intend no substantive change. A person Improvements Act of 1994, Pub. L. 103–
death requirements for basic entitlement could not be ‘‘receiving, or eligible to 446, section 111(a), 108 Stat. 4645,
to DIC based upon the interplay receive, death compensation’’ unless 4654. Including the date was helpful
between DIC and a benefit program they were ‘‘receiving or eligible to during the time when the right to elect
called death compensation that DIC receive death compensation on death pension in lieu of DIC was new.
replaced in the 1950s. VA data shows December 31, 1956 ‘‘ under laws in However, we propose to omit it from
that fewer than 1,000 persons, primarily effect on that date or * * * this revision inasmuch as elections are
the parents of veterans, are still subsequently bec[a]me eligible by prospective and its inclusion is no
receiving death compensation benefits. reason of a death which occurred prior longer necessary.
On the other hand, more than 300,000 to January 1, 1957.’’ And, as also
persons are receiving DIC benefits. mentioned previously, rules concerning Current § 3.5(c) speaks of the right of
Detailed information about the death compensation entitlement are a surviving spouse ‘‘receiving’’ DIC to
relationship between DIC and death addressed elsewhere in proposed part 5. elect death pension. However, under 38
compensation was desirable years ago The same is true of rules concerning the U.S.C. 1317(b), the surviving spouse
when current § 3.5 was drafted and VA election of DIC in lieu of death need only be eligible for DIC in order to
was transitioning between the two compensation. make this election. Proposed § 5.512(b)
death-benefit programs. However, a Finally, in paragraph (d) of proposed uses the statutory term. No other
simpler explanation of DIC benefits will § 5.510, we state that DIC for parents is substantive changes are proposed.
now be more useful to most claimants subject to income limitations. This
and VA personnel adjudicating claims. provision is derived from current 38
Therefore, we propose to place death CFR 3.251(a).
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61332 Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules
Dependency and Indemnity 1151. Proposed § 5.520(b) includes this which the injury or disease causing the
Compensation—Eligibility information. death of the veteran was incurred or
Requirements and Payment Rules for Proposed § 5.520(b)(1)(ii) resolves an aggravated.’’
Surviving Spouses and Children ambiguity in the current regulation. As Concerning the one-year marriage
noted above, the time of marriage requirement in claims based on 38
5.520 Dependency and indemnity requirements for eligibility for DIC U.S.C. 1318, we have previously noted
compensation—time of marriage under 38 U.S.C. 1151 or 1310 may be that the statute provides that benefits
requirements for surviving spouses. met if the surviving spouse was married may not be paid to a surviving spouse
A surviving spouse must meet various to the veteran for one year or more. We unless ‘‘the surviving spouse was
requirements in order to qualify for DIC propose to state that multiple periods of married to the veteran for one year or
benefits. These include requirements marriage can be added together to meet more immediately preceding the
that the date of his or her marriage to this 1-year marriage requirement. The veteran’s death.’’ 38 U.S.C. 1318(c)(1)
the veteran, or the length of that one-year marriage requirement is (emphasis added). VA interprets this
marriage, must fall within certain designed to prevent abuse by sham provision to mean that multiple periods
parameters. Proposed § 5.520, based on ‘‘death bed’’ marriages to obtain of marriage cannot be added together to
portions of current § 3.54 and applicable benefits. We believe that there is much meet the 1-year marriage requirement
statutory provisions, sets out the time of less risk of such abuse where the for purposes of eligibility for DIC under
marriage requirements and the ways in veteran and the surviving spouse have 38 U.S.C. 1318. In order to satisfy the
which the requirements can be met. had an ongoing close relationship one-year marriage requirement, the
The first way in which the demonstrated by previous marriage. veteran and spouse must have been
requirements can be met is set out in the This information has been included to married continuously for a year or more
introduction to current § 3.54, which fill a gap in the current regulation. immediately prior to the veteran’s
explains that a surviving spouse who We believe that this interpretation, death. Therefore, we propose to add the
married the veteran before, or during, favorable to surviving spouses, is requirement for continuity of the
the veteran’s service may qualify for reasonable. The statute authorizing the marriage during the year prior to the
DIC. Three alternative time-of-marriage time of marriage requirement, 38 U.S.C. veteran’s death to paragraph
requirements, which apply when the 1304, does not prohibit adding multiple § 5.520(b)(2).
veteran and the surviving spouse were periods of marriage together. On the
married after the veteran’s separation other hand, 38 U.S.C. 1318 does provide 5.521 [Reserved]
from service, are listed in current such a prohibition. Specifically, 38 VA proposes to set out in §§ 5.521 and
§ 3.54(c). These alternative requirements U.S.C. 1318(c)(1) provides that benefits 5.522 the rules concerning the payment
are that the surviving spouse was may not be paid under that section to of DIC benefits to the survivors of
married to the veteran: a surviving spouse of a veteran unless certain deceased veterans who received,
(1) Before the expiration of 15 years after ‘‘the surviving spouse was married to or were entitled to receive,
the termination of the period of service in the veteran for one year or more compensation for service-connected
which the injury or disease causing the death immediately preceding the veteran’s disability rated as totally disabling.
of the veteran was incurred or aggravated, or death.’’ Inasmuch as Congress These rules would be based on the
(2) For 1 year or more, or prohibited combining multiple statute that authorizes DIC on this basis,
(3) For any period of time if a child was marriages together to meet the 1-year 38 U.S.C. 1318, and VA’s implementing
born of the marriage, or was born to them marriage requirement in 38 U.S.C. 1318 regulation, current § 3.22.
before the marriage.
and did not do so in 38 U.S.C. 1304, we However, we propose to simply
This list in current § 3.54(c) is based believe it was Congress’ intent not to reserve § 5.521 for purposes of this
on 38 U.S.C. 1304, ‘‘Special provisions apply the prohibition to other claims for NPRM. VA is undertaking a separate
relating to surviving spouses,’’ which DIC. Norman J. Singer, Sutherland On rulemaking to respond to a decision by
applies to a surviving spouse who is Statutory Construction § 46:06 (6th ed. the United States Court of Appeals for
seeking DIC under 38 U.S.C. 1310. 2000) (‘‘when the legislature uses the Federal Circuit in National
However, current § 3.54 does not certain language in one part of the Organization of Veterans’ Advocates,
explain time of marriage requirements statute and different language in Inc. v. Secretary of Veterans Affairs, 314
for surviving spouses who married the another, the court assumes different F.3d 1373 (Fed. Cir. 2003). See 69 FR
veteran after service and who are meanings were intended. In like 62229 (2004). This proposed rulemaking
seeking DIC under 38 U.S.C. 1151 or 38 manner, where the legislature has involves revision of provisions of
U.S.C. 1318. Proposed § 5.520 explains carefully employed a term in one place current § 3.22(b), which defines
how the time of marriage requirement and excluded it in another, it should not ‘‘entitled to receive’’ for purposes of
applies to claims for DIC under any of be implied where excluded.’’). determining whether a veteran’s
the three statutory bases for DIC. Therefore, we have included in survivors are entitled to benefits under
The time of marriage requirements are proposed § 5.520(b)(1)(ii) that multiple 38 U.S.C. 1318. See 38 U.S.C. 1318(b).
not specifically addressed in 38 U.S.C. periods of marriage may be combined to We propose to reserve § 5.521 as the
1151. However, subsection 1151(a) meet the 1-year marriage requirement eventual location for a part 5 regulation
provides that ‘‘[DIC] under chapter 13 of for claims of DIC based on 38 U.S.C. that will repeat the material in § 3.22(b)
this title shall be awarded for a 1151 or 1310. after the final amendment of § 3.22(b) is
qualifying * * * death of a veteran in Proposed § 5.520(b)(2) describes the adopted.
the same manner as if such * * * death methods of meeting the time of marriage
were service-connected.’’ (Emphasis requirements under 38 U.S.C. 1318, 5.522 Dependency and indemnity
added.) Therefore, we conclude that the which only provides for two methods of compensation benefits for survivors of
three methods in current § 3.54(c) for meeting the requirements. Following the certain veterans rated totally disabled at
meeting the time of marriage statute, proposed paragraph (b)(2) omits time of death—offset of wrongful death
requirements under 38 U.S.C. 1310 also the provision for marriage ‘‘[b]efore the damages.
apply to cases in which DIC is awarded expiration of 15 years after the VA is required by 38 U.S.C. 1318(d)
based upon the provisions of 38 U.S.C. termination of the period of service in to offset the value of money or property
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Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules 61333
a surviving spouse or child may receive Committee on Veterans’ Affairs stated that property received, ‘‘[e]xpenses incident
‘‘pursuant to an award in a judicial ‘‘[t]he appropriate Federal obligation to these to recovery, such as attorney’s fees, may
proceeding based upon, or a settlement survivors should, in the Committee’s view, not be deducted from the amount to be
or compromise of, any cause of action be the replacement of the support lost when reported.’’ However, in providing that
the veteran dies.’’ S. Rep. No. 1054, 95th
for damages’’ for the death of a veteran Cong., 2d Sess. 28 (1978), reprinted in 1978
damages going to pay attorney’s fees and
against any death benefits to which the U.S.C.C.A.N. 3465, 3486. Similarly, the basis costs be included in the offset, proposed
spouse or child may be entitled under for authorizing such benefits was described § 5.522(c)(2) limits the amount included
38 U.S.C. 1318. Current § 3.22(e) during floor debates as follows: to the particular claimant’s proportional
implements this requirement. In The purpose of those benefits is to provide share of fees and costs in cases where
proposed § 5.522, the part 5 replacement income security to the survivors. This reflects the recovered damages are payable to
for § 3.22(e), we have restructured this the Committee’s view that the veteran’s total multiple parties.
material in more readily understandable disability endured over a lengthy period of The 38 U.S.C. 1318(d) offset would
language and to provide additional time, necessarily results in a substantial not normally include damages payable
impairment of the veteran’s ability to provide to another person or entity. However,
information about how the offset should for his or her survivors; and that the primary
be calculated. because the focus of 38 U.S.C. 1318(d)
purpose of the new benefit is to compensate
An opinion by the United States Court for that impairment.
is on who receives the money or
of Appeals for Veterans Claims in Bryan property, that exclusion does not apply
124 Cong. Rec. S12687 (daily ed. Aug. 7,
v. West, 13 Vet. App. 482 (2000), shows 1978) (statement of Sen. Cranston). * * *
where the other person or entity is
the need for regulatory guidance merely acting as a conduit to pass the
concerning how offsets are calculated. Particularly in view of Congressional money or property recovered to the
In Bryan the Court remanded a case to intent that 38 U.S.C. 1318 benefits are claimant. For example, a wrongful death
the Board of Veterans’ Appeals in order to provide for the survivors’ support, we award paid to a veteran’s estate that is
for the Board to decide the following propose to look to whether the money then distributed to the claimant, or paid
matters with respect to a 38 U.S.C. or property received is actually into a trust for the benefit of the
1318(d) offset: ‘‘(1) How much money available to meet the claimants’ needs claimant, would be included in the
was received by a plaintiff other than and obligations, rather than the offset. We propose to address this
[the VA claimant]; (2) Whether the technical form in which the money or situation in § 5.522(c)(3).
money received by such a plaintiff was property is passed to the claimant, in Another addition to proposed § 5.522
received ultimately by [the VA calculating the offset under 38 U.S.C. provides for determining the date of the
claimant] through estate distribution; (3) 1318(d). In this regard, we propose to valuation of property for purposes of
If so, whether such distribution was adopt the rationale in paragraph 13 of this section. Current § 3.22(g) requires,
considered received by [the VA VAOPGCPREC 3–97: in part, that a beneficiary receiving DIC
13. Finally, we note that the reference in under 38 U.S.C. 1318 report the value of
claimant]; and (4) Whether the money
section 1318(d) to amounts received property received as damages for the
received by her attorney was, in
‘‘pursuant to’’ an award, settlement, or death of a veteran at fair market value,
contemplation of law, ‘received’ by [the
compromise may be intended to indicate that but is silent as to the time of valuation
VA claimant].’’ Proposed § 5.522
the surviving spouse or child need not have of such property. The statute, 38 U.S.C.
addresses these and other practical been an actual party to the action, but need 1318, is also silent as to the time of
issues. only have received money or property of valuation. We propose to fill this gap by
Proposed § 5.522(c)(1) incorporates a value ‘‘pursuant to’’ the action. Many state providing, in § 5.522(c)(5), that the
concept favorable to VA claimants statutes require wrongful death actions to be
property be valued at its fair market
(because it would reduce the amount of brought by a representative of the estate or
other designated representative, although value at the time the claimant receives
offset) from a 1997 Precedent Opinion
such actions are for the exclusive benefit of it. We believe that this is most
by VA’s General Counsel,
the actual beneficiaries. 22A Am. Jur. 2d consistent with the expressed
VAOPGCPREC 3–97, which states:
Death § 399. The phrase ‘‘pursuant to’’ may Congressional intent that these DIC
Section 1318(d) of title 38, United States be read as clarifying that offset will be benefits serve to provide for the support
Code, requires offset against survivors’ required against amounts received by the of the veteran’s survivors.
benefits payable under section 1318 of actual beneficiaries pursuant to a wrongful Proposed paragraph (d), based on
amounts received by the beneficiary pursuant death action regardless of whether the current § 3.22(g), states the DIC
to an award, settlement, or compromise beneficiaries were individually named as
based on a claim for damages resulting from
beneficiary’s obligation to report
parties in the award, settlement, or
the death of a veteran, i.e., the types of wrongful death recoveries to VA. We
damages typically recoverable under state propose to add that overpayments
wrongful death statutes, but does not require Under proposed § 5.522(c)(2), any created by failure to report will be
offset of amounts received pursuant to a amounts used to pay a third party to subject to recovery if not waived. The
survival action as compensation for injuries satisfy a legal obligation of the claimant instructions for VA Form 21–534,
suffered by the veteran prior to his or her would be considered as ‘‘received’’ by ‘‘Application for Dependency and
death. the claimant regardless of whether the Indemnity Compensation, Death
Legislative history is of some claimant receives the damages and pays Pension and Accrued Benefits by a
assistance in determining other aspects the third party directly or whether the Surviving Spouse or Child (Including
of how the offset should be calculated. third party is paid on the claimant’s Death Compensation if Applicable),’’
VAOPGCPREC 3–97 includes the behalf by the party liable for the notify claimants of the reporting
following information, at paragraph 10: damages. This view is consistent with requirement described in proposed
long-standing VA policy that attorney’s § 5.522(d).
