Monetary Allowance Under 38 U.S.C. 1805 for a Child Suffering From Spina Bifida Who Is a Child of a Vietnam Veteran

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AI70

Monetary Allowance Under 38 U.S.C. 1805 for a Child Suffering

From Spina Bifida Who Is a Child of a Vietnam Veteran

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends the Department of Veterans Affairs (VA)

adjudication regulations to provide for payment of a monetary allowance

to a child suffering from spina bifida who is a child of a Vietnam

veteran. The intended effect of this amendment is to implement

legislation authorizing VA to provide such benefits.

DATES: Effective Date: October 1, 1997.

FOR FURTHER INFORMATION CONTACT: John Bisset, Jr., Consultant,

Regulations Staff, Compensation and Pension Service, Veterans Benefits

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

(202) 273-7230.

SUPPLEMENTARY INFORMATION: Section 3 of the Agent Orange Act of 1991,

Pub. L. 102-4, 105 Stat. 11, directed the Secretary of Veterans Affairs

to seek to enter into an agreement with the National Academy of

Sciences (NAS) for a series of reports to review and summarize the

scientific evidence concerning the association between exposure to

herbicides used in support of military operations in the Republic of

Vietnam during the Vietnam era, and each disease suspected to be

associated with such exposure. In its most recent report, entitled

``Veterans and Agent Orange: Update 1996,'' which was released on March

14, 1996, NAS noted what it considered ``limited/suggestive evidence of

an association'' between herbicide exposure and spina bifida in the

offspring of Vietnam veterans.

Since VA did not have the statutory authority to provide benefits

to children of veterans based on birth defects, the Secretary announced

on May 28, 1996, that he would seek legislation to provide an

appropriate remedy. VA submitted proposed legislation to Congress in

July of that year. Section 421 of Pub. L. 104-204 added a new chapter

18 to title 38, United States Code, authorizing VA to provide certain

benefits, including a monthly monetary allowance, to children suffering

from spina bifida who are the natural children of veterans who served

in the Republic of Vietnam during the Vietnam era. VA published a

proposal to implement section 421 of Pub. L. 104-204 in the Federal

Register of May 1, 1997 (62 FR 23724-23731). Interested persons were

invited to submit written comments on or before June 30, 1997. We

received a total of thirty-two comments from: the Vietnam Veterans of

America, Inc.; the Vietnam Veterans of America (Illinois State Council

Service Program); a combined comment from the National Veterans Legal

Services Program (NVLSP), the Spina Bifida Association of America, and

the National Alliance of Veteran Family Service Organizations; the

Veterans of Foreign Wars of the United States (VFW); The American

Legion; the Paralyzed Veterans of America (PVA); Senator Tom Daschle;

Senator John D. Rockefeller IV; and twenty-four other concerned

individuals.

A number of commenters specifically recommended changes to the

statutory language of title 38, United States Code, chapter 18. Others

recommended that in the regulation we change the amount of the monetary

allowance associated with the three levels of disability; add

additional payment levels for the monetary allowance; pay the monetary

allowance retroactive to dates prior to October 1, 1997; provide

automobile adaptive equipment or an automobile allowance and specially

adapted housing to children with spina bifida; pay the benefit to

children with spina bifida occulta; pay the benefit to grandchildren of

Vietnam veterans; and pay the benefit to the children of certain

individuals who do not meet the statutory definition of the term

``veteran.'' No changes are made based on these comments. VA has no

legal authority to make any of these changes.

One commenter suggested that in the regulation VA use the term

``biological child'' of a Vietnam veteran rather than ``natural

child.''

Section 1801(1) of title 38, United States Code, defines the term

``child'' for purposes of this benefit as meaning, among other things,

a ``natural child'' of a Vietnam veteran. The term ``natural'' as used

in the statute means relating naturally rather than by adoption

(Webster's New World Dictionary, Third College Ed., 1988, 903), so in

our judgment the terms ``natural child'' and ``biological child'' are

synonymous. Using a term in the regulation that is inconsistent with

the statutory language might imply a difference that we do not intend.

Therefore, we make no change based on this suggestion.

One commenter stated that a child with spina bifida who is the

legally adopted child of a Vietnam veteran should be eligible for this

benefit.

The statute clearly defines the term ``child'' as used in

determining eligibility for spina bifida benefits as meaning the

natural child of a Vietnam veteran (see 38 U.S.C. 1801 (1)). Since VA

has no authority to expand that statutory definition, we make no change

based on this comment.

We proposed to terminate the monetary allowance effective the last

day of the month before the month in which the beneficiary dies. A

commenter suggested that we terminate not only this benefit, but

benefits to veterans and survivors as well, effective the first day of

the month following the month of death.

