[Federal Register Volume 66, Number 218 (Friday, November 9, 2001)]
[Rules and Regulations]
[Pages 56613-56614]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28157]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AK25


Written and Oral Information or Statements Affecting Entitlement 
to Benefits

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 eliminate the requirement that 
beneficiaries advise VA of changes affecting entitlement to benefits in 
writing. This allows VA to increase or decrease benefit payments based 
on information submitted orally or by e-mail, facsimile, or other 
electronic means and makes it easier for beneficiaries to submit 
information that they must provide. This document also amends our 
notice requirements to allow VA to reduce or terminate benefit payments 
based on information reported orally without issuing a 60-day advance 
notice, but only under certain conditions that ensure that claimants 
are not deprived of benefits without adequate notice. This will reduce 
the amounts of any overpayments created by these actions.

DATES: Effective Date: December 10, 2001.

FOR FURTHER INFORMATION CONTACT: Donald England, Chief, Policy and 
Regulations Staff (211A), Compensation and Pension Service, Veterans 
Benefits Administration, Department of Veterans Affairs, 810 Vermont 
Avenue, NW., Washington, DC 20420, (202) 273-7210. (This is not a toll-
free number.)

SUPPLEMENTARY INFORMATION: On April 20, 2001, we published in the 
Federal Register (66 FR 20220-23) a proposed rule to amend the 
adjudication regulations to permit contemporaneous notice of benefit 
reductions based on orally-provided evidence of changes in income, 
marital status or the number of dependents, affecting their entitlement 
to benefits, and to establish safeguards to ensure that VA adjusts 
benefit payments based only on information provided by the beneficiary 
(or his or her fiduciary) and that the information provided is 
documented for VA records.
    We requested interested persons to submit comments on or before 
June 19, 2001. We received no comments. Based on the rationale set 
forth in the proposed rule and in this document, we are adopting the 
proposed rule as a final rule without substantive change, except that 
we are adding statements explaining that the information collections 
are approved by the Office of Management and Budget (OMB) under control 
number 2900-0624.

Paperwork Reduction Act

    VA submitted the information collection provisions contained in 
this final rule to OMB for review in accordance with the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501-3520). The action concerning 
information collection is to change the allowable means of collection 
of information. We requested interested parties to submit comments on 
the collection of information provisions to OMB by June 19, 2001. No 
comments were submitted. OMB has approved the information collection 
provisions under control number 2900-0624.
    OMB assigns a control number for each collection of information it 
approves. VA may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number.

Executive Order 12866

    This document has been reviewed by the Office of Management and 
Budget under Executive Order 12866.

Regulatory Flexibility Act

    The Secretary hereby certifies that this regulatory amendment 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 amendment would not directly affect any small 
entities. Only individuals 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

    The Catalog of Federal Domestic Assistance program numbers 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, Radioactive materials, Veterans, Vietnam.

    Approved: September 13, 2001.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set out in the preamble, 38 CFR part 3 is amended 
as set forth below:

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 3.103 is amended by:
    A. Revising paragraph (b)(2) heading and revising paragraphs (b)(3) 
introductory text and (b)(3)(i).
    B. Removing ``is'' from paragraphs (b)(3)(ii), (b)(3)(iv), 
(b)(3)(v) and (b)(3)(vi).
    C. Removing the comma at the end of paragraphs (b)(3)(ii), 
(b)(3)(iii) and (b)(3)(iv), and adding, in its place, a period.
    D. Removing ``, or'' at the end of paragraph (b)(3)(v) and adding, 
in its place, a period.
    E. Adding paragraph (b)(4).
    F. Revising the authority citation at the end of the section.
    The addition and revisions read as follows:


Sec. 3.103  Procedural due process and appellate rights.