The legislative history indicates that the fees, court costs and other expenses
purpose of providing DIC in the case of such 5.523 [Reserved]
non-service-connected deaths was to provide
incident to a civil claim are not
a measure of income to the surviving spouse deductible from the total amount As indicated in the discussion
or child to replace the support lost when the awarded or accepted. For example, concerning reservation of § 5.521, VA is
veteran died. In a report prepared during current § 3.22(g) provides that when a undertaking a separate rule-making to
consideration of that legislation, the Senate VA beneficiary reports money or respond to a decision by the United
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61334 Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules
States Court of Appeals for the Federal be affected by the provision have statutory rules for determining what
Circuit in National Organization of already received their benefits. In the counts as income for parents’ DIC
Veterans’ Advocates, Inc. v. Secretary of unlikely event that the need should purposes, and portions of current
Veterans Affairs, 314 F.3d 1373 (Fed. arise, VA could process the retroactive §§ 3.251, 3.260, 3.261 and 3.262 that
Cir. 2003). See 69 FR 62229 (2004). That award relying on applicable statutory implement that statute.
proposed rulemaking involves revision authority. Proposed paragraph 5.531(a) states the
of provisions of current § 3.5(e) relating basic statutory rule that VA must count
to the rates of DIC payable to surviving Dependency and Indemnity all payments of any kind from any
spouses and moving those provisions Compensation—Eligibility source in determining income.
into new § 3.10. We propose to reserve Requirements and Payment Rules for Beginning with this basic rule permits
§ 5.523 as the eventual location for the Parents simplification of the proposed
part 5 regulation that will repeat the 5.530 Eligibility for, and payment of, regulation because the all-inclusive
material in proposed § 3.10 when § 3.10 parents’ dependency and indemnity nature of the basic rule eliminates any
is adopted as a final rule. compensation. need to catalog types of countable
income. All income that a parent
5.524 Awards of dependency and Proposed § 5.530 serves as an receives is income for parents’ DIC
indemnity compensation benefits to introduction to a group of regulations purposes unless there is a specific
children when there is a retroactive concerning parents’ DIC and provides a exclusion. For example, with this
award to a school child. brief overview of that VA benefit beginning point, provisions such as the
Under 38 U.S.C. 1313, ‘‘Dependency program. first sentence of current § 3.262(j)(2)
and indemnity compensation to As noted previously, proposed (providing that, with respect to life
children,’’ DIC is payable to eligible § 5.510(b) sets out the three statutory insurance, ‘‘the full amount of payments
children when there is no surviving bases for the award of DIC. Proposed is considered income as received’’)
spouse entitled to DIC. The total amount paragraph § 5.530(a) explains that only become redundant and need not be
payable to the children, which varies two of those bases are applicable to carried forward. We have also included
according to the number of eligible parents’ DIC. This is because 38 U.S.C. a cross-reference to proposed § 5.533,
children, is divided and paid to the 1318, which provides for payment of ‘‘Exclusions from income,’’ where the
children in equal shares. However, there DIC to the survivors of certain veterans exceptions to the general rule in
is an exception to the equal-share rule with a service-connected disability rated paragraph (a) may be found.
that applies to a retroactive payment to as totally disabling at the time of their Because VA must count all payments,
a child whose entitlement terminated death, only provides benefits to the it is necessary to know what VA
when he or she reached eighteen years veteran’s surviving spouse and children. includes in and excludes from the term
of age, but who later reestablished Unlike DIC benefits payable to ‘‘payments.’’ Proposed § 5.531(b) serves
entitlement because he or she is surviving spouses and children, parents’ that function. It is based on various
pursuing a course of instruction at an DIC is an income-based benefit program. rules from portions of current §§ 3.261
approved educational institution. Under 38 U.S.C. 1315(b) the amount of and 3.262. See the ‘‘Table comparing
We have addressed rules concerning parents’ DIC payable bears an inverse current part 3 rules with proposed part
this exception, currently found in relationship to the amount of the 5 rules’’ earlier in the supplementary
§ 3.650(c), in proposed § 5.524. In an parents’ income and no DIC is payable information.
effort to make them more if the parents’ income exceeds statutory Proposed § 5.531(c) provides that if a
understandable, we have substantially limits. Proposed paragraph 5.530(b) parent is married, ‘‘income’’ is the
restructured the text. In proposed states these principles and, through a combined income of the parent and the
§ 5.524(a), ‘‘Applicability,’’ we have also cross-reference, points readers to parent’s spouse, except if the marriage
provided more context by including a subsequent part 5 sections that provide has been terminated or the parent is
description of the equal-share rule and income and payment rate rules. separated from his or her spouse. We
a better description of the exception to Some income-based VA benefit also propose to state in paragraph (c)
that rule that § 5.524 addresses. programs also consider the claimant’s that ‘‘[i]ncome is combined whether the
Because of requirements of 38 U.S.C. net worth in determining payments. For parent’s spouse is the veteran’s other
5111, ‘‘Commencement of period of example, eligibility for certain benefits surviving parent or the veteran’s
payment,’’ payment of newly awarded requires a specific finding that a parent stepparent.’’ We believe that this is a
or increased DIC does not begin to was actually ‘‘dependent’’ upon the clearer statement of the principle in the
accrue until the first day of the calendar veteran, and VA considers the parent’s introduction to current § 3.262(b),
month following the month in which net worth in making such findings. See which provides that ‘‘[i]ncome of the
the award or increased award became 38 U.S.C. 102, 1115, 1121, 5121; 38 CFR spouse will be determined under the
effective. For that reason, proposed 3.263(a). However, that is not the case rules applicable to income of the
§ 5.524 refers to the ‘‘payment with parents’ DIC, as 38 U.S.C 1315 claimant.’’ The income rules in
commencement date,’’ rather than the does not require a specific finding of proposed § 5.531 are applicable to a
‘‘effective date,’’ in some instances. dependency, but merely provides that parent. The spouse of a claimant-parent
We have not included the provisions DIC may be paid to a veteran’s parent, will always be either the veteran’s other
in § 3.650(c)(3) that state the method for subject to reduction based on the parent (in which case the rules would
determining retroactive awards to a parent’s income. We therefore propose expressly apply) or the veteran’s
school child for periods prior to October to state in paragraph 5.530(c) that net stepparent.
1, 1981 (a date established by Congress worth is not a factor in determining Proposed paragraph (d) provides the
in the Veterans’ Disability entitlement to parents’ DIC or the rules VA uses to determine whether
Compensation, Housing, and Memorial amount of parents’ DIC payable. income from property is the income of
Benefits Amendments of 1981, Pub. L. a parent. Property ownership is an
97–66, 95 Stat. 1026). We propose to 5.531 General income rules. important indicator of the right to
omit this provision because we believe Proposed § 5.531 is based on 38 income from that property, but it is not
that all eligible dependents who could U.S.C. 1315(f), which contains the basic always controlling. In keeping with
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Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules 61335
long-standing VA practice, we propose change, it is only necessary to state in We believe that this statement
to state in paragraph (d)(3) that if a § 5.532(a) that losses sustained in captures the meaning of ‘‘constructive’’
parent transfers ownership of income- operating a business or profession may household membership. However rather
producing property to another person or not be deducted from income from any than referring to constructive household
legal entity, but retains the right to that other source. This is consistent with the members and then defining that term,
income, the income will be counted. rule in current § 3.262(a)(3) that states we propose to use a simpler approach
Current § 3.262(k)(1) provides, in part, that ‘‘[a] loss sustained in operating a by stating in § 5.532(d)(1)(i) that ‘‘[a
that ‘‘if property is owned jointly each business, profession, or farm or from family member] includes a relative who
person will be considered as owning a investments may not be deducted from would normally be a resident of the
proportionate share. The claimant’s income derived from any other source.’’ household, but who is physically absent
share of property held in partnership Note also that current § 3.262(a)(3) due to unusual or unavoidable
will be determined on the facts found.’’ implies that investment income is circumstances, such as a child away at
Current § 3.262(k)(2) provides, in part, counted and that current § 3.262(k)(5) school or a family member confined to
that the ‘‘claimant’s share [of income] provides, with respect to DIC, that profit a nursing home.’’
will be determined in proportion to his from the sale of nonbusiness property is We have not repeated in proposed
right according to the rules of not counted. With respect to § 5.532(d) a restriction in current
ownership.’’ We propose to combine investments, VA only counts income § 3.262(l)(4) that limits the exclusion of
these provisions in § 5.531(d)(4) by when the investment property is sold unreimbursed amounts a parent pays for
stating that ‘‘[i]n the absence of and does not constantly adjust income the unusual medical expenses of the
evidence showing otherwise, VA will based on increases or decreases in the parent’s relatives who are members, or
consider a parent who owns property market value of investment property ‘‘constructive members,’’ of the parent’s
jointly with others, including due to market fluctuations. Therefore, household to relatives ‘‘in the ascending
partnership property, to be entitled to a VA essentially already treats investment as well as descending class.’’ We
share of the income from that property transactions as business transactions. construe this to mean relatives in the
proportionate to the parent’s share of parents’ direct line. (Ascendant means
ownership. VA will accept the Proposed § 5.532(b) continues a ‘‘[o]ne who precedes in lineage, such as
claimant’s statement concerning the provision in current § 3.262(j)(4) that a parent or grandparent.’’ Black’s Law
terms of ownership in the absence of permits deduction of related medical, Dictionary 121 (8th ed. 2004).
evidence to the contrary.’’ The last legal, or other expenses from sums Descendant means ‘‘[o]ne who follows
sentence of paragraph (d)(4) follows the recovered under disability, accident, or in lineage, in direct (not collateral)
last sentence of current § 3.261(k)(1). health insurance. Of course the same descent from a person. Example are
Current § 3.260(b) provides rules for expenses cannot be deducted twice. children and grandchildren.’’ Id. at 476.)
how VA calculates income when there Therefore, we propose to state in This would appear to exclude, for
is uncertainty about the amount of § 5.532(b) that if medical expenses are example, the medical expenses of an
income a parent will receive during a deducted under that paragraph, they orphaned niece or nephew who had
calendar year. We propose, in § 5.531(e), cannot be deducted as unusual medical been taken into the parent’s household.