Because 38 U.S.C. 5112(b)(1) requires VA to discontinue

compensation, dependency and indemnity compensation, or pension

payments on the last day of the month before the death of the

beneficiary, we have no discretion with respect to these benefits.

Although Pub. L. 104-204 is silent on the issue of effective dates for

discontinuing the monetary allowance, there is no indication in chapter

18 of title 38, United States Code, or its legislative history that

Congress intended VA to administer the monetary allowance for children

with spina bifida any differently than compensation, dependency and

indemnity compensation, or pension in this respect, and we make no

change based on this suggestion.

We proposed to define the term ``Vietnam veteran,'' for purposes of

this benefit, to include an individual with service in the waters

offshore and service in other locations ``if the conditions of service

involved duty or visitation in the Republic of Vietnam.'' One commenter

recommended that we eliminate the phrase ``if the conditions of service

involved duty or visitation in the Republic of Vietnam.''

VA defines the term service in the Republic of Vietnam, for the

purposes of presuming herbicide exposure, to include service in the

waters offshore and service in other locations ``if the conditions of

service involved duty or visitation in the Republic of Vietnam'' (see

38 CFR 3.307(a)(6)(iii)). Because herbicides were not applied in waters

off the shore of Vietnam, limiting the scope of the term service in the

Republic of Vietnam to persons whose service involved duty or

visitation in the Republic of Vietnam limits the focus of the

presumption of exposure to persons who may have been in areas where

herbicides could have been encountered. Since the purpose of this

rulemaking is to provide a monetary allowance to the children of those

same veterans that VA presumes to be

[[Page 51275]]

herbicide-exposed if the children are born with spina bifida, it would

be inappropriate to revise the presumption of exposure for the purposes

of this benefit. We make no change based on this comment.

VA proposed to amend 38 CFR 3.263 and 3.275 to implement the

provisions of 38 U.S.C. 1805(c) that specify that the monetary

allowance not be considered income or resources in determining

eligibility for benefits under any Federal program. One commenter

stated that not only should the monetary allowance be excluded from VA

net worth calculations but that assets purchased with the monetary

allowance should also be excluded from those calculations.

Both Secs. 3.263 and 3.275 define ``net worth'' to mean the market

value, less mortgages or other encumbrances, of all real and personal

properties owned by the claimant, except the claimant's dwelling

(single family unit), including a reasonable lot area, and personal

effects suitable and consistent with the claimant's reasonable mode of

life. In our judgment, that definition allows reasonable exclusions

from net worth for purposes of VA's income-based benefit programs, and

we make no change based on this comment.

Several commenters suggested that VA provide an outreach plan as

part of the final regulation. Although we intend informally to advise

potentially eligible claimants that benefits are available and to

solicit claims, we see no reason to include a statement regarding this

matter in the regulations, since those who read the regulations

necessarily would know about the program.

Several commenters stated that spina bifida claimants should have

the same due process and appellate rights as other VA claimants.

38 CFR 3.103, Procedural due process and appellate rights, clearly

states that its provisions apply to all claims for benefits and relief

within the purview of VA's adjudication regulations (38 CFR part 3).

Since the regulatory framework for the monetary allowance to children

with spina bifida (38 CFR 3.814) is codified within 38 CFR part 3, the

due process and appellate rights provided by Sec. 3.103 apply to spina

bifida claimants.

One commenter requested that the comment period for this rulemaking

proceeding be extended until the end of the comment period for the

proposed rule regarding vocational training and rehabilitation for

Vietnam veterans' children who suffer from spina bifida.

Such an extension is unwarranted. An understanding of the issues in

the rulemaking proceeding regarding vocational training and

rehabilitation is not necessary to make informed comments regarding

this rulemaking proceeding.

Another commenter recommended that VA use its Schedule for Rating

Disabilities (title 38, Code of Federal Regulations, part 4) to

evaluate the severity of disabilities for the purpose of furnishing the

monetary allowance for spina bifida.

38 U.S.C. 1155, the statutory authority for VA's Schedule for

Rating Disabilities, provides that evaluations of disabled veterans be

based, as far as practicable, upon average impairment of earning

capacity resulting from similar disabilities in civil occupations, and

be at one of ten grades in 10 percent increments. 38 U.S.C. 1805(b)

authorizes VA to pay a monetary allowance to an eligible child with

spina bifida at one of three levels based on the degree of disability

suffered by the child, as determined in accordance with a schedule for

rating such disabilities to be prescribed by the Secretary. By

requiring evaluations at three levels rather than 10, and by not

directing that evaluations be based on average impairment of earning

capacity or be expressed in percentages, Congress established

requirements for evaluating spina bifida so different from the

requirements for evaluating disabilities for compensation and pension

purposes that they are incompatible with the Schedule for Rating

Disabilities. By codifying the requirement to establish rating criteria

for spina bifida other than under the authority of 38 U.S.C. 1155,

Congress further indicated its expectation that children with spina

bifida would be evaluated under different criteria. For these reasons,

we make no change based on this comment.

