[Federal Register Volume 67, Number 40 (Thursday, February 28, 2002)]
[Rules and Regulations]
[Page 9209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-4687]



[[Page 9209]]

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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AK84


Exclusion from Countable Income of Expenses Paid for Veteran's 
Last Illness Subsequent to Veteran's Death but Prior to Date of Death 
Pension Entitlement

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends the Department of Veterans Affairs (VA) 
adjudication regulations governing exclusion of expenses of the 
veteran's last illness, burial, and just debts from countable income 
for death pension purposes. This amendment eliminates the prohibition 
against reducing countable income by the amount of these expenses that 
the surviving spouse paid after the date of death but prior to the date 
of his or her entitlement. The intended effect of this amendment is to 
bring the regulations into conformance with the governing statute as 
interpreted by VA's General Counsel.

DATES: Effective Date: February 28, 2002.

FOR FURTHER INFORMATION CONTACT: Beth McCoy, Consultant, Regulations 
Staff, Compensation and Pension Service (211A), Department of Veterans 
Affairs, 575 N. Pennsylvania St., Suite 309, Indianapolis, IN 46237, 
(317) 226-5209 extension 3058.

SUPPLEMENTARY INFORMATION: VA death pension is a needs-based benefit 
available to surviving spouses and unmarried children of deceased 
veterans with qualifying wartime service. In order for an individual to 
be eligible for death pension, his or her income from all sources must 
be less than the maximum annual pension rate established by law. The 
annual benefit is reduced, dollar for dollar, by the amount of the 
beneficiary's countable income. All income from any source is counted 
unless specifically excluded by statute or regulation.
    Section 1503(a)(3) of 38 U.S.C. provides for certain exclusions 
from countable income for death pension entitlement, including an 
amount equal to the expenses of the veteran's last illness, burial and 
just debts paid by the spouse or by the surviving spouse or child of a 
deceased veteran. VA implemented the provisions of 38 U.S.C. 1503(a)(3) 
at 38 CFR 3.272(h). The last sentence of Sec. 3.272 (h) provides that 
the amount of expenses of the veteran's last illness, burial, and just 
debts ``paid subsequent to death but prior to date of entitlement are 
not deductible.''
    In a precedent opinion dated March 28, 2000 (VAOPGCPREC 1-2000), 
VA's General Counsel held that the last sentence of Sec. 3.272(h) is 
inconsistent with 38 U.S.C. 1503(a)(3) because the statute does not 
limit the period in which expenses of a veteran's last illness may be 
deducted in calculating the surviving spouse's death pension 
entitlement. The General Counsel determined that VA may not deny a 
death pension claim or reduce the amount of benefits payable based on 
the last sentence of Sec. 3.272(h) and that VA must revise 
Sec. 3.272(h) to eliminate the prohibition against reducing the 
surviving spouse's countable income by the amount of expenses of the 
veteran's last illness, just debts and burial when paid after the 
veteran's death but before the date of the surviving spouse's 
entitlement to death pension. Pursuant to 38 CFR 14.507, a General 
Counsel precedent opinion is binding on VA. Accordingly, we are 
amending Sec. 3.272(h) to make it consistent with that General Counsel 
opinion.
    This final rule brings the regulations into conformance with the 
governing statute as interpreted by VA's General Counsel in a precedent 
opinion that under 38 CFR 14.507 is binding on VA and the public. 
Accordingly, since there is no discretion in this matter, there is a 
basis for dispensing with prior notice and comment and delayed 
effective date provisions of 5 U.S.C. 552 and 553.

Paperwork Reduction Act

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

Executive Order 12866

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

Regulatory Flexibility Act

    Because no notice of proposed rule making 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 
regulatory amendment will 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 
flexibility analysis requirements of sections 603 and 604.
    The Catalog of Federal Domestic Assistance numbers are 64.101 and 
64.105.

List of Subjects in 38 CFR Part 3

    Administrative practice and procedure, Claims, Disability benefits, 
Health care, Pensions, Radioactive materials, Veterans, Vietnam.

    Approved: November 19, 2001.
Anthony J. Principi,
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. Section 3.272 is amended by removing the last sentence of 
paragraph (h) introductory text.

[FR Doc. 02-4687 Filed 2-27-02; 8:45 am]
BILLING CODE 8320-01-P