[Federal Register Volume 67, Number 147 (Wednesday, July 31, 2002)]
[Rules and Regulations]
[Pages 49585-49590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-19328]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AK67


Monetary Allowances for Certain Children of Vietnam Veterans; 
Identification of Covered Birth Defects

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 provide for payment of a monetary allowance 
for an individual with disability from one or more covered birth 
defects who is a child of a woman Vietnam veteran and to provide for 
the identification of covered birth defects, to implement recent 
legislation. In addition, this document amends the VA adjudication 
regulations affecting benefits for Vietnam veterans' children with 
spina bifida to reflect that legislation, to make conforming changes, 
and to remove unnecessary or obsolete provisions.

DATES: Effective Date: July 31, 2002.
    Applicability Date: Benefits are payable in accordance with this 
rule retroactively to December 1, 2001, the effective date of the 
applicable statutory provisions.

FOR FURTHER INFORMATION CONTACT: Caroll McBrine, M.D., Consultant, 
Regulations Staff (211A), Compensation and Pension Service, Veterans 
Benefits Administration, Department of Veterans Affairs, 810 Vermont 
Avenue, NW., Washington, DC 20420, (202) 273-7230.

SUPPLEMENTARY INFORMATION: In a document published in the Federal 
Register on January 2, 2002 (67 FR 200), we proposed to amend the VA 
adjudication regulations to provide for payment of a monetary allowance 
for an individual with disability from one or more covered birth 
defects who is a child of a woman Vietnam veteran and to provide for 
the identification of covered birth defects, to implement provisions in 
recent legislation. In addition, we proposed to amend the VA 
adjudication regulations affecting benefits for Vietnam veterans' 
children with spina bifida to reflect that legislation, to make 
conforming changes, and to remove unnecessary or obsolete provisions. 
Companion proposed rule documents concerning the provision under that 
legislation of health care (RIN: 2900-AK88) (67 FR 209) and vocational 
training benefits (RIN: 2900-AK90) (67 FR 215) for eligible children of 
Vietnam veterans were also set forth in the January 2, 2002, issue of 
the Federal Register.
    That legislation, section 401 of the Veterans Benefits and Health 
Care Improvement Act of 2000, Public Law 106-419, amended chapter 18 of 
title 38, United States Code, effective December 1, 2001, to authorize 
VA to provide certain benefits, including a monthly monetary allowance, 
for children with covered birth defects who are the natural children of 
women veterans who served in the Republic of Vietnam during the Vietnam 
era. We provided a thirty-day period for public comments, which ended 
on February 1, 2002. We received one comment, from an individual.
    The commenter felt that the U.S. government is displaying a bias in 
favor of women veterans in this regulation and that the hidden effect 
of Agent Orange may also have remained dormant in men's systems and 
produced chromosomal disorders in their children. No changes are made 
based on this comment. Public Law 106-419, which was based on a 
comprehensive health study conducted by VA of 8,280 women Vietnam-era 
veterans (as discussed in the SUPPLEMENTARY INFORMATION section of the 
proposed rule), provides benefits specifically for women Vietnam 
veterans' children with certain birth defects. We have no legal 
authority to award the new benefits to children of male Vietnam 
veterans.
    VA appreciates the comment submitted in response to the proposed 
rule. Based on the rationale set forth in the proposed rule and in this 
document, we are adopting the provisions of the proposed rule as a 
final rule without change, except for nonsubstantive changes for 
purposes of clarity.

Administrative Procedure Act

    Because this rule solely provides for new benefits and makes 
nonsubstantive changes, there is under 5 U.S.C. 553 no need for a 30-
day delay of the effective date of this rule.

Applicability Date

    Benefits are payable retroactively in accordance with this rule to 
December 1, 2001, the effective date of the new benefit programs 
enacted by section 401 of Public Law 106-419.

Paperwork Reduction Act of 1995

    This rule removes the approved information collection provisions 
contained in 38 CFR 3.814 as unnecessary or obsolete. This rule 
contains no provisions constituting new collections of information 
under the Paperwork Reduction Act.

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 these regulatory amendments 
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

[[Page 49586]]

reason for this certification is that these amendments will not 
directly affect any small entities. Only individuals could be directly 
affected. Therefore, pursuant to 5 U.S.C. 605(b), these amendments are 
exempt from the initial and final regulatory flexibility analysis 
requirements of sections 603 and 604.