Section 1805 of title 38, United States Code, provides a monetary

allowance at one of three levels to eligible individuals based on the

degree of disability to be determined according to a rating schedule

prescribed by the Secretary. We proposed to base the three levels of

disability on neurological deficit, as manifested by impairment of

functioning of: the extremities; bowel or bladder; and intellect; and

to evaluate each of those at one of three levels of severity. Several

commenters objected that those criteria are too narrow because they

fail to include all disabilities ``related to, or secondary to, spina

bifida,'' such as hydrocephalus, Arnold-Chiari malformation, sexual/

reproductive dysfunction, latex allergy, seizure disorders, etc.

While spina bifida is commonly associated with other developmental

defects and congenital abnormalities, 38 U.S.C. 1805 authorizes VA to

pay the monetary allowance for any ``disability resulting from'' spina

bifida. Neurological deficit is the main determinant of disability for

individuals with spina bifida (Long-term Outcome in Surgically Treated

Spina Bifida Cystica, Isao Date, M.D., Yasunori Yagyu, M.D., Shoji

Asari, M.D., and Takshi Ohmoto, M.D., Surg. Neurol. 1993, 40:471-5).

Conditions that are commonly associated with spina bifida, such as

Arnold-Chiari malformation, hydrocephalus, etc., generally affect one

or more of the same functions we proposed to use for rating spina

bifida. The evaluation criteria do not require the raters to rate

impairment of those functions only to the extent that it is due to

spina bifida, but allow them to take into account the effect on those

functions of associated conditions. In our judgment, the rating

criteria that we proposed constitute a reasonable method for

differentiating between three levels of disability, as Congress

required, and we make no change based on these comments.

Several commenters felt that the payment criteria do not take into

account the synergistic effect of disabilities and recommended that an

individual with more than one Level II disability be rated at Level

III.

Congress mandated rating criteria supporting three levels of

payment. If we are to administer this monetary allowance equitably, and

in the manner we believe Congress intended, in assigning an

intermediate (Level II) payment based on combined aspects of

neurological impairment, we must consider not only that some

beneficiaries with spina bifida may be less severely disabled than a

particular individual, but that some may be more severely disabled.

Someone with even four Level II disabilities, for example, would not be

as severely disabled as someone with any of the Level III disabilities,

because the criteria used to assess each disability represent

incremental degrees of severity from least (Level I) through most

severe (Level III). Since Congress established three levels of payment,

it would not be equitable, in our judgment, to pay someone with Level

II impairment of each neurological function considered in the criteria

the same amount as someone with Level III impairment of each

neurological function considered. The criteria as proposed represent a

reasonable and equitable method for distinguishing three levels of

disability, and we make no change based on this comment.

We proposed to measure impairment of intellectual functioning using

[[Page 51276]]

intelligence quotient (I.Q.). A number of commenters stated that I.Q.

is not the best representation of intellectual functioning as it

relates to level of disability. Some recommended that we use

``performance I.Q.'' or ``assessed intellectual functioning'' instead.

According to a recent British study, it is, in fact, I.Q. that is

one of the two main determinants of disability and dependency in

individuals with spina bifida, neurological deficit being the other

(Open spina bifida: a complete cohort reviewed 25 years after closure,

Urology Department, Addenbrooke's Hospital, Cambridge, UK, Dev Med

Child Neurol 1995 Jan; 37(1):19-29). Furthermore, it is important to

keep the criteria as simple and objective as possible to ensure

consistent ratings and timely resolution of claims. Although I.Q. can

be measured by any of several standardized tests that are in general

use, we are not aware of any comparable standard objective measures for

the other aspects of intellectual functioning that the commenters

suggested we use. For these reasons, we make no change based on these

comments.

One commenter felt that the payment criteria should take into

account emotional suffering due to past surgical procedures.

38 U.S.C. 1805 authorizes a monetary allowance for disability

resulting from spina bifida. In normal usage, the term ``disability''

implies a lack of the ability to function normally, physically or

mentally (Dorland's Illustrated Medical Dictionary, 27th ed. 1988,

480). In our judgment, mental suffering due to prior surgeries is not a

disability as that term is used in the statute, and we make no change

based on this comment.

We proposed to evaluate impairment of bowel and bladder function

from least (Level I) to most (Level III) severely impaired based on

whether an individual is continent of urine and feces, requires drugs

or mechanical means to maintain proper bladder or bowel function, or is

completely incontinent of urine or feces. A number of commenters stated

that these criteria penalize individuals for receiving appropriate

treatment and are a financial disincentive to seeking treatment.

