[Federal Register Volume 66, Number 185 (Monday, September 24, 2001)]
[Proposed Rules]
[Pages 48845-48846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23801]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AK23


Renouncement of Benefits

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: This document proposes to amend the Department of Veterans 
Affairs (VA) adjudication regulation concerning the renouncement of 
benefits. A substantive change in the effective date of a renouncement 
is proposed. The intended effect of this amendment is to present the 
existing regulation in plain language so that it is easier to 
understand and to establish a rule for the effective date of a 
renouncement of benefits when the award is in suspense.

DATES: Comments must be received on or before November 23, 2001.

ADDRESSES: Mail or hand deliver written comments to: Director, Office 
of Regulations Management (02D), Department of Veterans Affairs, 810 
Vermont Ave., NW, Room 1154, Washington, DC, 20420; or fax comments to 
(202) 273-9289; or e-mail comments to [email protected]. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AK23.'' All comments received will be available for public 
inspection in the Office of Regulations Management, Room 1158, between 
the hours of 8:00 a.m. and 4:30 p.m., Monday through Friday (except 
holidays).

FOR FURTHER INFORMATION CONTACT: Bob White, Team Leader, Plain Language 
Regulations Project, Veterans Benefits Administration, 810 Vermont 
Avenue, NW, Washington, DC, 20420. Telephone: (202) 273-7228 (this is 
not a toll-free number).

SUPPLEMENTARY INFORMATION: VA proposes to rewrite 38 CFR 3.106 in plain 
language. This regulation concerns the renouncement of VA pension, 
compensation, or dependency and indemnity compensation (DIC) benefits. 
It explains who has the right to renounce benefits, how to renounce 
benefits, and what renouncement will mean to a beneficiary. There is 
also a discussion about the right to reapply for benefits that have 
been renounced, as well as effective dates for the termination of 
renounced benefits. The current regulation is located in Subpart A of 
Part 3. We propose to create new Sec. 3.2145 to restate the current 
regulation and to amend the effective date portion of it. The new 
section would be located in Subpart D--Universal Adjudication Rules 
that Apply to Benefit Claims Governed by part 3 of this title.
    Paragraph (a)(1) of proposed new Sec. 3.2145 informs readers that 
only primary beneficiaries have the right to renounce VA pension, 
compensation, or DIC benefits, and the term ``primary beneficiary'' is 
defined as anyone who is entitled to receive benefits in his or her own 
right. It explains that when a primary beneficiary decides to renounce 
his or her benefits, the entire benefit is renounced, not just a 
portion of it. The renouncement must be in writing and be signed by the 
primary beneficiary or his or her fiduciary. This language was added to 
clarify that fiduciaries may sign renouncements on behalf of minors and 
incompetents. The effective date of the renouncement will be the last 
day of the month in which VA receives it or, if the award is in 
suspense, the date of last payment. This is a restatement of 
Sec. 3.106(a), except for the last sentence. The last sentence 
incorporates our proposed effective date change to the regulation by 
adding ``or, if payments have been suspended, the date of last 
payment.''
    Prior to January 21, 1992, the effective date for renouncement 
under 38 CFR 3.106 was the date of last payment. The date of last 
payment is the last date that VA sent a beneficiary his or her regular 
monthly benefit payment. However, using the date of last payment 
created a problem due to workload differences among regional offices, 
as well as fluctuations within the same office. This often resulted in 
the termination of two beneficiaries' benefit payments on different 
dates even though VA had received both beneficiaries' renouncements on 
the same date. For example, VA receives two renouncements from two 
beneficiaries on April 19th. Both beneficiaries were last paid on April 
1. One renouncement gets processed immediately. That beneficiary's 
benefits are renounced effective April 1st, the date of last payment, 
and no more payments are made. The other renouncement isn't processed 
for two weeks. That beneficiary's May 1st benefit payment has already 
been issued. Now the date of last payment is May 1st and that is when 
the renouncement becomes effective. The result is an additional payment 
sent to a beneficiary who wanted to terminate benefits immediately.
    On January 21, 1992, the effective date for a renouncement was 
changed from the date of last payment to the last day of the month in 
which the renouncement was received. This eliminated the problem 
illustrated by the example in the preceding paragraph. However, it did 
not take into account beneficiaries whose awards were already in 
suspense when their renouncements were received.
    VA proposes to add ``or, if payments have been suspended, the date 
of last payment'' to the existing regulation to avoid sending 
additional payments to a beneficiary who wants to terminate his or her 
benefits immediately, but currently has an award in suspended status. 
If a beneficiary has an award that has been suspended, it means that he 
or she has not received any benefit payments for some length of time. 
Under normal circumstances when VA is able to resume a beneficiary's 
suspended award, those payments that are due but not yet paid would be 
released to the beneficiary. In the case of renouncement, however, 
releasing those payments to a beneficiary seeking to terminate benefits 
would be inconsistent with the expressed desire of the beneficiary to 
stop receiving benefits. The proposed wording for paragraph (a) of 
Sec. 3.2145 would make sure that beneficiaries who renounce their 
rights to receive VA benefits are not sent any additional benefit 
payments.
    Paragraph (a)(2) of proposed Sec. 3.2145 has been added to clearly 
state that apportionees and dependents on the awards of other persons 
are not primary beneficiaries and may not renounce benefits.
    Paragraph (b) of proposed Sec. 3.2145 explains that a primary 
beneficiary who renounces the right to receive VA benefits may reapply 
for the same benefit at any time. VA will treat the new application as 
the first claim for that benefit, and no payments may be made for any 
period prior to its receipt (except as noted in paragraph (c) of this 
section). This is a restatement of Sec. 3.106(b).
    Paragraph (c) of proposed Sec. 3.2145 states the exception to 
paragraph (b), which concerns reapplication for pension or parents' DIC 
benefits. When an application for one of these benefits