to more clearly explain the process expenses under § 5.532(d). This restriction to the ascending and
involved. We also propose to include a Proposed § 5.532(d) states the rules descending class is not required by
cross-reference to proposed § 5.535, for deducting unusual medical statute. The authorizing statute, 38
‘‘Adjustments to parents’ DIC when expenses, as authorized by 38 U.S.C. U.S.C. 1315(f)(3), merely states that
income is less than anticipated,’’ to 1315(f)(3) and described in current ‘‘[t]he Secretary [of Veterans Affairs]
assist users of the proposed regulation § 3.262(l). Among other things, the latter may provide by regulation for the
in finding information about submitting permits deduction of the unusual exclusion from income under this
amended income information. medical expenses of relatives of a parent section of amounts paid by a parent for
or, under some circumstances, of a unusual medical expenses.’’ We do not
5.532 Deductions from income.
parent’s spouse who are ‘‘constructive believe that the restriction is necessary,
While all income is counted except members’’ of the household. See particularly because the deduction is
where there is statutory authority to § 3.262(l)(4). However, there is no already limited in several ways that
exclude it, VA permits deductions from definition of what a ‘‘constructive’’ should serve to deter any abuse. The
countable income in some instances. household member is. In VAOPGCPREC deduction is limited to expenses of
That is, the amount of income 61–90, VA’s Office of General Counsel persons who are relatives, who are
ultimately counted is the difference discussed exceptions that had been members of the parent’s household (or
between income and certain deductible carved out of the general rule that a who would be a member of the
expenses directly associated with that ‘‘household’’ is comprised of those who household absent unusual or
income. Proposed § 5.532 lists permitted dwell under the same roof and compose unavoidable circumstance), and to
deductions. These deductions are the a family. The General Counsel then whom the parent has a moral or legal
same as those included in current observed that: obligation of support. We also note that
§ 3.262. However, we propose to add there is no such restriction with respect
some clarifications, as described in the We regard the foregoing exceptions with to medical expenses deductions used in
following paragraphs. respect to the language ‘‘who is a member of calculating VA’s largest income-based
Proposed § 5.532(a) continues a rule a veteran’s household’’ generally as
program, Improved Pension. See current
recognizing any situation where it may be
in current § 3.262(a)(2) that permits the § 3.272(g)(1)(i). We believe that VA’s
reasonably assumed that the parties would be
deduction of expenses incident to the dwelling under one roof but for unusual or rules for determining income for
operation of businesses and professions unavoidable circumstances, such as one purposes of administering its income-
from income from those sources. We temporary in nature or one beyond the based programs should be consistent
propose to clarify that ‘‘business’’ control of the parties and wherein the family unless the law requires otherwise.
includes the operation of a farm and ties and relationship continue and the parties The term ‘‘medical expenses’’ is used
transactions involving investment considered themselves morally bound to care in a number of regulations in current
property. Because of this definitional for each other. part 3 and would similarly appear in a
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61336 Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules
number of regulations in proposed part Section (f)(1)(C) of 38 U.S.C. 1315 proposed § 5.533(g) all of the various
5. Therefore, we will propose a provides that several types of VA benefit § 3.262 ten-percent exclusions based on
centralized definition of that term in a payments are not counted in the 38 U.S.C. 1315(f)(1)(G) exclusion.
separate NPRM as part of the Project. determining income for parents’ DIC One of these 10-percent exclusions,
This is the definition referenced in purposes. These include payments found at current § 3.262(i)(2), is for
proposed § 5.532(d)(1)(ii). made under 38 U.S.C. chapter 15, the ‘‘payments based on permanent and
chapter that authorizes VA’s current total disability or death * * * received
5.533 Exclusions from income. from the Bureau of Employees’
Improved Pension program, and ‘‘under
Income that VA does not count when the first sentence of section 9(b) of the Compensation.’’ The Bureau of
calculating parents’ income is listed in Veterans’ Pension Act of 1959.’’ The Employees’ Compensation was
proposed § 5.533. Paragraph (a) is based referenced sentence preserved the rights abolished in 1974. See 20 CFR 1.5. Its
on 38 U.S.C. 1315(f)(1)(A), which of persons receiving earlier types of functions are now carried out by the
excludes ‘‘payments of the six-months’ pension to continue to receive that Office of Workers’ Compensation
death gratuity.’’ However, we propose to pension at the time that Section 306 Programs of the U.S. Department of
change the description to ‘‘death pension was introduced. The Veterans’ Labor. See 20 CFR 1.6(b). This change
gratuity payments by the Secretary and Survivors’ Pension Improvement is reflected in proposed paragraph (g)(4).
concerned under 10 U.S.C. 1475 Act of 1978, Pub. L. 95–588, 92 Stat. Section 1315(f)(1)(K) of 38 U.S.C.
through 1480.’’ The phrase ‘‘six-months’ 2497 (1978), introduced the current 1315 excludes ‘‘profit realized from the
death gratuity’’ is obsolete. While the Improved Pension program. Section disposition of real or personal property
death gratuity consisted of six-months’ 306(b)(1) of that public law explicitly other than in the course of a business’’
pay when originally enacted (see Pub. L. repealed section 9(b) of the Veterans’ from being counted as income for
66–99, 41 Stat. 367 (1919)), that is no Pension Act of 1959. See 92 Stat. 2509. parents’ DIC purposes. Current
longer the case. Over the years these However, section 306(b)(3) of Pub. L. § 3.262(k)(5) states, in part, that ‘‘[a]ny
death gratuity payments have evolved 95–588 provides that those who do not amounts received in excess of the sales
into a fixed sum, rather than a variable elect to receive Improved Pension ‘‘shall price will be counted as income. Where
amount equal to six-months’ pay. See 10 continue to receive pension at the payments are received in installments,
U.S.C. 1478. As would be provided in monthly rate being paid to such person principal and interest will not be
proposed paragraph (a), this exclusion on December 31, 1978, subject to all counted separately.’’ We interpret this
extends to death gratuity payments in provisions of law applicable to basic last statement to mean that where
lieu of payments under 10 U.S.C. 1478 eligibility for and payment of pension payments are received in installments,
made to certain survivors of ‘‘Persian under section 9(b) of the Veterans’ the installments received will not begin
Gulf conflict’’ veterans as authorized by Pension Act of 1959, as in effect on to count as income until the total of
the Persian Gulf Conflict Supplemental December 31, 1978.’’ 92 Stat. 2509. We installments received is equal to the
Authorization and Personnel Benefits interpret these various provisions sales price without interest. That rule is
Act of 1991. See Pub. L. 102–25, Title together as excluding all VA nonservice- more clearly stated at proposed
III, Part A, § 307, 105 Stat. 82 (1991). connected disability and death pension § 5.533(i).
(Note that the phrase ‘‘Secretary payments from income for parents’ DIC Section 38 U.S.C. 1315(f)(1)(F)
concerned’’ is defined currently in purposes, as currently provided in excludes, among other things,
§ 3.1(g). It will also be defined in § 3.1’s § 3.261(a)(20). That rule is stated in ‘‘payments of servicemen’s indemnity.’’
part 5 equivalent, to be published in § 5.533(c)(3). We propose to omit this exclusion
another NPRM.) because it is now obsolete. The
Another exclusion from parents’
Servicemen’s Indemnity Act of 1951,
Subsection (f)(1)(B) of 38 U.S.C. 1315 countable income, found at 38 U.S.C.
Pub. L. 82–23, 65 Stat. 33, 34 (1951),
excludes ‘‘donations from public or 1315(f)(1)(G), is ‘‘10 percent of the
authorized VA to pay indemnity in the
private relief or welfare organizations’’ amount of payments to an individual
form of $10,000 automatic life insurance
from income for parents’ DIC purposes. under public or private retirement,
coverage to the survivors of members of
Proposed § 5.533(b) would combine annuity, endowment, or similar plans or
the Armed Forces who died in service.
material from several portions of current programs.’’ VA has traditionally
However, the Act authorizing this
§ 3.262 that explain how VA interprets construed this ten-percent exclusion to
benefit was repealed in 1956. See sec.
this exclusion. One of these is current apply to a broad range of payments for
502(9) of the Servicemen’s and
§ 3.262(f), which states that ‘‘[b]enefits disability or death, including payments
Veterans’ Survivor Benefits Act, Pub. L.
received under noncontributory pursuant to insurance policies, statutory
84–881, 70 Stat. 857, 886 (1956).
programs, such as old age assistance, aid retirement or disability-compensation Current § 3.262(e)(4) provides, in part,
to dependent children, and programs, and tort damages collected that:
supplemental security income are pursuant to employer’s liability statutes.
subject to the rules contained in In a 1966 opinion, designated as VA Where a parent was receiving or entitled to
paragraph (d) of this section applicable Administrator’s Decision 989, the receive dependency and indemnity
compensation and retirement benefits based
to charitable donations.’’ We propose to Administrator of Veterans’ Affairs on his or her own employment on December
remove the references to the Old Age applied the principle that statutes 31, 1966, the retirement payments will not be
Assistance program and the Aid to should be construed in favor of veterans considered income until the amount of the
Dependent Children program because and reasoned that such payments are claimant’s personal contribution (as
these programs no longer exist. The Old sufficiently similar to payments under a distinguished from amounts contributed by
Age Assistance program was phased out retirement program to come within the the employer) has been received. Thereafter
and totally replaced by the meaning of statutory language the 10 percent exclusion will apply.
Supplemental Security Income program essentially identical to that in 38 U.S.C. Similarly, current § 3.262(j)(1)
in 1972 and the Aid to Dependent 1315(f)(1)(G). That interpretation is provides in part that:
Children program became a federal reflected in current VA regulations at 38 In dependency and indemnity
block grant known as Temporary CFR 3.262(f), (g), (i)(2), (j)(1), (j)(2), and compensation claims, where the parent is
Assistance to Needy Families in 1996. (j)(4). We propose to aggregate in receiving or entitled to receive dependency
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Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules 61337
and indemnity compensation on December These broad exclusions that will be calendar year except as provided in this
31, 1966, and is also receiving or entitled to addressed in a future NPRM include section.’’
receive annuity payments on that date, or some of the income exclusions that The first exception, addressed in
endowment insurance matures on or before currently appear in §§ 3.261 and 3.262. proposed paragraph (b), is based on
that date, no part of the payments received concepts in current § 3.260(c) and (d)
will be considered income until the full
These are Agent Orange settlement
amount of the consideration has been payments, certain relocation payments, concerning ‘‘proportionate’’ income
received, after which 10 percent of the annuity payments elected under the calculations. As proposed paragraph
amount received will be excluded. Retired Serviceman’s Family Protection 5.534(b) indicates, ‘‘proportionate’’
Plan, restitution to individuals of income calculations are used when
We propose to omit these two Japanese ancestry, income received by parents’ DIC is first awarded, or when
provisions from § 5.533. It is extremely American Indian beneficiaries from an award follows a period of no
unlikely that a parent’s contributions to trust or restricted lands, payments entitlement. Under the proportionate
retirement benefits, an annuity, or an under the Alaska Native Claims annual income calculation method, VA
endowment he or she was receiving on Settlement Act, payments from certain disregards income received, and
December 31, 1966, were not recovered volunteer programs, Victims of Crime expenses paid, during the portion of the
long ago. Should the occasion arise, VA Act of 1984 payments, and monetary year prior to the award of parents’ DIC.
will adjudicate any affected claims allowances under 38 U.S.C. chapter 18 It then determines what the parent(s)’
under existing statutory authority. for certain children of veterans who income would have been if income had
Proposed § 5.533(k) continues an served in Vietnam and Korea. Because been received at the same rate for the
exclusion for payments under section 6 these exclusions will be addressed in entire calendar year as it was from the
of the Radiation Exposure another regulation included in a future effective date of the award of parents’
Compensation Act of 1990, Pub. L. 101– NPRM, they have not been listed in DIC to the end of the calendar year. The
426, 104 Stat. 920, 923. Payments under proposed § 5.533. result is the proportionate annual
that act are not countable as income for In redrafting various provisions of income.
parents’ DIC purposes because section current § 3.262 for proposed § 5.533, we Paragraph (b)(3) describes the specific
6(h)(2) of the act provides that amounts have intentionally omitted references to steps VA would use to calculate this
paid to individuals under section 6 a January 1, 1967, effective date proportionate annual income. While
‘‘shall not be included as income or applicable to various income exclusions there are several ways in which the
resources for purposes of determining in paragraphs (e)(4), (i)(2), (j)(1), (j)(4), mathematical process involved could be
eligibility to receive benefits described and (k)(5) of § 3.262. We believe that it described, we are proposing a daily
in section 3803(c)(2)(C) of title 31, is highly unlikely that VA would need average method, because we believe this
United States Code, or the amount of to process a retroactive adjustment to a will be the most understandable to
such benefits.’’ The list of benefits in 31 prior parents’ DIC award effective more regulation users. Basically, VA would
U.S.C. 3803(c)(2)(C) includes benefits than 35 years in the past. Therefore, we calculate the daily average income for
under 38 U.S.C. chapter 13. See 31 believe it is no longer necessary to refer the applicable portion of the year and
U.S.C. 3803(c)(2)(C)(viii). Parents’ DIC is to these effective dates in the regulation. multiply that figure by 365 to determine
such a benefit. Should the occasion arise, VA will what annual income would have been if
adjudicate any affected claims under the same level of income had been in
However, payments under section 6 of effect for the entire year.
existing statutory authority.
the Radiation Exposure Compensation As current 3.260(c) does, proposed
Act of 1990 are not the only payments 5.534 When VA counts parents’ paragraph 5.534(b) permits using actual
that Congress has excluded from income. annual income, rather than
consideration as income for benefit Proposed § 5.534 is based on portions proportionate income, if that would be
programs on the 31 U.S.C. 3803(c)(2)(C) of current §§ 3.251 and 3.260 that to the parents’ advantage.