The issue is not whether impairment of bowel or bladder function is

severely disabling--we can concede that it is--but the degree of

severity. An individual who is continent at least part of the time, by

whatever means, is clearly less disabled than one who is unable to

attain any degree of continence by any means. Even in cases where an

individual has attained continence of either bowel or bladder function

through drugs or mechanical means, other factors would influence the

payment level. For example, some individuals may be able to attain

continence for either bowel or bladder function but not both. In such a

case, the payment level would remain at Level III. Furthermore,

individuals with impairment of bowel or bladder function will, in many

cases, have other impairments that affect the payment level, so that a

change from incontinence to continence might not warrant any change in

the payment level. In our judgment, the fact that a beneficiary might,

in rare cases, receive a higher monthly payment if he or she does not

follow procedures designed to alleviate, or at least manage,

incontinence will not outweigh for most individuals with spina bifida

the incentives, from both health and social perspectives, to follow

such a program. We therefore make no change based on this comment.

Two commenters pointed out that because the degree of continence

may change, the payment level may need to change. One recommended that

we not reduce the payment from Level II (based on the fact that an

individual requires drugs to maintain urinary continence) to Level I,

until one year after he or she becomes continent without drugs, in

order to ascertain whether continence can be maintained without

medication.

The payment level is based on a combination of specified functional

impairments. For that reason, a change in the severity of one type of

impairment would not necessarily affect the payment level. A reduction

from Level II to Level I based on the fact that an individual has

achieved urinary continence, for example, would occur only if all other

specified impairments (bowel, ambulation, I.Q., upper extremities) were

also at Level I. Under the provisions of 38 CFR 3.814, VA will

reevaluate the disability level whenever there is an indication of

material change in an individual's condition; these evaluations will

generally be based on medical reports from the beneficiary's primary

care physician or the medical institution where he or she receives

treatment. Should the health-care provider indicate that the long-term

effect of withdrawing treatment cannot yet be determined, the rating

activity could defer the reevaluation if it had any potential effect on

the payment level. The length of any deferment should be based on

medical evidence rather than a fixed period set by regulation, however,

and we make no change based on this comment.

Because all children less than one year of age, whether or not they

are suffering from spina bifida, are essentially helpless, incontinent,

unable to walk, and too young for I.Q. to be measured, we proposed to

pay children under the age of one at Level I. Several commenters

objected to this provision.

One commenter stated that this provision is unfair because it is at

odds with the likely disability once the child is old enough to be

properly examined, and arbitrary because it treats infants with spina

bifida differently than older individuals with spina bifida without a

rational basis.

The rating criteria for spina bifida are based on impairment of

specified neurological functions. These functions have not yet

developed in newborns, regardless of their spina bifida status. We do

not dispute the fact that an infant with spina bifida has disabilities

due to the condition. However, since it would be purely speculative to

assess the severity of impairment of neurological functions until such

time as those functions would have developed, in our judgment, there is

a rational basis for setting the level of the monthly allowance at the

lowest rate established by statute. As for the comment that Level I may

not reflect the eventual severity of the child's disability, we believe

that the monetary allowance is meant to reflect the current, rather

than potential, level of severity, and that the requirement to

reevaluate at age one is sufficient to ensure the child will be paid

according to the actual impairment of neurological function once it is

possible to objectively assess that impairment.

Three commenters felt that a child under the age of one should be

paid at Level III. One commenter gave as a reason that this is the

period of most intensive medical and surgical treatment. Another said a

child with hydrocephalus could have multiple shunt malfunctions.

The issue is impairment of specific functions that are not yet

developed in any infant. A child eligible for the monetary allowance is

also entitled to health care from VA, including medical care, supplies,

transportation, etc. Such a child will not be deprived of needed

medical care because of the amount of monetary allowance. Furthermore,

a child under the age of one may be evaluated at Level III if a

pediatric neurologist or pediatric neurosurgeon certifies that there is

a neurologic deficit present that will prevent the individual from

ambulating, that will preclude self-care and feeding self because of

sensory or motor impairment of the upper extremities, or that will make

it impossible for the individual to achieve urinary or fecal

continence. For these

[[Page 51277]]

reasons, we make no change based on this comment.

One commenter said this inequity of presuming a Level I could

continue for years if the parents or VA fail to arrange a reevaluation.

No changes are made based on this comment. These regulations

require VA to reevaluate a child when it reaches one year of age and

thereafter at intervals of not more than five years. That is adequate

protection against the inequity the commenter foresees. Anything beyond

that would be a duty beyond the scope of VA's responsibility.

