Eligibility Reporting Requirements

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AH18

Eligibility Reporting Requirements

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) is proposing to amend

its adjudication regulations regarding eligibility verification reports

(EVRs) for income-based benefits. This amendment implements recent

legislation which eliminated the mandatory requirement for submission

of EVRs on an annual basis from recipients of pension or parents'

dependency and indemnity compensation (DIC) and gives VA discretionary

authority to require such reports where necessary to determine

eligibility. This amendment is necessary to set forth the guidelines

that the Secretary will use in exercising this discretionary authority.

DATES: Comments must be received on or before July 14, 1995.

ADDRESSES: Mail written comments to: Director, Office of Regulations

Management (02D), Department of Veterans Affairs, 810 Vermont Avenue,

NW, Washington, DC 20420, or hand-deliver written comments to: Office

of Regulations Management, Room 1176, 801 Eye Street, NW, Washington,

DC 20001. Comments should indicate that they are in response to ``RIN

2900-AH18.'' All written comments received will be available for public

inspection in the Office of Regulations Management, Room 1176, 801 Eye

Street, NW, Washington, DC 20001, between the hours of 8:00 a.m. and

4:30 p.m., Monday through Friday (except holidays).

FOR FURTHER INFORMATION CONTACT: Paul Trowbridge, Consultant,

Regulations Staff, Compensation and Pension Service, Veterans Benefits

Administration, 810 Vermont Avenue, NW, Washington, DC 20420, telephone

(202) 273-7210.

SUPPLEMENTARY INFORMATION: The term ``eligibility verification report''

means a VA form which requests information needed to determine or

verify eligibility for VA's income-based benefit programs (pension and

parents' DIC). A series of forms, rather than one universal form, is

used because specific entitlement factors vary depending on the benefit

involved and the status of the beneficiary. However, all EVR forms

request income and marital status information and have a similar

format.

Until recently VA was required by law (38 U.S.C. 1315(e) and 38

U.S.C. 1506(2)) to secure a completed EVR at least once a year from

every pension beneficiary and every parents' DIC beneficiary under the

age of 72. Public Law 103-271, the Board of Veterans' Appeals

Administrative Procedures Improvement Act of 1994, amended 38 U.S.C.

1315 and 1506 to give the Secretary of Veterans Affairs discretionary

authority to require submission of income and resource reports by

recipients of income-based benefits. These implementing regulatory

amendments outline the manner in which the secretary will exercise this

discretionary authority each year to determine which claimants and

beneficiaries must complete an EVR.

The proposed rule would require an EVR in three instances. First,

VA will require submission of an EVR by any beneficiary whose Social

Security number, or whose spouse's Social Security number, has not been

verified by the Social Security Administration (SSA). VA conducts

periodic computer matches with SSA. These matches permit VA to verify

the information upon which payment of VA benefits is based. However,

these matches cannot be conducted unless VA records contain accurate

Social Security numbers for the beneficiary and, if applicable, his or

her spouse. A Social Security number is considered to be verified when

the identifying information associated with that number in VA records

(e.g., name, date of birth, sex) matches identifying information

associated with the number in SSA records. SSA verifies the Social

Security numbers of VA beneficiaries and spouses twice each year.

VA is required by 38 U.S.C. 5312 to increase current pension and

parents' DIC rates by the same percentage and on the same date as the

Social Security COLA, and for that reason we automatically update

Social Security income information in our records at the time of a

Social Security COLA. VA then receives a computer extract from SSA

showing the actual Social Security income which beneficiaries will

receive based upon the new COLA and reconciles any differences between

data in VA's records and data provided by SSA. Based on this review of

Social Security data, we are confident of the timeliness and accuracy

of the Social Security income match and, in our judgment, it is not

necessary to require beneficiaries with verified Social Security

numbers who have no income, or whose only income is Social Security, to

submit an annual EVR.

VA will also require beneficiaries who receive income other than

Social Security to submit an EVR. These beneficiaries must submit an

EVR because VA is unable to verify the receipt and amount of other

types of income with the same accuracy that it can verify Social

Security income.

Even if all relevant Social Security numbers have been verified and

neither the beneficiary nor the beneficiary's spouse received income

other than Social Security, VA will still require completion of an EVR

if it determines that submission of an EVR is necessary to preserve

program integrity. The phrase ``necessary to preserve program

integrity'' applies when it is necessary for VA, or an agency with

oversight authority over VA, to verify that EVR-exempt beneficiaries

are accurately reporting changes in entitlement factors.

