[Federal Register Volume 67, Number 42 (Monday, March 4, 2002)]
[Proposed Rules]
[Pages 9638-9640]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5134]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AH42


Evidence for Accrued Benefits

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) is proposing to amend 
its

[[Page 9639]]

adjudication regulations dealing with accrued benefits, those benefits 
to which an individual was entitled under existing ratings or 
decisions, or those based on ``evidence in the file at date of death'' 
which were due and unpaid at the time the individual died. ``Evidence 
in the file at date of death'' would be interpreted as evidence in VA's 
possession on or before the date of the beneficiary's death, even if 
such evidence was not physically located in the VA claims folder on or 
before the date of death. Further, ``evidence necessary to complete the 
application'' for accrued benefits would be interpreted as information 
necessary to establish that the claimant is within the category of 
eligible persons and that circumstances exist which make the claimant 
the specific person entitled to the accrued benefits. These amendments 
would reflect our interpretation of the governing statute.

DATES: Comments must be received by VA on or before May 3, 2002.

ADDRESSES: Mail or hand deliver written comments to: Director, Office 
of Regulations Management (02D), Department of Veterans Affairs, Room 
1154, 810 Vermont Ave., N.W., 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-AH42.'' All comments will be made available for public inspection 
at the above address in the Office of Regulations Management, Room 
1158, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday 
(except holidays).

FOR FURTHER INFORMATION CONTACT: Randy A. McKevitt, Consultant, 
Regulations Staff, Compensation and Pension Service (211A), Veterans 
Benefits Administration, Department of Veterans Affairs, 810 Vermont 
Ave., N.W., Washington, DC 20420, (202) 273-7138.

SUPPLEMENTARY INFORMATION: 38 U.S.C. 5121(a) states that periodic 
monetary benefits under laws administered by the Secretary of Veterans 
Affairs to which an individual was entitled at death, either under 
existing ratings or decisions, or based on ``evidence in the file at 
date of death,'' which are due and unpaid for a period not to exceed 
two years shall, upon death of that individual, be paid to a properly 
entitled claimant. This statutory provision lists the persons who are 
eligible to be paid accrued benefits, in order of preference in the 
case of a deceased veteran, and specifies the circumstances under which 
they will be entitled. Section 5121(c) states that the application for 
accrued benefits must be filed within one year after the date of death, 
and that if a claimant's application is incomplete at the time it is 
originally submitted, the Secretary shall notify the claimant of the 
evidence necessary to complete the application.
    In Hayes v. Brown, 4 Vet. App. 353, 360 (1993), the Court of 
Veterans Appeals (now the Court of Appeals for Veterans Claims) stated 
that ``the regulatory framework that has been established to implement 
section 5121(a), (c) is confusing at best.'' The Court also found the 
provisions of VA's Adjudication Procedures Manual (M21-1) at Part IV, 
Chapter 27, and Part VI, Chapter 5, to be confusing with regard to what 
post-date-of-death evidence is acceptable, pointing out that to the 
extent these manual provisions affect what post-date-of-death evidence 
may be considered, they are substantive rules. The Hayes panel also 
pointed out an apparent statutory ambiguity, noting that while section 
5121(a) permits only ``evidence in file at the date of death,'' section 
5121(c) seems to contradict, or at least qualify, that provision by 
stating, ``[i]f a claimant's application is incomplete at the time it 
is originally submitted, the Secretary shall notify the claimant of the 
evidence necessary to complete the application.''
    We propose to rewrite 38 CFR 3.1000 to remove redundant language 
and to define both what constitutes ``evidence in the file at the date 
of death'' for purposes of section 5121(a) and what constitutes 
``evidence necessary to complete the application'' for purposes of 
section 5121(c).
    Before granting accrued benefits, VA must determine whether the 
deceased individual had established entitlement to a periodic monetary 
benefit that was due and unpaid on the date of death. Also, VA must 
determine (1) whether the application for accrued benefits provides 
sufficient information to establish that the claimant falls within the 
category of persons who may be eligible for accrued benefits, and (2) 
whether circumstances exist under which that person is entitled to the 
benefits that have accrued.
    38 CFR 3.1000(c)(1) currently states that if a claimant's 
application is incomplete, the claimant will be notified of the 
evidence necessary to complete the application. We propose to add 
provisions to Sec. 3.1000(c)(1) to reflect our interpretation of what 
constitutes ``evidence necessary to complete the application'' under 38 
U.S.C. 5121(c). Such evidence would be information establishing that 
the claimant is within the category of persons eligible for accrued 
benefits and that circumstances exist which make the claimant the 
specific person entitled to payment of all or any part of benefits 
which may have accrued. We believe that the proposed language would 
make it clear that the ``evidence'' in question is that information 
necessary to establish that the applicant for accrued benefits is the 
person eligible for and entitled to those benefits. Further, we believe 
that the proposed language would ensure that the ``evidence necessary 
to complete the application'' would not be confused with the ``evidence 
in the file at date of death'' referred to in 38 U.S.C. 5121(a), which 
concerns whether an individual was entitled to benefits at the date of 
his/her death based on ``evidence in the file.'' This will also align 
the interpretation of this statute with that of 38 U.S.C. 5102, as 
amended by the Veterans Claims Assistance Act of 2000, Pub. L. 106-475.
    38 CFR 3.1000(d)(4) purports to define ``evidence in the file at 
date of death.'' Rather than defining that statutory term, this 
regulation currently states that in certain instances VA may accept 
identifying, corroborating or verifying information from the death 
certificate and evidence submitted with the claim for accrued benefits 
to support prima facie evidence already in the file. These current 
provisions do not define the term ``evidence in the file.''
    A claimant who meets all eligibility requirements for a VA benefit 
is not entitled to that benefit (and there are no payments due) until 
he or she has filed a specific claim and VA received evidence 
establishing entitlement. Therefore, there can be no accrued benefits 
unless the deceased individual had filed a specific claim and VA had 
received sufficient evidence on or before the date of death to 
establish entitlement to a VA benefit. See Jones v. West, 136 F.3d 
1296, 1299 (Fed. Cir. 1998) (in the absence of an existing rating or 
decision, decedent must have had a claim pending at the time of death). 
Therefore, we propose to define ``evidence in the file at date of 
death'' according to when the evidence was received, i.e., the evidence 
must have been in VA's possession on or before the date of death.
    We propose to revise Sec. 3.1000(d)(4) to define ``evidence in the 
file at the date of death'' as evidence in VA's possession on or before 
the date of the beneficiary's death, even if such evidence was not 
physically located in the VA claims folder on or before the date of 
death. We believe this definition accurately reflects the meaning of 
the statutory provisions of section 5121(a). This change would 
supersede the

