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Updated Feb 19, 2025

In This Section

  
This section contains the following topics:
 
Topic
Topic Name
1
2
3
4
 

1.  General Information on Apportionments
 
 

Introduction

  
This topic contains general information on apportionments, including

Change Date

  
February 19, 2025

VII.iii.1.A.1.a.  Requirement That Claimants Submit a Prescribed Form

  
The Department of Veterans Affairs (VA) will consider a claim for an apportionment of a beneficiary’s VA benefits only upon receipt of VA Form 21-0788, Information Regarding Apportionment of Beneficiary’s Award.
 
Note:  The requirement that a claimant file a claim for apportionment on VA Form 21-0788 went into effect on March 24, 2015.  If a claimant requests an apportionment on or after that date on anything other than a VA Form 21-0788, treat the correspondence as a request for an application.
 
Reference:  For more information on requests for application, see M21-1, Part II, Subpart iii, 2.G.

VII.iii.1.A.1.b.  Who May Receive an Apportionment of a Beneficiary’s Benefits

  
An apportionment may be paid to or for a Veteran’s
  • estranged spouse
  • child that is in an estranged or former spouse’s custody
  • child that is not living with the Veteran or the Veteran’s surviving spouse, or
  • dependent parent.
Important: 
  • As the United States Court of Appeals for the Federal Circuit affirmed in Batcher v. Wilkie, 975 F. 3d 1333 (Fed. Cir. 2020), a domestic relations separation agreement sanctioned by a State court by a judgment of separation plays no role in VA’s determination of entitlement to special apportionment.
  • VA may not apportion a surviving spouse’s current-law Survivors Pension to a child that is not in the surviving spouse’s custody.  (The child, in this case, might be entitled to Survivors Pension in their own right.)
  • The policy described in the previous bullet does not apply if the surviving spouse is receiving Section 306 or Old Law survivors pension.
References:  For more information on

VII.iii.1.A.1.c.  Apportioning Benefits to a Dependent That Is Not on the Beneficiary’s Award

  
VA may apportion benefits to a dependent, even if the dependent is not on the beneficiary’s award, as long as the dependent’s relationship to the Veteran, on whose service the award is based, is properly established.  However, VA cannot add such a dependent to the award unless the beneficiary submits the appropriate form.
 
Example:  A Veteran is receiving compensation as a single Veteran evaluated as 50-percent disabled.  An ex-wife submits a claim for an apportionment on behalf of their 10-year old son who is in her custody.  She submits a certified birth certificate showing the Veteran is, in fact, the biological father of the child. 
 
Analysis:  Even though the Veteran is not currently receiving additional benefits for the child, and regardless of whether or not the Veteran submits the appropriate form to add the child to his award, VA may apportion benefits for the child because
  • the relationship to the Veteran is properly established, and
  • there is no indication the Veteran has given up the child for adoption.
References:  For more information on

VII.iii.1.A.1.d.  Regulations Under Which VA May Apportion Benefits

  
When processing an apportionment claim, claims processors must first determine whether an apportionment is payable under the provisions of 38 CFR 3.450. 
 
If benefits are not apportionable under 38 CFR 3.450, claims processors must determine whether a special apportionment under the provisions of 38 CFR 3.451 is in order.
 
The Court of Appeals for Veterans Claims, in Hall v. Brown, 5 Vet.App. 294 (1993), distinguished the adjudication of apportionment claims under one regulation as being independent of the other regulation.
 
Exceptions:  The table below describes exceptions to the policy expressed in this block.
 
If …
And benefits are subject to reduction because the …
Then consider only the provisions of …
  • the beneficiary is an incompetent Veteran in receipt of disability compensation, and
  • VA has not appointed the Veteran a fiduciary
Veteran is institutionalized at government expense
38 CFR 3.452(c)(1) when determining the entitlement of the Veteran’s spouse, child(ren), or dependent parent(s) to an apportionment.
  • the beneficiary is an incompetent Veteran in receipt of any type of pension, and
  • VA has not appointed the Veteran a fiduciary
Veteran is institutionalized at government expense
38 CFR 3.454(a) when determining a spouse’s or child’s entitlement to an apportionment.
 
Note:  If a Veteran in this case has neither a spouse nor child, VA may apportion the Veteran’s pension to their dependent parent.  Consider only the provisions of 38 CFR 3.451 when determining the parent’s entitlement to an apportionment in this case.
the beneficiary is a Veteran in receipt of
  • Section 306 Pension, or
  • current-law pension
Veteran was hospitalized at VA expense
38 CFR 3.452(c)(2) and 3.454(b) when determining the entitlement of the Veteran’s spouse to an apportionment.
the beneficiary is a Veteran in receipt of disability compensation
Veteran was incarcerated
38 CFR 3.665(e)(1) when determining entitlement to an apportionment.
the beneficiary is a surviving spouse or child in receipt of Dependency and Indemnity Compensation (DIC)
surviving spouse or child was incarcerated
38 CFR 3.665(e)(2) when determining entitlement to an apportionment.
the beneficiary is receiving current-law survivors pension
—
38 CFR 3.451 when determining a child’s entitlement to an apportionment.
 
