[Federal Register Volume 60, Number 93 (Monday, May 15, 1995)]
[Proposed Rules]
[Pages 25877-25879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11880]



=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AH18


Eligibility Reporting Requirements

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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

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.

* * * * *
    (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.
* * * * *
[FR Doc. 95-11880 Filed 5-12-95; 8:45 am]
BILLING CODE 8320-01-P