Sorry for the mess!

The site is undergoing a massive update. All the content on the site still works but things just might look a little messy and disorganized. Most of the upgrades will probably be don by the end of the month. Thank you for your understanding!

Updated Sep 01, 2021

In This Section

1.  Examples of Award Adjustments Necessitated by a Veteran’s Election of Drill Pay

Introduction
This topic contains examples of award adjustments necessitated by a Veteran’s receipt of drill pay, including

Change Date

  June 22, 2020

VI.ii.3.C.1.a.  Training Is Completed During a Prior Year
Scenario:
  • In January 2016, a Veteran with a 10-percent disability rating returns a signed VA Form 21-8951, Notice of Waiver of VA Compensation or Pension to Receive Military Pay and Allowances, showing he attended 63 days of training during fiscal year 2015.
  • The regional office (RO) that received the VA Form 21-8951 processes it in April 2016.
  • The monthly rate of compensation payable to the Veteran on the last day of fiscal year 2015 (September 30, 2015) was $133.17.
  • The monthly rate of compensation payable to the Veteran on October 1, 2015, is still $133.17.
Results:
  • The Department of Veterans Affairs (VA) begins withholding all of the Veteran’s compensation effective October 1, 2015.
  • VA resumes monthly payments of $133.17 effective December 4, 2015.
Note:  There was no cost-of-living adjustment (COLA) on December 1, 2015.  Had there been, the Veteran would have been entitled to
  • the amount of the COLA, for the period December 1, 2015, through December 3, 2015, and
  • $133.17 plus the amount of the COLA, effective December 4, 2015.

VI.ii.3.C.1.b.  Veteran Provides Advance Notice of Training
Scenario:
Results:
  • VA begins withholding all of the Veteran’s compensation effective January 1, 2016.
  • VA resumes monthly payments of $133.17, effective February 26, 2016.

VI.ii.3.C.1.c.  VA Increases the Disability Rating After the End of the Fiscal Year in Question
Scenario:
  • In June 2015, VA increased a Veteran’s disability rating from 10 percent to 30 percent, effective December 1, 2014.
  • In March 2016, the Veteran returns a signed VA Form 21-8951 showing he attended 63 days of training during fiscal year 2014.
  • The RO that received the VA Form 21-8951 processes it in May 2016.
  • As of the last day of fiscal year 2014 (September 30, 2014), VA was paying the Veteran $130.94 per month.
  • The Veteran has no dependents.
  • The monthly rate of compensation payable to the Veteran on October 1, 2015 is $407.75.
Results:
  • VA reduces the Veteran’s compensation to $276.81 per month effective October 1, 2015.  (This amount represents the difference between the rate payable at the end of fiscal year 2014 and the rate payable on October 1, 2015.)
  • VA resumes monthly payments of $407.75 effective December 4, 2015.
Notes:
  • There was no COLA on December 1, 2015.  Had there been, the Veteran would have been entitled to
    • $276.81 plus the amount of the COLA, for the period December 1, 2015, through December 3, 2015, and
    • $407.75 plus the amount of the COLA, effective December 4, 2015.
  • If VA subsequently receives a signed VA Form 21-8951 showing the Veteran received drill pay during fiscal year 2015, and the RO that receives the form processes it during fiscal year 2016, begin the withholding for drill pay the Veteran received during fiscal year 2015 effective December 4, 2015.  If the amount of benefits VA must withhold on December 4, 2015, is greater than the monthly rate of compensation payable to the Veteran on that same date, begin the withholding from an earlier date, such as
    • the date of the most recent award line that precedes October 1, 2015 (this might be December 1, 2014, which was the effective date for a COLA), or
    • the first day of the fiscal year prior to fiscal year 2015 (October 1, 2014).

