Department of Veterans AffairsM21-1, Part III, Subpart v



Department of Veterans AffairsM21-1, Part III, Subpart vVeterans Benefits Administration December 21, 2015Washington, DC 20420Key Changes Changes Included in This RevisionThe table below describes the changes included in this revision of Veterans Benefits Manual M21-1, Part III, “General Claims Process,” Subpart v, “General Authorization Issues and Claimant Notifications.”Notes: Unless otherwise noted, the term “claims folder” refers to the official, numbered, Department of Veterans Affairs (VA) repository – whether paper or electronic – for all documentation relating to claims that a Veteran and/or his/her survivors file with VA.Minor editorial changes have also been made to update incorrect or obsolete referencesto replace “Veteran” with “beneficiary,” when information/instructions in a block apply to both Veteran and non-Veteran beneficiariesremove references to specific claims-processing systems, where doing so does not affect the clarity of the instructions or information providedreassign alphabetical designations to individual blocks, where necessary, to account for new and/or deleted blocks within a topicupdate section and topic titles to more accurately reflect their contentclarify block labels and/or block textdelete unnecessary/irrelevant references, and bring the document into conformance with M21-1 standards.Reason(s) for the ChangeCitationTo relocate the content of the first paragraph of (old) M21-1, Part III, Subpart v, Chapter 8, Section A, Topic 1, Block b (III.v.8.A.1.b).To move from (old) III.v.8.A.1.e and f the sentence regarding the proper effective date for reducing or discontinuing benefits due to incarceration.III.v.8.A.1.aTo delete (old) III.v.8.A.1.a as the content was rewritten in the new Block a.--To add a new Block b that discusses the effect a dependent’s incarceration has on a beneficiary’s award.III.v.8.A.1.bTo delete (old) III.v.8.A.1.b as the content was either incorporated into III.v.8.A.1.a or III.v.8.A.2.f.--To delete a paragraph regarding beneficiaries that are incarcerated in a foreign penal institution because the same paragraph already exists (and is more appropriately located) in III.v.8.A.4.b.III.v.8.A.1.cTo delete (old) III.v.8.A.1.e as the content was relocated to III.v.8.A.3.d.--To delete (old) III.v.8.A.1.f as the content was relocated to III.v.8.A.2.d.--To delete (old) III.v.8.A.1.g as the content was relocated to III.v.8.A.2.g.--To delete (old) III.v.8.A.1.h as the content was relocated to III.v.8.A.2.c.--To update the definition of “fugitive felon.”III.v.8.A.1.eTo add a new Topic 2 regarding the benefit-specific effects of a beneficiary’s incarceration.III.v.8.A.2To add a new Block a containing information (from (old) III.v.8.A.2.f and III.v.8.A.3.b) regarding the effect of a Veteran’s incarceration on his/her disability compensation.To reword the bullets that present the dates prior to which reduction of disability compensation due to incarceration was not required so they more accurately reflect the intent of 38 CFR 3.665(c).III.v.8.A.2.aTo add a new Block b that discusses the effect a Veteran’s incarceration has on a rating of total disability due to individual unemployability (TDIU). (The content for this block was pulled from (old) III.v.8.A.1.h and III.v.8.A.3.b.)III.v.8.A.2.bTo add a new Block c to relocate the content of (old) III.v.8.A.1.h to a more logical location.III.v.8.A.2.cTo add a new Block d to relocate the content of (old) III.v.8.A.1.f, which addresses payment of the clothing allowance during periods of incarceration, to a more logical location.III.v.8.A.2.dTo add a new Block e containing information (from (old) III.v.8.A.2.f and III.v.8.A.3.b) regarding the effect a beneficiary’s incarceration has on an award of Dependency and Indemnity Compensation (DIC).To reword the bullets that present the dates prior to which reduction of DIC due to incarceration was not required so they more accurately reflect the intent of 38 CFR 3.665(c).III.v.8.A.2.eTo add a new Block f which contains the information from (old) III.v.8.A.2.e.To relocate the paragraph in (old) III.v.8.A.1.b, regarding Veterans entitled to both compensation and pension, to a more logical location.III.v.8.A.2.fTo add a new Block g to relocate the content of (old) III.v.8.A.1.g, which discusses the requirement to determine whether VA is paying education benefits to an incarcerated beneficiary, to a more logical location.III.v.8.A.2.gTo add a new Block a that consolidates the instructions for processing notices of incarceration. (The content for this block was pulled from (old) III.v.8.A.2.b and e, and the first paragraph in III.v.8.A.2.c and d.)To add information about the appropriate claim labels for end product (EP) 290.III.v.8.A.3.aTo add a new Block b that defines “official source.”III.v.8.A.3.bTo add a new Block c to relocate the content of (old) III.v.8.A.2.a.III.v.8.A.3.cTo delete (old) III.v.8.A.2.a as it was revised and incorporated into the new III.v.8.A.3.a.To delete (old) III.v.8.A.2.b and e, as they were consolidated into the new III.v.8.A.3.a.--To delete (old) III.v.8.A.2.c and d, as their content was moved to III.v.8.A.3.a and e.--To create a new Block d and relocate the content of (old) III.v.8.A.1.e to a more logical location.To add a note that refers the reader to III.v.8.A.3.e for a description of the available means for obtaining details (such as the date and type of conviction) regarding a beneficiary’s incarceration.III.v.8.A.3.dTo create a new Block e that discusses the available means for requesting/obtaining information from official sources. (The content for this block was pulled from (old) III.v.8.A.2.c and d.)To add instructions to indicate in the Remarks block of VA Form 21-4193, Notice to Department Of Veterans Affairs of Veteran Or Beneficiary Incarcerated in Penal Institution, the name of the VA employee that completed the form, and the date of the telephone call.III.v.8.A.3.eTo delete (old) III.v.8.A.2.e as the content was relocated to III.v.8.A.2.f.--To delete (old) III.v.8.A.2.f as the content was relocated to III.v.8.A.2.a.--To delete (old) III.v.8.A.2.g and relocate the content to the new Block f.To relocate the note in III.v.8.A.1.a that discusses the requirement for due process before reducing or discontinuing benefits due to incarceration or re-incarceration.To correct the implication that VA apportions an incarcerated beneficiary’s pension to his/her dependent(s). (VA does not treat the payment of an incarcerated beneficiary’s pension to his/her dependent(s) as an apportionment.)To add a requirement to send VA Form 21-0788, Information Regarding Apportionment of Beneficiary’s Award, to both the beneficiary and his/her dependent(s) when VA sends notice to the beneficiary of its intent to reduce or discontinue benefits due to incarceration.To add a requirement to provide the beneficiary with the proposed date of reduction or discontinuance and (if the beneficiary receives disability compensation or DIC) the amount to which VA proposes reducing the beneficiary’s benefits.III.v.8.A.3.fTo add a new Block g with content previously located in (old) III.v.8.A.3.e.III.v.8.A.3.gTo add a new Block h that addresses the issue of a beneficiary’s re-incarceration for the same conviction following a period of release.III.v.8.A.3.hTo rewrite and clarify the prior content. III.v.8.A.4.aTo add a new Block b containing the paragraph from (old) III.v.8.A.3.c that discusses the issue of beneficiaries that are transferred from a foreign penal institution to a U.S. penal institution.III.v.8.A.4.bTo delete (old) III.v.8.A.3.b as the content was relocated to III.v.8.A.2.a, b, and e.--To delete (old) III.v.8.A.3.c as the content was relocated to III.v.8.A.2.f and III.v.8.A.4.b.--To delete (old) III.v.8.A.3.d as the content was relocated to III.v.8.A.4.c.To add a new Block c with content previously located in (old) III.v.8.A.3.d.III.v.8.A.4.cTo move the reference in (old) III.v.8.A.3.d regarding the recoupment of Voluntary Separation Pay (VSP) from Air Force Veterans during incarceration to new Block d.III.v.8.A.4.dTo delete (old) III.v.8.A.3.e as the content was relocated to III.v.8.A.3.f.--To clarify that a beneficiary’s report that his/her period of incarceration has ended must be confirmed through an official source.III.v.8.A.5.aTo add a new Block c which consolidates the content of (old) III.v.8.A.4.c and d into a single block.III.v.8.A.5.cTo delete (old) III.v.8.A.4.c as it was consolidated into III.v.8.A.5.c.--To delete (old) III.v.8.A.4.d as it was consolidated into III.v.8.A.5.c.