list. Our research has shown three pertain to when VA counts income for The second exception to the general
others that we propose to add to § 5.533 parents’ DIC purposes. Rules concerning rule in proposed § 5.534(a)(3) is set out
as paragraph (l) through (n). These are pension in current § 3.260 will be in paragraph (c). It states that ‘‘[i]f a
payments under section 103(c)(1) of the addressed in a different NPRM. parent marries during the applicable
Ricky Ray Hemophilia Relief Fund Act Current § 3.251(b) provides that calendar year, income received by the
of 1998, payments under the Energy ‘‘[i]ncome will be counted for the parent’s spouse prior to the date of the
Employees Occupational Illness calendar year in which it is received marriage is not counted.’’ This simple
Compensation Program, and payments and total income for the full calendar rule is in accord with long-standing VA
to certain eligible Aleuts under 50 U.S.C year will be considered except as practice. It would replace complex rules
Appx. 1989c–5. provided in § 3.260.’’ The introduction in current § 3.260(f), as they relate to
There are also a number of other to current § 3.260 provides that ‘‘[f]or parents’ DIC, and would achieve
Federal statutes that exempt specific entitlement to pension or dependency essentially the same result.
kinds of income from consideration in and indemnity compensation, income Finally, we note that we have
determining either eligibility for all will be counted for the calendar year in intentionally omitted the rule stated in
Federal income-based programs, or which it is received.’’ Proposed current § 3.260(a) that installment
eligibility for all of VA’s income-based § 5.534(a) provides a consolidated income ‘‘will be determined by the total
benefit programs. Because those restatement of these rules. It also amount received or anticipated during
exclusions affect more than the parents’ clarifies that VA uses anticipated the calendar year.’’ In terms of whether
DIC benefit program, they will be income in calculating parents’ DIC in installment income will be counted as
addressed in a separate regulation in some circumstances (for example, see parents’ income, this rule is subsumed
another NPRM to be published later as proposed § 5.531(e)). in the general rule stated in proposed
part of this Project. This separate The remainder of proposed § 5.534 § 5.531(a) that all payments of any kind
regulation is the future regulation sets out the exceptions referenced in from any source are counted in
mentioned in paragraphs (c)(4) and (q) paragraph 5.534(a)(3), ‘‘VA will count determining the income of a veteran’s
of proposed § 5.533. parents’ total income for the full parents. With respect to proposed
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61338 Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules
§ 5.534, the rule in § 3.260(a) is not an year B from the beneficiary. In either Essentially, they send users to different
exception to the general rules in case, the situation will be one in which sections of statutes and to
§ 5.534(a). anticipated income for year B turned out announcements by the Social Security
to be less than anticipated. Therefore, Administration to obtain data for
5.535 Adjustments to parents’ DIC
the rule in 3.660(b)(1) would apply and performing complex calculations under
when income is less than anticipated.
the parent would have through different scenarios. However, as they
Proposed § 5.535 is a simplification December 31 of year C to provide also note, VA performs those
and clarification of the rules in current evidence of the decreased income for calculations when there are changes and
§ 3.660(b) that state when VA may make year B. publishes the result in the Federal
a retroactive award of parents’ Register. For an example, see the rates
dependency and indemnity 5.536 Parents’ dependency and
indemnity compensation rates. of parents’ DIC published in the Federal
compensation based on amended Register on April 7, 2004 (69 FR 18425).
income information. Current Current part 3 regulations for In § 5.536, we propose to take a much
§ 3.660(b)(1) and (2) state the following determining the rates payable for simpler and more practical approach.
alternative rules for determining when a parents’ dependency and indemnity Proposed paragraph (a) states that VA
parent must submit amended income compensation are quite complex. pays DIC to eligible parents based upon
information in order to obtain a Current § 3.25 sets out a series of rules statutory requirements and briefly
retroactive increase in DIC benefits for calculating payments of DIC to describes the nature of the relevant
when income decreases: parents. The rules vary depending upon statutory provisions. It also cross-
(1) Anticipated income. Where payments whether there is one unmarried parent, references the regulation concerning the
were not made or were made at a lower rate one parent who has remarried, two calculation of parents’ DIC based on
because of anticipated income, pension or parents living together, two parents not service of certain Filipino veterans.
dependency and indemnity compensation living together, two parents not living Then, in paragraph (b), proposed § 5.536
may be awarded or increased in accordance together one or both of whom have
with the facts found but not earlier than the provides that VA will use the data it
remarried, or a parent who is a patient publishes in the Federal Register in
beginning of the appropriate 12-month in a nursing home or who is so helpless
annualization period if satisfactory evidence calculating parents’ DIC payments. VA
is received within the same or the next
or blind, or so nearly helpless or blind, normally publishes such data within
calendar year. as to require the regular aid and three months of the effective date of the
(Authority: 38 U.S.C. 5110(h)) attendance of another person. The rules legislative cost-of-living increases.
refer regulation users to various The remainder of § 5.536 provides
(2) Actual income. Where the claimant’s
actual income did not permit payment, or provisions of 38 U.S.C. 1315 for specific specific rate payment rules based on
payment was made at a lower rate, for a given rates. Together with current § 3.27(b), various provisions of current §§ 3.25,
12-month annualization period, pension or they note that those rates, and the 3.251, 3.260, and 3.704. See the ‘‘Table
dependency and indemnity compensation annual income limitation for parents’ comparing current part 3 rules with
may be awarded or increased, effective the DIC, are increased in step with cost-of-
beginning of the next 12-month proposed part 5 rules’’ earlier in the
living increases in benefits under title II
annualization period, if satisfactory evidence supplementary information.
of the Social Security Act. (These
is received within that period. 5.537 Payment intervals.
increases are required by 38 U.S.C.
Proposed § 5.535(b) follows the rule 5312(b).) Because parents’ DIC is Proposed § 5.537(a) states the general
in § 3.660(b)(1). We propose to omit the income based and because 38 U.S.C. rule that VA pays parents’ DIC monthly.
rule in § 3.660(b)(2), which provides a 1315 requires it, these rules also provide An exception in proposed paragraph (b)
shorter period of time for submitting for rate reductions based on parents’ is based on the rule in current § 3.30(e)
amended income information in some income. They provide a formula for that that provides that parents’ DIC will be
instances, because we believe that it has reduction, but note that the formula will paid semiannually if the amount of the
no practical application to parents’ DIC be recomputed when there is a rate annual benefit is less than 4 percent of
cases. increase in order to achieve ‘‘an the maximum allowable rate as
With respect to parents’ DIC, current equitable distribution of the rate published in the Notices section of the
§ 3.660(b)(2) contemplates a situation increase.’’
Federal Register. We propose to retain
such as the following: A parents’ DIC Current §§ 3.25 and 3.27(d) together
the exception, found in the introduction
beneficiary provides VA with the require that VA publish in the Federal
to current § 3.30, that permits parents
amount of income expected for year A. Register the increased DIC payment
receiving payment semiannually to elect
VA pays DIC for year A based on that rates, the annual income limitation
to receive payment monthly in cases in
anticipated income. The beneficiary increases, and the updated formulas VA
which other Federal benefits would
receives actual income for year A in the uses for reducing DIC payments because
otherwise be denied.
amount anticipated. Therefore, no of income. Section 3.25 also includes
adjustments are necessary for year A. various other rules based on Effective Dates
However, income decreases during year requirements of 38 U.S.C. 1315, such as
5.573 Effective date for dependency
B. If the beneficiary provides VA with a $5.00 minimum for parents’ DIC
and indemnity compensation rate
evidence of the decreased income for payments applicable under some
adjustments when an additional
year B not later than December 31 of circumstances.
These various provisions of §§ 3.25 survivor files an application.
year B, VA will increase benefits for
year B because of the decreased income. and 3.27 are all accurate, but they do Proposed § 5.573 is a revision of
However, as a practical matter, what not provide the information in a way current § 3.650(a) and (b) and provides
will have taken place in this situation is that is very practical for regulations general DIC rate and effective date
that VA will have commenced paying users who want specific information determination rules. We intend no
benefits for year B either in anticipation about the dollar amounts of rates and substantive changes in these provisions.
that income for year B is going to be the income limitations and the specific We propose to use ‘‘survivor’’ rather
same as it was for year A or on the basis current formulas for calculating than the word ‘‘dependent,’’ which is
of anticipated income information for payment reductions because of income. used in current § 3.650. DIC is payable
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Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules 61339
to certain survivors of a veteran who We propose, in § 5.574(b)(2), to the information described in proposed
may or may not have been financially provide an effective date rule for 38 CFR 5.500 through 5.502.
dependent upon the veteran. See 38 discontinuance of a surviving spouse’s Comments on the collections of
U.S.C. 1310(a) (providing for payment of special monthly DIC award based on information should be submitted to the
DIC to a veteran’s surviving spouse, housebound status that parallels the Office of Management and Budget,
children, or parents). This proposed rule structure of the rule for the Attention: Desk Officer for the
would fall at the end of the effective discontinuance of a surviving spouse’s Department of Veterans Affairs, Office
date rules for subpart G previously special monthly DIC award based on the of Information and Regulatory Affairs,
published for notice and comment. See need for aid and attendance. ‘‘When a Washington, DC 20503, with copies to
69 FR 59072 (Oct. 1, 2004). surviving spouse is no longer the Director, Regulations Management
housebound, VA will discontinue (00REG1), Department of Veterans
5.574 Effective dates of awards and Affairs, 810 Vermont Avenue, NW.,
special monthly DIC based upon
discontinuances of special monthly Washington, DC 20420. Comments
housebound status effective the first day
dependency and indemnity should indicate that they are submitted
of the month that follows the month for
compensation. in response to ‘‘RIN 2900–AL89.’’
which VA last paid that benefit.’’
Proposed § 5.574 provides effective Title: Proof of death.
date rules for the award and Omission of Rule in 38 CFR 3.22(h) Summary of collection of information:
discontinuance of special monthly DIC Current § 3.22(h), based on 38 U.S.C. Survivors of VA beneficiaries may be
benefits. Proposed § 5.574(b)(1), based 1318(e), sets out a rule concerning the entitled to certain VA survivors’ benefits
on current §§ 3.502(e)(1) and 3.504, offset of certain DIC payments to a when that beneficiary dies. Examples of
provides an effective date rule for the surviving spouse against annuity such survivors’ benefits that would be
discontinuance of special monthly DIC payments to that spouse under a governed by provisions of proposed 38
when a surviving spouse or parent is no survivor benefit plan applicable to CFR part 5 include benefits awarded,
longer in need of aid and attendance. survivors of members of the Armed but unpaid at death, and accrued
The current rules refer to discontinuing Forces. We propose not to repeat that benefits under 38 U.S.C. 5121; death
special monthly DIC on the ‘‘date of last rule in part 5. The rule is accurate, but compensation under 38 U.S.C. 1121 and
payment.’’ We propose to instead state it provides no substantive information 1141; dependency and indemnity
that ‘‘VA will discontinue special that is not included in the underlying compensation under 38 U.S.C. chapter
monthly DIC based upon the need of aid statute. Further, the survivor benefit 13; and death pension under 38 U.S.C.
and attendance effective the first day of plan in question is not administered by chapter 15. Proposed 38 CFR 5.500
the month that follows the month for VA. It is administered by the through 5.502 set forth the various kinds
which VA last paid that benefit.’’ The Department of Defense. of evidence that a survivor may submit
result is exactly the same, but we to prove the death. VA will provide
believe that this description will be Endnote Regarding Amendatory assistance in obtaining this evidence as
clearer to VA claimants and to VA Language provided in 38 CFR 3.159(c).
personnel who adjudicate claims. As the We intend to ultimately remove part Description of the need for
name suggests, VA pays special monthly 3 entirely, but we are not including information and proposed use of
DIC on a monthly basis. See 38 U.S.C. amendatory language to accomplish that information: A basic element of
1311(c) and (d) and 1315(g). The ‘‘last at this time. VA will provide public entitlement to VA benefits for survivors
payment’’ in question is the check for notice before removing part 3. is establishing the death of the person
the last month in which VA paid the whom the claimant survives. VA will
Paperwork Reduction Act
benefit. Benefit payments would examine the evidence of death
therefore stop on the first day of the Proposed 38 CFR 5.500 through 5.502, submitted in determining eligibility for
following month. which are set forth in full in the claimed survivors’ benefits.
We have not included in this special proposed regulatory text portion of this Description of likely respondents: VA
monthly DIC effective date section document, contain collections of survivors’ benefits claimants.
language in current § 3.502(e)(2) which information under the Paperwork Estimated number of respondents:
states the following: ‘‘If hospitalized at Reduction Act of 1995 (44 U.S.C. 3501– Approximately 56,865 per year.