Furthermore, a child, parent, or guardian may submit evidence that the

disability has worsened at any time after the child is one year of age,

and VA will determine whether that evidence warrants a change in the

amount of monetary allowance.

Several commenters felt that the provision requiring certification

by a pediatric neurologist for an infant to be paid at Level III is too

stringent. Some commenters suggested that in addition to pediatric

neurologists the certification also should be allowed to be made by

pediatric neurosurgeons. We agree that such determinations could also

be made by pediatric neurosurgeons. However, due to the difficulty of

making an objective prognosis for infants with this complex disability,

we believe that only pediatric neurologists and pediatric neurosurgeons

have sufficient expertise to ensure that the option of rating the

infant at Level III is equitably and consistently applied. Accordingly,

the final rule limits such certifications to pediatric neurologists and

pediatric neurosurgeons.

Some commenters said that infants with spina bifida, particularly

those in rural areas, might not have access to a pediatric neurologist

and recommended that VA accept certifications from other health-care

practitioners.

Hospitals even in rural areas offer referral services for treatment

or evaluation of severely disabled children. Under the provisions of 38

U.S.C. 1803, VA will provide an eligible child with spina bifida any

health care, including transportation expenses, that it determines is

necessary. If VA determines that evaluation by a pediatric neurologist

or a pediatric neurosurgeon qualifies as a reasonable need, the

services of a pediatric neurologist or a pediatric neurosurgeon will be

available to any eligible disabled child who needs them, and we make no

change based on this comment.

We proposed to rate impairment of neurological function of the

lower extremities at Level I if the individual is able to walk without

braces or other external support; at Level II if he or she is

ambulatory, but only with braces or other external support; and at

Level III if he or she is unable to ambulate. One commenter said that

the need to wear braces should warrant a Level III determination, and

another said that some who can walk without braces still have very

severe disability.

This comment raises the same issue, i.e., the degree of severity,

discussed above in conjunction with the synergistic effects of

disabilities. In order to administer this monetary allowance equitably,

it is important that we consider not only that some beneficiaries may

be less severely disabled than an individual rated at Level II, but

also that some may be more severely disabled. While spina bifida is

undoubtedly a very disabling condition, the statute requires us to

establish rating criteria that distinguish three levels of disability.

A person able to ambulate with braces or other external support is

unquestionably less severely disabled than an individual who is unable

to ambulate. We believe, therefore, the proposed criteria establish a

clear and reasonable separation between the intermediate and most

severe levels of impairment of neurological functioning of the lower

extremities, and we make no change based on this comment.

We proposed to reevaluate individuals with spina bifida at the age

of one year and then at intervals of no more than five years until the

individual reaches the age of 21. One commenter proposed that VA waive

further reevaluation if the child's primary caregiver states that it is

unlikely that the overall level of disability will improve.

Periodic reevaluations are necessary because, until maturity, the

level of neurological functioning may fluctuate. Virtually all children

can be taught to ambulate with sufficient bracing and external support,

for example, but those with lesions at L2 or higher will usually revert

to wheelchairs in the teenage period (Diseases of the Nervous System,

Arthur K. Asbury, M.D., Guy M. McKhann, M.D., and W. Ian McDonald, Ph.

D., 1986, 712). The purpose of the reevaluations is to ensure that the

beneficiary is being paid at the level commensurate with the severity

of the disability. Although reevaluation will generally be based on

private medical evidence, it is the VA adjudicator, rather than the

caregiver, who is responsible for determining how that medical evidence

compares to the requirements set forth in VA regulations. We therefore

make no change based on this comment.

One commenter noted that the application form asked for parents'

Social Security numbers. The commenter asserted that the form should

clearly state that this is optional information. No change to the form

is made based on this comment. The form clearly and prominently states

in the material under the heading ``Privacy Act Information'' that

disclosure of Social Security numbers is voluntary.

One commenter also noted that the application form asked for the

parents' VA claim numbers and asserted that such information is

irrelevant and should be eliminated from the form. No change to the

form is made based on this comment. Not all parents will have VA claim

numbers. However, for those who do, the corresponding claims file

should provide relevant information that would eliminate the need for

other searching. For example, the file should establish whether the

parent had service in the Republic of Vietnam during the Vietnam era.

For the sake of clarity, we have made some non-substantive

editorial changes to the proposed language.

VA appreciates the comments submitted in response to the proposed

rule. Based on the rationale set forth in the proposed rule and this

document, the provisions of the proposed rule are adopted with the

changes noted above.

Executive Order 12866

This final rule has been reviewed by OMB under Executive Order

12866.

Administrative Procedure Act

There is good cause for making this final rule effective without

regard to a 30 day delay. This final rule does not adversely affect

anyone, and the affected children need the benefits from the rule as

soon as possible.