--RescissionsNone AuthorityBy Direction of the Under Secretary for Benefits SignatureThomas J. 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ADDIN \* MERGEFORMAT Section A. General Information on the Payment of Benefits During Effects of a Beneficiary’s Incarceration on His/Her Department of Veterans Affairs (VA) BenefitsOverviewIn This SectionThis section contains the following topics:TopicTopic Name1General Information on the Discontinuance/ Reduction of Benefits Due to IncarcerationAbout Incarcerated Beneficiaries 2Benefit-Specific Effects of a Beneficiary’s Incarceration23Receiving and Sending Notification Regarding IncarcerationHandling Notice of a Beneficiary’s Incarceration34Effective Dates and Rates for Discontinuance/ Reduction of Other Considerations When Adjusting an Awards Due to Incarceration45Resuming the Payment of Benefits Following Release fromWhen Incarceration Ends1. General Information on the Discontinuance/Reduction of Benefits Due to IncarcerationAbout Incarcerated Beneficiaries PRIVATE INFOTYPE="OTHER" IntroductionThis topic contains general information on the discontinuance or reduction of benefit payments due to the incarceration of a Veteranabout incarcerated beneficiaries, including the regulatory requirements for reducing orcompensation and discontinuing benefits during incarcerationpensionpaying compensation in lieu of pension during incarcerationeffect of a dependent’s incarceration on a beneficiary’s awardexceptions to the requirements for reducing paymentsperiods during which VA may not reduce or discontinue benefitsmatching programs for identifying incarcerated beneficiaries, andinformation required to verify incarceration reduction of a clothing allowance due to incarcerationreviewing for possible adjustment of educational benefitsincreased evaluation during incarceration, andbeneficiaries and dependents that are fugitive felons.Change DateJuly 22, 2015December 21, 2015a. Regulatory Requirements for Reducing or Discontinuing Benefits During Incarceration38 CFR 3.665 requires the reduction of a beneficiary’s disability compensation or Dependency and Indemnity Compensation (DIC) when the beneficiary is incarcerated more than 60 days following conviction of a felony.38 CFR 3.666 requires the discontinuance of a beneficiary’s pension when the beneficiary is incarcerated more than 60 days following conviction of a felony or misdemeanor.Notes:A “beneficiary,” for the purpose of this section, is limited toVeterans entitled to disability compensation or pensionsurviving spouses, children, and parents that are entitled to DIC, andsurviving spouses and children that are entitled to Survivors Pension.The requirement to reduce or discontinue benefits applies to beneficiaries incarcerated in a Federal, State, or local penal institution or correctional facility, including privately owned correctional facilities that are operated under contract with a State.The proper effective date for reducing or discontinuing benefits is the 61st day of incarceration.References:For more information about privately owned correctional facilities, see VAOPGCPREC 5-06.For more detail regarding the effect a beneficiary’s incarceration has on an award ofdisability compensation, see M21-1, Part III, Subpart v, 8.A.2.a through cDIC, see M21-1, Part III, Subpart v, 8.A.2.e, andpension, see M21-1, Part III, Subpart v, 8.A.2.f.For detailed instructions for processing notices of incarceration, see M21-1, Part III, Subpart v, 8.A.3.a.a. Regulatory Requirements for Reducing Compensation and Discontinuing PensionReduce payment of compensation and Dependency and Indemnity Compensation (DIC) under HYPERLINK ""38 CFR 3.665, and discontinue pension under HYPERLINK ""38 CFR 3.666, to a payee as provided in this chapter. Payment restrictions apply to all payees who are incarcerated in a Federal, State, local or other penal institution or correctional facility for more than 60 days. Payees includeVeteranssurviving spouseschildren, or parents.Notes: Due process must be issued prior to a reduction in benefits each time a payee is incarcerated for more than 60 days, to include reincarceration following a parole violation or dismissal from a halfway house or work-release program.Incarceration in a private institution operated under contract with a state also constitutes incarceration for Department of Veterans Affairs (VA) purposes.References: For more information about notification of incarceration, see M21-1, Part III, Subpart v, 8.A.2the authority to discontinue pension, see HYPERLINK ""38 U.S.C. 1505the authority to reduce compensation, see HYPERLINK ""38 U.S.C. 5313incarceration in private institutions contracted by a state, see HYPERLINK ""VAOPGCPREC 5-06 total disability due to individual unemployability (TDIU) and removal from the work-possible environment, see HYPERLINK ""VAOPGCPREC 13-97.b. Effect of a Dependent’s Incarceration on a Beneficiary’s Award38 CFR 3.666 requires the removal of an incarcerated dependent from a beneficiary’s award if the beneficiary receives pension. There is no such requirement, however, if the beneficiary is aVeteran receiving disability compensation, orsurviving spouse receiving DIC.References: For more information aboutremoving an incarcerated dependent from a pension award, see M21-1, Part III, Subpart v, 8.C.1, anddependents that are fugitive felons, see M21-1, Part III, Subpart v, 8.A.1.e.b. Paying Compensation in Lieu of Pension During Incarceration HYPERLINK ""38 CFR 3.666 requires VA to discontinue the payment of pension to a Veteran incarcerated for more than 60 days following conviction of a felony or misdemeanor, whereas HYPERLINK ""38 CFR 3.665 requires VA to reduce the payment of compensation to a Veteran incarcerated for more than 60 days following conviction of a felony.Because the law allows Veterans entitled to compensation to continue receiving a portion of their benefits during incarceration, compensation is often the greater benefit for Veterans entitled to both compensation and pension whose awards are subject to adjustment due to incarceration.Reference: For more information about paying compensation in lieu of pension during incarceration, see M21-1 Part III, Subpart v, 8.A.3. c. Exceptions to the Reduction of PaymentsPeriods During Which VA May Not Reduce or Discontinue Benefits Do not reduce or discontinue benefits payments for any period during which the payee a beneficiary isparticipating in a work-release programunder community control (per VAOPGCPREC 59-91)incarcerated in a foreign penal institution, or residing in a halfway houseresidential re-entry center, orcivil commitment center.Notes: “Residential re-entry center” is a term used by the Bureau of Prisons (BOP) in lieu of the traditional term, “halfway house.”A Veteran incarcerated in a foreign penal institution is not subject to benefit payment reduction. However, when the Veteran is transferred from a foreign penal institution to a Federal, State, or local penal institution in the U.S. to serve the remainder of a sentence for a foreign conviction of a crime equivalent to a felony (or misdemeanor) under the laws of the U.S., the Veteran’s compensation must be reduced, or pension must be discontinued effective the 61st day of incarceration. References: For more information regarding the definition of community control, see HYPERLINK "" VAOPGCPREC 59-91a person sentenced to community control, see HYPERLINK "" VAOPGCPREC 59-91, anda beneficiaryies that are transferred from a foreign penal institution to a Federal, State, or local penal institution to serve the remainder of their sentence for a foreign conviction, see M21-1 Part III, Subpart v, 8.A.4.b8. A. 3. c. d. Matching Programs for Identifying Incarcerated Beneficiaries Beneficiaries who have been incarcerated in Federal or State penal institutions may be identified through computer-matching programs. Through agreements between the Department of Veterans Affairs (VA), the BOP, and the Social Security Administration (SSA), periodic computer matches are run to compare VA beneficiaries’ identifying data with BOP and SSA records. Note: VA also receives Information about incarceration may also be receivednotice of the incarceration of beneficiaries through other, unofficial sources, as described in M21-1, Part III, Subpart v, 8.A.2.c.References: For more information on theBOP matching program, see M21-1, Part X, 12.1, andSSA matching program, see M21-1, Part X, 15.1.e. Information Required to Verify IncarcerationPrior to issuing due process for the reduction or discontinuance of benefits, the following information must be of record in the beneficiary’s claim’s foldertype of