[Federal Register Volume 84, Number 76 (Friday, April 19, 2019)]
[Proposed Rules]
[Pages 16421-16426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-07751]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 3
RIN 2900-AP86
Active Service Pay
AGENCY: Department of Veterans Affairs.
ACTION: Proposed rule.
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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its
adjudication regulations. One amendment would permit VA to suspend
disability compensation payments upon receipt of notice from the
Department of Defense (DoD) that the veteran has received, is
receiving, or will begin to receive active service pay. This proposed
change would reduce the financial impact on veterans associated with
receipt of VA disability compensation and active service pay by
allowing VA to make necessary adjustments as close in time to the
receipt of active service pay as possible. VA also proposes an
amendment to clarify how VA adjudicates benefit adjustments based on
receipt of active service pay for certain types of service.
DATES: Comments must be received on or before June 18, 2019.
ADDRESSES: Written comments may be submitted through
www.Regulations.gov; by mail or hand-delivery to Director, Office of
Regulation Policy and Management (00REG), Department of Veterans
Affairs, 810 Vermont Avenue NW, Room 1064, Washington, DC 20420; or by
fax to (202) 273-9026. (This is not a toll-free telephone number.)
Comments should indicate that they are submitted in response to RIN
2900-AP86--Active Service Pay. Copies of comments received will be
available for public inspection in the Office of Regulation Policy and
Management, Room 1064, between the hours of 8:00 a.m. and 4:30 p.m.,
Monday through Friday (except holidays). Please call (202) 461-4902 for
an appointment. (This is not a toll-free number.) In addition, comments
may be viewed online through the Federal Docket Management System
(FDMS) at www.Regulations.gov.
FOR FURTHER INFORMATION CONTACT: Gabrielle Mancuso, Consultant,
Regulations Staff (211D), Compensation Service, Department of Veterans
Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 461-9700.
(This is not a toll-free telephone number.)
SUPPLEMENTARY INFORMATION: Section 5304(c) of title 38, United States
Code, provides that ``Pension, compensation, or retirement pay on
account of any person's own service shall not be paid to such person
for any period for which such person receives active service pay.''
``Active service pay'' is defined by VA at 38 CFR 3.654 as ``pay
received for active duty, active duty for training or inactive duty
training'' and therefore encompasses both active duty and training pay.
VA implements the statutory prohibition on receiving concurrent VA
benefits and active service pay in current 38 CFR 3.700(a)(1). In order
to reduce hardships for veterans and improve processing of benefits, VA
proposes to amend the current procedural requirements related to the
60-day notice period and take immediate action to suspend compensation
payments upon notice of receipt of active service pay from DoD when the
veteran has received prior notice that the law prevents concurrent
receipt of certain VA benefits and active service pay or VA has
received a statement from the veteran indicating knowledge that
concurrent receipt of VA benefits and active service pay is prohibited.
This proposed change would only apply to compensation payments, not
pension.
I. Current Regulation and Adjustment Process
Current 38 CFR 3.103 generally establishes the procedures for
notice of law in the VA benefits system. In particular, Sec.
3.103(b)(2) establishes procedures that VA must follow before an
``award of compensation, pension or dependency and indemnity
compensation'' can be ``terminated, reduced or otherwise adversely
affected.'' Importantly, VA must provide a veteran with notice of a
proposed adverse action and 60 days to provide evidence showing why the
adverse action should not be taken. VA continues to pay benefits during
this 60-day period.
Current regulations provide exceptions for when VA may dispense
with the 60-day notice requirement and terminate or reduce benefits at
the same time it notifies a veteran of such action. One exception is
specific to veterans who inform VA when they return to active duty or
participate in training duty. Under 38 CFR 3.103(b)(3)(v), VA may take
immediate action to suspend payment of VA benefits when the decision is
``based upon a written statement provided to VA by a veteran indicating
that he or she has returned to active service, the nature of that
service, and the date of reentry into service, with the knowledge or
notice that receipt of active service pay precludes concurrent receipt
of VA compensation or pension.'' In other words, when a veteran
proactively notifies VA of his or her receipt of active service pay, VA
may suspend benefits without waiting 60 days, thereby eliminating or
reducing the overpayment that VA must collect from the veteran. VA
proposes to expand this exception to include notice of receipt of
active service pay from DoD. Not only would this proposal further
eliminate or reduce overpayments VA must collect, it also reduces the
reporting burden on veterans in cases where VA receives information
directly from DoD.