Paperwork Reduction Act

Information collection requirements associated with this final rule

concerning the Application for Spina Bifida Benefits (38 CFR 3.814)

have been approved by the Office of Management and Budget (OMB) under

the provisions of the Paperwork Reduction Act (44 U.S.C. 3504(h)) and

have been assigned OMB Control Number 2900-0572.

This collection of information included in 38 CFR 3.814 concerns an

application for eligibility for the monetary allowance based on spina

bifida that must be submitted on VA Form 21-0304, which has been

approved.

OMB assigns a control number for each collection of information it

approves. VA may not conduct or

[[Page 51278]]

sponsor, and a person is not required to respond to, a collection of

information unless it displays a currently valid OMB control number.

The valid OMB control number assigned to the collection of information

in this final rule is displayed at the end of the affected section of

the regulations.

Two collection of information comments were received and are

discussed above.

Regulatory Flexibility Act

The Secretary hereby certifies that this final rule 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. This final rule would not directly affect any small entities.

Only VA beneficiaries could be directly affected. Therefore, pursuant

to 5 U.S.C. 605(b), this final rule is exempt from the initial and

final regulatory flexibility analysis requirements of Secs. 603 and

604.

There is no Catalog of Federal Domestic Assistance program number

for this benefit.

List of Subjects in 38 CFR Part 3

Administrative practice and procedure, Claims, Disability benefits,

Health care, Pensions, Reporting and recordkeeping requirements,

Veterans, Vietnam.

Approved: September 11, 1997.

Hershel W. Gober,

Acting Secretary of Veterans Affairs.

For the reasons set forth in the preamble, 38 CFR part 3 is 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. In Sec. 3.27, paragraph (c) is redesignated as paragraph (d), a

new paragraph (c) is added, and newly redesignated paragraph (d) and

its authority citation are revised to read as follows:

Sec. 3.27 Automatic adjustment of benefit rates.

* * * * *

(c) Monetary allowance under 38 U.S.C. 1805 for a child suffering

from spina bifida who is a child of a Vietnam veteran. Whenever there

is a cost-of-living increase in benefit amounts payable under section

215(i) of Title II of the Social Security Act, VA shall, effective on

the dates such increases become effective, increase by the same

percentage the monthly allowance under 38 U.S.C. 1805 for a child

suffering from spina bifida who is a child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(b)(3))

(d) Publishing requirements. Increases in pension rates, parents'

dependency and indemnity compensation rates and income limitation, and

the monthly allowance under 38 U.S.C. 1805 for a child suffering from

spina bifida made under this section shall be published in the Federal

Register.

(Authority: 38 U.S.C. 5312(c)(1), 1805(b)(3))

3. In Sec. 3.105, paragraphs (g) and (h) are redesignated as

paragraphs (h) and (i), respectively; in paragraphs (d), (e), (f) and

newly redesignated paragraph (h) remove ``paragraph (h)'' each time it

appears and add, in its place, ``paragraph (i)''; in newly redesignated

paragraph (i)(1) remove ``paragraphs (d) through (g)'' and add, in its

place, ``paragraphs (d) through (h)''; in newly redesignated paragraph

(i)(2) introductory text remove ``paragraph (d), (e), (f) or (g)'' and

add, in its place, ``paragraph (d), (e), (f), (g) or (h)''; in newly

redesignated paragraph (i)(2)(ii) remove ``paragraph (f)'' and add, in

its place, ``paragraphs (f) and (g)''; in newly redesignated paragraph

(i)(2)(iii) remove ``paragraph (g)'' and add, in its place, ``paragraph

(h)''; and add a new paragraph (g) to read as follows:

Sec. 3.105 Revision of decisions.

* * * * *

(g) Reduction in evaluation--monetary allowance to a child

suffering from spina bifida under 38 U.S.C. 1805. Where a change in

disability level warrants a reduction of the monthly allowance

currently being paid, VA will notify the beneficiary at his or her

latest address of record of the proposed reduction, furnish detailed

reasons therefor, and allow the beneficiary 60 days to present

additional evidence to show that the monthly allowance should be

continued at the present level. Unless otherwise provided in paragraph

(i) of this section, if VA does not receive additional evidence within

that period, it will take final rating action and reduce the award

effective the last day of the month following sixty days from the date

of notice to the payee of the proposed reduction.

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

* * * * *

Sec. 3.158 [Amended]

4. In Sec. 3.158, paragraphs (a) and (c) are amended by removing

``or dependency and indemnity compensation'' and adding, in its place,

``dependency and indemnity compensation, or monetary allowance under

the provisions of 38 U.S.C. 1805''.

5. In Sec. 3.261, paragraph (a)(40) is added to read as follows:

Sec. 3.261 Character of income; exclusions and estates.