Department of Veterans Affairs expense 3521). These provisions prescribe the Estimated frequency of responses:
as a veteran, the date [of discontinuance information VA claimants submit to This information is collected on a ‘‘one-
of the aid and attendance allowance to prove the death of a person upon whose time’’ basis.
a surviving spouse will be the date] death their entitlement to various VA Estimated average burden per
specified in § 3.552(b)(1) or (3).’’ We benefits for survivors depends. As collection: In most cases survivors will
have also omitted similar language from required under section 3507(d) of the have evidence of death at hand because
current § 3.504 pertaining to the Act, VA has submitted a copy of this they have gathered that evidence for
discontinuance of the aid and proposed rulemaking action to the probating estates, filing commercial life
attendance allowance for surviving Office of Management and Budget insurance claims, and similar purposes.
parents. Current § 3.552(b) is based on (OMB) for its review of the collection of Most survivors know that proof of death
38 U.S.C. 5503(c) (identified in the information. should accompany applications for VA
authority citation at the end of OMB assigns control numbers to survivors’ benefits and mail copies of
§ 3.552(b) under its old designation of collections of information it approves. the proof of death to VA with their
38 U.S.C. 5503(e)). The provisions of 38 VA may not conduct or sponsor, and a applications. (The information
U.S.C. 5503(c) only concern adjustments person is not required to respond to, a collections in survivor benefit
of special monthly disability collection of information unless it applications have been separately
compensation under various portions of displays a currently valid OMB control approved by OMB.) VA estimates that
38 U.S.C. 1114 for veterans who are in number. Subject to OMB approval, VA the burden for those individuals will be
need of aid and attendance and special proposes to amend the collection approximately one-quarter hour for
monthly pension for veterans who are in currently approved by OMB under locating and mailing the documentation
need of aid and attendance. control number 2900–0004 to include proving death they already have at
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61340 Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules
hand. In other cases, VA will obtain the Federal Register. Therefore, a comment PART 5—COMPENSATION, PENSION,
proof of death for the claimant. VA is to OMB is best assured of having its full BURIAL, AND RELATED BENEFITS
obligated under 38 CFR 3.159(c) to effect if OMB receives it within 30 days
obtain for claimants records in the of publication. This does not affect the Subpart G—Dependency and
custody of a Federal department or deadline for the public to comment on Indemnity Compensation, Accrued
agency and will make reasonable efforts the proposed regulations. Benefits, Death Compensation
to obtain records in the custody of other Benefits, and Special Rules Applicable
sources. In a relatively small number of Regulatory Flexibility Act Upon Death of a Beneficiary
cases claimants will need to obtain
The Secretary hereby certifies that
proof of death and provide it to VA. VA 1. The authority citation for subpart G
this proposed regulatory amendment of part 5 continues to read as follows:
estimates that this will take an average
will not have a significant economic
of 1 hour per respondent.
Estimated total annual reporting and impact on a substantial number of small Authority: 38 U.S.C. 501(a) and as noted in
recordkeeping burden: This information entities as they are defined in the specific sections.
collection imposes no recordkeeping Regulatory Flexibility Act, 5 U.S.C. 601–
612. This proposed amendment would 2. Sections 5.500 through 5.549 are
requirement. VA estimates that it will
not affect any small entities. Therefore, added to subpart G to read as follows:
receive approximately 66,900
applications for VA survivors’ benefits pursuant to 5 U.S.C. 605(b), this General Provisions
annually. VA estimates that it will proposed amendment is exempt from Sec.
obtain proof of death for approximately the initial and final regulatory flexibility 5.500 Proof of death.
15 percent of those claimants. Of the analysis requirements of sections 603 5.501 Proving death by other means.
remaining 56,865 claimants, VA and 604. 5.502 Proving death after 7 years of
estimates that approximately 90 percent, continuous, unexplained absence.
Executive Order 12866 5.503 Establishing the date of death.
or 51,179 claimants, will already have
the information at hand and that the This document has been reviewed by 5.504 Service-connected cause of death.
remaining 10 percent, or 5,686 5.505–5.509 [Reserved]
the Office of Management and Budget
claimants, will need to obtain and under Executive Order 12866. Dependency and Indemnity Compensation—
provide proof of death. The information General
collection burden per case is Unfunded Mandates
5.510 Dependency and indemnity
approximately one-quarter hour for compensation—basic entitlement.
The Unfunded Mandates Reform Act
those who have the information at hand, 5.511 Special monthly dependency and
of 1995 requires, at 2 U.S.C. 1532, that
or a total of 12,795 hours. VA estimates indemnity compensation.
agencies prepare an assessment of
the time necessary to obtain and provide 5.512 Eligibility for death compensation or
anticipated costs and benefits before death pension instead of dependency
proof of death in other cases will
developing any rule that may result in and indemnity compensation.
average approximately 1 hour, or 5,686
an expenditure by State, local, or tribal 5.513–5.519 [Reserved]
hours. Therefore VA estimates the total
annual reporting burden to be 18,481 governments, in the aggregate, or by the
Dependency and Indemnity Compensation—
hours. private sector of $100 million or more
Eligibility Requirements and Payment Rules
The Department considers comments (adjusted annually for inflation) in any for Surviving Spouses And Children
by the public on proposed collections of given year. This proposed amendment
5.520 Dependency and indemnity
information in: would have no such effect on State,
compensation—time of marriage
• Evaluating whether the proposed local, or tribal governments, or the requirements for surviving spouses.
collections of information are necessary private sector. 5.521 [Reserved]
for the proper performance of the Catalog of Federal Domestic Assistance 5.522 Dependency and indemnity
functions of the Department, including Numbers compensation benefits for survivors of
whether the information will have certain veterans rated totally disabled at
practical utility; The Catalog of Federal Domestic time of death—offset of wrongful death
• Evaluating the accuracy of the Assistance program number and title for damages.
Department’s estimate of the burden of 5.523 [Reserved]
this proposal is 64.110, Veterans 5.524 Awards of dependency and
the proposed collections of information, Dependency and Indemnity indemnity compensation benefits to
including the validity of the Compensation for Service-Connected children when there is a retroactive
methodology and assumptions used; Death. award to a school child.
• Enhancing the quality, usefulness, 5.525–5.529 [Reserved]
and clarity of the information to be List of Subjects in 38 CFR Part 5
collected; and Dependency and Indemnity Compensation—
• Minimizing the burden of the Administrative practice and Eligibility Requirements and Payment Rules
collections of information on those who procedure, Claims, Disability benefits, for Parents
are to respond, including through the Health care, Pensions, Radioactive 5.530 Eligibility for, and payment of,
use of appropriate automated, materials, Veterans, Vietnam. parents’ dependency and indemnity
electronic, mechanical, or other Approved: July 13, 2005. compensation.
technological collection techniques or 5.531 General income rules.
Gordon H. Mansfield, 5.532 Deductions from income.
other forms of information technology,
Deputy Secretary of Veterans Affairs. 5.533 Exclusions from income.
e.g., permitting electronic submission of 5.534 When VA counts parents’ income.
responses. For the reasons set out in the
5.535 Adjustments to parents’ DIC when
OMB is required to make a decision preamble, VA proposes to amend 38 income is less than anticipated.
concerning the proposed collection of CFR chapter I by further amending 5.536 Parents’ dependency and indemnity
information contained in this proposed subpart G of part 5, as proposed to be compensation rates.
rule between 30 and 60 days after added at 69 FR 59084, October 1, 2004, 5.537 Payment intervals.
publication of this document in the as follows: 5.538–5.549 [Reserved]
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Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules 61341
General Provisions § 5.501 Proving death by other means. they concluded that death was caused
(a) Applicability. This section and by the event.
§ 5.500 Proof of death. (3) Finding of fact of death by
§ 5.502, ‘‘Proving death after 7 years of
(a) Purpose and application.—(1) This continuous, unexplained absence,’’ authorized VA official. An authorized
section describes evidence VA will describe methods of proving that a VA official may make a finding of the
accept to prove that a person has died person has died if the death of that fact of death where death is shown by
in cases where the death of the person person is relevant to eligibility for a VA competent evidence. See § 3.100(a) of
is relevant to eligibility for a VA benefit. benefit and the evidence described in this chapter (concerning delegation of
It covers the most common situations. § 5.500, ‘‘Proof of death,’’ is not authority to make findings and
Sections 5.501, ‘‘Proving death by other available. decisions concerning entitlement to VA
means,’’ and 5.502, ‘‘Proving death after (b) Required statement. A claimant benefits).
7 years of continuous, unexplained seeking to establish the fact of death (Authority: 38 U.S.C. 501(a)(1))
absence,’’ apply where the evidence under this section must submit a
described in this section is not statement explaining why none of the § 5.502 Proving death after 7 years of
available. continuous, unexplained absence.
evidence described in § 5.500 is
(2) Where more than one paragraph of available. (a) Evidence required. A claimant
this section applies, VA will accept the (c) Affidavits or certified statements of seeking to establish the death of a
evidence described in any relevant witnesses who viewed the body. The fact person who has been absent for 7 years,
paragraph as proof of death. For of death may be established by the where death is not established with
example, if the person died in a U.S. affidavit or certified statement of one or documentary evidence described in
Government hospital located within a more persons who have personal § 5.500, ‘‘Proof of death,’’ or § 5.501,
State, VA would accept the evidence knowledge of the fact of death, have ‘‘Proving death by other means,’’ must
establishing death specified in either viewed the body of the deceased, and produce competent, credible evidence
paragraph (b) or (d) of this section. know it to be the body of the person to show that:
(b) Deaths occurring within a State. whose death is being alleged. These (1) The person has been continuously
Death occurring within a State may be affidavits or statements should describe absent from home and family for at least
established by: (1) A copy of the public all the facts and circumstances known 7 years without explanation; and
record of the State or community where (2) A diligent search disclosed no
concerning the death, including the
death occurred, or evidence of the person’s continued
place, date, time, and cause of death.
(2) A copy of a coroner’s report of existence after the disappearance.
(d) Other methods of establishing (b) Finding of death conclusive. A
death, or of a verdict of a coroner’s jury, death. If the claimant cannot furnish the
from the State or community where finding of death under this section will
affidavits or certified statements be conclusive and final for the purposes
death occurred, provided the report or described in paragraph (c) of this
verdict properly identifies the deceased. of laws administered by VA except
section, the fact of death may be where suit is filed for insurance under
(c) Deaths occurring abroad. Death established by one of the following:
occurring abroad may be established by: 38 U.S.C. 1984, ‘‘Suits on insurance.’’
(1) U.S. Government agency finding. (c) Impact of findings of death made
(1) A U.S. consular report of death In the absence of evidence to the
bearing the signature and seal of the by other entities.—(1) State laws that
contrary, VA will accept a finding of the provide for presumption of death are
U.S. consul, fact of death by another U.S.
(2) A copy of the public record of not applicable to claims for VA benefits
Government agency. and may not be used to establish death
death authenticated by the U.S. consul (2) Body not recovered or not
or other agency of the State Department under this section.
identifiable. If circumstances preclude (2) A finding of death by another
or which is exempt from such recovery or identification of the body of Federal agency meeting the criteria
authentication as provided in the deceased, the fact of death may be described in paragraphs (a)(1) and (2) of
§ 3.202(b)(4) of this chapter (concerning established by the claimant’s affidavit or this section is acceptable for VA
certain copies of public or church certified statement setting forth the purposes if there is no credible evidence
records), or circumstances under which the missing to the contrary.
(3) An official report of death of a person was last seen and the known
civilian employee of the U.S. (Authority: 38 U.S.C. 108, 501(a)(1))
facts which led the claimant to believe
Government from the employing U.S. that death has occurred and one of the § 5.503 Establishing the date of death.
Government entity. following, as applicable: (a) Applicability. This section applies
(d) Deaths at institutions under the (i) The affidavits or certified when the fact of death is established
control of the U.S. Government. Death statements of persons who witnessed under §§ 5.500 through 5.502, but the
occurring in a hospital or other the event in which the missing person exact date of death is uncertain.
institution under the control of the U.S. is alleged to have perished, describing (b) Date of death in cases involving a
Government may be established by: the event and, if applicable, why they continuous, unexplained absence of
(1) A death certificate signed by a believe the missing person perished in seven years or more. When the fact of
medical officer, or the event, or death is established under § 5.502,
(2) A clinical summary, or other (ii) If the testimony of eyewitnesses is ‘‘Proving death after 7 years of
report, signed by a medical officer not obtainable, the affidavits or certified continuous, unexplained absence,’’ the
showing the fact and date of death. statements of persons who have the date of death for purposes of the laws
(e) Deaths of members of the most reliable information available administered by VA is seven years after
uniformed services. The death of a concerning why the missing person is the date the person was last known to
member of the uniformed services may believed to have been at the event in be alive.
be established by an official report of which the missing person is alleged to (c) Date of death in other cases. If the
the death from the uniformed service have perished, why the missing person fact of death is established by the
concerned. was in imminent peril at the time the evidence described in § 5.500, ‘‘Proof of
(Authority: 38 U.S.C. 501(a)(1)) event occurred, and the basis on which death,’’ or § 5.501, ‘‘Proving death by
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61342 Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules
other means,’’ VA will determine the at the time of death, only one of which will grant DIC to the qualified survivors
date of death for purposes of the laws was service connected or service of a veteran rated totally disabled due to
administered by VA by considering all connectable, and each disability by service-connected disability for a
of the known facts and circumstances itself was sufficient to bring about specified period of time at the time of
surrounding the death, including the death, VA will grant service connection death, in the same manner as if the
condition of the body when found and for the cause of the veteran’s death. veteran’s death were service connected.
any estimate of the date of death (2) Service-connected disability See § 3.22 of this chapter, ‘‘DIC benefits
provided by a coroner or other official hastens death. VA will grant service for survivors of certain veterans rated
within the scope of that official’s duties. connection for the cause of death if totally disabled at time of death,’’ and
If no identifiable body is found, the date competent medical evidence shows that 38 U.S.C. 1318, ‘‘Benefits for survivors
of death will be presumed to be the date a service-connected disability, or the of certain veterans rated totally disabled
the deceased was last known to be alive combined effect of multiple service- at time of death.’’
in the absence of evidence to the connected disabilities, was so (3) Veterans whose death was due to
contrary. debilitating as to materially hasten certain VA-furnished medical, training,
(Authority: 38 U.S.C. 108, 501(a)) death from nonservice-connected compensated work therapy, or
causes. VA will presume such rehabilitation services—38 U.S.C. 1151.