conviction (felony, misdemeanor, infraction, etc.)date (month, day, year) of conviction date (month, day, year) of incarceration following conviction, andwhether the beneficiary or dependent was incarcerated for more than 60 days following the date of conviction.Note: If this information is received over the phone or in person, complete a VA Form 27-0820e, Report of Incarceration.f. Reduction of Clothing Allowance Due to IncarcerationIncarceration for more than 60 days may require a reduction in the payment of a clothing allowance if the Veteran receives clothing at no cost from the penal institution.Reference: For more information on the reduction of a clothing allowance, see HYPERLINK ""38 CFR 3.810(d).g. Reviewing for Possible Adjustment of Educational Benefits When reducing compensation or discontinuing pension because of incarceration, review the treasury inquiry screen (TINQ) or education master record in the Benefits Delivery Network (BDN) to determine if any educational benefits are being paid which may also require adjustment. If educational benefits are involved, notify the regional processing office (RPO) of jurisdiction with a copy of the official notice of imprisonment.Note: Because access to BDN is limited, inquire with local management to determine the individuals with access. HYPERLINK "" \l "c" h. Increased Evaluation During IncarcerationThe amount otherwise payable for an increased evaluation awarded to an incarcerated Veteran may be subject to reduction due to incarceration.If the service-connected (SC) evaluation was increased from 10 percent to 20 percent or more, payments would be increased from one-half of the 10percent rate to the full 10percent rate, andfrom 20 percent or more, to a percent greater than the current SC evaluation, none of the increased compensation would be paid while incarcerated.Note: Do not assign a Veteran an initial or reinstated rating of TDIU during a period of incarceration.References: For more informationon handling increases, see HYPERLINK ""38 CFR 3.665(j), andabout the prohibition against assigning an initial or reinstated TDIU evaluation to a Veteran while he/she is incarcerated, seeHYPERLINK ""38 CFR 3.341(b), and HYPERLINK "" 38 U.S.C. 5313.ie. Beneficiaries and Dependents That Are Fugitive FelonsDisability Ccompensation, DIC, and pension are not payable to a beneficiary that is a fugitive felon, orfor a dependent that is a fugitive felon.on behalf of a Veteran or dependent for any period during which the individual is a fugitive felon. A dependent includes aspousesurviving spousechild, anddependent parent.A fugitive felon is anyone who that is fleeing to avoid prosecution, custody, or confinement after conviction for, or an attempt to commit, an offense that is a felony, orconviction for an offense, orattempt to commit an offense which is a felony in the place where committed, andviolating a condition of probation or parole imposed for commission of a felony under Federal or State law.References:For more information on the requirement to suspend discontinue the payment of benefits to or forof fugitive felons, see38 CFR 3.665(n) (for disability compensation and DIC), and38 CFR 3.666(e) (for pension).For further instructions about identifying fugitive felons, see M21-1, Part X, 16.1, and adjusting awards based on fugitive felon status, see M21-1, Part X, 16.2.2. Benefit-Specific Effects of a Beneficiary’s Incarceration IntroductionThis topic contains information regarding the benefit-specific effects of a beneficiary’s incarceration, including,effect of incarceration on payments of disability compensationeffect of incarceration on ratings of total disability due to individual unemployability (TDIU)increased disability evaluations during incarcerationeffect of incarceration on payment of the clothing allowanceeffect of incarceration on payments of DICeffect of incarceration on pension awards, anddetermining whether VA is paying education benefits to an incarcerated beneficiary.Change DateDecember 21, 2015a. Effect of Incarceration on Payments of Disability CompensationThe table below shows the amount to which VA must reduce a Veteran’s disability compensation when the Veteran is incarcerated for more than 60 days following conviction for a felony. Important: Reduction is necessary only if the Veteran committed the felony after October 7, 1980the Veteran was incarcerated on October 1, 1980 (regardless of the date the Veteran committed the felony), and VA granted entitlement to disability compensation with an effective date that is after September 30, 1980, orthe Veteran was incarcerated on or before October 7, 1980, for a felony he/she committed prior to that date, and the Veteran remained incarcerated for the same conviction through December 27, 2001. (Reductions under this last condition take effect beginning with the payment of disability compensation VA makes for the month of April 2002.)If the Veteran’s combined disability evaluation is ...Then ...0 percent, but the Veteran is entitled to special monthly compensation (SMC) under 38 U.S.C. 1114(k), ora protected rate under 38 CFR 3.959 (statutory Q)38 CFR 3.665(d)(2) requires VA to reduce the Veteran’s monthly award to one half of the amount payable for a service-connected (SC) disability evaluated as 10 percent disabling.Note: Calculation of the reduced monthly rate might result in an amount that ends in $.50.10 percent20 percent or higher38 CFR 3.665(d)(1) requires VA to reduce the Veteran’s monthly award to the amount payable for a disability evaluation of 10 percent.Note: Pay the Veteran the full amount of any benefit due him/her for periods prior to October 1, 1980.References:For detailed instructions for processing notices of incarceration, see M21-1, Part III, Subpart v, 8.A.3.a.For information about apportioning an incarcerated Veteran’s disability compensation to his/her dependent(s), see M21-1, Part III, Subpart v, 8.B.2.b. Effect of Incarceration on Ratings of TDIU38 CFR 3.341(b) prohibits the assignment of an initial or reinstated rating of total disability due to individual unemployability (TDIU) during a period of incarceration. There is no requirement, however, to discontinue a rating of TDIU solely because a Veteran was incarcerated and, thereby, removed from the work-possible environment.Important: Although a rating of TDIU may remain in effect during a Veteran’s incarceration, the Veteran’s disability compensation is still subject to the reduction described in M21-1, Part III, Subpart v, 8.A.2.a.References: For more information about ratings of TDIU, see M21-1, Part IV, Subpart ii, 2.F, andthe effect of removal from the work-possible environment on a rating of TDIU, see VAOPGCPREC 13-97.c. Increased Disability Evaluations During IncarcerationFollow the instructions in the table below if VA increases a Veteran’s combined disability evaluation from an effective date that falls within a period during which VA reduced the Veteran’s disability compensation due to incarceration.If ...Then ...VA increased the combined disability evaluation from a level of 10 percent to a level of 20 percent or higherincrease the Veteran’s benefits to the rate payable for a combined disability evaluation of 10 percent during his/her period of incarceration.the Veteran’s combined disability evaluation was 20 percent or higher before VA granted entitlement to an increased evaluation.process the corresponding rating decision but do not increase the Veteran’s benefits to reflect the increased evaluation until incarceration ends.Important: As stated in M21-1, Part III, Subpart v, 8.A.2.b, 38 CFR 3.341(b) prohibits the assignment of an initial or reinstated rating of TDIU during a period of incarceration.Reference: For more information about handling increased disability evaluations during incarceration, see 38 CFR 3.665(j).d. Effect of Incarceration on Payment of the Clothing Allowance38 CFR 3.810(d) requires a reduction in VA’s clothing allowance ifa Veteran entitled to this benefit is incarcerated for more than 60 days, and the Veteran receives clothing at no cost from his/her penal institution.Reference: For more information on VA’s clothing allowance, see M21-1, Part IX, Subpart i, Chapter 7.e. Effect of Incarceration on Payments of DICWhen a beneficiary entitled to DIC is incarcerated for more than 60 days following conviction of a felony, 38 CFR 3.665(d)(3) requires VA to reduce the beneficiary’s monthly award to an amount equal to one half of the amount payable for an SC disability evaluated as 10-percent disabling.Important: Reduction of DIC due to incarceration is necessary only ifthe beneficiary committed the