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 will have no 
consequential effect on State, local, or tribal governments.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance program numbers for 
benefits affected by this rule are 64.104, 64.109, 64.127, and 64.128.
    There are no Catalog of Federal Domestic Assistance program numbers 
for other benefits affected by this rule. 2

List of Subjects in 38 CFR Part 3

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

    Approved: May 13, 2002.
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.

    2. In Sec. 3.27, paragraphs (c) and (d) are revised to read as 
follows:


Sec. 3.27  Automatic adjustment of benefit rates.

* * * * *
    (c) Monetary allowance under 38 U.S.C. chapter 18 for certain 
individuals who are children of Vietnam veterans. Whenever there is a 
cost-of-living increase in benefit amounts payable under section 215(i) 
of Title II of the Social Security Act, VA shall, effective on the 
dates such increases become effective, increase by the same percentage 
the monthly allowance rates under 38 U.S.C. chapter 18.

    (Authority: 38 U.S.C. 1805(b)(3), 1815(d), 5312) (d) Publishing 
requirements. Increases in pension rates, parents' dependency and 
indemnity compensation rates and income limitation, and the monthly 
allowance rates under 38 U.S.C. chapter 18 made under this section 
shall be published in the Federal Register.

    Authority: (38 U.S.C. 1805(b)(3), 1815(d), 5312(c)(1))

    3. In Sec. 3.29, paragraph (c) is revised to read as follows:


Sec. 3.29  Rounding

* * * * *
    (c) Monthly rates under 38 U.S.C. chapter 18. When increasing the 
monthly monetary allowance rates under 38 U.S.C. chapter 18 for certain 
individuals who are children of Vietnam veterans, VA will round any 
resulting rate that is not an even dollar amount to the next higher 
dollar.

    Authority: (38 U.S.C. 1805(b)(3), 1815(d), 5312)


Sec. 3.31  [Amended]

    4. Section 3.31 is amended by:
    a. In the introductory text, removing ``the monetary allowance 
under 38 U.S.C. 1805 for a child suffering from spina bifida'' and 
adding, in its place, ``a monetary allowance under 38 U.S.C. chapter 18 
for an individual''.
    b. In paragraph (c)(4)(ii), removing ``the monetary allowance for 
children suffering from spina bifida'' and adding, in its place, ``a 
monetary allowance under 38 U.S.C. chapter 18''.
    c. Revising the authority citation.
    The revision reads as follows:


Sec. 3.31  Commencement of the period of payment.

* * * * *

    Authority: (38 U.S.C. 1822, 5111)

    5. In Sec. 3.105, paragraph (g) is revised to read as follows:


Sec. 3.105  Revision of decisions.

* * * * *
    (g) Reduction in evaluation--monetary allowance under 38 U.S.C. 
chapter 18 for certain individuals who are children of Vietnam 
veterans.  Where a reduction or discontinuance of a monetary allowance 
currently being paid under 38 U.S.C. chapter 18 is considered 
warranted, VA will notify the beneficiary at his or her latest address 
of record of the proposed reduction, furnish detailed reasons therefor, 
and allow the beneficiary 60 days to present additional evidence to 
show that the monetary allowance should be continued at the present 
level. Unless otherwise provided in paragraph (i) of this section, if 
VA does not receive additional evidence within that period, it will 
take final rating action and reduce the award effective the last day of 
the month following 60 days from the date of notice to the beneficiary 
of the proposed reduction.

    Authority: (38 U.S.C. 1822, 5112(b)(6))
* * * * *


Sec. 3.114  [Amended]

    6. Section 3.114 is amended by:
    a. In the introductory text of paragraph (a), removing ``the 
monetary allowance under 38 U.S.C. 1805 for a child suffering from 
spina bifida'' each place it appears and adding, in its place, ``a 
monetary allowance under 38 U.S.C. chapter 18 for an individual''.
    b. Revising the authority citation at the end of paragraph (a).
    The revision reads as follows:


Sec. 3.114  Change of law or Department of Veterans Affairs issue.

* * * * *

    Authority: (38 U.S.C. 1822, 5110(g))
* * * * *


Sec. 3.158  [Amended]

    7. In Sec. 3.158, paragraphs (a) and (c) are amended by removing 
``1805'' and adding, in its place, ``chapter 18''.


Sec. 3.216  [Amended]

    8. Section 3.216 is amended by:
    a. Removing ``or the monetary allowance for a child suffering from 
spina bifida who is a child of a Vietnam veteran under Sec. 3.814 of 
this part'' and adding, in its place, ``a monetary allowance under 38 
U.S.C. chapter 18''.
    b. Revising the authority citation.
    The revision reads as follows:


Sec. 3.216  Mandatory disclosure of social security numbers.