VI.ii.3.C.1.d.  VA Increases the Disability Rating Prior to the End of the Fiscal Year in Question
 Scenario:
  • In December 2015, VA increased a Veteran’s disability rating from 10 percent to 30 percent, retroactive to April 1, 2000.
  • In January 2016, the Veteran returns a signed VA Form 21-8951 showing she attended 63 days of training during fiscal year 2014.
  • The RO that received the VA Form 21-8951 processes it in April 2016.
  • The Veteran has no dependents.
  • The monthly rate of compensation payable to the Veteran on the last day of fiscal year 2014 (September 30, 2014) is $400.93.
  • The monthly rate of compensation payable to the Veteran on October 1, 2015, is $407.75.
Results:
  • VA reduces the Veteran’s compensation to $6.81 per month effective October 1, 2015.  (This amount represents the difference between the monthly rate payable on the last day of fiscal year 2014 and the monthly rate payable on October 1, 2015.)
  • VA resumes monthly payments of $407.75, effective December 4, 2015.
Notes:
  • There was no COLA on December 1, 2015.  Had there been, the Veteran would have been entitled to
    • $6.81 plus the amount of the COLA, for the period December 1, 2015, through December 3, 2015, and
    • $407.75 plus the amount of the COLA, effective December 4, 2015.
  • If VA subsequently receives a signed VA Form 21-8951 showing the Veteran received drill pay during fiscal year 2015, and the RO that receives the form processes it during fiscal year 2016, begin the withholding for drill pay the Veteran received during fiscal year 2015 effective December 4, 2015.  If the amount of benefits VA must withhold on December 4, 2015, is greater than the monthly rate of compensation payable to the Veteran on that same date, begin the withholding from an earlier date, such as
    • the date of the most recent award line that precedes October 1, 2015 (this might be December 1, 2014, which was the effective date for a COLA), or
    • the first day of the fiscal year prior to fiscal year 2015 (October 1, 2014).

VI.ii.3.C.1.e.  VA Reduces the Veteran’s Disability Rating
 Scenario:
  • In January 2015, a Veteran returns a signed VA Form 21-8951 showing she attended 55 days of training during fiscal year 2014.
  • In December 2015, VA reduces the Veteran’s disability rating from 10 percent to 0 percent, effective August 1, 2015.
  • The RO that received the VA Form 21-8951 processes it in March 2016.
  • The monthly rate of compensation payable to the Veteran on the last day of fiscal year 2014 (September 30, 2014) is $130.94.
  • The last award line before VA discontinued the Veteran’s compensation on August 1, 2015, shows a COLA on December 1, 2014, that increased the Veteran’s monthly rate of payment to $133.17.
 Result:
  • VA creates an overpayment in the Veteran’s account by retroactively reducing her compensation to $2.23 effective December 1, 2014.  (This amount represents the difference between the monthly rate payable on the last day of fiscal year 2014 and the monthly rate payable on December 1, 2014.)
  • VA resumes payments at the monthly rate of $133.17 from January 26, 2015, to August 1, 2015.

VI.ii.3.C.1.f.  Veteran Returns to Active Duty During a Period VA Withheld or Is Withholding Benefits
Scenario:
Part I:
  • In May 2015, a Veteran with a 10-percent disability rating returns a signed VA Form 21-8951 showing he attended 64 days of training during fiscal year 2014.
  • The RO that received the VA Form 21-8951 processes it in March 2016.
  • The monthly rate of compensation payable to the Veteran
    • on the last day of fiscal year 2014 (September 30, 2014) is $130.94, and
    • between December 1, 2014, and December 1, 2015, is $133.17.
Results:  VA reduces the Veteran’s award to $2.23 per month for the period October 1, 2015, through December 4, 2015.  (This amount represents the difference between the monthly rate payable at the end of fiscal year 2014 and the monthly rate payable on October 1, 2015.)
Note:  There was no COLA on December 1, 2015.  Had there been, the Veteran would have been entitled to
  • $2.23 plus the amount of the COLA, for the period December 1, 2015, through December 3, 2015, and
  • $133.17 plus the amount of the COLA, effective December 4, 2015.
Part II:
  • In May 2016, the Veteran informs VA he returned to active duty on October 21, 2015.
  • December 1, 2014, is the date of the most recent award line that both
    • precedes the date the Veteran returned to active duty, and
    • equals or exceeds $130.94.
Results:  VA
  • discontinues the Veteran’s benefits effective October 21, 2015, and
  • reduces his monthly benefit to $2.23 for the period December 1, 2014, through January 4, 2015. (This date range represents the 34-day period during which VA was unable to withhold benefits (from October 1, 2015, through December 4, 2015) because the Veteran is not entitled to VA benefits while on active duty.)
Part III:
  • In May 2016, the Veteran returns a signed VA Form 21-8951 showing he attended 63 days of training during fiscal year 2015.
  • The RO that received the VA Form 21-8951 processes it in August 2016.
  • The monthly rate of compensation payable to the Veteran on the last day of fiscal year 2015 (September 30, 2015) is $133.17.
Result:
  • VA begins withholding all of the Veteran’s compensation effective January 5, 2015.
  • VA resumes payments at the monthly rate of $133.17 from March 8, 2015, through October 20, 2015.