A. Overpayments
``[T]he Secretary generally is required to recover erroneous VA
payments,'' including the overpayment of benefits. Edwards v. Peake, 22
Vet. App. 57, 59 (2008) (citing 38 U.S.C. 5314); see also VAOPGCPREC 1-
2010 (Jan. 4, 2010). Section 5304(c) of title 38, United States Code,
precludes concurrent receipt of VA compensation and active service pay.
If VA pays benefits to a veteran for a period in which he or she is not
entitled to receive them, including during the 60-day notice period, VA
must generally recover these overpayments. At present, the only way for
VA to avoid the overpayment and resulting recoupment action is if the
veteran provides VA a statement prior to the receipt of active service
pay, which allows VA to immediately suspend benefit payments. See 38
CFR 3.103(b)(3)(v). Otherwise VA must provide a 60-day response period
prior to suspending benefits. Only upon expiration of the response
period or a timely response from a veteran, whichever is sooner, may VA
create an overpayment and initiate recoupment action. As discussed
further in section II below, this process has created financial
hardships for veterans, who must repay the duplicate benefits they
received, as well as burdensome inefficiencies in processing
overpayments, further amplifying the impact on veterans.
VA processes two basic types of benefit adjustments based on
concurrent receipt of active service pay: Training pay offsets, which
can be performed either prospectively or retrospectively, and active
duty suspensions. The respective processes for adjusting benefits
differ. For training pay, DoD, until recently, transmitted an annual
notice to VA with the number of days for which a veteran received
training pay. Training pay is characteristically periodic and
recurring, and of shorter duration than active duty pay. However,
active duty pay, which DoD previously transmitted information about to
VA quarterly, is typically of indeterminate
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duration that could extend months, or even years, particularly for
members of the Reserves and National Guard returning to active duty.
Because there are significant systemic differences in the processes for
adjusting VA benefits based on receipt of either active duty or
training pay, the processes for adjusting benefits will be discussed
separately to assist the reader with understanding the unique hardships
created by each type.
B. Training Pay
Training pay is the monetary benefit a reservist or member of the
National Guard receives for performing periodic active duty for
training, as discussed in more detail below, or inactive duty training.
See 38 CFR 3.6(c) (active duty for training) and 3.6(d) (inactive duty
training). During a single fiscal year, reservists and members of the
National Guard commonly receive training pay for a total of 63 days,
which consists of 48 drill periods (a drill period is defined as four
hours), and 15 days of active duty training. Previously, at the end of
each fiscal year, DoD's Defense Manpower Data Center (DMDC) sent VA an
electronic file identifying veterans who received both training pay and
VA disability compensation benefits during that fiscal year (ending in
September). For data matches after the fiscal year (FY) 2017 match, VA
will use the Reserve military pay data in the VA-DoD Identity
Repository (VADIR) to match against VA recipients of VA disability
compensation or pension. DMDC sends Reserve military pay data to VADIR
monthly. DoD's provision, and VA's use of, DMDC data is based upon
terms set forth in a computer matching agreement between DoD and VA.
See Notice of a New Matching Program, 83 FR 51673 (Oct. 12, 2018).
VA may not learn of a veteran's receipt of training pay until the
annual data match is received from DMDC. VA then sends each affected
veteran VA Form 21-8951, Notice of Waiver of VA Compensation or Pension
to Receive Military Pay and Allowances, notifying the veteran that
concurrent receipt of VA disability compensation or pension benefits
and active service pay is prohibited, and that the veteran may use the
form to elect to keep the training pay in lieu of VA compensation. If
the veteran elects to keep the training pay, he or she must use the
form to waive VA benefits for the number of days equal to the number of
training days for which he or she received payment. Occasionally, a
veteran will proactively notify VA of receipt (or anticipated receipt)
of training pay by submitting VA Form 21-8951-2, Notice of Waiver of VA
Compensation or Pension to Receive Military Pay and Allowances. Similar
to VA Form 21-8951, this form allows a veteran to waive VA benefits or
training pay. VA typically requires the signature of the veteran's
military unit commander to ensure the number of days reported is
accurate.