felony after October 7, 1980, orthe beneficiary was incarcerated on October 1, 1980 (regardless of the date the beneficiary committed the felony), and VA granted entitlement to DIC with an effective date that is after September 30, 1980.Pay beneficiaries the full amount of any benefit due them for periods prior to October 1, 1980. If a parent’s DIC award is less than half of the amount payable for an SC disability evaluated as 10-percent disabling, do not adjust the award.Calculation of the reduced rate specified in 38 CFR 3.665(d)(3) might result in an amount that ends in $.50.References: For detailed instructions for processing notices of incarceration, see M21-1, Part III, Subpart v, 8.A.3.a.For information regarding the apportionment of an incarcerated surviving spouse’s or child’s DIC, seeM21-1, Part III, Subpart v, 8.C.3 and 5, and38 CFR 3.665(e)(2).f. Effect of Incarceration on Pension AwardsWhen a beneficiary entitled to pension is incarcerated more than 60 days following conviction of a felony or misdemeanor, 38 CFR 3.666 requires VA to discontinue the payment of pension to the beneficiary.Before discontinuing Veterans Pension due to incarceration, review the Veteran’s claims folder to determine whether he/she is also entitled to disability compensation. If entitlement to both benefits exists, follow the instructions in M21-1, Part III, Subpart v, 8.B.3.References: For detailed instructions for processing notices of incarceration, see M21-1, Part III, Subpart v, 8.A.3.a.For more information about the allotment of an incarcerated Veteran’s pension to his/her dependents see M21-1, Part III, Subpart v, 8.B.1, and38 CFR 3.666(a)surviving spouse’s pension to eligible children, see M21-1, Part III, Subpart v, 8.C.2, and38 CFR 3.666(b)(1), andchild’s pension to a surviving spouse or other eligible children, see 38 CFR 3.666(b)(2). g. Determining Whether VA Is Paying Education Benefits to an Incarcerated BeneficiaryWhen reducing or discontinuing benefits because of incarceration, review the treasury inquiry screen (TINQ) or education master record in the Benefits Delivery Network (BDN) to determine whether VA is paying education benefits to the incarcerated beneficiary, as these benefits might also require adjustment. If VA is paying education benefits, e-mail a copy of the official notice of incarceration to the regional processing office (RPO) of jurisdiction.Note: Because access to BDN is limited, inquire with local management to identify individuals with access.References:For a discussion of what constitutes official notice, see M21-1, Part III, Subpart v, 8.A.3.c.To determine the RPO of jurisdiction, see M22-4, Part III, 1.02.For the e-mail address of individual RPOs, see M21-1, Part III, Subpart iii, 6.C.3.b.32. Receiving and Sending Notification Regarding IncarcerationHandling Notice of a Beneficiary’s Incarceration PRIVATE INFOTYPE="OTHER" IntroductionThis topic contains information on instructions for receiving and sending notification regarding the incarceration of a Veteranhandling notice of a beneficiary’s incarceration, includingaction to take upon receipt of notice of incarcerationidentifying official sources of information regarding a beneficiary’s incarcerationidentifying official notices of a beneficiary’s incarcerationverifying the details of incarcerationavailable means for requesting/obtaining information from official sourcesactions to take when VA receives official notice of incarcerationVerifying incarceration status unofficial notice of incarceration controlling development and adjustmentdiscontinuing pension upon receipt of official notice of incarcerationreducing compensation upon receipt of official notice of incarceration, andnotifying a beneficiary of VA’s intent to reduce or discontinue benefits due to incarcerationnotifying the payee of benefit discontinuance or reductionadjusting a beneficiary’s award in the claims-processing system, andre-incarceration for the same conviction following a period of release.Change Date December 21, 2015July 22, 2015a. Action to Take Upon Receipt of Notice of IncarcerationFollow the steps in the table below upon receipt of notice of a beneficiary’s incarceration. StepAction1Establish end product (EP) 290.Notes: Use one of the following claim labels (whichever applies):Incarceration AdjustmentBureau of Prisons, orSocial Security Prison Match.If an 800-series work item served as notice of the beneficiary’s incarceration, use the date of the work item as the date of claim. For other types of notice, use the date of receipt as the date of claim.2Establish EP 690 or 693, according to instructions in M21-1, Part III, Subpart ii, 1.C.6.b.3Did VA receive the notice of incarceration from the beneficiary?If yes, proceed to Step 6.If no, proceed to the next step.4Is the notice VA received “official”?If yes, proceed to the next step.If no, proceed to Step 7.Reference: For a discussion of what constitutes official notice of incarceration, see M21-1, Part III, Subpart v, 8.A.3.c.5Has VA obtained the information referenced in M21-1, Part III, Subpart v, 8.A.3.d from an official source?If yes, proceed to Step 16.If no, proceed to the next step.Reference: For a definition of “official source,” see M21-1, Part III, Subpart v, 8.A.3.b.6Request/obtain the information referenced in M21-1, Part III, Subpart v, 8.A.3.d from an official source.If VA requests the information (by letter, for example), proceed to Step 13.If VA obtains the information without issuing a request (through telephone contact or by accessing a correctional facility’s website, for example), proceed to Step 16.Note: Allow entities from which VA requests information concerning a beneficiary’s incarceration 30 days to respond.Reference: For a discussion of the available means for requesting/obtaining information from an official source, see M21-1, Part III, Subpart v, 8.A.3.e.7Attempt to corroborate the unofficial notice and request/obtain the information referenced in M21-1, Part III, Subpart v, 8.A.3.d through official sources. Note: Allow entities from which VA requests corroboration of and information concerning a beneficiary’s incarceration 30 days to respond. Reference: For a discussion of the available means for requesting/obtaining information/corroboration from official sources, see M21-1, Part III, Subpart v, 8.A.3.e.8Follow the instructions in the table below.If VA …Then …requests the information/corroboration referenced in Step 7 (by letter, for example)proceed to the next step.obtains the information/corroboration referenced in Step 7 without issuing a request (through telephone contact or by accessing a correctional facility’s website, for example)proceed to Step 16.confirms through official sources – without issuing a request – that the beneficiary is/was not incarceratedclear the EPs 290 and 690/693, andtake no further action. 9Did the entity from which VA requested information/corroboration respond within 30 days?If no, proceed to the next step.If yes, proceed to Step 12.10Send a follow-up request and allow 30 days for a response.11Did the entity to which VA sent a follow-up request respond within 30 days?If no, clear the EPs 290 and 690/693, andtake no further action.If yes, proceed to the next step. 12Follow the instructions in the table below:If the unofficial notice of incarceration …Then …is corroboratedproceed to Step 16.is not corroboratedclear the EPs 290 and 690/693, andtake no further action. 13Did the entity from which VA requested the information referenced in M21-1, Part III, Subpart v, 8.A.3.d respond within 30 days?If yes, proceed to Step 16.If no, proceed to the next step.14Send a follow-up request for the information and allow 30 days for a response.15Did the entity to which VA sent a follow-up request respond within 30 days?If yes, proceed to the next step.If no, attempt to obtain the information through different means, andtake no further action until VA obtains the information.16Follow the instructions in the table below.If …Then …information obtained from official sources showsthe beneficiary was incarcerated for reasons other than conviction of afelony (if the beneficiary receives disability compensation or DIC), or felony or misdemeanor (if the beneficiary receives pension), orthe beneficiary was incarcerated less than 60 days after conviction for a felony or misdemeanorclear the EPs 290 and 690/693, andtake no further action.Important: If the beneficiary was the source of the notice of incarceration, notify him/her of the reason no award adjustment is rmation obtained from official sources shows the beneficiary was incarcerated at least 60 days after conviction for afelony (if the beneficiary receives disability compensation or DIC), or felony or misdemeanor (if the beneficiary receives pension)clear the EP 290establish EP 600, using the current date as the date of claim and one of the following claim labels, if applicable:Bur[eau] of Prisons, orSSA Prison Match, andproceed to the next step. 17Prepare notice of proposed adverse action, according to instructions in M21-1, Part III, Subpart v, 8.A.3.f, and send the notice to the beneficiary. 