Dependency and Income

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AI47

Dependency and Income

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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

adjudication regulations to exclude payments of accrued pension

benefits from countable income in determining entitlement to VA

improved death pension benefits. This change is needed to implement a

decision of the United States Court of Veterans Appeals. The intended

effect of this change is to bring the regulations into conformance with

the decision of the Court.

EFFECTIVE DATE: This amendment is effective November 29, 1994.

FOR FURTHER INFORMATION CONTACT: Bradley Flohr, Consultant, Program

Management, Compensation and Pension Service, Veterans Benefits

Administration, 810 Vermont Avenue, NW., Washington, DC 20420, (202)

273-7241.

SUPPLEMENTARY INFORMATION: Under Title 38 United States Code, Chapter

15, eligible veterans may be entitled to nonservice-connected

disability pension benefits and eligible surviving spouses and/or

children may be entitled to payment of nonservice-connected death

pension benefits subject to statutory annual income limitations. In

determining annual income under Chapter 15, all payments of any kind or

from any source are countable unless specifically excluded by statute.

38 U.S.C. 1503(a)(2) specifically excludes ``payments under this

chapter,'' i.e., Chapter 15, from countable income.

Under the provisions of 38 U.S.C. 5121, certain periodic monetary

benefits to which an individual was entitled at death under existing

ratings or decisions, or based on evidence in file at date of death,

that are due and unpaid for a period not to exceed two years shall,

upon the death of such individual, be paid to certain individuals as

set forth in 5121(a).

The United States Court of Veterans Appeals has held that, since

accrued benefits paid to a veteran's surviving spouse and/or child

based on pension benefits owed to a veteran at the time of his or her

death are derivative in nature, they are no more than payments of

pension under 38 U.S.C. Chapter 15 that VA owed a veteran at the time

of death and are, therefore, excluded from countable annual income for

VA improved death pension purposes. See Martin v. Brown, 7 Vet. App.

196, 199-200 (1994). The department is amending 38 CFR 3.272(c) to

incorporate this holding of the Court.

VA is issuing a final rule to implement this decision of the Court.

Because this amendment is an interpretive rule that reflects a decision

of the Court, publication as a proposal for public notice and comment

under Title 5 U.S.C. 553, the Administrative Procedures Act, is

unnecessary.

Because no notice of proposed rulemaking was required in connection

with the adoption of this final rule, no regulatory flexibility

analysis is required under the Regulatory Flexibility Act (5 U.S.C.

601-612). Even so, 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.

The Catalog of Federal Domestic Assistance program numbers are

64.100, 64.101, 64.104, 64.105, 64.106, 64.109, and 64.110.

List of Subjects in 38 CFR Part 3

Administrative practice and procedure, Claims, Disability benefits,

Health care, Pensions, Veterans.

Approved: January 23, 1997.

Jesse Brown,

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.

Sec. 3.272 [Amended]

2. In Sec. 3.272, paragraph (c) is amended by removing ``Code.''

and adding, in its place, ``Code, including accrued pension benefits

payable under 38 U.S.C. 5121.''

[FR Doc. 97-2901 Filed 2-5-97; 8:45 am]

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