Exclusions From Income

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AG47

Exclusions From Income

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) has amended its

regulations concerning exclusions from income. The amendment implements

an opinion of VA's General Counsel that the portion of the cash

surrender value of a life insurance policy which represents a return of

premiums should not be considered income under VA's improved pension

program. The intended result is to ensure that countable income is

correctly computed when VA determines entitlement to improved pension.

EFFECTIVE DATE: This amendment is effective October 6, 1994.

FOR FURTHER INFORMATION CONTACT:

Steven Thornberry, Consultant, Regulations Staff, Compensation and

Pension Service, Veterans Benefits Administration, 810 Vermont Avenue,

NW., Washington, DC 20420, (202) 233-3005.

SUPPLEMENTARY INFORMATION: In the Federal Register of December 17,

1993, VA published a proposal to amend 38 CFR 3.272 to exclude from

income for improved pension purposes that portion of the proceeds from

the cash surrender of a life insurance policy which represents a return

of premiums (58 FR 65958-59). A technical correction extending the

comment and review period was published in the Federal Register of

January 4, 1994 (59 FR 278). Interested persons were invited to submit

written comments, suggestions, or objections to the proposal on or

before February 15, 1994. Since no comments were received, the proposed

amendment is adopted without change.

The Secretary hereby certifies that these regulatory amendments

will not have a significant economic impact on a substantial number of

small entities as they are defined in the Regulatory Flexibility Act

(RFA), 5 U.S.C. 601-612. The reason for this certification is that

these amendments would not directly affect any small entities. Only VA

beneficiaries could be directly affected. Therefore, pursuant to 5

U.S.C. 605(b), these amendments are exempt from the initial and final

regulatory flexibility analysis requirements of sections 603 and 604.

The Catalog of Federal Domestic Assistance program numbers are

64.104 and 64.105.

List of Subjects in 38 CFR Part 3

Administrative practice and procedure, Claims, Handicapped, Health

care, Pensions, Veterans.

Approved: July 12, 1994.

Jesse Brown,

Secretary of Veterans Affairs.

For the reasons set forth in the preamble, 38 CFR Part 3 is amended

to read as follows:

PART 3--ADJUDICATION

Subpart A--Pension, Compensation, Dependency and Indemnity

Compensation

1. The authority citation for part 3, subpart A continues to read

as follows:

Authority: 38 U.S.C. 501(a), unless otherwise noted.

2. In Sec. 3.272, paragraph (q) and an authority citation are added

to read as follows:

Sec. 3.272 Exclusions from income.

* * * * *

(q) Cash surrender value of life insurance. That portion of

proceeds from the cash surrender of a life insurance policy which

represents a return of insurance premiums.

(Authority: 38 U.S.C. 501(a))

[FR Doc. 94-21852 Filed 9-2-94; 8:45 am]

BILLING CODE 8320-01-M