18Did the beneficiary respond to the notice of proposed adverse action within 65 days of the date VA sent the notice?If yes, proceed to the next step.If no, proceed to Step 20.19Did the beneficiary submit evidence showing an adjustment of his/her award due to incarceration is not in order?If yes,clear the EPs 600 and 690/693notify the beneficiary that VA will not reduce or discontinue (whichever applies) his/her benefits, anddisregard the remaining steps in this table.If no, proceed to the next step.20Reduce or discontinue benefits, under the EP 600, as proposed in the notice of proposed adverse action.Clear the EP 690/693.Reference: To execute the reduction or discontinuance in the claims-processing system, follow the instructions in M21-1, Part III, Subpart v, 8.A.3.g.21Notify the beneficiary of the action taken.Reference: For more information about issuing decision notices, see M21-1, Part III, Subpart v, 2.B.2.b. Identifying Official Sources of Information Regarding a Beneficiary’s IncarcerationAn official source, for the purpose of this section, includesFederal, State, and local government authorities, such as law enforcement officials, officials at correctional facilities, prosecutors, and parole officersBOP’s web site ()official web sites of individual correctional facilities, and Vine (), a privately operated, online inmate locator service.c. Identifying Official Notice of a Beneficiary’s IncarcerationEach of the following constitute official notice of a beneficiary’s incarceration:an 800-series work item that was system-generated as a result of the computer-matching described in M21-1, Part III, Subpart v, 8.A.1.da completed VA Form 21-4193 from a correctional facility, andevidence of incarceration that originated from an official source, including statements affirming incarceration from prison or law enforcement authorities, prosecutors, or parole officers.Statements affirming incarceration from a private attorney or a member of a beneficiary’s family do not constitute official notice.a. Identifying Official Notices of IncarcerationThe following documents are considered official notices of incarceration:a BOP or SSA prison match 800-series work item (800WI)a completed VA Form 21-4193, Notice to Department of Veterans Affairs of Veteran or Beneficiary Incarcerated in Penal Institution, from a representative of a correctional facilityevidence concerning a beneficiary’s or dependent’s incarceration originating from an official source at some level of government, andstatements by prison or law enforcement authorities, prosecutors, and parole officers.Important: Evidence concerning a beneficiary’s or dependent’s incarceration must originate from an official source at some level of government. Uncorroborated statements by beneficiaries (refuting incarceration), family members, or private attorneys concerning incarceration, are not acceptable as official. An exception is a beneficiary’s statement (affirming incarceration), which would result in a lower rate of VA payment. Statements by prison or law enforcement authorities, prosecutors, and parole officers are acceptable. b. Actions to Take When VA Receives Official Notice of IncarcerationUpon receipt of an official notice of incarceration, with sufficient information to verify the individual and his or her incarceration status, take appropriate action by initiating due process notification to the beneficiary, andmaking any necessary adjustment to the Veteran’s benefits, as supported by evidence received.References: For more information on controlling development and appropriate EPs to use, see M21-1, Part III, Subpart v, 8.A.2.e.due process notification, see M21-1, Part III, Subpart v, 8.A.2.f, andEPs 690/693, see M21-4 or M21-1, Part III, Subpart ii, 1.B.rmation provided by a prison match is considered to be official notice of incarceration. See the discussion of prison match information inM21-1, Part X, 12.1 for BOP matchM21-1, Part X, 15.1 for SSA match, andM21-1, Part X, 16.1 for Fugitive Felon matchc. Verifying Incarceration StatusVerify that the Veteran or dependent was convicted of a felony and incarcerated for more than 60 days after conviction using the information sources listed belowVA Form 21-4193 sent to the facility where the beneficiary or dependent is incarceratedindividual state web sites that maintain inmate locator datathe privately operated search site, HYPERLINK "" , andtelephone numbers or email addresses listed on official correctional facility web sites.d. Actions to Take When VA Receives Unofficial Notice of IncarcerationIf VA receives unofficial notice of a payee’s or dependent’s incarceration, for instance notice from an individual or non-government third party, attempt to confirm the unofficial notice through Federal, State or other inmate or fugitive information resources, such asthe BOP web site at HYPERLINK "" state corrections web sites that maintain inmate locator datathe privately run national inmate search site at HYPERLINK "" numbers or email addresses listed on official correctional facility web sites, or VA Form 21-4193 sent to the facility where the beneficiary or dependent is reportedly incarceratedNote: Send the beneficiary a notice of proposed adverse action only after official verification of incarceration is received.References: For information oncontrolling development and EPs for incarceration adjustments, see M21-1, Part III, Subpart v, 8.A.2.eadverse action proposal period, see M21-1, Part I, 2.C.1.anotice of proposed adverse action, see M21-1, Part I, 2.B.1.b, and end products, see M21-4, Appendix B.e. Controlling Development and AdjustmentControl development for verification of incarceration or fugitive status with EP 290 and the companion EP 690/693 for control of potential overpayment. Reference: For information on EP 690/693, see M21-4, Appendix B.Use the table below to determine what control action to take.If . . .Then...unofficial notice of incarceration is receivedReference: Unofficial notice is discussed in M21-1, Part III, Subpart v, 8.A.2.destablish a pending EP 290 and EP 690/693 to control for potential overpayment withthe date of receipt of the unofficial notice as the date of claim, anda 60 day suspense date from the date development is initiated.official notification of incarceration is received and an EP 290 is not already pending based on unofficial notificationReference: Official notice is discussed in M21-1, Part III, Subpart v, 8.A.2.bestablish a pending EP 290 and EP 690/693 to control for potential overpayment with the date of receipt of the official notice as the date of claim, and a 65 day suspense date from the date of receipt of the official notice.development of official or unofficial notice of incarceration results inevidence that the beneficiary is not subject to adjustment due to incarceration, ora negative response from an official sourceclear the pending EP 290 and EP 690/693, andtake no further action.development of unofficial notice of incarceration results in no reply after 60 daysclear the pending EP 290, andtake no further action.evidence is sufficient to adjust the award and due process notification is ready to be sent, based on receipt of official notice of incarcerationReference: Official notice is discussed in M21-1, Part III, Subpart v, 8.A.2.bclear the pending EP 290leave the corresponding EP 690/693 pending establish a pending EP 600 withthe date of due process notification as the date of claim, anda 65 day suspense date from the date of due process notificationfollowing due process notification, the issue is resolved withan award adjustment for incarceration, orno action deemed necessaryclear the pending EP 600 and 690/693d. Verifying the Details of IncarcerationPrior to issuing due process for a reduction or discontinuance of benefits based on incarceration, obtain the following information from an official source:type of conviction (such as felony, misdemeanor, or infraction)date (month, day, year) of conviction date (month, day, year) of incarceration following conviction, andan indication the beneficiary was incarcerated for more than 60 days following the date of conviction.Note: M21-1, Part III, Subpart v, 8.A.3.e describes the available means for obtaining the information referenced in this block.Reference: For a definition of “official source,” see M21-1, Part III, Subpart v, 8.A.3.b.e. Available Means for Requesting/ Obtaining Information From Official SourcesThe available means for requesting/obtaining information from official sources consist of the following:contacting (by telephone or e-mail) the correctional facility where the beneficiary is/was incarcerated accessing BOP’s web site ()using Vine (), a privately operated, online, inmate locator service, and/orasking the correctional facility where the beneficiary is/was incarcerated to complete and return VA Form 21-4193, Notice to Department Of Veterans Affairs of Veteran Or Beneficiary Incarcerated in Penal Institution.Notes: Many correctional facilities have web sites that display telephone numbers and/or e-mail addresses of facility officials, and/orallow visitors to access inmate locator data.When information regarding a beneficiary’s incarceration is obtained by telephone, document the call on VA Form 21-4193. Indicate in the Remarks block of the form (Block 13)the name of the VA employee that completed the form, and the date of the telephone call.e. Discontinuing Pension Upon Receipt of Official Notice of IncarcerationDiscontinue pension payments upon receipt of official notice showing conviction of a felony or misdemeanor, andimprisonment in a Federal, State, local or other penal institution or correctional facility exceeding 60 days. Notes: Discontinue pension payments effective the 61st day of incarceration following the initial conviction or reincarceration for parole or probation violation.Review the claims folder to determine if the Veteran is entitled to compensation at a reduced rate while incarcerated.Reference: For information about official notice of incarceration, see M21-1, Part III, Subpart v, 8.A.2.b.f. Reducing Compensation Upon Receipt of Official Notice of IncarcerationReduce compensation on the 61st day of incarceration following a felony conviction or reincarceration for a felony due to parole or probation violationif the felony was committed after October 7, 1980if the primary beneficiarywas currently incarcerated on October 1, 1980, andwas awarded compensation or DIC effective after September 30, 1980, orif a Veteranwas incarcerated on or before October 7, 1980, was continuously incarcerated through December 27, 2001, andremains incarcerated for the same felony. Notes: Pay the full amount of any benefit due for periods prior to October 1, 1980.Reduction under the third bullet, above, is effective from April 1, 2002.References: For information about official notice, see M21-1, Part III, Subpart v, 8.A.2.b, andthe nature of incarceration affecting benefits, see HYPERLINK ""VAOPGCPREC 2-96. g. Notifying the Beneficiary of Discontinuance or Reduction of Benefits A beneficiary is entitled to due process before benefits are reduced or discontinued. When notifying them of the proposed action cite the applicable statutory authority in the notice of proposed adverse action as follows:HYPERLINK ""38 U.S.C. 1505 for nonservice-connected pension, or HYPERLINK ""38 U.S.C. 5313 for service-connected benefits include information about the dependent’s rights to an apportionment and other information, as applicabledevelop for an apportionment to any dependent(s) at the same time that the payee is notified, if the address of the dependent(s) is available, andinform the beneficiary that VA may resume payments effective from the date of release only if VA receives notice within one year of release, ormay not pay from any date prior to the month the notice is received if it does not receive notice within one year of release, per HYPERLINK ""38 CFR 3.666(c).Reference: For more information regarding the resumption of payments upon release, see M21-1, Part III, Subpart v, 8.B.3.f. Notifying a Beneficiary of VA’s Intent to Reduce or Discontinue Benefits Due to IncarcerationAn incarcerated beneficiary is entitled to due process before VA reduces or discontinues his/her benefits. When notifying the beneficiary of the proposed actioncite the statutory authority for the proposed action, which is38 U.S.C. 5313 if the beneficiary is receiving disability compensation or DIC, or38 U.S.C. 1505 if the beneficiary is receiving pensioninform the beneficiary that VA proposes to reduce or discontinue (whichever applies) his/her benefits effective the 61st day of incarcerationprovide the amount to which VA proposes reducing the beneficiary’s award (only if the beneficiary receives disability compensation or DIC)include information about the right of eligible family members toan apportionment of the beneficiary’s disability compensation or DIC, oran allotment of the pension to which the beneficiary is otherwise entitledattach VA Form 21-0788, Information Regarding Apportionment of Beneficiary’s Award, to the notice, andinform the beneficiary that VA may resume benefits effective the date incarceration ends if it receives notice within one year of that date. Otherwise, VA may resume benefits no earlier than the date it receives notice.Important:If the address of family members that are eligible for an apportionment or allotment of the incarcerated beneficiary’s benefits is known, send VA Form 21-0788 to them at the same time the notice described above is sent to the beneficiary.A beneficiary is entitled to due process and the notice described in this block each time he/she is incarcerated. This includes re-incarceration (following a resumption of benefits after incarceration ends) because ofa parole violation, or dismissal from a halfway house or work-release program.References: For more information about due process and the issuing of notices of proposed adverse action, see M21-1, Part I, 1.2the amount to which VA must reduce disability compensation and DIC when a beneficiary is incarcerated, see M21-1, Part III, Subpart v, 8.A.2.a and e, respectivelyapportioning an incarcerated Veteran’s disability compensation to his/her dependent(s), see M21-1, Part III, Subpart v, 8.B.2apportioning an incarcerated beneficiary’s DIC to other family members, see M21-1, Part III, Subpart v, 8.C.3 and 5allotting an incarcerated Veteran’s pension to his/her dependents, see M21-1, Part III, Subpart v, 8.B.1, andallotting an incarcerated beneficiary’s Survivors Pension to other family members, see M21-1, Part III, Subpart v, 8.C.2.g. Adjusting a Beneficiary’s Award in the Claims-Processing SystemTo adjust a beneficiary’s award based on incarceration, first access the INSTITUTIONALIZATIONS screen in the claims-processing system. After clicking on the ADD button, enterIncarceration Period in the INSTITUTION TYPE/EVENT fieldthe name of the facility where the beneficiary is incarcerated in the INSTITUTION fieldthe date of the first full day of incarceration in the FROM field, andthe date incarceration ended (if applicable) in the TO field.After making the above entries, click on the ACCEPT button, then the ADJUST button. When the next screen appears, enter Incarceration Adjustment, in the ADJUSTMENT TYPE field, andclick on the ACCEPT button.References: For more information about adjusting awards in theVeterans Service Network (VETSNET), see the VETSNET Awards User Guide, orVeterans Benefits Management System (VBMS), see the VBMS-A User Guide.h. Re-incarceration for the Same Conviction Following a Period of ReleaseThe instructions contained in M21-1, Part III, Subpart v, 8.A.3.a apply equally to instances of re-incarceration for the same conviction following a period of release.Re-incarceration may occur, for example, following a parole violation or dismissal from a halfway house or work-release program.Example: Scenario:VA begins paying a Veteran the full amount of disability compensation to which he is entitled after he is released from prison and placed on parole.Three months later, the Veteran violates his parole and is re-incarcerated.Results:VA must complete each of the steps in the procedure outlined in M21-1, Part III, Subpart v, 8.A.3.a, to include the issuing of a new notice of proposed adverse action.VA may not reduce the Veteran’s disability compensation any earlier than the 61st day of re-incarceration.Reference: See VAOPGCPREC 2-96 for a discussion regardingthe payment of benefits while a beneficiary is on parole, andre-incarceration of a beneficiary.34. Effective Dates and Rates for Discontinuance/Reduction of Other Considerations When Adjusting an Awards Due to Incarceration PRIVATE INFOTYPE="OTHER" IntroductionThis topic contains information