§ 5.504 Service-connected cause of death. debilitation where a service-connected VA will grant DIC to the qualified
(a) Purpose. Eligibility for several VA disability affected a vital organ and was survivors of a veteran whose death was
benefits for a veteran’s survivors evaluated as 100 percent disabling caused by VA-furnished hospital care,
requires that the veteran’s death be under the Schedule for Rating medical or surgical treatment, medical
service connected. This section provides Disabilities in part 4 of this chapter at examination, training and rehabilitation
the rules VA uses to determine whether the time of the veteran’s death. For services, or participation in a
a veteran’s death is service connected. purposes of this paragraph, vital organs compensated work therapy program, in
(b) Definition of service-connected are those organs necessary to sustain the same manner as if the veteran’s
disability—(1) General. For purposes of life, including the heart, lungs, central death were service connected. See
this section, ‘‘service-connected nervous system, liver, and kidneys. §§ 3.358, 3.361 and 3.800 of this chapter
disability’’ means: (Authority: 38 U.S.C. 101(16), 501(a), 1121, and 38 U.S.C. 1151, ‘‘Benefits for
(i) Except as provided in paragraph 1141, 1310) persons disabled by treatment or
(b)(2) of this section, a disability that vocational rehabilitation.’’
was service connected at the time of the §§ 5.505–5.509 [Reserved] (c) Certain Federal Employees’ Group
veteran’s death, or Dependency and Indemnity Life Insurance beneficiaries ineligible.
(ii) A disability that is service Compensation—General VA cannot pay DIC to any surviving
connectable under the provisions of spouse, child or parent based on the
subpart E of this part, ‘‘Claims for § 5.510 Dependency and indemnity death of a commissioned officer of the
service connection and disability compensation—basic entitlement.
Public Health Service, the Coast and
compensation.’’ For purposes of this (a) Definition. Dependency and Geodetic Survey, the Environmental
section, VA will deem a sudden death indemnity compensation (DIC) is a Science Services Administration, or the
in service from trauma to have been monthly VA payment to a veteran’s National Oceanic and Atmospheric
preceded by disability from the trauma. surviving spouse, child, and/or parent Administration occurring after April 30,
(2) Exception. For purposes of this based on the veteran’s death. The 1957, if any amounts are payable based
section, ‘‘service-connected disability’’ surviving relative must be otherwise on the same death under the Federal
does not include a disability that was qualified and meet the entitlement Employees’ Group Life Insurance Act of
service connected at the time of the criteria provided in this section. 1954 (Pub. L. 598, 83d Cong., as
veteran’s death if the law in effect at the (b) Bases for entitlement. There are amended).
time of a survivor’s claim precludes VA three ways in which an otherwise (d) Special rules for parents’ DIC. The
from establishing service connection for qualified survivor may become entitled basis of entitlement described in
the cause of the veteran’s death. See to DIC: paragraph (b)(2) of this section does not
§ 3.300 of this chapter, ‘‘Claims based (1) Service-connected death—38 apply to parents’ DIC and payment of
on the effects of tobacco products,’’ and U.S.C. 1310. (i) VA will grant DIC to the parents’ DIC is subject to income
§ 3.301(d) of this chapter ‘‘Line of duty; qualified survivors of a veteran when it limitations. See §§ 5.530 through 5.537
abuse of alcohol or drugs.’’ determines that the cause of the for special eligibility and payment rules
(c) Determining whether a veteran’s veteran’s death, whether occurring for parents’ DIC.
death is service connected. A veteran’s during or after service, is service
death is service connected if death connected. See 38 U.S.C. 1310, ‘‘Deaths (Authority: 38 U.S.C. 101(14), 1151, 1304,
resulted from a service-connected 1310, 1315, 1318; Sec. 501(c)(2), Pub. L. 84–
entitling survivors to dependency and
881, 70 Stat. 857, as amended by Sec. 13(u),
disability. Death resulted from a service- indemnity compensation,’’ and § 5.504, Pub. L. 85–857, 72 Stat. 1266; Sec. 5, Pub. L.
connected disability if the service- ‘‘Service-connected cause of death.’’ 91–621, 84 Stat. 1863)
connected disability produced death or (ii) DIC is not payable unless the
hastened death, as provided in the service-connected death occurred after § 5.511 Special monthly dependency and
following paragraphs: December 31, 1956, except in the case indemnity compensation.
(1) Service-connected disability of certain individuals receiving or (a) Entitlement based on need for
produces death. A service-connected eligible to receive death compensation regular aid and attendance. A surviving
disability is the cause of death if a single who elect to receive DIC in lieu of death spouse or parent in receipt of
service-connected disability, or the compensation. See § 3.702 of this dependency and indemnity
combined effect of multiple service- chapter, ‘‘Dependency and indemnity compensation (DIC) is entitled to special
connected disabilities, is such that compensation.’’ monthly DIC benefits if he or she is
death would not have occurred in the (2) Veterans with a service-connected helpless, or so nearly helpless as to need
absence of the disability, or disabilities. disability rated as totally disabling at the regular aid and attendance of
If two or more disabilities were present the time of death—38 U.S.C. 1318. VA another person. Among other factors,
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VA considers the presence of conditions §§ 5.513–5.519 [Reserved] to the veteran meets any of the
listed in § 3.352(a) of this chapter when Dependency and Indemnity following criteria:
determining whether a person Compensation—Eligibility (i) The surviving spouse was married
demonstrates this degree of Requirements and Payment Rules for to the veteran continuously for one year
helplessness. Surviving Spouses and Children or more immediately preceding the
(b) Automatic entitlement. VA will
§ 5.520 Dependency and indemnity (ii) The surviving spouse was married
automatically consider a person to be in compensation—time of marriage to the veteran for any length of time and
need of regular aid and attendance, requirements for surviving spouses. a child was born of the marriage or
without having to demonstrate the (a) Purpose. In addition to meeting the before the marriage. See § 3.54(d) of this
degree of helplessness described in marriage requirements necessary to chapter, ‘‘Child born.’’
paragraph (a) of this section, if the qualify as a surviving spouse, as defined (Authority: 38 U.S.C. 1151, 1304, 1310, 1318)
person: at § 3.50 of this chapter, a surviving
(1) Is blind or so nearly blind as to spouse must meet certain requirements § 5.521 [Reserved]
have corrected visual acuity of 5/200 or concerning the time of his or her § 5.522 Dependency and indemnity
less in both eyes; marriage to the veteran in order to compensation benefits for survivors of
(2) Has concentric contraction of the qualify for dependency and indemnity certain veterans rated totally disabled at
compensation (DIC). This section sets time of death—offset of wrongful death
visual field in both eyes to 5 degrees or
out those requirements. damages.
(b) Time of marriage requirements— (a) Applicability. This section applies
(3) Is a patient in a nursing home (1) Surviving spouse eligible under when a surviving spouse or child:
because of mental or physical § 5.510(b)(1) or (b)(3). A surviving (1) Is eligible for dependency and
incapacity. spouse meets the time of marriage indemnity compensation (DIC) on the
(c) Entitlement based on permanent requirements for DIC under the bases for basis described in § 5.510(b)(2),
housebound status—surviving spouse. A eligibility set out in § 5.510(b)(1), ‘‘Veterans with a service-connected
surviving spouse who does not qualify ‘‘Service-connected death—38 U.S.C. disability rated as totally disabling at
for special monthly DIC based on need 1310’’ or (b)(3), ‘‘Veterans whose death the time of death—38 U.S.C. 1318,’’ and
for regular aid and attendance, as was due to certain VA-furnished (2) Receives any money or property of
provided in paragraphs (a) and (b) of medical, training, compensated work value pursuant to an award in a judicial
this section, is entitled to special therapy, or rehabilitation services—38 proceeding based upon, or a settlement
U.S.C. 1151,’’ if his or her marriage to or compromise of, any cause of action
monthly DIC if he or she is permanently
the veteran meets any of the following for damages for the wrongful death of
housebound. A surviving spouse will be
criteria: the veteran whose death is the basis for
considered permanently housebound if
(i) The surviving spouse married the such VA benefits.
substantially confined to his or her veteran before or during the veteran’s (b) Offset. VA will not pay DIC on the
home (ward or clinical areas, if military service. basis described in § 5.510(b)(2) for any
institutionalized) or immediate (ii) The surviving spouse was married month following a month in which the
premises because of a disability or to the veteran for one year or more. beneficiary receives money or property
disabilities and it is reasonably certain Multiple periods of marriage may be described in paragraph (a)(2) of this
that such disability or disabilities will added together to meet the 1-year section until the total amount of such
remain throughout the surviving marriage requirement. DIC benefits that would otherwise have
spouse’s lifetime. (iii) The surviving spouse was been payable equals the total of the
(Authority: 38 U.S.C. 1311(c), (d), 1315(g)) married to the veteran for any length of amount of such money and/or value of
time and a child was born of the such property. This paragraph does not
§ 5.512 Eligibility for death compensation marriage or before the marriage. See apply to DIC benefits payable under this
or death pension instead of dependency § 3.54(d) of this chapter, ‘‘Child born.’’ section for any period preceding the end
and indemnity compensation. (iv) The surviving spouse married the of the month in which such money or
(a) General rule. Subject to paragraph veteran within 15 years of the date of property was received.
(b) of this section, VA will not pay death termination of the period of service in (c) Amount of offset. The following
compensation or death pension to any which the injury or disease causing the rules apply when calculating the
person eligible for dependency and veteran’s death was incurred or amount to be offset in DIC cases:
indemnity compensation (DIC) based aggravated. For purposes of this (1) The amount to be offset includes
upon a death occurring after December paragraph, ‘‘period of service’’ means a damages typically recoverable under
31, 1956. period of active military service from wrongful death statutes, such as
which the veteran was discharged under reimbursement for the loss of support,
(b) Right of spouse to elect death conditions other than dishonorable. If services, and other contributions, which
pension. A surviving spouse eligible for the surviving spouse has been married the surviving spouse or child would
DIC may elect to receive death pension to the veteran more than once, see have received if the veteran had lived
instead of DIC. For effective date § 3.54(e) of this chapter, ‘‘More than one and, where allowed, reimbursement for
information, see § 3.400(j)(1) of this marriage to veteran.’’ pain, suffering or mental anguish of the
chapter. (2) Surviving spouse eligible under survivors due to death. Damages
(Authority: 38 U.S.C. 1317) § 5.510(b)(2). A surviving spouse meets recoverable as compensation for injuries
the time of marriage requirements for suffered by, or economic loss sustained
DIC under the basis for eligibility set out by, the veteran prior to death such as
in § 5.510(b)(2), ‘‘Veterans with a wages lost prior to death, medical
service-connected disability rated as expenses, and compensation for the
totally disabling at the time of death— veteran’s pain and suffering prior to
38 U.S.C. 1318,’’ if his or her marriage death are excluded.
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(2) The amount to be offset includes was discontinued because he or she parents on the basis described in
amounts paid to a third party to satisfy reached 18 years of age; § 5.510(b)(2), ‘‘Veterans with a service-
a legal obligation of the surviving (3) That additional child has connected disability rated as totally
spouse or child. This includes the reestablished entitlement to DIC because disabling at the time of death— 38
payment of the claimant’s proportional he or she is attending an approved U.S.C. 1318.’’
share of attorney’s fees, court costs, and educational institution; and (b) Parents’ DIC is income based.
other expenses incident to the civil (4) The effective date of the additional Unlike DIC benefits for a surviving
claim. child’s reestablished entitlement is prior spouse and children, the amount of
(3) The amount to be offset excludes to the date VA received the application parents’ DIC payable is adjusted based
money or property payable to a person to reestablish entitlement. on parents’ income and DIC is not
or entity other than the spouse or child (b) Award to the additional child—(1) payable to parents whose income
under the terms of the judgment, Retroactive payment. The payment to exceeds statutory limits. Sections 5.531
settlement, or compromise agreement the additional child for the period through 5.537 provide income and
unless the spouse or child receives the extending from the payment payment rules.
benefit of such a payment. For example, commencement date of the award to the (c) Net worth not considered. Net
wrongful death damages paid to a additional child through the month that worth is not a factor in determining
veteran’s estate or into a trust or similar award was approved is equal to the entitlement to parents’ DIC or the
arrangement will be included in the difference between the total amount amount of parents’ DIC payable.
amount to be offset to the extent that payable for all children, including the (Authority: 38 U.S.C. 501(a), 1151, 1310,
they are distributed to, or available for additional child, during that period and 1318, 1315)
the use and benefit of, the surviving the total amount paid to the other
spouse or child. children during that period. If more § 5.531 General income rules.