Both forms notify the veteran that if he or she elects to waive VA
benefits in order to receive training pay, VA will adjust VA benefit
payments for the total number of days waived. Generally, VA calculates
the withholding at the monthly benefit rate in effect at the end of the
fiscal year for which the veteran received training pay. Historically,
VA withheld future compensation payments in lieu of creating an
overpayment as an alternative mechanism of collecting the erroneous
concurrent payments of training pay and VA compensation. However,
adjustments by future withholding did not provide repayment options,
leaving the veteran with no means to mitigate the adverse effect of
losing the withheld benefits.
Consequently, starting in June 2016, VA began automating the annual
process for training days completed in FY 2015. The new process is no
longer dependent on employees initiating the adverse actions, which
were previously delayed due to conflicting workload priorities. The
automated process releases the notice letter upon receipt of notice
from DMDC. After the veteran responds or the response period expires,
VA issues a decision. If the decision results in an overpayment in the
veteran's account, VA provides the veteran an opportunity to request a
waiver of the overpayment or develop a payment plan to resolve the
resulting debt. Subsequent data indicates that automation has increased
the number of training pay adjustments processed by almost 62.9 percent
from FY 2015 to FY 2016 while also reducing the number of days it takes
to process the proposed compensation adjustment from 232 to 181 days,
respectively. The average days to process the proposed compensation
adjustment will continue to improve once the older training pay
notices, received prior to the June 2016 automation process, are
adjudicated. However, as discussed below, further improvement is
possible.
C. Active Duty Pay
A veteran may receive active duty pay as a result of returning to
active duty in the United States Armed Forces. Additionally, VA treats
some active duty for training in the same manner as active duty for
purposes of processing VA benefit adjustments on the grounds that
individuals performing such duty earn leave and time towards retirement
on par to a servicemember on active duty status. Moreover, like active
duty, some active duty for training can be of a longer duration and may
not necessarily have an ascertainable end date. Therefore, active
service pay for active duty for training described in 38 CFR 3.6(c),
with the exception of annual active duty for training (typically
performed 15 days each year by reservists and members of the National
Guard) and Active Duty for Special Work to receive training, is
generally processed as active duty pay for purposes of the cessation of
VA compensation payments. Pay received for annual active duty for
training and Active Duty for Special Work to receive training is
processed as training pay. VA is proposing to amend 38 CFR 3.654(b) to
accurately account for all instances in which VA discontinues an award,
in the same manner as return to active duty, based on receipt of active
service pay for active duty for training. See 38 U.S.C. 101(22) and 38
CFR 3.6(c).
VA's processing of concurrent VA benefits and active duty payments
is generally different from processing of concurrent VA benefits and
training pay. VA typically receives notice of a veteran's return to
active duty or full-time duty in one of two ways: Either written notice
from a veteran or through a DMDC active duty, and on some occasions
training pay, data match. While veterans returning to active duty or
full-time duty can notify VA of their status, due to the fast-paced
nature of some military deployments, or the fact that the veteran may
be stationed in areas with limited mail service, VA frequently learns
of a veteran's return to active duty through the DMDC active duty data
match. The DMDC active duty data match differs from the data match
described for training pay, as VA and DMDC previously conducted the
active duty data match quarterly (i.e., approximately every 3 months).
VA is in the process of developing a new computer matching agreement
with DoD that may change the frequency with which VA receives this
information.
When the data match shows that a veteran has returned to active or
full-time duty, VA will confirm the date of return by reviewing
electronic VA and DoD shared databases, such as the Defense Personnel
Records Image Retrieval System (DPRIS) or the Veterans Information
Solution. After confirming a veteran's return to active or full-time
duty, VA must, under current requirements, notify the veteran of VA's
proposal to discontinue the payment of compensation or pension. VA
sometimes encounters difficulties when trying to locate and contact
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veterans who have returned to active duty. As VA must notify a veteran
of its intent to suspend disability payments, this becomes problematic
when some veterans on active duty serve in remote locations, such as a
combat zone or similarly austere environments, with infrequent mail
service, and have no reasonable method for dealing with financial
difficulties. VA's current regulations allow the veteran 60 days to
respond to the proposed decision, submit evidence, and request a
hearing before VA may suspend benefits. 38 CFR 3.103(b)(2). Following
the end of the 60-day period, and provision of a hearing if requested,
VA considers any relevant evidence, and, if warranted, discontinues the
award of benefits effective the day preceding return to active or full-
time duty. See 38 CFR 3.501(a) and 3.654(b).