on effective dates and rates for the discontinuance or reduction of benefit awards due to incarceration, includingcalculating the 61st day of incarcerationconviction as the basis for establishing an effective date for benefit discontinuance or reductionreducing compensation or DIC rates, andbeneficiaries transferred from a foreign to a U.S. penal institutioneffective dates for discontinuing or reducing an awardreduction for incarceration if recoupment of disability severance pay is involvedrecoupment of disability severance pay during incarceration, andrecoupment of voluntary separation pay (VSP) during incarceration, andupdating the incarceration status for a pending amended award action.Change DateDecember 21, 2015July 22, 2015a. Calculating the 61st Day of Incarceration Conviction as the Basis for Establishing an Effective Date for Benefit Discontinuance or ReductionWhen calculating the 61st day of incarceration (or re-incarceration, as discussed in M21-1, Part III, Subpart v, 8.A.3.h), start with the first, full day of imprisonment following conviction.Do not include in the calculation the number of days a beneficiary spent in confinement while awaiting trial, or for examination or treatment, even if the beneficiary is credited for those days as “time served” following conviction.Reference: For a discussion of the issue of time served prior to conviction, see VAOPGCPREC 3-05.When discontinuing or reducing an award effective on the 61st day of imprisonment, counting to the 61st day begins only with the first full day of actual imprisonment following conviction or reincarceration following parole or probation violation.Notes:Confinement while awaiting trial, or for examination or treatment does not warrant termination or reduction of benefits.Credit for time served prior to the date of conviction is not considered in calculating 60 days for the effective date of reduction.Conviction may occur prior to sentencing, see HYPERLINK ""VAOPGCPREC 3-05.b. Beneficiaries Transferred From a Foreign to a U.S. Penal InstitutionThere is no requirement to reduce or discontinue benefits when a beneficiary is incarcerated in a foreign penal institution. VA must, however, reduce or discontinue the same beneficiary’s award ifthe beneficiary is later transferred to a U.S. penal institution to serve the remainder of his/her sentence, andthe beneficiary was incarcerated in the foreign penal institution for conviction of an offense that is equivalent to afelony (if the beneficiary receives disability compensation or DIC), orfelony or misdemeanor (if the beneficiary receives pension).Important: The effective date of the reduction or discontinuance is the 61st day of incarceration in the U.S. penal institution.b. Reducing Compensation or DIC RatesReduce compensation payments to the 10-percent rate for any Veteran with an evaluation of 20 percent or greater. Reduce payment to one half of the 10-percent rate fora Veteran with adisability evaluation of less than 20 percent, orzero percent combined evaluation with a special monthly compensation (SMC) under HYPERLINK ""38 U.S.C. 1114(k) or a protected rate under HYPERLINK ""38 CFR 3.959 (statutory Q), andany payee in receipt of DIC.Notes:If the 10-percent rate is an odd dollar amount, the incarceration rate ends in $.50.If a parent’s DIC award is less than one half the 10-percent compensation rate, do not adjust. See M21-1, Part III, Subpart v, 8.C.6.b.When a Veteran is in receipt of TDIU, entitlement to TDIU should not be discontinued based solely on the Veteran’s removal from the work-possible environment. c. Effective Date for Discontinuing or Reducing an Award Discontinue a pension award or reduce a compensation award effective the 61st day of incarceration in a Federal, State, local or other penal institution or correctional facility from the date of the payee’s conviction ofa felony for compensation or DIC purposes, ora felony or misdemeanor for pension purposes. When a Veteran is transferred from a foreign penal institution to a penal institution in the U.S. to serve the remainder of a sentence for a foreign conviction of an offense which is equivalent to a felony (or misdemeanor under HYPERLINK "" 38 U.S.C. 1505), reduce or discontinue the Veteran’s benefits effective the 61st day of incarceration in the Federal, state, or local penal institution in the U.S.Note: When paying compensation in lieu of pension to a Veteran entitled to both, begin paying the Veteran compensation at the rate specified in 38 CFR 3.665(d) effective the 61st day of incarceration. Reference: For more information on paying compensation in lieu of pension, see M21-1 Part III, Subpart v, 8.B.1.b. d. Reduction for Incarceration if Disability Severance Pay Recoupment Is InvolvedUse the table below to determine how to reduce payments if disability severance pay recoupment is involved.If a Veteran is receiving compensation...Then ...for disability severance pay conditions, andnon-severance pay conditionsreduce the compensation to the incarceration ratepay the reduced amount to the Veteransuspend the severance pay withholding during the period of reduction for incarceration, andresume the severance pay recoupment upon restoration of the full amount of compensation, after release from incarceration.for disability severance pay conditions onlyrecoup the reduced incarceration rate of compensation for the disability severance pay, andresume recoupment of the full amount of compensation, up to the amount of the initial compensable evaluation, upon release from incarceration.Note: If disability severance pay is not being recouped due to combat-related disabilities, pay the incarceration rate to the Veteran.Reference: For more information regarding the recoupment of voluntary separation pay from an incarcerated Air Force Veteran, see M21-1 Part III, Subpart v, 4.B.4.c.c. Recoupment of Disability Severance Pay During IncarcerationFollow the instructions in the table below if VA is recouping disability severance pay from a Veteran whose disability compensation is subject to reduction because of incarceration. If the Veteran received disability severance pay for ...Then ...all of the disabilities for which he/she receives disability compensationchange the amount of the withholding (for recoupment of the Veteran’s disability severance pay) to the rate specified in M21-1, Part III, Subpart v, 8.A.2.a, andincrease the amount of the withholding when the period of incarceration ends to an amount that complies with the policies expressed in M21-1, Part III, Subpart v, 4.B.3.b.Note: The Veteran, in this case, receives no disability compensation during his/her period of incarceration.some but not all of the disabilities for which he/she receives disability compensationreduce the Veteran’s disability compensation to the amount specified in M21-1, Part III, Subpart v, 8.A.2.asuspend the withholding for recoupment of disability severance pay during the period of reduction for incarceration, andresume the withholding when the period of incarceration ends and VA is able to resume the payment of disability compensation at the normal rate (the rate payable when the Veteran is not incarcerated). Note: The Veteran, in this case, receives disability compensation at the rate specified in M21-1, Part III, Subpart v, 8.A.2.a during his/her period of incarceration.a combat-related disability or disabilities (as discussed in M21-1, Part III, Subpart v, 4.B.3.e)pay the Veteran the amount specified in M21-1, Part III, Subpart v, 8.A.2.a during his/her period of incarceration.Reference: For more information regarding the recoupment of disability severance pay, see M21-1, Part III, Subpart v, 4.B.3.d. Recoupment of VSP During IncarcerationFollow the instructions in M21-1 Part III, Subpart v, 4.B.4.c if VA is recouping voluntary separation pay (VSP) from an Air Force Veteran whose disability compensation is subject to reduction because of incarceration.e. Updating the Incarceration Status for a Pending Amended Award ActionWhen incarceration adjustments are made in the Veterans Service Network (VETSNET) Awards or the Veterans Benefits Management System - Awards (VBMS-A), information about the date and location of incarceration should be entered in the “Incarceration Period” fields of the Institutionalized screen. Information should includethe date of incarcerationthe location of incarceration or facility, and if available, the date of release.References: For more information onupdating the incarceration status in VBMS-A, see the HYPERLINK "" VBMS-A User Guideon the Institutionalized screen, see the HYPERLINK " February 2008.htm" VETSNET Awards User