38 U.S.C. 1315(e) establishes a statutory exemption from filing an

EVR for parents who have attained the age of 72 and who have been paid

Dependency and Indemnity Compensation for two consecutive years.

However, when Congress removed the mandatory requirement for annual

reporting by persons who have received old law or section 306 pension

or parents' DIC for two consecutive years and are at least 72 years

old, it indicated that removal of this reporting requirement did not

affect VA's authority to require clarification or [[Page 25878]] proof

of income, when indicated, for this group (see Pub. L. No. 91-588,

Secs. 2(d) and 6, 84 Stat. 1583, 1584 (1970)). Therefore, VA will apply

the same criteria for determining when persons who are 72 years or

older and have received the particular benefit for two consecutive

calendar years must submit an EVR.

Although beneficiaries will be required to file an EVR only if

requested to do so by VA, they have an affirmative obligation to advise

VA promptly of changes in factors such as income, marital status, etc.

which affect entitlement. This affirmative obligation appears at

Secs. 3.256(a) and 3.277(b) of the amendments.

When VA sends a beneficiary an EVR to be completed, it advises the

beneficiary in writing that the completed form must be returned to VA

at the address shown within 60 days and that failure to return the

completed form will result in interruption of benefits. If the

completed form is not received within the specified period, VA will

suspend payment and send a letter to the beneficiary advising that

completion of the EVR form is required. The beneficiary's continued

failure to return the EVR will result in termination of the award under

the provisions of 38 CFR 3.661.

If a claimant with a pending claim fails to return an EVR when

requested to do so, VA will disallow the claim and notify the claimant

of the reason for the disallowance. The notification will furnish

notice of procedural and appellate rights and will advise the claimant

that no further action can be taken on the claim unless the EVR is

returned within 1 year of the date it was originally requested. VA will

consider the claim abandoned under 38 CFR 3.158 if the EVR is not

received within one year of the date it was originally requested.

We are proposing to change the heading of 38 CFR 3.256 from

``Annual income and net worth questionnaires'' to the more general

``Eligibility reporting requirements'' to better describe the content

of the section. The text of 38 CFR 3.256 is similarly changed to

reflect the new reporting requirements and set out the criteria for

determining which recipients are required to complete an EVR.

The heading of 38 CFR 3.277 is changed from ``Income and net worth

reports'' to ``Eligibility reporting requirements'' to better describe

the content of the section. Paragraph (b) emphasizes a pension claimant

or beneficiary's responsibility to notify VA of any material change in

entitlement factors. Paragraph (c) shows when VA will require

completion of an EVR.

These amendments do not change any substantive rules concerning

eligibility for VA benefits, alter the recipient's obligation to report

changes that may affect the rate of VA benefits payable, or limit VA's

authority to require evidence of entitlement factors in an individual

case. The amendments merely set out VA's policy on requiring completion

of an EVR.

Regulatory Flexibility Act

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.

Paperwork Reduction Act of 1980

This proposed rule contains information collections which are

subject to review by the Office of Management and Budget (OMB) under

the Paperwork Reduction Act of 1980. The title, description of agency

need, and respondents of the information collections are shown below

with estimates of reporting burdens.

Title: Eligibility Verification Reports.

Description of Agency Need: These information collections are to be

used to verify entitlement to or continued eligibility for pension or

parents' DIC and to determine whether adjustments in the rate of

payment are necessary.

Respondents: Recipients of pension or parents' DIC who come within

the circumstances described in proposed Secs. 3.256(b) or 3.277(c) for

submitting an annual EVR or claimants or recipients who have a change

affecting entitlement as specified in proposed Secs. 3.256(a) or

3.277(b).

Estimates of Reporting Burdens: (1) Under current regulations all

of the 825,000 recipients of pension or parents' DIC are required to

submit an annual EVR. It is estimated that under proposed

Secs. 3.256(b) and 3.277(c) the number of persons required to submit an

EVR during a calendar year would be reduced from 825,000 to 325,000. It

is estimated that an EVR takes approximately 30 minutes to complete.

Accordingly, the estimated total annual reporting hours for annual EVRs

would be reduced from approximately 412,500 hours to approximately

162,500 hours. (2) Also, under current regulations approximately

190,000 individuals must independently report changes in factors

affecting entitlement. The proposed regulations (see proposed

Secs. 3.256(a) and 3.277(b)) would not cause a change in this reporting

requirement. It is estimated that such a report takes approximately 15

minutes to complete. Accordingly, the estimated total annual reporting

hours for independent reports because of changes in factors affecting

entitlement would be approximately 47,500 hours.