VI.ii.3.C.1.g.  RO Concurrently Processes Multiple VA Forms 21-8951 From the Same Veteran for Multiple Fiscal Years
 Scenario:
  • A Veteran with a combined disability rating of 10 percent attended 65 days of training each fiscal year between 2012 through 2015.
  • Each time the Veteran received a VA Form 21-8951 from the Hines Information Technology Center, she completed, signed, and returned it to the local RO.
  • The local RO saved the VA Forms 21-8951 that it received each year from the Veteran but was unable to process any of them because the RO was understaffed.
  • The local RO underwent a hiring initiative in June 2016 and, after training 10 new employees, was finally able to process all the Veteran’s VA Forms 21-8951 (concurrently) in August 2016.
  • The monthly rate of compensation payable to the Veteran on the last day of fiscal year
    • 2012 (September 30, 2012) is $127.00
    • 2013 (September 30, 2013) is $129.00
    • 2014 (September 30, 2014) is $130.94, and
    • 2015 (September 30, 2015) is $133.17.
Results:
  • VA reduces the Veteran’s award to
    • $6.17 ($133.17 – $127.00), effective October 1, 2015
    • $4.17 ($133.17 – $129.00), effective December 6, 2015
    • $2.23 ($133.17 – $130.94), effective February 11, 2016, and
    • $0.00, effective April 16, 2016.
  • VA resumes payments at the monthly rate of $133.17, effective June 21, 2016.
Notes:
  • There was no COLA on December 1, 2015.  Had there been, the Veteran would have been entitled to
    • $6.17 plus the amount of the COLA, for the period December 1, 2015, through December 5, 2015
    • $4.17 plus the amount of the COLA, effective December 6, 2015
    • $2.23 plus the amount of the COLA, effective February 11, 2016
    • the amount of the COLA, effective April 16, 2016, and
    • $133.17, plus the amount of the COLA, effective June 21, 2016.
  • As explained in M21-1, Part VI, Subpart ii, 3.A.5.b, it is now VA policy to make all award adjustments necessitated by a Veteran’s receipt of drill pay retroactively.  Had the local RO in this scenario been able to concurrently process all of the Veteran’s VA Forms 21-8951 much earlier in 2016 (March, instead of August, for example) it would have had to take a different approach than the one described under the Results sublabel in order to comply with this policy.  The RO would have had to begin the series of withholdings listed under the Results sublabel from an earlier date, such as
    • the date of the most recent award line that precedes October 1, 2015 (this might be December 1, 2014, which was the effective date for a COLA), or
    • the first day of the fiscal year prior to fiscal year 2015 (October 1, 2014).

VI.ii.3.C.1.h.  VA Is Withholding Compensation in Its Entirety to Recoup Separation Benefits
 Scenario:
  • In December 2010, VA
    • determines a Veteran is entitled to disability compensation for residuals of a broken wrist effective June 25, 2009, and
    • assigns the wrist a disability rating of 10 percent.
  • VA withheld all of the Veteran’s compensation because she received $38,000.00 in separation benefits that are subject to recoupment.
  • In November 2015, the Veteran returns a signed VA Form 21-8951 showing she attended 63 days of training during fiscal year 2014.
  • The RO that received the VA Form 21-8951 processes it in March 2016.
  • The monthly rate of compensation payable for a disability rated 10-percent disabling is $130.94 on the last day of fiscal year 2014 (September 30, 2014).
Results:
  • VA continues to withhold all of the Veteran’s compensation.  However, effective October 1, 2015, VA withholds
    • $2.23 for recoupment of the Veteran’s separation benefits (This represents the difference between the rate payable at the end of fiscal year 2014 and the rate payable on October 1, 2015.), and
    • $130.94 to offset the Veteran’s receipt of drill pay.
  • VA resumes the withholding of $133.17 for recoupment of the Veteran’s separation benefits effective December 4, 2015.
 Notes:
  • There was no COLA on December 1, 2015.  Had there been, VA would have
    • increased the amount of the withholding for recoupment of the Veteran’s separation benefits by the amount of the COLA ($2.23 plus the amount of the COLA) for the period December 1, 2015, through December 3, 2015, and
    • resumed the withholding of all of the Veteran’s benefits (for recoupment of the Veteran’s separation benefits), effective December 4, 2015.
  • If VA subsequently receives a signed VA Form 21-8951 showing the Veteran received drill pay during fiscal year 2015, and the RO that receives the form processes it during fiscal year 2016, begin the withholding for drill pay the Veteran received during fiscal year 2015 effective December 4, 2015.
Reference:  For instructions about withholding benefits for more than one purpose in the