* * * * *

    Authority: (38 U.S.C. 1822, 5101(c))
* * * * *

    9. In Sec. 3.261, paragraph (a)(40) is revised to read as follows:


Sec. 3.261  Character of income; exclusions and estates.

* * * * *
    (a) * * *

[[Page 49587]]



 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Dependency  and
                                                               indemnity              Pension; old-law           Pension; section 306
            Income               Dependency  (parents)       compensation           (veterans, surviving         (veterans, surviving          See--
                                                               (parents)           spouses and children)        spouses and children)
--------------------------------------------------------------------------------------------------------------------------------------------------------
          *                  *                  *                  *                  *                  *                  *
(40) Monetary allowance under   Excluded..............  Excluded..............  Excluded...................  Excluded...................  Sec.  3.262(y)
 38 U.S.C. chapter 18 for
 certain individuals who are
 children of Vietnam veterans
 (38 U.S.C. 1823(c)).
--------------------------------------------------------------------------------------------------------------------------------------------------------

* * * * *

    10. In Sec. 3.262, paragraph (y) is revised to read as follows:


Sec. 3.262  Evaluation of income.

* * * * *
    (y) Monetary allowance under 38 U.S.C. chapter 18 for certain 
individuals who are children of Vietnam veterans. There shall be 
excluded from income computation any allowance paid under the 
provisions of 38 U.S.C. chapter 18 to or for an individual who is the 
child of a Vietnam veteran.

    Authority: (38 U.S.C. 1823(c))

    11. In Sec. 3.263, paragraph (g) is revised to read as follows:


Sec. 3.263  Corpus of estate; net worth.

* * * * *
    (g) Monetary allowance under 38 U.S.C. chapter 18 for certain 
individuals who are children of Vietnam veterans. There shall be 
excluded from the corpus of estate or net worth of a claimant any 
allowance paid under the provisions of 38 U.S.C. chapter 18 to or for 
an individual who is a child of a Vietnam veteran.

    Authority: (38 U.S.C. 1823(c))

    12. In Sec. 3.272, paragraph (u) is revised to read as follows:


Sec. 3.272  Exclusions from income.

* * * * *
    (u) Monetary allowance under 38 U.S.C. chapter 18 for certain 
individuals who are children of Vietnam veterans. Any allowance paid 
under the provisions of 38 U.S.C. chapter 18 to or for an individual 
who is a child of a Vietnam veteran.

    Authority: (38 U.S.C. 1823(c))

    13. In Sec. 3.275, paragraph (i) is revised to read as follows:


Sec. 3.275  Criteria for evaluating net worth.

* * * * *
    (i) Monetary allowance under 38 U.S.C. chapter 18 for certain 
individuals who are children of Vietnam veterans. There shall be 
excluded from the corpus of estate or net worth of a claimant any 
allowance paid under the provisions of 38 U.S.C. chapter 18 to or for 
an individual who is a child of a Vietnam veteran.

    Authority: (38 U.S.C. 1823(c))

    14. In Sec. 3.403, paragraph (b) is revised and paragraph (c) is 
added, to read as follows:


Sec. 3.403  Children.

* * * * *
    (b) Monetary allowance under 38 U.S.C. 1805 for an individual 
suffering from spina bifida who is a child of a Vietnam veteran. An 
award of the monetary allowance under 38 U.S.C. 1805 to or for an 
individual suffering from spina bifida who is a child of a Vietnam 
veteran will be effective either date of birth if claim is received 
within one year of that date, or date of claim, but not earlier than 
October 1, 1997.

    Authority: (38 U.S.C. 1822, 5110; sec. 422(c), Pub. L. 104-204, 
110 Stat. 2926)

    (c) Monetary allowance under 38 U.S.C. 1815 for an individual with 
covered birth defects who is a child of a woman Vietnam veteran. Except 
as provided in Sec. 3.114(a) or Sec. 3.815(i), an award of the monetary 
allowance under 38 U.S.C. 1815 to or for an individual with one or more 
covered birth defects who is a child of a woman Vietnam veteran will be 
effective as of the date VA received the claim (or the date of birth if 
the claim is received within one year of that date), the date 
entitlement arose, or December 1, 2001, whichever is latest.