II. Undue Burdens to Veterans and Administrative Inefficiencies
Under current Sec. 3.103(b), which we propose to amend, VA cannot
suspend compensation benefit payments before the veteran responds to
the proposed benefit adjustment or the expiration of the prescribed 60-
day response period. During this period, a veteran who has returned to
active duty continues to receive benefits that VA will be required to
recoup. As such, in the case of a veteran who returned to active duty,
the 60-day delay potentially harms the veteran by increasing the amount
of the overpayment that VA must ultimately recover. Additionally, when
a veteran is overpaid, VA is required to take ``aggressive collection
action . . . to collect all claims for money or property arising from
its activities.'' See 38 CFR 1.910(a). This action can include
disclosure of debt information to consumer reporting agencies. See 38
CFR 1.916. Collection and reporting of debt can negatively impact a
veteran's credit rating, ability to borrow money, or ability to qualify
for a security clearance or a job.
As discussed below, VA believes that processing benefits
adjustments on a more frequent basis will be beneficial to veterans.
However, under current 38 CFR 3.103, depending on the frequency with
which DMDC sends the electronic file to VA (see section III below), VA
could potentially send multiple notice letters (up to 12 or more
letters per year in the case of a veteran who regularly drills and
multiple letters referring to the same period of service in the case of
a veteran returning to active duty). This could result in overlapping
notice periods and would create administrative inefficiencies
associated with tracking and promulgating each action. For veterans who
returned to active duty, it may be confusing to receive multiple notice
letters related to the same period of service. VA also encourages
veterans to respond promptly to each letter to minimize the
overpayment; however, a prompt response may be difficult, at best, and
create an undue burden to those who may have returned to active duty
and are in remote locations with infrequent mail service. The multiple
notice letters could also create unnecessary distractions for veterans
who may already be experiencing stressful situations in hostile areas
and would likely create an influx of calls to VA's National Call
Centers from veterans or their family members seeking assistance,
clarification, or guidance.
Moreover, once VA issues a decision, the veteran receives one post-
determination letter from the Veterans Benefits Administration (VBA)
and, if an overpayment is created, a collections letter from VA's Debt
Management Center. The first letter, from VBA, provides VA's decision,
the summary of the evidence, and the veteran's appellate rights. The
second letter is a collections letter from VA's Debt Management Center,
which notifies the veteran of his or her rights and obligations,
explains why the debt was created, and provides repayment options and
waiver rights. In total, the veteran receives up to two post-
determination notices for each adverse action. This indicates that even
with the proposed removal of the response period and pre-determination
letter, the veteran would still receive sufficient notice of VA's
decision and the veteran's appellate rights, repayment options, and
waiver rights.
III. Future State of VA's Administrative Process
As discussed above, active service pay creates large compensation
overpayments and burdensome reporting requirements for veterans. The
data for FY 2016 indicates that the average overpayment was $1,309.00
for training pay and $5,545.00 for return to active duty. VA and DoD
are presently discussing changes to the way VA receives notification
that a veteran has received active service pay. VA would like to
leverage technological advancements, such as the DMDC data discussed
above, to process benefits adjustments based upon receipt of active
service pay on a frequent and reoccurring basis. This would reduce
large overpayments in cases of return to active duty. Additionally, VA
believes that processing adjustments based on receipt of active service
pay more frequently will minimize stress and financial impact on
veterans by making adjustments as close in time to the receipt of the
active service pay as possible. Veterans will also be able to more
clearly associate the benefit adjustment with the receipt of training
pay when it occurs closer in time, rather than having to recall the
number of training days performed in the previous fiscal year.
Moreover, processing adjustments more frequently helps VA identify
veterans who may have returned to active duty or full-time duty, which
is indicated, for example, when data shows a veteran performed more
than 15 training days in a month. VA's current regulations, however,
would remain an impediment to reducing or ending overpayments and
bureaucratic inefficiencies because we must currently notify the
veteran of VA's intent to suspend payments upon receipt of the DMDC
data and wait 60 days for the veteran to respond before taking action.
Information received directly from DoD regarding a veteran's
receipt of active service pay is sufficiently reliable for VA to
initiate suspension of VA disability compensation to avoid or minimize
overpayments. The data sent to DMDC is based on information from the
Defense Finance and Accounting Service, which pays all DoD military
personnel, providing the most current and accurate payment information.