(4) The amount to be offset excludes than one child reestablishes entitlement (a) All payments included in income.
benefits received under Social Security as described in paragraph (a) of this All payments of any kind from any
or worker’s compensation even though section, the retroactive award will be source are counted in determining the
such benefits may have been awarded in paid to each such child in equal shares. income of a veteran’s parents, except as
a judicial proceeding. (2) Payment commencement date for provided in § 5.533, ‘‘Exclusions from
(5) The value of property received is full equal share. The payment income.’’
that property’s fair market value at the commencement date for the full equal (b) Payments—(1) What is included.
time it is received by the claimant. share of DIC to the additional child, or For purposes of this section,
(d) Beneficiary’s duty to report receipt additional children, is the first of the ‘‘payments’’ are cash and cash
of money or property. Any person month following the month VA equivalents (such as checks and other
entitled to DIC on the basis described in approved his or her reestablished DIC negotiable instruments) and the fair
§ 5.510(b)(2), ‘‘Veterans with a service- award. market value of personal services,
connected disability rated as totally (c) Effective date of payment of goods, or room and board a parent
disabling at the time of death—38 U.S.C. reduced shares to the other children. receives from someone else in lieu of
1318,’’ must promptly report to VA the The running awards to the other other forms of payment.
receipt of any money or property children will be reduced to the amount (2) What is not included. ‘‘Payments’’
described in paragraph (a)(2) of this of their new equal shares effective the do not include any of the following:
section. This obligation may be satisfied first of the month following the month (i) The value of a parent’s use of his
by providing VA a copy of the VA approved the award of reestablished or her own property, such as the rental
judgment, settlement agreement, or DIC to the additional child. value of a home a parent owns and lives
compromise agreement awarding the in.
(Authority: 38 U.S.C. 1313(b), 5110(e), 5111)
money or property. Overpayments (ii) Dividends on commercial
created by failure to report will be Cross-references: See also § 3.31 of insurance policies.
subject to recovery if not waived. this chapter, ‘‘Commencement of the (iii) Retirement benefits from the
period of payment,’’ and § 3.667 of this following sources (or to the following
(Authority: 38 U.S.C. 1318(d)) chapter, ‘‘School attendance.’’ persons), if the benefits have been
§ 5.523 [Reserved] waived pursuant to Federal statute:
§§ 5.525–5.529 [Reserved] (A) Civil Service Retirement and
§ 5.524 Awards of dependency and Dependency and Indemnity Disability Fund;
indemnity compensation benefits to Compensation—Eligibility (B) Railroad Retirement Board;
children when there is a retroactive award (C) District of Columbia, firemen,
Requirements and Payment Rules for
to a school child. policemen, or public school teachers;
(a) Applicability. Dependency and (D) Former United States Lighthouse
indemnity compensation (DIC) is § 5.530 Eligibility for, and payment of, Service.
payable to eligible children when there parents’ dependency and indemnity (c) Spousal income combined. Income
is no surviving spouse entitled to DIC. compensation. for parents’ dependency and indemnity
The total amount payable to the (a) Basic eligibility. A veteran’s compensation purposes is the combined
children, which varies according to the surviving parents may receive income of a parent and the parent’s
number of children, is divided and paid dependency and indemnity spouse, unless the marriage has been
to the children in equal shares. This compensation (DIC) on the basis terminated or the parent is separated
section states an exception that applies described in § 5.510(b)(1), ‘‘Service- from his or her spouse. Income is
when all of the following conditions are connected death—38 U.S.C. 1310,’’ and combined whether the parent’s spouse
met: § 5.510(b)(3), ‘‘Veterans whose death is the veteran’s other surviving parent or
(1) DIC is being paid to one or more was due to certain VA-furnished the veteran’s stepparent. See also
children; medical, training, compensated work § 5.534(c) (concerning how much of the
(2) DIC was previously paid to an therapy, or rehabilitation services—38 spouse’s income to count for the year of
additional child, but that child’s DIC U.S.C. 1151.’’ DIC is not payable to remarriage).
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Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules 61345
(d) Income-producing property—(1) (b) Expenses associated with school or a family member confined to
Scope. This paragraph (d) provides rules disability, accident, or health insurance a nursing home.
for determining whether income from recoveries. Medical, legal, or other (ii) Medical expenses. See [regulation
property should be counted as a parent’s expenses incident to the insured that will be published in a future Notice
income. The provisions of this disability are deductible from sums of Proposed Rulemaking] (defining
paragraph (d) apply to all property, real recovered under disability, accident, or medical expenses).
or personal, in which a parent has an health insurance. However, if medical (iii) Unusual medical expenses. For
interest, whether acquired through expenses are deducted under this purposes of this section, ‘‘unusual
purchase, bequest or inheritance. paragraph, they cannot be deducted as medical expenses’’ means unreimbursed
(2) Proof of ownership. In determining unusual medical expenses under medical expenses above five percent of
whether to count income from real or paragraph (d) of this section. annual income. If annual income
personal property, VA will consider the (c) Expenses of a deceased spouse or includes retirement plan income, the
terms of the recorded deed or other of the deceased veteran—(1) Deceased five percent will be calculated prior to
evidence of title. However, VA will spouse. Amounts a parent pays for the deduction of the ten percent exclusion
accept the claimant’s statement following expenses of a deceased spouse under § 5.533(g), ‘‘Ten percent of
concerning the terms of ownership in are deductible: income from retirement plans and
the absence of evidence to the contrary. (i) A deceased spouse’s just debts, similar plans and programs.’’
(3) Transfer of ownership with excluding debts secured by real or (2) Expenses of parent and parent’s
retention of income. If a parent transfers personal property. family members. Amounts paid by a
ownership of property to another person (ii) The expenses of the spouse’s last parent for his or her own unusual
or legal entity, but retains the right to illness and burial to the extent such medical expenses and those of family
income, the income will be counted. expenses are not reimbursed by VA
members are deductible.
(4) Income from jointly owned under 38 U.S.C. chapter 23 (see subpart
(3) Expenses of spouse and spouse’s
property. In the absence of evidence J of this part concerning VA burial
family members. The deduction
showing otherwise, VA will consider a benefits) or 38 U.S.C. chapter 51 (see
includes the unusual medical expenses
parent who owns property jointly with § 5.551(e) concerning the use of accrued
of the spouse and the spouse’s family
others, including partnership property, benefits to reimburse the person who
members if the combined annual
to be entitled to a share of the income bore the expense of a deceased
income of the parent and the parent’s
from that property proportionate to the beneficiary’s last sickness or burial).
(2) Deceased veteran. Amounts a spouse is the basis for calculating
parent’s share of ownership. VA will
accept the claimant’s statement parent pays for the expenses of the income.
concerning the terms of ownership in veteran’s last illness and burial are (4) When expenses are deducted. VA
the absence of evidence to the contrary. deductible to the extent that such will deduct unusual medical expenses
(e) Procedure when income amounts expenses are not reimbursed by VA from income for the calendar year in
are uncertain—deferred determinations. under 38 U.S.C. chapter 23 (see subpart which they were paid regardless of
When a parent is uncertain about the J of this part concerning VA burial when the expenses were incurred.
amount of income the parent will benefits). (5) Proof of expenses. VA will accept
receive during a calendar year, VA will (3) When expenses are deducted. the claimant’s statement as to the
calculate dependency and indemnity Expenses deductible under this amount and nature of each medical
payments for that calendar year using paragraph (c) are deductible for the year expense, the date of payment, and the
the highest amount of income the parent in which they were paid. However, if identity of the creditor unless the
estimates, or VA’s best estimate of such expenses were paid during the circumstances create doubt as to the
income if the parent’s estimate appears year following the year the veteran or credibility of the statement.
to be unrealistically low in light of the spouse died, the expenses may be (6) Estimates of expenses for future
parent’s past income and current deducted for the year the expenses were benefit periods. For the purpose of
circumstances. VA will adjust benefits, paid or the year of death, whichever is authorizing prospective payment of
or pay benefits, when actual total to the parent’s advantage. benefits, VA may accept a claimant’s
income for the year is determined. See (4) Proof of expenses. VA will accept estimate of future medical expenses
also § 5.535, ‘‘Adjustments to parents’ as proof of expenses deductible under based on a clear and reasonable
DIC when income is less than this paragraph (c) a claimant’s statement expectation that unusual medical
anticipated.’’ as to the amount and nature of each expenditure will be incurred. VA will
(Authority: 38 U.S.C. 1315(f)) expense, the date of payment, and the adjust an award based on such an
identity of the creditor unless the estimate upon receipt of an amended
§ 5.532 Deductions from income. circumstances create doubt as to the estimate or upon receipt of an eligibility
(a) Expenses of a business or credibility of the statement. verification report. See also § 3.256 of
profession. Necessary business (d) Unusual medical expenses—(1) this chapter (concerning requirements
operating expenses are deductible from Applicability—(i) Family members. For for eligibility verification reports).
gross income from a business or purposes of determining whose medical (e) Certain salary deductions not
profession. Examples include the cost of expenses are deductible, a family deductible for determining income. For
goods sold and payments for rent, taxes, member is a relative of the parent or purposes of determining a parent’s
upkeep, repairs, and replacements. parent’s spouse who is a member of the income, a salary may not be reduced by
Depreciation is not a deductible household of the parent or parent’s the amount of deductions made under a
expense. Losses sustained in operating a spouse whom the parent or parent’s retirement act or plan or for income tax
business or profession may not be spouse has a moral or legal obligation to withholding.
deducted from income from any other support. This includes a relative who (Authority: 38 U.S.C. 1315(f))
source. For purposes of this section, would normally be a resident of the
‘‘business’’ includes the operation of a household, but who is physically absent § 5.533 Exclusions from income.
farm and transactions involving due to unusual or unavoidable VA will not count payments from the
investment property. circumstances, such as a child away at following sources when calculating
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61346 Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules
parents’ income for dependency and (4) Payments for permanent and total (Authority: 42 U.S.C. 300c–22 (note))
indemnity compensation purposes: disability or death received from the (m) Energy Employees Occupational
(a) Death gratuity. Death gratuity Office of Workers’ Compensation Illness Compensation Program
payments by the Secretary concerned Programs of the U.S. Department of payments. Payments under the Energy
under 10 U.S.C. 1475 through 1480. Labor, the Social Security Employees Occupational Illness
This includes death gratuity payments Administration, or the Railroad Compensation Program.
in lieu of payments under 10 U.S.C. Retirement Board, or pursuant to any
(Authority: 42 U.S.C. 7385e(2))
1478 made to certain survivors of worker’s compensation or employer’s
Persian Gulf conflict veterans liability statute, including damages (n) Payments to Aleuts. Payments to
authorized by sec. 307, Pub. L. 102–25, collected incident to a tort suit under certain eligible Aleuts under 50 U.S.C.
105 Stat. 82. employer’s liability law of the United Appx. 1989c–5.
(b) Donations received. Donations States or a political subdivision of the (Authority: 50 U.S.C. Appx. 1989c–5(d)(2))
from public or private relief or welfare United States. This ten-percent
organizations, including the following: (o) Increased inventory value of a
exclusion applies after the income from
(1) The value of maintenance business. The value of an increase of
the specified payments is reduced by
furnished by a relative, friend, or a civic stock inventory of a business.
the deductions described in § 5.532(b),
or governmental charitable organization, (p) Employer contributions. An
‘‘Expenses associated with disability,
including money paid to an institution employer’s contributions to health and
accident, or health insurance
for the care of the parent due to hospitalization plans for either an active
impaired health or advanced age. or retired employee.
(5) The proceeds of a commercial
(2) Benefits received under (q) Other payments. Other payments
annuity, endowment, or life insurance.
noncontributory programs, such as listed in [regulation that will be
(6) The proceeds of disability,
Supplemental Security Income published in a future Notice of Proposed
accident or health insurance. This ten-
percent exclusion applies after the
(c) Certain VA benefit payments. The income from the specified payments is (Authority: 38 U.S.C. 1315(f))
following VA benefit payments: reduced by the deductions described in § 5.534 When VA counts parents’ income.
(1) Payments under 38 U.S.C. chapter § 5.532(b), ‘‘Expenses associated with
11, ‘‘Compensation for Service- disability, accident, or health insurance (a) General rules—(1) VA counts
Connected Disability or Death.’’ recoveries.’’ income for parents’ dependency and
(2) Payments under 38 U.S.C. chapter (h) Casualty loss reimbursement. indemnity compensation (DIC) purposes
13, ‘‘Dependency and Indemnity Reimbursements of any kind for any on a calendar year basis.