[[Page 48846]]

is received within one year from the date a renouncement of the same 
benefit was received, it will not be considered a new application. VA 
will determine entitlement as if the renouncement had never been 
received. This is a restatement of Sec. 3.106(c).
    Paragraph (d) of proposed Sec. 3.2145 clarifies that renouncement 
by a primary beneficiary does not increase benefits or create 
independent entitlement to benefits in any other person. While current 
Sec. 3.106(d) and (e) address this issue with respect to DIC only, the 
proposed paragraph (d) makes clear that renouncement has the same 
affect on compensation and pension as well.
    This rulemaking reflects VA's goal of making government more 
responsive, accessible, and comprehensible to the public. The Plain 
Language Regulations Project was developed as a long-term comprehensive 
project to reorganize and rewrite in plain language the adjudication 
regulations in Part 3 of Title 38, Code of Federal Regulations. This 
proposed rule is part of a series of proposed revisions to those 
regulations.

Unfunded Mandates

    The Unfunded Mandates Reform Act, Public Law 104-4, March 22, 1995, 
requires (in section 202) that agencies prepare an assessment of 
anticipated costs and benefits before developing any rule that may 
result in an expenditure by State, local, or tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any 
given year. This proposed rule would have no consequential effect on 
State, local, or tribal governments.

Paperwork Reduction Act

    This document contains no provisions constituting a collection of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-3520).

Regulatory Flexibility Act

    The Secretary certifies that the adoption of the proposed rule 
would not have a significant economic impact on a substantial number of 
small entities as they are defined in the Regulatory Flexibility Act, 5 
U.S.C. 601-612. The proposed rule does not directly affect any small 
entities. Only VA beneficiaries could be directly affected. Therefore, 
pursuant to 5 U.S.C. 605(b), this amendment is exempt from the initial 
and final regulatory flexibility analysis requirements of sections 603 
and 604.

Catalog of Federal Domestic Assistance Program Numbers

    The Catalog of Federal Domestic Assistance program numbers for 
this proposal are 64.104, 64.105, 64.109, and 64.110.

List of Subjects in 38 CFR Part 3

    Administrative practice and procedure, Claims, Disability Benefits, 
Health care, Pensions, Veterans, Vietnam.

    Approved: March 26, 2001.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set forth in the preamble, VA proposes to amend 38 
CFR Part 3 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. 3.106  [Removed]

    2. Section 3.106 is removed.

Subpart D--Universal Adjudication Rules That Apply to Benefit 
Claims Governed by Part 3 of This Title

    3. The authority citation for part 3, subpart D continues to read 
as follows:

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

    4. New Sec. 3.2145 is added under the undesignated center heading 
GENERAL to read as follows:


Sec. 3.2145  Can I voluntarily give up my VA benefits?

    (a)(1) Only a primary beneficiary may renounce (give up) the right 
to receive VA pension, compensation, or dependency and indemnity 
compensation (DIC) benefits. A primary beneficiary is anyone who is 
entitled to receive benefits in his or her own right. The renouncement 
of the right to receive benefits must be in writing and must be signed 
by the primary beneficiary or his or her fiduciary. No specific form is 
required to do so. Any renouncement must be for the entire benefit, not 
just a portion of it. VA will stop the renounced benefit payments 
effective the last day of the month in which the renouncement is 
received or, if payments have been suspended, the date of last payment.
    (2) Apportionees and dependents on a primary beneficiary's award 
may not renounce benefits.
    (b) A primary beneficiary who renounces the right to receive a VA 
benefit may reapply for the same benefit at any time. Except as 
provided in paragraph (c) of this section, VA will treat the new 
application as an original claim for that benefit. No payments may be 
made for any period prior to the receipt of the new application.
    (c) If a former primary beneficiary reapplies for pension or 
parents' DIC within one year of renouncing the same benefit, then VA 
will determine entitlement as if the renouncement had never been 
received.
    (d) The renouncement of benefits by a primary beneficiary does not 
increase benefits or create independent entitlement to benefits for any 
other person.


(Authority: 38 U.S.C. 5306)

[FR Doc. 01-23801 Filed 9-21-01; 8:45 am]
BILLING CODE 8320-01-P