As required by section 3504(h) of the Paperwork Reduction Act of

1980, VA is submitting a copy of this proposed rule to OMB for its

review of these information collection requirements. Organizations and

individuals desiring to submit comments regarding these burden

estimates or any aspect of these information collection requirements,

including suggestions for reducing burdens, should direct them to VA's

Director, Office of Regulations Management (address above) and the

Office of Information and Regulatory Affairs, OMB, Room 10235, New

Executive Office Bldg., Washington, DC 20503, Attn: Desk Officer for

VA.

The Catalog of Federal Domestic Assistance program numbers are

64.104, 64.105, and 64.110.

List of Subjects in 38 CFR Part 3

Administrative practice and procedure, Claims, Health care,

Individuals with disabilities, Pensions, Reporting and recordkeeping

requirements, Veterans.

Approved: February 3, 1995.

Jesse Brown,

Secretary of Veterans Affairs.

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

proposed to be amended as follows:

PART 3--ADJUDICATION

Subpart A--Pension, Compensation, and 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. Section 3.256 is revised to read as follows:

Sec. 3.256 Eligibility reporting requirements.

(a) Obligation to report changes in factors affecting entitlement.

Any individual who has applied for or receives pension or parents'

dependency and indemnity [[Page 25879]] compensation must promptly

notify the Secretary in writing of any change affecting entitlement in

any of the following:

(1) Income;

(2) Net worth or corpus of estate;

(3) Marital status;

(4) Nursing home patient status;

(5) School enrollment status of a child 18 years of age or older;

or

(6) Any other factor that affects entitlement to benefits under the

provisions of this part.

(b) Eligibility verification report. (1) For purposes of this

section the term eligibility verification report means a form

prescribed by the Secretary that is used to request income, net worth

(if applicable), dependency status, and any other information necessary

to determine or verify entitlement to pension or parents' dependency

and indemnity compensation.

(2) The Secretary shall require an eligibility verification report

under the following circumstances:

(i) If the Social Security Administration has not verified the

beneficiary's Social Security number and, if the beneficiary is

married, his or her spouse's Social Security number;

(ii) If there is reason to believe that the beneficiary or, if the

spouse's income could affect entitlement, his or her spouse may have

received income other than Social Security during the current or

previous calendar year; or

(iii) If the Secretary determines that an eligibility verification

report is necessary to preserve program integrity.

(3) An individual who applies for or receives pension or parents'

dependency and indemnity compensation as defined in Sec. 3.3 or 3.5

shall, as a condition of receipt or continued receipt of benefits,

furnish the Department of Veterans Affairs an eligibility verification

report upon request.

(c) If VA requests that a claimant or beneficiary submit an

eligibility verification report but he or she fails to do so within 60

days of the date of the VA request, the Secretary shall suspend the

award or disallow the claim.

(Authority: 38 U.S.C. 1315(e) and 1506)

3. Section 3.277 is amended by revising the heading and paragraphs

(b) and (c) and by adding paragraph (d) to read as follows:

Sec. 3.277 Eligibility reporting requirements.

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(b) Obligation to report changes in factors affecting entitlement.

Any individual who has applied for or receives pension must promptly

notify the Secretary in writing of any change affecting entitlement in

any of the following:

(1) Income;

(2) Net worth or corpus of estate;

(3) Marital status;

(4) Nursing home patient status;

(5) School enrollment status of a child 18 years of age or older;

or

(6) Any other factor that affects entitlement to benefits under the

provisions of this Part.

(c) Eligibility verification reports. (1) For purposes of this

section the term eligibility verification report means a form

prescribed by the Secretary that is used to request income, net worth,

dependency status, and any other information necessary to determine or

verify entitlement to pension.

(2) The Secretary shall require an eligibility verification report

under the following circumstances:

(i) If the Social Security Administration has not verified the

beneficiary's Social Security number and, if the beneficiary is

married, his or her spouse's Social Security number;

(ii) If there is reason to believe that the beneficiary or his or

her spouse may have received income other than Social Security during

the current or previous calendar year; or

(iii) If the Secretary determines that an eligibility verification

report is necessary to preserve program integrity.

(3) An individual who applies for or receives pension as defined in

Sec. 3.3 shall, as a condition of receipt or continued receipt of

benefits, furnish the Department of Veterans Affairs an eligibility

verification report upon request.

(d) If VA requests that a claimant or beneficiary submit an

eligibility verification report but he or she fails to do so within 60

days of the date of the VA request, the Secretary shall suspend the

award or disallow the claim.

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[FR Doc. 95-11880 Filed 5-12-95; 8:45 am]

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