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current provisions at 38 CFR 3.1000(d)(4).
    Accordingly, we propose to delete from M21-1 provisions that are 
inconsistent with our proposed definition. Those provisions state that 
certain classes of evidence not in file on the date of death will be 
considered to provide a basis for an award of accrued benefits and 
permit an award of accrued benefits to be based on inferences or 
prospective estimation drawn from information in file on the date of 
death. Those provisions are in M21-1, part IV, paragraphs 27.08b, c, d, 
e, and f.
    We also propose to delete provisions in M21-1, part VI, paragraph 
5.06, that are duplicative of governing statutes, inconsistent with our 
interpretation of those statutes, or superseded by these proposed 
regulatory amendments. Such provisions are contained in paragraph 
5.06a, which describes general principles applicable to accrued 
benefits rating decisions.
    M21-1, part VI, paragraph 5.06b, in the introductory text, purports 
to permit the acceptance of a claim for disability pension as an 
informal claim for disability compensation, and vice versa, only if a 
claim for accrued benefits is filed within 1 year of the date of 
receipt of the disability claim. This is inconsistent with 38 CFR 
3.151(a), which permits VA to consider a claim for compensation to be a 
claim for pension and a claim for pension to be a claim for 
compensation without regard to any accrued benefits claim. Neither 
Sec. 3.151(a) nor 38 U.S.C. 5101 limits acceptance of such claims only 
to where a claim for accrued benefits is received. Because the 
paragraph 5.06b introductory text is inconsistent with the regulations 
and statute, we propose to delete that introductory text.
    M21-1, part VI, paragraph 5.06b(3), concerning payment of accrued 
benefits for the month of death, is duplicative of the regulations and 
of governing law. We propose to delete this paragraph as unnecessary.
    M21-1, part VI, paragraphs 5.06c and d, are inconsistent with the 
proposed amendments, and we propose to delete them.
    In accordance with the foregoing discussion, we would delete from 
M21-1, as inconsistent with our interpretation of our statutory 
authority, duplicative of governing laws, or superseded by these 
amendments, provisions in Part IV, paragraphs 27.08b, c, d, e, and f, 
and part VI, paragraphs 5.06a, b introductory text, b(3), c, and d, 
which relate to rating decisions, claims pending at death, payment for 
the month of death, consideration of evidence not in VA's possession on 
the date of the beneficiary's death, the sufficiency of evidence in 
VA's possession on that date, and inferences or predictions from such 
evidence.

Paperwork Reduction Act

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

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, 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 rule would have no 
consequential effect on State, local or tribal governments.

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 proposed amendment will 
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 amendment would not directly affect any small 
entities. Only VA beneficiaries could be directly affected. Therefore, 
pursuant to 5 U.S.C. 605(b), the proposed amendment is exempt from the 
initial and final regulatory flexibility analysis requirements of 
sections 603 and 604.
    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: December 10, 2001.
Anthony J. Principi,
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 3.1000 is amended by revising the section heading, 
paragraph (c)(1), and paragraph (d)(4) introductory text, to read as 
follows:


Sec. 3.1000  Entitlement under 38 U.S.C. 5121 to benefits due and 
unpaid upon death of a beneficiary.

* * * * *
    (c) * * *
    (1) If an application for accrued benefits is incomplete because 
the claimant has not furnished information necessary to establish that 
he or she is within the category of eligible persons under the 
provisions of paragraphs (a)(1) through (a)(4) or paragraph (b) of this 
section and that circumstances exist which make the claimant the 
specific person entitled to payment of all or part of any benefits 
which may have accrued, VA shall notify the claimant:
    (i) Of the type of information required to complete the 
application;
    (ii) That VA will take no further action on the claim unless VA 
receives the required information; and
    (iii) That if VA does not receive the required information within 1 
year of the date of the original VA notification of information 
required, no benefits will be awarded on the basis of that application.
* * * * *
    (d) * * *
    (4) Evidence in the file at date of death means evidence in VA's 
possession on or before the date of the beneficiary's death, even if 
such evidence was not physically located in the VA claims folder on or 
before the date of death.
* * * * *
[FR Doc. 02-5134 Filed 3-1-02; 8:45 am]
BILLING CODE 8320-01-P