* * * * *

(a) * * *

----------------------------------------------------------------------------------------------------------------

Pension;

Dependency and Pension; old- section 306

Dependency indemnity law (veterans, (veterans,

Income (parents) compensation surviving surviving See--

(parents) spouses and spouses and

children) children)

----------------------------------------------------------------------------------------------------------------

* * * * * *

*

(40) Monetary allowance under Excluded....... Excluded....... Excluded....... Excluded....... Sec. 3.262(y

38 U.S.C. 1805 for children ).

suffering from spina bifida

who are children of Vietnam

Veterans (38 U.S.C. 1805(d)).

----------------------------------------------------------------------------------------------------------------

* * * * *

6. In Sec. 3.262, paragraph (y) is added immediately preceding the

final authority citation at the end of the section to read as follows:

Sec. 3.262 Evaluation of income.

* * * * *

(y) Monetary allowance under 38 U.S.C. 1805 for a child suffering

from spina bifida who is a child of a Vietnam veteran. There shall be

excluded from income computation any allowance paid under the

provisions of 38 U.S.C. 1805 to a child suffering from spina

[[Page 51279]]

bifida who is the child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(d))

* * * * *

7. In Sec. 3.263, paragraph (g) is added to read as follows:

Sec. 3.263 Corpus of estate; net worth.

* * * * *

(g) Monetary allowance under 38 U.S.C. 1805 for a child suffering

from spina bifida who is a child of a Vietnam veteran. There shall be

excluded from the corpus of estate or net worth of a claimant any

allowance paid under the provisions of 38 U.S.C. 1805 to a child

suffering from spina bifida who is the child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(d))

8. In Sec. 3.272, paragraph (u) is added to read as follows:

Sec. 3.272 Exclusions from income.

* * * * *

(u) Monetary allowance under 38 U.S.C. 1805 for a child suffering

from spina bifida who is a child of a Vietnam veteran. Any allowance

paid under the provisions of 38 U.S.C. 1805 to a child suffering from

spina bifida who is the child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(d))

9. In Sec. 3.275, paragraph (i) is added to read as follows:

Sec. 3.275 Criteria for evaluating net worth.

* * * * *

(i) Monetary allowance under 38 U.S.C. 1805 for a child suffering

from spina bifida who is a child of a Vietnam veteran. There shall be

excluded from the corpus of estate or net worth of a claimant any

allowance paid under the provisions of 38 U.S.C. 1805 to a child

suffering from spina bifida who is the child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(d))

10. In Sec. 3.403, the introductory text and paragraphs (a) through

(e) are redesignated as paragraph (a) introductory text and paragraphs

(a)(1) through (a)(5), respectively, and paragraph (b) is added to read

as follows:

Sec. 3.403 Children.

* * * * *

(b) Monetary allowance under 38 U.S.C. 1805 for a child suffering

from spina bifida who is a child of a Vietnam veteran (Sec. 3.814). An

award of the monetary allowance under 38 U.S.C. 1805 to a child

suffering from spina bifida who is the child of a Vietnam veteran will

be either date of birth if claim is received within one year of that

date, or, date of claim, but not earlier than October 1, 1997.

(Authority: 38 U.S.C. 1806, 5110(n); sec. 422(c), Pub. L. 104-204,

110 Stat. 2926)

11. In Sec. 3.503, the introductory text and paragraphs (a) through

(j) are redesignated as paragraph (a) introductory text and paragraphs

(a)(1) through (a)(10), respectively, and paragraph (b) is added to

read as follows:

Sec. 3.503 Children.

* * * * *

(b) Monetary allowance under 38 U.S.C. 1805 for a child suffering

from spina bifida who is a child of a Vietnam veteran (Sec. 3.814). The

effective date of discontinuance of the monthly allowance under 38

U.S.C. 1805 to a child suffering from spina bifida who is the child of

a Vietnam veteran will be the last day of the month before the month in

which the death of the child occurred.

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

12. Section 3.814 is added under the undesignated centerheading

``Special Benefits'' to read as follows:

Sec. 3.814 Monetary allowance under 38 U.S.C. 1805 for a child

suffering from spina bifida who is a child of a Vietnam veteran.

(a) VA shall pay a monthly allowance based upon the level of

disability determined under the provisions of paragraph (d) of this

section to or for a child who it has determined is suffering from spina

bifida and who is a child of a Vietnam veteran. Receipt of this

allowance shall not affect the right of the child, or the right of any

individual based on the child's relationship to that individual, to

receive any other benefit to which the child, or that individual, may

be entitled under any law administered by VA. If a child suffering from

spina bifida is the natural child of two Vietnam veterans, he or she is

entitled to only one monthly allowance under this section.