Amending 38 CFR 3.103(b)(3) to permit VA to suspend disability
compensation payments upon receipt of notice from DoD that the veteran
has received, is receiving, or will begin to receive active service pay
would allow VA to take action immediately and with little likelihood of
error, thus reducing or eliminating these overpayments. Additionally,
the proposed rule reduces the number of notices a veteran receives,
thus simplifying the process while still providing sufficient notice
and appellate rights. This proposed regulatory amendment would provide
better service to our veterans by eliminating the 60-day notice period
(for veterans who received prior notice that the law prevents
concurrent receipt of VA benefits and active service pay or from whom
VA has received a statement indicating knowledge that concurrent
receipt of VA benefits and active service pay is prohibited), thereby
reducing potential overpayments and minimizing the financial impact on
the veteran.
IV. Due Process Concerns and Mitigating Risks
As relevant here, the Fifth Amendment generally requires that an
individual receive due process of law
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before being finally deprived of a property interest. See Mathews v.
Eldridge, 424 U.S. 319, 332-33 (1976). In the context of receipt of
monetary government benefits, the Supreme Court has held that a pre-
termination hearing is necessary before subsistence payments, such as
welfare benefits, may be terminated. See Goldberg v. Kelly, 397 U.S.
254, 260-264 (1970). While the changes we propose here deal with
suspension of monthly compensation payments rather than final
termination, and with disability compensation rather than welfare
payments, it is clear that suspending the payment implicates a valid
property interest in continued receipt of the award.
However, the fact that due process of law applies does not mean
that VA's current cumbersome procedures are constitutionally required.
See Morrissey v. Brewer, 408 U.S. 471, 481 (1972) (``Once it is
determined that due process applies, the question remains what process
is due.''). Rather, the Supreme Court has made clear that `` `due
process' is a flexible concept [and] the processes required by the [Due
Process] Clause with respect to the termination of a protected interest
will vary depending upon the importance attached to the interest and
the particular circumstances under which the deprivation may occur.''
Walters v. Nat'l Ass'n of Radiation Survivors, 473 U.S. 305, 320
(1985).
VA believes that in the limited circumstance of temporary
suspension of compensation payments based upon DoD notification that a
veteran is in receipt of active service pay, constitutionally
sufficient due process may be provided in a manner that does not unduly
delay payment adjustments. To begin with, the inquiry that determines
whether benefits must be suspended is straightforward: There is a clear
statutory prohibition on receipt of compensation while a veteran is in
receipt of active service pay. Further, this prohibition is only
triggered by factual information that is relatively clear,
straightforward, and reliable, such as notice from DoD indicating a
veteran has received active service pay. On its face, the risk of
erroneous suspension in this context is low and would be mitigated, as
is currently done by VA, by cross referencing identifiers (e.g.,
service number, social security number, date of birth).
Although VA is able to minimize the possibility of erroneous
suspension of benefits, it has identified one primary scenario where
benefits might be erroneously suspended due to the application of 10
U.S.C. 12316. This statute provides that a reservist called to active
duty for a period of more than 30 days is precluded from receiving
disability compensation ``[u]nless the payments because of his earlier
military service are greater than the compensation [payable for his
current service].'' See 10 U.S.C. 12316(b). Accordingly, it is
theoretically possible that VA's suspension of VA benefits, which
exceeded the veteran's active service pay, could adversely impact the
veteran.
While this scenario is theoretically possible, VA views the
probability of this occurring as extremely low. Nevertheless, VA has
structured this proposed rule to include a safeguard to address the
unlikely scenario by cross referencing VA disability compensation pay
to DMDC pay to identify veterans who may be impacted. In the proposed
rule, VA would specify that it will continue to require a statement
directly from the veteran in order to suspend payment of compensation
without advance notice and opportunity for a hearing ``[w]hen notice
provided by the Department of Defense contains information indicating
that the monthly level of disability compensation for a veteran exceeds
the veteran's monthly active service pay rate.'' Further, we note that
portions of 38 CFR 3.103 unaltered by this proposed rule would still
provide the veteran with significant procedural protection that would
allow VA to correct any errors. The amended regulation will still
require VA to send a written notice to the veteran of the suspension at
the time it takes the adverse action. See 38 CFR 3.103(b)(3). That
notice must advise the veteran of the reasons for the decision and his
or her right to appeal. See 38 CFR 3.103(f).