VI.ii.3.C.1.i.  VA Is Withholding Part of the Veteran’s Compensation to Recoup Separation Benefits
Scenario:
  • In January 2010, VA grants a Veteran’s original claim for disability compensation, assigning the Veteran a disability rating of
    • 30 percent for depression, and
    • 10 percent for residuals of a right knee strain.
  • The effective date of the rating is June 2, 2009.
  • The Veteran has no dependents.
  • VA pays the Veteran at the rate payable for a disability rated as 10-percent disabling and withholds the difference because the Veteran received disability severance pay (in the amount of $49,000.00) for depression.
  • In November 2015, the Veteran returns a signed VA Form 21-8951 showing he attended 60 days of training during fiscal year 2014.
  • The RO that received the VA Form 21-8951 processes it in March 2016.
  • The monthly rate of compensation payable for a combined disability rating of 40 percent is $577.54 on the last day of fiscal year 2014 (September 30, 2014).
Results:
  • Effective October 1, 2015, VA withholds
    • $577.54 from the Veteran’s award for the drill pay he received during fiscal year 2014, and
    • the balance of the Veteran’s award ($9.82) for recoupment of his disability severance pay.
  • VA resumes the payment of $133.17 and the withholding of $454.19 (for recoupment of disability severance pay), effective December 1, 2015.
Notes:
  • There was no COLA on December 1, 2015.  Had there been, VA would have made corresponding increases, effective December 1, 2015, in
    • the Veteran’s monthly rate of payment, and
    • the amount of the withholding for recoupment of the Veteran’s disability severance pay.
  • If VA subsequently receives a signed VA Form 21-8951 showing the Veteran received drill pay during fiscal year 2015, and the RO that receives the form processes it during fiscal year 2016, begin the withholding for drill pay the Veteran received during fiscal year 2015 effective December 1, 2015.

VI.ii.3.C.1.j.  Veteran’s Benefits Are Subject to Reduction/ Withholding Based on Incarceration and Receipt of Drill Pay
Scenario:
  • In June 2015, a Veteran with a 20-percent disability rating returns a signed VA Form 21-8951 showing she attended 60 days of training during fiscal year 2014.
  • In March 2016, the RO that received the VA Form 21-8951
    • reduces the Veteran’s award to $4.40 ($263.23 – $258.83), effective October 1, 2015, and
    • resumes payments at the monthly rate of $263.23, effective December 1, 2015.
  • In May 2016, VA receives notice the Veteran is currently incarcerated.  Further development reveals
    • the Veteran was incarcerated following conviction of a felony, and
    • the 61st day of incarceration was September 12, 2015.
  • The Veteran does not respond to VA’s notice of proposed adverse action to reduce her monthly rate of payment to $133.17, effective September 12, 2015.
  • December 1, 2014, represents the most recent award line that
    • precedes the 61st day of incarceration, and
    • shows a monthly rate of payment ($263.23) that is equal to or exceeds the Veteran’s rate of payment at the end of fiscal year 2014 ($258.83).
 Results:
  • VA changes the effective date of the withholding (to offset the Veteran’s receipt of drill pay during fiscal year 2014) to December 1, 2014.  (This action has the effect of reducing the Veteran’s monthly rate of payment to $4.40 ($263.23 – $258.83) for a period of 60 days, beginning December 1, 2014.)
  • VA resumes payments at the monthly rate of $263.23, effective February 1, 2015.
  • VA reduces the Veteran’s award to $133.17, effective the 61st day of incarceration (September 12, 2015).