    Authority: (38 U.S.C. 1815, 1822, 1824, 5110)

    15. In Sec. 3.503, paragraph (b) is revised to read as follows:


Sec. 3.503  Children.

* * * * *
    (b) Monetary allowance under 38 U.S.C. chapter 18 for certain 
individuals who are children of Vietnam veterans. The effective date of 
discontinuance of the monthly allowance under 38 U.S.C. chapter 18 will 
be the last day of the month before the month in which the death of the 
individual occurred.

    Authority: (38 U.S.C. 1822, 5112(b))

    16. Section 3.814 is amended by:
    a. Revising the section heading.
    b. Adding a heading to paragraph (a).
    c. In paragraph (a), revising the first sentence and, in the second 
sentence, removing ``other related individual'' and adding, in its 
place, ``related person''.
    d. Removing and reserving paragraph (b).
    e. In paragraph (c)(1), removing ``an individual'' and adding, in 
its place, ``a person'' and removing ``individual's'' and adding, in 
its place, ``person's''.
    f. In paragraph (c)(2), removing ``Sec. .3.204(a)(1), VA shall'' 
and adding, in its place, ``Sec. 3.204(a)(1), VA will'' and by removing 
``an individual's biological father or mother is or was'' and adding, 
in its place, ``a person is the biological son or daughter of''.
    g. Add a heading for paragraph (d).
    h. Removing the authority citation at the end of paragraph (d).
    i. In paragraph (e) introductory text, removing ``children'' and 
adding, in its place, ``an individual''.
    j. Revising the authority citation at the end of the section.
    k. Removing the information collection parenthetical at the end of 
the section.
    The revisions and additions read as follows:


Sec. 3.814  Monetary allowance under 38 U.S.C. chapter 18 for an 
individual suffering from spina bifida whose biological father or 
mother is or was a Vietnam veteran.

    (a) Monthly monetary allowance. VA will pay a monthly monetary 
allowance under subchapter I of 38 U.S.C. chapter 18, based upon the 
level of disability determined under the provisions of paragraph (d) of 
this section, to or for a person who VA has determined is an individual 
suffering from spina bifida whose biological mother or father is or was 
a Vietnam veteran. * * *
* * * * *

[[Page 49588]]

    (d) Disability evaluations. (1) * * *
* * * * *

    Authority: (38 U.S.C. 501, 1805, 1811, 1812, 1821, 1822, 1823, 
1824, 5101, 5110, 5111, 5112)

    17. Section 3.815 is added to read as follows:


Sec. 3.815  Monetary allowance under 38 U.S.C. chapter 18 for an 
individual with disability from covered birth defects whose biological 
mother is or was a Vietnam veteran; identification of covered birth 
defects.