In sum, VA believes that the current 60-day waiting period,
required by 38 CFR 3.103, when applied to the unique context of a
veteran receiving active service pay, places unnecessary burdens on
both the veteran and VA. Further, in this narrow situation, the 60-day
waiting period protects against only a minimal risk of minor errors
that can be mitigated or retrospectively corrected. The proposed
amendments are beneficial to veterans and consistent with due process
requirements.
V. Proposed Regulatory Amendments
For the reasons stated above, VA proposes to amend 38 CFR 3.103 to
expand the existing exception in paragraph (b)(3)(v) so as to allow VA
to suspend compensation benefits upon receipt of DoD notice that a
veteran has received, is receiving, or will receive active service pay.
The proposed amendment is intended to widen the exception created by
paragraph (b)(3)(v) for suspension of compensation payments only and
does not affect the process for suspending pension payments. VA's
experience shows that the vast majority of recoupment cases involve the
overpayment of compensation, not pension, benefits. Additionally, VA
does not foresee that significant numbers of pension recipients will
return to active service.
Therefore, this rule proposes to add the clause ``or, in the case
of compensation, written or electronic notice from the Department of
Defense'' in Sec. 3.103(b)(3)(v), to dispense with tailored notice of
VA's proposed suspension of benefits and the 60 days traditionally
provided to respond before VA makes the required adjustment. The
proposed rule would reference receipt of active service pay, rather
than return to active service, to account for the possibility that in
certain circumstances, see 10 U.S.C. 12316, a veteran may return to
service and still receive VA compensation. The proposed rule would
require that the notice from the Department of Defense include the date
on which the service resulting in receipt of active service pay began
or is expected to begin or, in the case of training pay, the number of
training days performed during a specified period of time.
Additionally, the rule would note that the exception created by
paragraph (b)(3)(v) can only be triggered when the veteran has received
prior notice, or has submitted a statement to VA indicating knowledge,
that receipt of active service pay precludes concurrent receipt of VA
benefits.
We note that the fourth and final sentence of paragraph (b)(3)(v),
as we propose to revise it, would ensure that VA continues to account
for information indicating a veteran's rate of disability compensation
exceeds his or her rate of active duty pay. This sentence is designed
to provide a procedural safeguard to minimize the possibility of
erroneous suspension of benefits for any veterans who return to active
duty but their monthly disability compensation exceeds their monthly
active service pay. The sentence would ensure that this rare
classification of veteran has the opportunity to elect to receive
disability compensation in lieu of active duty pay.
The amended regulation would include cross-references to 38 CFR
3.654, which includes VA's definition of active service pay and an
explanation of how benefit adjustments based on receipt of active
service pay are adjudicated, and 38 CFR 3.700(a)(1), which implements
the statutory prohibition on receiving concurrent VA benefits and
active service pay. As
[[Page 16425]]
noted above, ``active service pay means pay received for active duty,
active duty for training or inactive duty training.'' See 38 CFR
3.654(a). Cross-referencing Sec. 3.654 in amended 3.103(b)(3)(v) would
ensure clarity with regard to the limited population to whom the
exception to the notice response period applies. The amended language
would also include a cross-reference to Sec. 3.217(a), VA's policy
regarding submission of statements or information affecting entitlement
to benefits. Cross referencing Sec. 3.217(a) would clarify that
information affecting entitlement to benefits may be received by email,
facsimile, or other written electronic means to satisfy the requirement
that the statement or information be submitted in writing.
VA proposes to amend 38 CFR 3.654(b) to include all circumstances
in which VA processes benefit adjustments for pay received for active
duty for training in the same manner as active duty pay in 3.654(b).
This is due to certain types of active duty for training being on par
with full-time active duty due to that duty being of longer duration
and not necessarily having an ascertainable end date. Therefore, an
award will be discontinued effective the day preceding reentrance into
active duty or active duty for training and payments, if otherwise in
order, will be resumed as described in 38 CFR 3.654(b)(2). The types of
active duty for training included are those described in Sec. 3.6(c),
with the exception of annual active duty for training typically
performed 15 days each year by reservists and members of the National
Guard and Active Duty for Special Work to receive training, which are
processed as training pay. VA proposes a corresponding amendment to 38
CFR 3.654(c) to clarify the types of active duty for training that are
processed as training pay.
