[Federal Register Volume 67, Number 101 (Friday, May 24, 2002)]
[Notices]
[Pages 36671-36674]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-13095]


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DEPARTMENT OF VETERANS AFFAIRS


Cost-of-Living Adjustments and Headstone or Marker Allowance Rate

AGENCY: Department of Veterans Affairs.

ACTION: Notice.

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SUMMARY: As required by law, the Department of Veterans Affairs (VA) is 
hereby giving notice of cost-of-living adjustments (COLAs) in certain 
benefit rates and income limitations. These COLAs affect the pension, 
parents' dependency and indemnity compensation (DIC), and spina bifida, 
and birth defects programs. These adjustments are based on the rise in 
the Consumer Price Index (CPI) during the one-year period ending 
September 30, 2001. VA is also giving notice of the maximum amount of 
reimbursement that may be paid for headstones or markers purchased in 
lieu of Government-furnished headstones or markers in Fiscal Year 2002, 
which began on October 1, 2001.

DATES: These COLAs are effective December 1, 2001. The headstone or 
marker allowance rate is effective October 1, 2001.

FOR FURTHER INFORMATION CONTACT: Paul Trowbridge, Consultant, 
Compensation and Pension Service (212B), Veterans Benefits 
Administration, Department of Veterans Affairs, 810 Vermont Avenue, 
NW., Washington, DC 20420, (202) 273-7218.

SUPPLEMENTARY INFORMATION: Under 38 U.S.C. 2306(d), VA may provide 
reimbursement for the cost of non-Government headstones or markers at a 
rate equal to the actual cost or the average actual cost of Government-
furnished headstones or markers during the fiscal year preceding the 
fiscal year in which the non-Government headstone or marker was 
purchased, whichever is less.
    Section 8041 of Pub. L. 101-508 amended 38 U.S.C. 2306(d) to 
eliminate the payment of the monetary allowance in lieu of VA-provided 
headstone or

[[Page 36672]]

marker for deaths occurring on or after November 1, 1990. However, in a 
precedent opinion (O. G. C. Prec. 17-90), VA's General Counsel held 
that there is no limitation period applicable to claims for benefits 
under the provisions of 38 U.S.C. 2306(d).
    The average actual cost of Government-furnished headstones or 
markers during any fiscal year is determined by dividing the sum of VA 
costs during that fiscal year for procurement, transportation, and 
miscellaneous administration, inspection and support staff by the total 
number of headstones and markers procured by VA during that fiscal year 
and rounding to the nearest whole dollar amount.
    The average actual cost of Government-furnished headstones or 
markers for Fiscal Year 2001 under the above computation method was 
$109. Therefore, effective October 1, 2001, the maximum rate of 
reimbursement for non-Government headstones or markers purchased during 
Fiscal Year 2002 is $109.

Cost of Living Adjustments

    Under the provisions of 38 U.S.C. 5312 and section 306 of Pub. L. 
95-588, VA is required to increase the benefit rates and income 
limitations in the pension and parents' DIC programs by the same 
percentage, and effective the same date, as increases in the benefit 
amounts payable under title II of the Social Security Act. The 
increased rates and income limitations are also required to be 
published in the Federal Register.
    The Social Security Administration has announced that there will be 
a 2.6 percent cost-of-living increase in Social Security benefits 
effective December 1, 2001. However, the actual increase reflected in 
this document will be slightly greater than 2.6% to compensate for an 
error in the calculation of the 1999 Consumer Price Index (CPI). The 
2.6% COLA effective December 1, 2001, has been recalculated on the 
basis of a 2.5% (as opposed to 2.4%) December 1, 1999, COLA. This 
adjustment was mandated by the Consolidated Appropriations Act, 2001 
(Pub. L. 106-554) which requires that each Federal agency that 
administers an applicable Federal benefit program compensate 
beneficiaries for the shortfall caused by the December 1, 1999 CPI 
error. Therefore, applying the COLA factors as indicated above and 
rounding up in accordance with 38 CFR 3.29, the following increased 
rates and income limitations for the VA pension and parents' DIC 
programs will be effective December 1, 2001:

                       Table 1.--Improved Pension
                         [Maximum annual rates]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
(1) Veterans permanently and totally disabled (38 U.S.C.
 1521):
  Veteran with no dependents...............................       $9,556
  Veteran with one dependent...............................       12,516
  For each additional dependent............................        1,630
(2) Veterans in need of aid and attendance (38 U.S.C.
 1521):
  Veteran with no dependents...............................       15,945
  Veteran with one dependent...............................       18,902
  For each additional dependent............................        1,630
(3) Veterans who are housebound (38 U.S.C. 1521):
  Veteran with no dependents...............................       11,679
  Veteran with one dependent...............................       14,639
  For each additional dependent............................        1,630
(4) Two veterans married to one another, combined rates (38
 U.S.C. 1521):
  Neither veteran in need of aid and attendance or                12,516
   housebound..............................................
  Either veteran in need of aid and attendance.............       18,902
  Both veterans in need of aid and attendance..............       24,628
  Either veteran housebound................................       14,639
  Both veterans housebound.................................       16,763
  One veteran housebound and one veteran in need of aid and       21,022
   attendance..............................................
  For each dependent child.................................        1,630
(5) Surviving spouse alone and with a child or children of
 the deceased veteran in custody of the surviving spouse
 (38 U.S.C. 1541):
  Surviving spouse alone...................................        6,407
  Surviving spouse and one child in his or her custody.....        8,389
  For each additional child in his or her custody..........        1,630
(6) Surviving spouses in need of aid and attendance (38
 U.S.C. 1541):
  Surviving spouse alone...................................       10,243
  Surviving spouse with one child in custody...............       12,221
  Surviving Spouse of Spanish-American War veteran alone...       10,905
  Surviving Spouse of Spanish-American War veteran with one       12,882
   child in custody........................................
  For each additional child in his or her custody..........        1,630
(7) Surviving spouses who are housebound (38 U.S.C. 1541):
  Surviving spouse alone...................................        7,832
  Surviving spouse and one child in his or her custody.....        9,810
  For each additional child in his or her custody..........        1,630
(8) Surviving child alone (38 U.S.C. 1542).................        1,630
------------------------------------------------------------------------

    Reduction for income. The rate payable is the applicable maximum 
rate minus the countable annual income of the eligible person. (38 
U.S.C. 1521, 1541 and 1542).
    Mexican border period and World War I veterans. The applicable 
maximum annual rate payable to a Mexican border period or World War I 
veteran under this table shall be increased by $2,166. (38 U.S.C. 
1521(g))

Parents' DIC

    DIC shall be paid monthly to parents of a deceased veteran in the 
following amounts (38 U.S.C. 1315):

                                                    Table 2.
 [One parent. If there is only one parent, the monthly rate of DIC paid to such parent shall be $457 reduced on
                  the basis of the parent's annual income according to the following formula:]
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                                          For each $1 of annual income
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           The $457 monthly rate shall be reduced by               Which is more than       But not more than
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$0.00.........................................................                       $0                     $800
.08...........................................................                      800                  10,871
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No DIC is payable under this table if annual income exceeds $10,871.

    One parent who has remarried. If there is only one parent and the 
parent has remarried and is living with the parent's spouse, DIC shall 
be paid under Table 2 or under Table 4, whichever shall result in the 
greater benefit being paid to the veteran's parent. In the case of 
remarriage, the total combined annual income of the parent and the 
parent's

[[Page 36673]]

spouse shall be counted in determining the monthly rate of DIC.
    Two parents not living together. The rates in Table 3 apply to (1) 
two parents who are not living together, or (2) an unmarried parent 
when both parents are living and the other parent has remarried. The 
monthly rate of DIC paid to each such parent shall be $329 reduced on 
the basis of each parent's annual income, according to the following 
formula:

                                                    Table 3.
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                                          For each $1 of annual income
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           The $329 monthly rate shall be reduced by               Which is more than       But not more than
----------------------------------------------------------------------------------------------------------------
$0.00.........................................................                        0                     $800
.06...........................................................                      800                      900
.07...........................................................                      900                    1,100
.08...........................................................                    1,100                  10,871
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No DIC is payable under this table if annual income exceeds $10,871.