Guide, or HYPERLINK "" VBMS-A User Guide, andusing Share, see the HYPERLINK "" Share User Guide.45. Resuming the Payment of Benefits Following Release FromWhen Incarceration EndsIntroductionThis topic contains instructions for resuming benefits to Veterans whose benefits have been reduced or discontinued due to incarceration, includinghandling noticenotification of release from that incarceration has endedwhen determining the date incarceration ended, ands for VA purposeseffective date for resumption of benefits, and principles that apply to the adjustment of a beneficiary’s award when incarceration endsresuming benefits of a Veteran entitled to both compensation and pension.Change DateJuly 22, 2015December 21, 2015a. Notification of Release From Handling Notice That Incarceration Has EndedVA does not require beneficiaries to submit a specific form to report that incarceration has ended or to request a resumption of benefits after incarceration has ended. A beneficiary may report release from incarceration in writingby telephone, e-mail, fax, orthrough eBenefits.Important: VA employees must fFollow the instructions in M21-1, Part III, Subpart iii, 1.B.1.e when obtaining an oral statement (such as a statement obtained by telephone) from a beneficiary., andDo not resume benefits without confirming the beneficiary’s release through an official source, such as those referenced in M21-1, Part III, Subpart v, 8.A.3.b. If confirmation of release is obtained by telephone, document the call onfill out VA Form 27-0820e (see M21-1, Part III, Subpart v, 8.1.e).Reference: For more information on eBenefits, see the Benefits Assistance Service (BAS) website.b. When Determining the Date Incarceration Endeds for VA PurposesFor VA purposes, incarceration ends when the Veteran a beneficiaryis released from prisonis placed under community control (per VAOPGCPREC 59-91)begins participation in a work-release program, or moves to ahallfway housecivil commitment center (as defined in M21-1, Part III, Subpart v, 8.A.1.c), orresidential re-entry center.Reference: For the definition of community control, see VAOPGCPREC 59-91c. Principles That Apply to the Adjustment of a Beneficiary’s Award When Incarceration EndsResume the payment of benefits at the full rate to which a beneficiary is otherwise entitled upon receipt of notification (or confirmation) from an official source that incarceration has ended. The effective date for adjusting the beneficiary’s award to reflect the change in status is the date incarceration ended, if VA receives notice within one year of that date. Otherwise, the effective date is the date VA first receives notice that incarceration has ended.Exception: The principle described in the preceding paragraph is based on the assumption that VA received notice incarceration had ended after VA had already discontinued or reduced benefits due to incarceration. When discontinuing or reducing benefits and resuming them in a single award action (because, for example, VA was unaware of a beneficiary’s incarceration until it received notice that incarceration had ended), the proper effective date for resuming benefits is the date incarceration ended, regardless of how long after this date VA received notice.The table below describes other principles that apply to the adjustment of a beneficiary’s award at the end of a period of incarceration.If ...Then ...VA receives notice from a parole board or other official source that indicates a beneficiary’s incarceration will end on a specific date in the future, andVA receives the notice no more than 30 days prior to the date incarceration will endit is acceptable to adjust the beneficiary’s award while he/she is still incarcerated to reflect that incarceration will end on the future date.Important: Inform the beneficiary in the corresponding decision notice that if incarceration does not end on the specified date, VA will discontinue or reduce benefits without advance notice, effective the same date it had resumed them.VA paid disability compensation in lieu of pension to a Veteran whose benefits were subject to discontinuance due to incarcerationaward whichever benefit is more favorable to the Veteran when incarceration ends.VA was paying the beneficiary either Section 306 or Old Law Pension prior to incarcerationresume payment of the same benefit when incarceration ends, as long as entitlement still exists. Important: Do not switch the beneficiary to current-law pension unless he/she specifically elects that benefit.Important: Some of the principles and instructions contained in this block apply only to beneficiaries whose disability compensation or DIC was not apportioned, or whose pension was not allotted, to eligible family members for the period of the beneficiary’s incarceration.Before resuming the payment of benefits, read the instructions inM21-1, Part III, Subpart v.8.B.2.h through m if VA apportioned disability compensation to a Veteran’s dependent(s) for the period of incarceration, orM21-1 Part III, Subpart v, 8.B.1.i and j if VA allocated pension to a Veteran’s dependent(s) for the period of incarceration.c. Effective Date for Resuming Benefits for a Veteran Not Receiving Additional Benefits for Dependents If, within one year after the date incarceration ended, VA receives notice that a Veteran without dependents is no longer incarcerated, resume the payment of pension or compensation to the Veteran effective the date incarceration ended. Otherwise, resume payment effective the date VA received notice that incarceration had ended.Exception: The instructions above are based on the assumption that VA received notice that the Veteran’s incarceration had ended after VA had already discontinued or reduced the Veteran’s benefits due to incarceration. Sometimes, notice that a Veteran’s incarceration has ended represents the first notice VA receives of a Veteran’s incarceration. Under these circumstances, when VA is discontinuing or reducing the Veteran’s benefits and resuming them in a single award adjustment, resume the payment of benefits effective the date incarceration ended, regardless of how long after this date VA received notice.Note: If VA receives notice from a parole board or other official prison source that the Veteran’s incarceration will end on a specific date in the future, and VA receives the notice no more than 30 days prior to that date, VA may take action to resume the payment of pension or compensation from the date incarceration will end, even though the Veteran is still incarcerated. VA must inform the Veteran, however, that if his/her incarceration does not end as scheduled, VA will discontinue or reduce benefits without advance notice, effective the same date it had resumed them.References: For more information about resuming pension when the Veteran’s dependents are receiving pension, see M21-1 Part III, Subpart v, 8.B.1.i, orcompensation at the full rate when the Veteran’s dependents are receiving an apportionment, see M21-1, Part III, Subpart v.8.B.2.h and j.d. Resuming Benefits to a Veteran Entitled to Both Compensation and Pension When Incarceration Ends If a Veteran entitled to both compensation and pension was receiving compensation in lieu of pension during incarceration, follow the instructions in the table below when incarceration ends.If ...Then ...compensation continues to be the greater benefit after incarceration endsadjust the Veteran’s award according to the instructions in M21-1, Part III, Subpart v, 8.A.4.b.pension is the greater benefit after incarceration endsfollow the instructions in M21-1, Part III, Subpart v, 8.B.1.h for selecting an effective date for resuming the payment of pension.Notes: If the Veteran was in receipt of compensation prior to incarceration, resume payment of compensation at the full rate to which the Veteran is entitled.If VA was paying the Veteran either Section 306 or Old Law Pension prior to incarceration, resume payment of the same benefit when incarceration ends, if entitlement still exists. Do not switch the Veteran to current-law pension unless he/she specifically elects this benefit.If VA has been paying pension or an apportionment of the Veteran’s compensation to the Veteran’s dependent(s) during the Veteran’s incarceration, the Veteran might not receive a full restoration of benefits effective the day incarceration ends. For an explanation and additional information, seeM21-1, Part III, Subpart v, 8.B.1.i. for pension, and M21-1, Part III, Subpart v, 8.B.2.h and i, for compensation.RABvAGMAVABlAG0AcAAxAFYAYQByAFQAcgBhAGQAaQB0AGkAbwBuAGEAbAA=

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