VA also proposes to amend the first sentence of 38 CFR 3.654(b) to
replace the reference to return to active duty status with a reference
to receipt of active service pay to account for the possibility that in
certain circumstances, see 10 U.S.C. 12316, a veteran may return to
service and still receive VA compensation. VA additionally proposes to
amend the final sentence of 38 CFR 3.654(b)(1) for clarity. The revised
sentence will clarify that when the exact date of reentrance to active
duty is not known, payments will be discontinued effective date of last
payment, and the effective date of discontinuance will be adjusted to
the day preceding reentrance when the date of reentrance has been
ascertained from the service department. Finally, VA proposes to add an
authority citation at the end of 38 CFR 3.654 because the section does
not currently have an authority citation.
Executive Orders (E.O.) 12866, 13563, and 13771
Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, and other advantages; distributive impacts;
and equity). Executive Order 13563 (Improving Regulation and Regulatory
Review) emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
Executive Order 12866 (Regulatory Planning and Review) defines a
``significant regulatory action'' which requires review by the Office
of Management and Budget (OMB), as ``any regulatory action that is
likely to result in a rule that may: (1) Have an annual effect on the
economy of $100 million or more or adversely affect in a material way
the economy, a sector of the economy, productivity, competition, jobs,
the environment, public health or safety, or State, local, or tribal
governments or communities; (2) Create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
this Executive Order.''
The economic, interagency, budgetary, legal, and policy
implications of this regulatory action have been examined and it has
been determined not to be a significant regulatory action under E.O.
12866. VA's impact analysis can be found as a supporting document at
http://www.regulations.gov, usually within 48 hours after the
rulemaking document is published. Additionally, a copy of this
rulemaking and its impact analysis are available on VA's website at
http://www.va.gov/orpm/, by following the link for VA Regulations
Published From FY 2004 Through Fiscal Year to Date.
This proposed rule is not expected to be an E.O. 13771 regulatory
action because this proposed rule is not significant under E.O. 12866.
Regulatory Flexibility Act
The Secretary hereby certifies that this proposed rule 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). This proposed rule will not directly affect small
entities. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is
exempt from the initial and final regulatory flexibility analysis
requirements of sections 603 and 604.
Unfunded Mandates
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C.
1532, that agencies prepare an assessment of anticipated costs and
benefits before issuing any rule that may result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any one year. This proposed rule will have no such effect
on State, local, and tribal governments, or on the private sector.
Paperwork Reduction Act
This action contains provisions constituting a collection of
information, at 38 CFR 3.151, under the provisions of the Paperwork
Reduction Act (44 U.S.C. 3501-3521). There are no new collections of
information associated with this proposed rule, but there will be a
reduction in the number of respondents associated with an approved
Office of Management and Budget (OMB) control number. The information
requirement for 38 CFR 3.103 is currently approved by the Office of
Management and Budget (OMB) and has been assigned control numbers 2900-
0747 and 2900-0463. This proposed rule would reduce the number of
respondents from the existing information collection requirements
associated with this action at 38 CFR 3.654, Active service pay. Under
the provisions of the Paperwork Reduction Act (44 U.S.C. 3501-3521),
while the actual OMB control number will remain in existence due to
other information collections on the same OMB control number that are
approved and active, it reduces the respondent burden for the approved
OMB control number, 2900-0463. As a result of this proposed rule, there
would be a reduction in the information collection burden that is
associated with it. For 38 CFR 3.654, Active service pay, which is
included on OMB control number 2900-0463, this would result in a
reduction of 3,465 estimated annual burden hours and an annual cost
savings of $84,338.10. As required by the Paperwork Reduction
[[Page 16426]]
Act of 1995 (at 44 U.S.C. 3507(d)), VA will submit this information
collection amendment to OMB for its review. Notice of OMB approval for
this information collection will be published in a future Federal
Register document.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers and titles for
the programs affected by this document are 64.102, Compensation for
Service-Connected Deaths for Veterans' Dependents; 64.105, Pension to
Veterans, Surviving Spouses, and Children; 64.109, Veterans
Compensation for Service-Connected Disability; and 64.110, Veterans
Dependency and Indemnity Compensation for Service-Connected Death.
List of Subjects in 38 CFR Part 3
Administrative practice and procedure, Claims, Disability benefits,
Veterans.