    Two parents living together or remarried parents living with 
spouses. The rates in Table 4 apply to each parent living with another 
parent; and each remarried parent, when both parents are alive. The 
monthly rate of DIC paid to such parents will be $309 reduced on the 
basis of the combined annual income of the two parents living together 
or the remarried parent or parents and spouse or spouses, as computed 
under the following formula:

                                                    Table 4.
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                                          For each $1 of annual income
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           The $309 monthly rate shall be reduced by               Which is more than       But not more than
----------------------------------------------------------------------------------------------------------------
$0.00.........................................................                        0                   $1,000
.03...........................................................                    1,000                    1,500
.04...........................................................                    1,500                    1,900
.05...........................................................                    1,900                    2,400
.06...........................................................                    2,400                    2,900
.07...........................................................                    2,900                    3,200
.08...........................................................                    3,200                  14,612
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No DIC is payable under this table if combined annual income exceeds $14,612.

    The rates in this table are also applicable in the case of one 
surviving parent who has remarried, computed on the basis of the 
combined income of the parent and spouse, if this would be a greater 
benefit than that specified in Table 2 for one parent.
    Aid and attendance. The monthly rate of DIC payable to a parent 
under Tables 2 through 4 shall be increased by $246 if such parent is 
(1) a patient in a nursing home, or (2) helpless or blind, or so nearly 
helpless or blind as to need or require the regular aid and attendance 
of another person.
    Minimum rate. The monthly rate of DIC payable to any parent under 
Tables 2 through 4 shall not be less than $5.

            Table 5.--Section 306 Pension Income Limitations
------------------------------------------------------------------------
 
------------------------------------------------------------------------
(1) Veteran or surviving spouse          $10,871  (Pub. L. 95-588,
 with no dependents.                               section 306(a)).
(2) Veteran with no dependents in         11,371  (38 U.S.C. 1521(d) as
 need of aid and attendance.                       in effect on December
                                                   31, 1978).
(3) Veteran or surviving spouse           14,612  (Pub. L. 95-588,
 with one or more dependents.                      section 306(a)).
(4) Veteran with one or more              15,112  (38 U.S.C. 1521(d) as
 dependents in need of aid and                     in effect on December
 attendance.                                       31, 1978).
(5) Child (no entitled veteran or          8,886  (Pub. L. 95-588,
 surviving spouse).                                section 306(a)).
(6) Spouse income exclusion (38 CFR        3,468  (Pub. L. 95-588,
 3.262).                                           section
                                                   306(a)(2)(B)).
------------------------------------------------------------------------


              Table 6.--Old-Law Pension Income Limitations
------------------------------------------------------------------------
 
------------------------------------------------------------------------
(1) Veteran or surviving spouse           $9,516  (Pub. L. 95-588,
 without dependents or an entitled                 section 306(b)).
 child.
(2) Veteran or surviving spouse           13,719  (Pub. L. 95-588,
 with one or more dependents.                      section 306(b)).
------------------------------------------------------------------------

Spina Bifida Benefits

    Section 421 of Public Law 104-204 added a new chapter 18 to title 
38, United States Code, authorizing VA to provide certain benefits, 
including a monthly monetary allowance, to children born with spina 
bifida who are natural children of veterans who served in the Republic 
of Vietnam during the Vietnam era. Pursuant to 38 U.S.C. 1805(b)(3), 
spina bifida rates are subject to adjustment under the provisions of 38 
U.S.C. 5312, which provides for the adjustment of certain VA benefit 
rates whenever there is an increase in benefit amounts payable under 
title II of the Social Security Act (42 U.S.C. 401 et

[[Page 36674]]

seq.). Effective December 1, 2001, spina bifida monthly rates are as 
follows:
Level I--$228
Level II--$792
Level III--$1,354

Birth Defects Benefits

    Section 401 of Public Law 106-419 authorizes the payment of 
monetary benefits to, or on behalf of, children of female Vietnam 
veterans born with certain birth defects. Rates are subject to 
adjustment under the provisions of 38 U.S.C. 5312, which provides for 
the adjustment of certain VA benefit rates whenever there is an 
increase in benefit amounts payable under title II of the Social 
Security Act (42 U.S.C. 401 et seq.). Effective December 1, 2001, birth 
defects monthly rates are as follows:
Level I--$100
Level II--$228
Level III--$792
Level IV--$1,354

    Dated: May 16, 2002.
Anthony J. Principi,
Secretary of Veterans Affairs.
[FR Doc. 02-13095 Filed 5-23-02; 8:45 am]
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