(b) Applicants for the monetary allowance under this section must

submit an application to the VA regional office and include the

information mandated on the following VA form entitled ``Application

for Spina Bifida Benefits'':

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[[Page 51280]]

[GRAPHIC] [TIFF OMITTED] TR30SE97.000

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[[Page 51281]]

(c) Definitions.--(1) Vietnam veteran. For the purposes of this

section, the term ``Vietnam veteran'' means a veteran who performed

active military, naval, or air service in the Republic of Vietnam

during the Vietnam era. Service in the Republic of Vietnam includes

service in the waters offshore and service in other locations if the

conditions of service involved duty or visitation in the Republic of

Vietnam.

(2) Child. For the purposes of this section, the term ``child''

means a natural child of a Vietnam veteran, regardless of age or

marital status, conceived after the date on which the veteran first

served in the Republic of Vietnam during the Vietnam era.

Notwithstanding the provisions of Sec. 3.204(a)(1), VA shall require

the types of evidence specified in Secs. 3.209 and 3.210 sufficient to

establish in the judgment of the Secretary that a child is the natural

child of a Vietnam veteran.

(3) Spina bifida. For the purposes of this section, the term

``spina bifida'' means any form and manifestation of spina bifida

except spina bifida occulta.

(d)(1) VA shall determine the level of disability suffered by the

child in accordance with the following criteria:

(i) Level I. The child is able to walk without braces or other

external support (although gait may be impaired), has no sensory or

motor impairment of upper extremities, has an IQ of 90 or higher, and

is continent of urine and feces.

(ii) Level II. Provided that none of the child's disabilities are

severe enough to be evaluated at Level III, and the child: is

ambulatory, but only with braces or other external support; or, has

sensory or motor impairment of upper extremities, but is able to grasp

pen, feed self, and perform self care; or, has an IQ of at least 70 but

less than 90; or, requires drugs or intermittent catheterization or

other mechanical means to maintain proper urinary bladder function, or

mechanisms for proper bowel function.

(iii) Level III. The child is unable to ambulate; or, has sensory

or motor impairment of upper extremities severe enough to prevent

grasping a pen, feeding self, and performing self care; or, has an IQ

of 69 or less; or, has complete urinary or fecal incontinence.

(2) Provided that they are adequate for assessing the level of

disability due to spina bifida under the provisions of paragraph (d)(1)

of this section, VA may accept statements from private physicians, or

examination reports from government or private institutions, for the

purpose of rating spina bifida claims without further examination. In

the absence of such information, VA will schedule an examination for

the purpose of assessing the level of disability.

(3) Unless or until VA is able to obtain medical evidence adequate

to assess the level of disability due to spina bifida, or to reassess

the level of disability when required to do so under the provisions of

paragraph (d)(4) or (5) of this section, VA will rate the disability of

a person eligible for this monetary allowance at no higher than Level

I.

(4) Children under the age of one year will be rated at Level I

unless a pediatric neurologist or a pediatric neurosurgeon certifies

that, in his or her medical judgment, there is a neurological deficit

that will prevent the child from ambulating; from grasping a pen,

feeding him or herself, or performing self care; or from achieving

urinary or fecal continence. If such a deficit is present, the child

will be rated at Level III. In either case, VA will reassess the level

of disability when the child reaches the age of one year.

(5) VA will reassess the level of disability due to spina bifida

whenever it receives medical evidence indicating that a change is

warranted. For individuals between the ages of one and twenty-one,

however, it will reassess the level of disability at intervals of not

more than five years. Thereafter, it will reassess the level of

disability only if evidence indicates there has been a material change

in the level of disability or that the current rating may be incorrect.

(Paperwork requirements were approved by the Office of Management and

Budget under control number 2900-0572.)

(Authority: 38 U.S.C. 501, 1805)

PART 3--[AMENDED]

13. The Cross Reference following Sec. 3.57 is amended by removing

``Sec. 3.403(a)'' and ``Sec. 3.503(c)'' and adding, in their places,

``Sec. 3.403(a)(1)'' and ``Sec. 3.503(a)(3)'', respectively.

14. Each Cross Reference following Secs. 3.659 and 3.703 is amended

by removing ``Sec. 3.503(g)'' and adding, in its place,

``Sec. 3.503(a)(7)''.

15. The Cross Reference following Sec. 3.707 is amended by removing

``Sec. 3.503(h)'' and adding, in its place, ``Sec. 3.503(a)(8)''.

16. The Cross Reference following Sec. 3.807 is amended by removing

``Sec. 3.503(h)'' and adding, in its place, ``Sec. 3.503(a)(8).''.

[FR Doc. 97-25663 Filed 9-29-97; 8:45 am]

BILLING CODE 8320-01-P