    (a) Monthly monetary allowance. (1) General. VA will pay a monthly 
monetary allowance under subchapter II of 38 U.S.C. chapter 18 to or 
for an individual whose biological mother is or was a Vietnam veteran 
and who VA has determined to have disability resulting from one or more 
covered birth defects. Except as provided in paragraph (a)(3) of this 
section, the amount of the monetary allowance paid will be based upon 
the level of such disability suffered by the individual, as determined 
in accordance with the provisions of paragraph (e) of this section.
    (2) Affirmative evidence of cause other than mother's service 
during Vietnam era. No monetary allowance will be provided under this 
section based on a particular birth defect of an individual in any case 
where affirmative evidence establishes that the birth defect results 
from a cause other than the active military, naval, or air service of 
the individual's mother during the Vietnam era and, in determining the 
level of disability for an individual with more than one birth defect, 
the particular defect resulting from other causes will be excluded from 
consideration. This will not prevent VA from paying a monetary 
allowance under this section for other birth defects.
    (3) Nonduplication; spina bifida. In the case of an individual 
whose only covered birth defect is spina bifida, a monetary allowance 
will be paid under Sec. 3.814, and not under this section, nor will the 
individual be evaluated for disability under this section. In the case 
of an individual who has spina bifida and one or more additional 
covered birth defects, a monetary allowance will be paid under this 
section and the amount of the monetary allowance will be not less than 
the amount the individual would receive if his or her only covered 
birth defect were spina bifida. If, but for the individual's one or 
more additional covered birth defects, the monetary allowance payable 
to or for the individual would be based on an evaluation at Level I, 
II, or III, respectively, under Sec. 3.814(d), the evaluation of the 
individual's level of disability under paragraph (e) of this section 
will be not less than Level II, III, or IV, respectively.
    (b) No effect on other VA benefits. Receipt of a monetary allowance 
under 38 U.S.C. chapter 18 will not affect the right of the individual, 
or the right of any person based on the individual's relationship to 
that person, to receive any other benefit to which the individual, or 
that person, may be entitled under any law administered by VA.
    (c) Definitions. (1) Vietnam veteran. For the purposes of this 
section, the term Vietnam veteran means a person who performed active 
military, naval, or air service in the Republic of Vietnam during the 
period beginning on February 28, 1961, and ending on May 7, 1975, 
without regard to the characterization of the person's service. Service 
in the Republic of Vietnam includes service in the waters offshore and 
service in other locations if the conditions of service involved duty 
or visitation in the Republic of Vietnam.
    (2) Individual. For the purposes of this section, the term 
individual means a person, regardless of age or marital status, whose 
biological mother is or was a Vietnam veteran and who was conceived 
after the date on which the veteran first entered the Republic of 
Vietnam during the period beginning on February 28, 1961, and ending on 
May 7, 1975. Notwithstanding the provisions of Sec. 3.204(a)(1), VA 
will require the types of evidence specified in Secs. 3.209 and 3.210 
sufficient to establish that a person is the biological son or daughter 
of a Vietnam veteran.
    (3) Covered birth defect. For the purposes of this section, the 
term covered birth defect means any birth defect identified by VA as a 
birth defect that is associated with the service of women Vietnam 
veterans in the Republic of Vietnam during the period beginning on 
February 28, 1961, and ending on May 7, 1975, and that has resulted, or 
may result, in permanent physical or mental disability. However, the 
term covered birth defect does not include a condition due to a:
    (i) Familial disorder;
    (ii) Birth-related injury; or
    (iii) Fetal or neonatal infirmity with well-established causes.
    (d) Identification of covered birth defects. All birth defects that 
are not excluded under the provisions of this paragraph are covered 
birth defects.
    (1) Covered birth defects include, but are not limited to, the 
following (however, if a birth defect is determined to be familial in a 
particular family, it will not be a covered birth defect):
    (i) Achondroplasia;
    (ii) Cleft lip and cleft palate;
    (iii) Congenital heart disease;
    (iv) Congenital talipes equinovarus (clubfoot);
    (v) Esophageal and intestinal atresia;
    (vi) Hallerman-Streiff syndrome;
    (vii) Hip dysplasia;
    (viii) Hirschprung's disease (congenital megacolon);
    (ix) Hydrocephalus due to aqueductal stenosis;
    (x) Hypospadias;
    (xi) Imperforate anus;
    (xii) Neural tube defects (including spina bifida, encephalocele, 
and anencephaly);
    (xiii) Poland syndrome;
    (xiv) Pyloric stenosis;
    (xv) Syndactyly (fused digits);
    (xvi) Tracheoesophageal fistula;
    (xvii) Undescended testicle; and
    (xviii) Williams syndrome.
    (2) Birth defects that are familial disorders, including hereditary 
genetic conditions, are not covered birth defects. Familial disorders 
include, but are not limited to, the following, unless the birth defect 
is not familial in a particular family:
    (i) Albinism;
    (ii) Alpha-antitrypsin deficiency;
    (iii) Crouzon syndrome;
    (iv) Cystic fibrosis;
    (v) Duchenne's muscular dystrophy;
    (vi) Galactosemia;
    (vii) Hemophilia;
    (viii) Huntington's disease;
    (ix) Hurler syndrome;
    (x) Kartagener's syndrome (Primary Ciliary Dyskinesia);
    (xi) Marfan syndrome;
    (xii) Neurofibromatosis;
    (xiii) Osteogenesis imperfecta;
    (xiv) Pectus excavatum;
    (xv) Phenylketonuria;
    (xvi) Sickle cell disease;
    (xvii) Tay-Sachs disease;
    (xviii) Thalassemia; and
    (xix) Wilson's disease.
    (3) Conditions that are congenital malignant neoplasms are not 
covered birth defects. These include, but are not limited to, the 
following:
    (i) Medulloblastoma;
    (ii) Neuroblastoma;
    (iii) Retinoblastoma;
    (iv) Teratoma; and
    (v) Wilm's tumor.
    (4) Conditions that are chromosomal disorders are not covered birth 
defects. These include, but are not limited to, the following:
    (i) Down syndrome and other Trisomies;
    (ii) Fragile X syndrome;
    (iii) Klinefelter's syndrome; and