Signing Authority
The Secretary of Veterans Affairs approved this document and
authorized the undersigned to sign and submit the document to the
Office of the Federal Register for publication electronically as an
official document of the Department of Veterans Affairs. Robert L.
Wilkie, Secretary, Department of Veterans Affairs, approved this
document on April 10, 2019, for publication.
Dated: April 12, 2019.
Jeffrey M. Martin,
Assistant Director, Office of Regulation Policy & Management, Office of
the Secretary, Department of Veterans Affairs.
For the reasons stated in the preamble, the Department of Veterans
Affairs proposes to amend 38 CFR part 3 as set forth below:
PART 3--ADJUDICATION
Subpart A--Pension, Compensation, and Dependency and Indemnity
Compensation
0
1. The authority citation for part 3, subpart A continues to read as
follows:
Authority: 38 U.S.C. 501(a), unless otherwise noted.
0
2. Amend Sec. 3.103 by revising paragraph (b)(3)(v) and adding a cross
references paragraph to the end of the section to read as follows:
Sec. 3.103 Procedural due process and other rights.
* * * * *
(b) * * *
(3) * * *
(v) An adverse action based upon a written or electronic statement
provided to VA by a veteran, or, in the case of compensation, written
or electronic notice from the Department of Defense, which indicates
that the veteran has received, is in receipt of, or will receive active
service pay as defined by Sec. 3.654(a). The statement from the
veteran or notice from the Department of Defense must include the date
on which the service resulting in receipt of active service pay began
or is expected to begin or, in the case of training duty, the number of
training days performed during a specified period of time (e.g., last
month, last quarter, last year, etc.). In order for this paragraph to
apply, the veteran must have received prior notice that receipt of
active service pay precludes concurrent receipt of VA benefits or VA
must have received a statement from the veteran which indicates
knowledge of such preclusion. When notice provided by the Department of
Defense contains information indicating that the monthly level of
disability compensation for a veteran exceeds the veteran's monthly
active service pay rate, the exception contained in this paragraph will
only apply to a written or electronic notice provided to VA by the
veteran.
* * * * *
CROSS REFERENCES: Submission of statements or information affecting
entitlement to benefits. See Sec. 3.217(a). Active Service Pay. See
Sec. 3.654. General. See Sec. 3.700(a)(1).
0
3. Amend Sec. 3.654 by revising paragraphs (b) and (c) and adding an
authority citation to the end of the section to read as follows:
Sec. 3.654 Active service pay.
* * * * *
(b) Active duty or active duty for training. (1) Where the veteran
receives active service pay as a result of returning to active duty
status or active duty for training as described in Sec. 3.6(c), with
the exception of annual active duty for training typically performed 15
days each year by reservists and members of the National Guard and
Active Duty for Special Work to receive training (see paragraph (c) of
this section), the award will be discontinued effective the day
preceding reentrance into active duty or active duty for training
status. If the exact date is not known, payments will be discontinued
effective date of last payment, and the effective date of
discontinuance will be adjusted to the day preceding reentrance when
the date of reentrance has been ascertained from the service
department.
(2) Payments, if otherwise in order, will be resumed effective the
day following release from active duty or active duty for training if
claim for recommencement of payments is received within 1 year from the
date of such release; otherwise payments will be resumed effective 1
year prior to the date of receipt of a new claim. Prior determinations
of service connection will not be disturbed except as provided in Sec.
3.105. Compensation will be authorized based on the degree of
disability found to exist at the time the award is resumed. Disability
will be evaluated on the basis of all facts, including records from the
service department relating to the most recent period of active
service. If a disability is incurred or aggravated in the second period
of service, compensation for that disability cannot be paid unless a
claim therefor is filed.
(c) Training duty. Prospective adjustment of awards may be made
where the veteran waives his or her Department of Veterans Affairs
benefit covering anticipated receipt of active service pay because of
expected periods of active duty for training (annual active duty for
training typically performed 15 days each year by reservists and
members of the National Guard or Active Duty for Special Work to
receive training) or inactive duty training. Where readjustment is in
order because service pay was not received for expected training duty,
retroactive payments may be authorized if a claim for readjustment is
received within 1 year after the end of the fiscal year for which
payments were waived.
(Authority: 38 U.S.C. 501(a) and 5304(c))
[FR Doc. 2019-07751 Filed 4-18-19; 8:45 am]
BILLING CODE 8320-01-P