X.v.2.C.1.a. Adjusting an Award to Reflect a COLA
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When the automated process of adjusting a beneficiary’s award to reflect a cost-of-living adjustment (COLA) fails, it will generate one of the following end products (EPs):
- 692 for compensation, Medal of Honor Pension, and Dependency and Indemnity Compensation (DIC) awards
- 600 for Pension and Parents’ DIC awards if a notice of adverse action prior to manual adjustment of COLA is required, or
- 696 for Pension and Parents’ DIC if no adverse action is needed.
Notes:
- EP 420 – CH 18 Increase Claim – Spina Bifida is established for COLA adjustments for Chapter 18 beneficiaries.
- The automated process will not establish both an EP 600 and an EP 696 for Pension and Parents’ DIC awards for the same COLA year.
Use the table below to determine the actions to take to manually process a COLA adjustment that was generated for the reason described in the preceding paragraphs.
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If a … |
Then … |
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Veterans Service Center is processing the EP 692 |
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an EP 692 is established with the claim label COLA Adjustment
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process an award that pays the COLA, and
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notify the beneficiary of the action taken.
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pension management center (PMC) is processing the EP 692 (for DIC beneficiaries only) |
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an EP 692 is established with the claim label PMC COLA Adjustment
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process an award that pays the COLA adjustment, and
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notify the beneficiary of the action taken.
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PMC is processing the EP 696 that was automatically established (for pension and Parents’ DIC beneficiaries only) |
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PMC is processing the EP 600 that was automatically established with automatic due process notification (for pension and Parents’ DIC beneficiaries only) |
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Important:
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Some apportionment decisions provide for increases in the amount of the apportionment each time the primary beneficiary receives a COLA. Such increases must be processed manually, as well. If the apportionment was granted based on the instructions in M21-1, Part VI, Subpart iii, 1.B for an incarcerated Veteran, or based on the instructions in M21-1, Part VI, Subpart iii, 1.C for an incarcerated survivor, then any COLA awarded annually should be paid to the apportionee.
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Notifying the beneficiary of the action taken only requires a brief statement of the reason for the action (the legislative COLA), statement of the change in rate, and the date from which the new rate applies. Decision notice requirements from 38 CFR 3.103(f) are not required. Notification of an award to manually implement a COLA is not an adjudicative decision on a claim.
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EP 130 is the appropriate EP for cases involving apportionments and other payee codes.
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If, during PMC processing of a current-year automatic COLA, additional action is identified (such as prior year COLAs), the claims processor must address the issue(s).
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If EP 600 was auto-established for pension or Parents’ DIC, but the increase in Medicare Part B premiums results in a higher rate of pension or Parents’ DIC, then follow the guidance in M21-1, Part IX, Subpart iii, 1.H.2.d and process an award under the existing EP 600.
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If EP 600 was auto-established and the COLA adjustment can be resolved without due process, cancel the EP 600 and process under a manually established EP 696.
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