[[Page 49589]]

    (iv) Turner's syndrome.
    (5) Conditions that are due to birth-related injury are not covered 
birth defects. These include, but are not limited to, the following:
    (i) Brain damage due to anoxia during or around time of birth;
    (ii) Cerebral palsy due to birth trauma, (iii) Facial nerve palsy 
or other peripheral nerve injury;
    (iv) Fractured clavicle; and
    (v) Horner's syndrome due to forceful manipulation during birth.
    (6) Conditions that are due to a fetal or neonatal infirmity with 
well-established causes or that are miscellaneous pediatric conditions 
are not covered birth defects. These include, but are not limited to, 
the following:
    (i) Asthma and other allergies;
    (ii) Effects of maternal infection during pregnancy, including but 
not limited to, maternal rubella, toxoplasmosis, or syphilis;
    (iii) Fetal alcohol syndrome or fetal effects of maternal drug use;
    (iv) Hyaline membrane disease;
    (v) Maternal-infant blood incompatibility;
    (vi) Neonatal infections;
    (vii) Neonatal jaundice;
    (viii) Post-infancy deafness/hearing impairment (onset after the 
age of one year);
    (ix) Prematurity; and
    (x) Refractive disorders of the eye.
    (7) Conditions that are developmental disorders are not covered 
birth defects. These include, but are not limited to, the following:
    (i) Attention deficit disorder;
    (ii) Autism;
    (iii) Epilepsy diagnosed after infancy (after the age of one year);
    (iv) Learning disorders; and
    (v) Mental retardation (unless part of a syndrome that is a covered 
birth defect).
    (8) Conditions that do not result in permanent physical or mental 
disability are not covered birth defects. These include, but are not 
limited to:
    (i) Conditions rendered non-disabling through treatment;
    (ii) Congenital heart problems surgically corrected or resolved 
without disabling residuals;
    (iii) Heart murmurs unassociated with a diagnosed cardiac 
abnormality;
    (iv) Hemangiomas that have resolved with or without treatment; and
    (v) Scars (other than of the head, face, or neck) as the only 
residual of corrective surgery for birth defects.
    (e) Disability evaluations. Whenever VA determines, upon receipt of 
competent medical evidence, that an individual has one or more covered 
birth defects, VA will determine the level of disability currently 
resulting, in combination, from the covered birth defects and 
associated disabilities. No monetary allowance will be payable under 
this section if VA determines under this paragraph that an individual 
has no current disability resulting from the covered birth defects, 
unless VA determines that the provisions of paragraph (a)(3) of this 
section are for application. Except as otherwise provided in paragraph 
(a)(3) of this section, VA will determine the level of disability as 
follows:
    (1) Levels of disability.
    (i) Level 0. The individual has no current disability resulting 
from covered birth defects.
    (ii) Level I. The individual meets one or more of the following 
criteria:
    (A) The individual has residual physical or mental effects that 
only occasionally or intermittently limit or prevent some daily 
activities; or
    (B) The individual has disfigurement or scarring of the head, face, 
or neck without gross distortion or gross asymmetry of any facial 
feature (nose, chin, forehead, eyes (including eyelids), ears 
(auricles), cheeks, or lips).
    (iii) Level II. The individual meets one or more of the following 
criteria:
    (A) The individual has residual physical or mental effects that 
frequently or constantly limit or prevent some daily activities, but 
the individual is able to work or attend school, carry out most 
household chores, travel, and provide age-appropriate self-care, such 
as eating, dressing, grooming, and carrying out personal hygiene, and 
communication, behavior, social interaction, and intellectual 
functioning are appropriate for age; or
    (B) The individual has disfigurement or scarring of the head, face, 
or neck with either gross distortion or gross asymmetry of one facial 
feature or one paired set of facial features (nose, chin, forehead, 
eyes (including eyelids), ears (auricles), cheeks, or lips).
    (iv) Level III. The individual meets one or more of the following 
criteria:
    (A) The individual has residual physical or mental effects that 
frequently or constantly limit or prevent most daily activities, but 
the individual is able to provide age-appropriate self-care, such as 
eating, dressing, grooming, and carrying out personal hygiene;
    (B) The individual is unable to work or attend school, travel, or 
carry out household chores, or does so intermittently and with 
difficulty;
    (C) The individual's communication, behavior, social interaction, 
and intellectual functioning are not entirely appropriate for age; or
    (D) The individual has disfigurement or scarring of the head, face, 
or neck with either gross distortion or gross asymmetry of two facial 
features or two paired sets of facial features (nose, chin, forehead, 
eyes (including eyelids), ears (auricles), cheeks, or lips).
    (v) Level IV. The individual meets one or more of the following 
criteria:
    (A) The individual has residual physical or mental effects that 
prevent age-appropriate self-care, such as eating, dressing, grooming, 
and carrying out personal hygiene;
    (B) The individual's communication, behavior, social interaction, 
and intellectual functioning are grossly inappropriate for age; or
    (C) The individual has disfigurement or scarring of the head, face, 
or neck with either gross distortion or gross asymmetry of three facial 
features or three paired sets of facial features (nose, chin, forehead, 
eyes (including eyelids), ears (auricles), cheeks, or lips).
    (2) Assessing limitation of daily activities. Physical or mental 
effects on the following functions are to be considered in assessing 
limitation of daily activities:
    (i) Mobility (ability to stand and walk, including balance and 
coordination);
    (ii) Manual dexterity;
    (iii) Stamina;
    (iv) Speech;
    (v) Hearing;
    (vi) Vision (other than correctable refraction errors);
    (vii) Memory;
    (viii) Ability to concentrate;
    (ix) Appropriateness of behavior; and
    (x) Urinary and fecal continence.
    (f) Information for determining whether individuals have covered 
birth defects and rating disability levels. (1) VA may accept 
statements from private physicians, or examination reports from 
government or private institutions, for the purposes of determining 
whether an individual has a covered birth defect and for rating claims 
for covered birth defects. If they are adequate for such purposes, VA 
may make the determination and rating without further examination. In 
the absence of adequate information, VA may schedule examinations for 
the purpose of determining whether an individual has a covered birth 
defect and/or assessing the level of disability.
    (2) Except in accordance with paragraph (a)(3) of this section, VA 
will not pay a monthly monetary allowance unless or until VA is able to 
obtain medical evidence adequate to determine that an individual has a 
covered birth defect and adequate to assess the level of disability due 
to covered birth defects.