* * * * *
    (b) * * *
    (2) Advance notice and opportunity for hearing. * * *
    (3) Exceptions. In lieu of advance notice and opportunity for a 
hearing, VA will send a written notice to the beneficiary or his or her 
fiduciary at the same time it takes an adverse action under the 
following circumstances:
    (i) An adverse action based solely on factual and unambiguous 
information or statements as to income, net worth, or dependency or 
marital status that the beneficiary or his or her fiduciary provided to 
VA in writing or orally (under the procedures set forth in 
Sec. 3.217(b)), with knowledge or notice that such information would be 
used to calculate benefit amounts.
* * * * *
    (4) Restoration of benefits. VA will restore retroactively benefits 
that were reduced, terminated, or otherwise

[[Page 56614]]

adversely affected based on oral information or statements if within 30 
days of the date on which VA issues the notification of adverse action 
the beneficiary or his or her fiduciary asserts that the adverse action 
was based upon information or statements that were inaccurate or upon 
information that was not provided by the beneficiary or his or her 
fiduciary. This will not preclude VA from taking subsequent action that 
adversely affects benefits.

    Authority: 38 U.S.C. 501, 1115, 1506, 5104.


    3. In Sec. 3.204(a)(1), the word ``written'' is removed; and the 
information collection requirements parenthetical is added immediately 
preceding the authority citation at the end of the section to read as 
follows:


Sec. 3.204  Evidence of dependents and age.

* * * * *
    (The Office of Management and Budget has approved the information 
collection requirements in this section under control number 2900-
0624.)
* * * * *

    4. A new Sec. 3.217 is added preceding the undesignated center 
heading ``Dependency, Income and Estate'':


Sec. 3.217  Submission of statements or information affecting 
entitlement to benefits.

    (a) For purposes of this part, unless specifically provided 
otherwise, the submission of information or a statement that affects 
entitlement to benefits by e-mail, facsimile, or other written 
electronic means, will satisfy a requirement or authorization that the 
statement or information be submitted in writing.

    Note to paragraph (a): Section 3.217(a) merely concerns the 
submission of information or a statement in writing. Other 
requirements specified in this part, such as a requirement to use a 
specific form, to provide specific information, to provide a 
signature, or to provide a certified statement, must still be met.

    (b) For purposes of this part, unless specifically provided 
otherwise, VA may take action affecting entitlement to benefits based 
on oral or written information or statements provided to VA by a 
beneficiary or his or her fiduciary. However, VA may not take action 
based on oral information or statements unless the VA employee 
receiving the information meets the following conditions:
    (1) During the conversation in which the information or statement 
is provided, the VA employee:
    (i) Identifies himself or herself as a VA employee who is 
authorized to receive the information or statement (these are VA 
employees authorized to take actions under Secs. 2.3 or 3.100 of this 
chapter);
    (ii) Verifies the identity of the provider as either the 
beneficiary or his or her fiduciary by obtaining specific information 
about the beneficiary that can be verified from the beneficiary's VA 
records, such as Social Security number, date of birth, branch of 
military service, dates of military service, or other information; and
    (iii) Informs the provider that the information or statement will 
be used for the purpose of calculating benefit amounts; and
    (2) During or following the conversation in which the information 
or statement is provided, the VA employee documents in the 
beneficiary's VA records the specific information or statement 
provided, the date such information or statement was provided, the 
identity of the provider, the steps taken to verify the identity of the 
provider as being either the beneficiary or his or her fiduciary, and 
that he or she informed the provider that the information would be used 
for the purpose of calculating benefit amounts.

    Authority: 38 U.S.C. 501, 1115, 1506, 5104.


    5. Section Sec. 3.256(a) introductory text is amended by removing 
``in writing''; and the information collection requirements 
parenthetical at the end of the section is revised to read as follows:


Sec. 3.256  Eligibility reporting requirements.

* * * * *
    (The Office of Management and Budget has approved the information 
collection requirements in this section under control numbers 2900-0101 
and 2900-0624.)
* * * * *

    6. Section Sec. 3.277(b) introductory text is amended by removing 
``in writing'; and the information collection requirements 
parenthetical at the end of the section is revised to read as follows:


Sec. 3.277  Eligibility reporting requirements.

* * * * *
    (The Office of Management and Budget has approved the information 
collection requirements in this section under control numbers 2900-0101 
and 2900-0624.)
* * * * *
[FR Doc. 01-28157 Filed 11-8-01; 8:45 am]
BILLING CODE 8320-01-P