Compensation for Service-Connected casualty loss are not counted, but only (2) The calendar year for which VA
Death.’’ However, payments under 38 up to the greater of the fair market value will count income is the calendar year
U.S.C. 1312(a), described in § 3.804 of or the reasonable replacement value of in which the parent received the
this chapter, are counted as income. the property involved immediately income, or anticipates receiving it.
(3) Nonservice-connected VA (3) VA will count parents’ total
preceding the loss. For purposes of this
disability and death pension payments. income for the full calendar year except
section, a ‘‘casualty loss’’ is the
(4) VA benefit payments listed in as provided in this section.
complete or partial destruction of
[regulation that will be published in a (b) Exception for first awards and
property resulting from an identifiable
future Notice of Proposed Rulemaking]. awards following a period of no
event of a sudden, unexpected or
(d) Certain life insurance payments. entitlement—proportionate annual
Payments under policies of income—(1) When used. VA will use
(i) Profit from sale of non-business
Servicemembers’ Group Life Insurance, proportionate annual income for the
property.—(1) Profit realized from the
United States Government Life first award of parents’ DIC, or for
sale of real or personal property other
Insurance, or National Service Life resuming payments on an award of
than in the course of a business.
Insurance. parents’ DIC which was discontinued
However, any amounts received in
(e) Social Security death payments. for a reason other than excess income or
excess of the sale price, such as interest
Lump-sum death payments under title II a change in marital or dependency
payments, will be counted as income.
of the Social Security Act. (2) If payments are received in status, if it is to the parents’ advantage.
(f) State service bonuses. Payments of installments, the sums received Otherwise, VA will base the award on
a bonus or similar cash gratuity by any (including principal and interest) will the parent’s actual total annual income
State based upon service in the Armed be excluded until the parent has for the entire calendar year.
Forces. (2) Proportionate annual income
received an amount equal to the sale
(g) Ten percent of income from calculation. A proportionate annual
price. Any amounts received after the
retirement plans and similar plans and income calculation disregards income
sale price has been recovered will be
programs. Ten percent of the amount of received, and expenses paid, prior to the
counted as income.
payments to an individual under public (j) Payment for civic obligations. effective date of an initial award of
or private retirement, annuity, Payments received for discharge of jury parents’ DIC, or prior to the effective
endowment, or similar plans or duty or other obligatory civic duties. date of an award that follows a period
programs is not counted. This includes (k) Radiation Exposure Compensation of no entitlement for a reason other than
payments for: Act payments. Payments under Section excess income or a change in marital or
(1) Annuities or endowments paid 6 of the Radiation Exposure dependency status. In performing a
under a Federal, State, municipal, or Compensation Act of 1990. proportionate annual income
private business or industrial plan. calculation, VA first determines what
(2) Old age and survivor’s insurance (Authority: 42 U.S.C. 2210 (note)) the parents’ income was for the portion
and disability insurance under title II of (l) Ricky Ray Hemophilia Relief Fund of the calendar year from the effective
the Social Security Act. payments. Payments under section date of the award of parents’ DIC to the
(3) Retirement benefits received from 103(c)(1) of the Ricky Ray Hemophilia end of the calendar year. VA then
the Railroad Retirement Board. Relief Fund Act of 1998. calculates what annual income would
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Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules 61347
have been if income had been received status, upon whether a parent is for DIC, the rate of DIC payable to that
at the same rate for the entire calendar separated from his or her spouse, and parent will be that which would be
year. upon whether a parent is a patient in a payable to such parent if both parents
(3) How VA computes proportionate nursing home or helpless or blind or so had filed an application.
annual income. VA will use the nearly helpless or blind as to require the (f) Minimum payment—(1) Five dollar
following steps in making the aid and attendance of another person. minimum. If any payment of parents’
proportionate annual income These rates are reduced by varying DIC is due after the applicable rate
calculation, rounding the result only at amounts that depend upon the parents’ payable is adjusted for income, the
the final step. income. See 38 U.S.C. 1315. Rate and amount of that payment will not be less
(i) Determine income from the income limitations are periodically than $5.00 monthly.
effective date of the award of parents’ adjusted whenever there is an increase (2) Minimum DIC payment required
DIC to the end of the calendar year, in benefit amounts payable under title II for special monthly DIC. The special
disregarding income received and of the Social Security Act. See 38 U.S.C. monthly DIC payable to a parent who is
expenses paid before the effective date 5312(b). In cases based on service in the a patient in a nursing home, is helpless
of the award. Commonwealth Army of the or blind or requires the aid and
(ii) Divide the result by the number of Philippines, or as a guerrilla or as a attendance of another person will be
days from the effective date of the award Philippine Scout, also see § 3.251(a)(3) paid to a parent only if he or she
of parents’ DIC to the end of the of this chapter (concerning calculation qualifies for at least the minimum DIC
calendar year. of the parents’ DIC income limitation for payment described in paragraph (f)(1) of
(iii) Multiply that result by 365. This claims based on such service). this section.
result, rounded down to the nearest (b) Use of published rates and income (g) Rate changes due to changes in
dollar, is the proportionate annual limitations. Whenever there is a cost-of- marital status or living arrangements. If
income. living increase in benefit amounts a parent’s conditions of entitlement
(c) Exception for an increase in payable under section 215(i) of title II of change because of a change in marital
income because of a parent’s marriage. the Social Security Act, VA increases status or living arrangements, VA will
If a parent marries during the applicable the annual income limitations and the determine the new rate payable based
calendar year, income received by the maximum monthly rates of parents’ DIC on the new status. For example, if the
parent’s spouse prior to the date of the by the same percentage as the Social parent was unmarried for part of the
marriage is not counted. Security increase. These increases are year, and married for part of the year,
(Authority: 38 U.S.C. 501(a), 1315(b)) effective on the same date as the Social VA will pay the applicable rate for an
Security increase. VA will publish unmarried parent for the part of the year
§ 5.535 Adjustments to parents’ DIC when parents’ DIC rates, the annual income that the parent was unmarried, and then
income is less than anticipated. limitations, and the formulas for pay the applicable rate for a married
(a) Applicability. This section applies adjusting parents’ DIC rates for annual
parent for the part of the year that the
when, based on anticipated income, VA income in the Notices section of the
parent was married.
did not pay parents’ DIC for a particular Federal Register when there is a change
(h) Rates payable when one of two
calendar year, or paid less than the full in the amounts. VA will use this
parents receiving death compensation
applicable statutory rate for that published data in calculating parents’
elects DIC—(1) Parent who elects DIC.
particular calendar year, but income for DIC payments. The rates referenced in
The rate of DIC for the parent who elects
that calendar year was actually less than paragraphs (c) through (e) of this section
DIC will not exceed the amount that
anticipated. are the rates specified in the applicable
would be paid to the parent if both
(b) Retroactive adjustment; income Federal Register notice of an increase in
the rates of parents’ DIC. parents had elected DIC.
reporting time limitation. VA may
(c) One parent—remarried. Where (2) Parent still receiving death
retroactively pay parents’ DIC or pay a
there is only one parent and that parent compensation. The rate of death
higher rate of parents’ DIC from the first
has remarried and is living with his or compensation for the parent who did
of the applicable calendar year under
her spouse, VA will pay DIC at the rate not elect DIC will not exceed the
the following circumstances:
(1) Satisfactory evidence shows that for one parent who has not remarried, amount that would be paid if both
income was actually less than or the rate applicable to a remarried parents were receiving death
anticipated for that calendar year and parent living with his or her spouse, compensation.
(2) VA receives such evidence not whichever will provide the greater (Authority: 38 U.S.C. 501(a), 1315, 5312)
later than the end of the year following monthly rate of DIC. However, § 5.531(c)
(requiring spousal income to be § 5.537 Payment intervals.
the year to which the evidence pertains.
Otherwise, payment or increased combined) applies in either instance. (a) Monthly payments. VA pays
payments may not be made for the (d) One parent—marriage ends or parents’ dependency and indemnity
applicable calendar year on the basis of parent is separated from spouse. Where compensation (DIC) monthly, except as
such evidence. there is only one parent and that parent provided in paragraph (b) of this
has remarried and that marriage has section.
(Authority: 38 U.S.C. 501(a), 1315(e), 5110(a))
ended or the parent is separated from (b) Exception. VA will pay the
Cross-reference: See also § 3.256 of this
chapter, ‘‘Eligibility reporting requirements.’’ his or her spouse, the rate of DIC for that parents’ DIC benefit semiannually, on or
parent will be that which would be about June 1 and December 1, if the
§ 5.536 Parents’ dependency and payable if there were one parent alone, amount of the annual benefit is less than
indemnity compensation rates. in the case of termination of the four percent of the maximum annual
(a) Statutory rates. VA pays marriage, or two parents not living rate payable for that parent. However,
dependency and indemnity together, in the case of separation. parents receiving payment semiannually
compensation (DIC) to eligible parents (e) Two parents living—one parent may elect to receive payment monthly
based upon statutory rates that vary files DIC application. Where there are in cases in which receiving payments
depending upon whether both parents two parents of the veteran living and semiannually would cause other Federal
are living, upon the parents’ marital only one parent has filed an application benefits to be denied.
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61348 Federal Register / Vol. 70, No. 203 / Friday, October 21, 2005 / Proposed Rules
(Authority: 38 U.S.C. 501(a), 1315) (ii) The first day of the month that also entitled to special monthly DIC at
follows the month for which VA last the time of that basic DIC award, the
§§ 5.538–5.549 [Reserved]
paid benefits to the original survivor(s). effective date for special monthly DIC
3. Sections 5.573 through 5.579 are (c) Effective date for award to will be the later of the following dates:
added to subpart G to read as follows: additional survivor. If an award for the (i) The effective date of the basic DIC
§ 5.573 Effective date for dependency and additional survivor is warranted, the award, or
indemnity compensation rate adjustments full rate to which the additional (ii) The date entitlement to special
when an additional survivor files an survivor is entitled is payable to the monthly DIC arose. See [regulation that
application. additional survivor from the effective will be published in a future Notice of
(a) General. If an additional survivor date of that award. Proposed Rulemaking] (defining ‘‘date
files an application for dependency and (d) Resumption of previous level of entitlement arose’’).
indemnity compensation (DIC) benefits payments to other survivors. If (3) Surviving spouse or parent in
while other survivors are receiving entitlement is not established for the receipt of hospital, institutional, or
benefits under a running award (for additional survivor, benefits previously domiciliary care at VA expense. If the
example, one or more children are being paid to other survivors will be surviving spouse or parent is provided
receiving benefits and another child resumed, if otherwise in order, from the hospital, institutional, or domiciliary
files for benefits), VA will reduce the date of the reduction in the running care at VA expense, the effective date of
running award while VA determines the award. any special monthly DIC award based
additional survivor’s entitlement when: (e) Exception. This section does not on the need for aid and attendance
(1) The additional survivor has apply to cases governed by § 5.524, under § 5.511(a) or (b) will be the date
apparent entitlement to benefits; and ‘‘Awards of dependency and indemnity of departure from the medical facility.
(2) Payment to the additional survivor compensation benefits to children when (b) Effective date of discontinuance—
would reduce the DIC benefits being there is a retroactive award to a school (1) Aid and attendance. When a parent
paid to other survivors under the child.’’ or surviving spouse is no longer in need
running award. (Authority: 38 U.S.C. 1313, 5110(a), (e), 5112) of aid and attendance, VA will
(b) Effective date of reduction to discontinue special monthly DIC based
running awards.—(1) Benefits payable § 5.574 Effective dates of awards and
upon the need of aid and attendance
prior to filing of application. If benefits discontinuances of special monthly
dependency and indemnity compensation. effective the first day of the month that
would be payable to the additional follows the month for which VA last
survivor from a date prior to the date (a) Effective date of award—(1)
paid that benefit.
VA received the additional survivor’s General rule. The effective date for an
award of special monthly dependency (2) Housebound. When a surviving
application, the effective date of any
and indemnity compensation (DIC) will spouse is no longer housebound, VA
reduction in the running award will be
be the date VA receives the application will discontinue special monthly DIC
the date of the additional survivor’s
for special monthly DIC or the date based upon housebound status effective
entitlement arose, as defined in the first day of the month that follows
(2) Benefits payable from the date of
[regulation that will be published in a the month for which VA last paid that
application. If benefits would be
future Notice of Proposed Rulemaking], benefit.
payable to the additional survivor from
the date VA received the additional whichever date is later. (Authority: 38 U.S.C. 501(a), 1311(c) and (d),
survivor’s application, VA will reduce (2) Exception—cases involving a 1315(g), 5110, 5112)
the running award on the later of the retroactive award of basic DIC. When an §§ 5.575–5.579 [Reserved]
following dates: award of basic DIC is effective for a
(i) The date VA received the period prior to the date of receipt of the [FR Doc. 05–21026 Filed 10–20–05; 8:45 am]
additional survivor’s application, or application and a spouse or parent is BILLING CODE 8320–01–P
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