[[Page 49590]]

    (g) Redeterminations. VA will reassess a determination under this 
section whenever it receives evidence indicating that a change is 
warranted.
    (h) Referrals. If a regional office is unclear in any case as to 
whether a condition is a covered birth defect, it may refer the issue 
to the Director of the Compensation and Pension Service for 
determination.
    (i) Effective dates. Except as provided in Sec. 3.114(a) or 
paragraph (i)(1) or (2) of this section, VA will award the monetary 
allowance under subchapter II of 38 U.S.C. chapter 18, for an 
individual with disability resulting from one or more covered birth 
defects, based on an original claim, a claim reopened after final 
disallowance, or a claim for increase, as of the date VA received the 
claim (or the date of birth if the claim is received within one year of 
that date), the date entitlement arose, or December 1, 2001, whichever 
is latest. Subject to the condition that no benefits may be paid for 
any period prior to December 1, 2001:
    (1) VA will increase benefits as of the earliest date the evidence 
establishes that the level of severity increased, but only if the 
beneficiary applies for an increase within one year of that date.
    (2) If a claimant reopens a previously disallowed claim based on 
corrected military records, VA will award the benefit from the latest 
of the following dates: the date the veteran or beneficiary applied for 
a correction of the military records; the date the disallowed claim was 
filed; or, the date one year before the date of receipt of the reopened 
claim.
    (j) Reductions and discontinuances. VA will generally reduce or 
discontinue awards under subchapter II of 38 U.S.C. chapter 18 
according to the facts found except as provided in Secs. 3.105 and 
3.114(b).
    (1) If benefits were paid erroneously because of beneficiary error, 
VA will reduce or discontinue benefits as of the effective date of the 
erroneous award.
    (2) If benefits were paid erroneously because of administrative 
error, VA will reduce or discontinue benefits as of the date of last 
payment.

    Authority: (38 U.S.C. 501, 1811, 1812, 1813, 1814, 1815, 1816, 
1821, 1822, 1823, 1824, 5101, 5110, 5111, 5112)

[FR Doc. 02-19328 Filed 7-30-02; 8:45 am]
BILLING CODE 8320-01-P