Notes:
  • VA may apportion an incompetent beneficiary’s benefits before or after it assigns the beneficiary a fiduciary.
  • If a beneficiary’s minor child(ren) is entitled to an apportionment of the beneficiary’s benefits, request the appointment of a fiduciary for the minor child(ren) by taking the following actions:
    • after the award granting the apportionment has been authorized, verify that an end product (EP) 590, Expedited Initial Appointment Field Examination, was automatically established.  If the EP 590 was not automatically established, establish an EP 290, FID-Fiduciary Adjustment, for automatic routing to the fiduciary hub of jurisdiction, and
  • When the apportionment is for a minor child and the beneficiary is
    • competent, make payments to a custodian on behalf of the minor child until a fiduciary is appointed if the situation meets the conditions for releasing funds to a custodian as outlined in M21-1, Part X, Subpart ii, 6.E.4.a and b, or
    • incompetent, or the situation does not meet the conditions for releasing funds to a custodian as outlined in M21-1, Part X, Subpart ii, 6.E.4.a and b, do not pay the apportionment until a fiduciary is appointed.
  • Do not apportion an incompetent Veteran’s benefits to the Veteran’s spouse if VA has appointed the spouse as the Veteran’s fiduciary.
References:  For more information on

VII.iii.1.A.1.e.  Criteria for Granting a Claim for an Apportionment

  
The table below describes what the evidence of record must show before VA may grant a claim for an apportionment, depending on the regulation under which VA is determining entitlement. 
 
Regulation
What the Evidence Must Show
Claimant does not reside with the beneficiary.
Beneficiary is not providing a reasonable level of support to the claimant.
  • Financial hardship on the part of the claimant.
  • Apportionment will not cause undue hardship on the beneficiary and their other dependent(s).
Note:  When determining entitlement to an apportionment under 38 CFR 3.451, claims processors must consider such factors as
  • amount of VA benefits payable
  • other resources and income of the beneficiary and claimant, and
  • special needs of the
    • beneficiary
    • beneficiary’s other dependent(s), and
    • claimant.
Financial hardship on the part of the spouse.
Individual need on the part of the claimant.
 
Note:  When determining individual need, claims processors must consider such factors as the
  • claimant’s income and living expenses
  • amount of benefits available for apportionment
  • needs and living expenses of other claimants, and
  • special needs of all claimants.
 
Examples:
  • The evidence of record must show the following to justify the apportionment of a Veteran’s benefits to an estranged spouse under the provisions 38 CFR 3.450:
    • spouse does not reside with the Veteran, and
    • Veteran is not providing a reasonable level of support to the spouse.
  • The evidence of record must show the following to justify the apportionment of a Veteran’s benefits to their child (who is in the custody of a former spouse) under the provisions of 38 CFR 3.451:
    • child does not reside with the Veteran
    • child and former spouse are experiencing financial hardship, and
    • apportioning the Veteran’s benefits will not cause undue hardship on the Veteran and their other dependent(s).

VII.iii.1.A.1.f. Circumstances Under Which VA May Not Apportion a Veteran’s Benefits

  
The table below contains a description of the circumstances under which 38 CFR 3.458 prohibits the apportioning of a Veteran’s benefits.
 

Circumstance
Additional Information
The total benefit payable to the Veteran is so small that it does not allow payment of a reasonable amount to any apportionee.
An apportionment so small that it would do little or nothing to mitigate an apportionee’s need is not considered reasonable.
 
Important:  Do not automatically discount as too small to apportion the amount of disability compensation a Veteran receives if they have a combined disability rating that is less than 30 percent.
The Veteran’s spouse, who is requesting an apportionment, has been found guilty of conjugal infidelity by a court having proper jurisdiction.

—
The Veteran’s spouse, who is requesting an apportionment, has lived with another person and held themselves out openly to the public to be the spouse of another person.
 
Exception:  The spouse entered into the relationship with the other person in good faith, believing that the marriage to the Veteran had been legally terminated.  Under this set of circumstances, however, VA may apportion benefits to the spouse only if
  • there has been a reconciliation between the Veteran and their spouse, and
  • later the Veteran and their spouse become estranged.
  • A Veteran entitled to disability compensation, who is estranged but not divorced from their spouse, remains entitled to benefits as a married Veteran.
  • A Veteran entitled to pension, who is estranged but not divorced from their spouse, remains entitled to benefits as a married Veteran as long as they are contributing to the spouse’s support.
  • Special attention must be paid to claims for an apportionment from an estranged spouse or a spouse for whom a Veteran entitled to Veterans Pension is not receiving additional benefits, as it could adversely affect the rate of the Veteran’s benefits, as explained in M21-1, Part IX, Subpart iii, 1.F.2.n.
The Veteran has given up for adoption the child for whom the apportionment claim is pending.
 
Exception:  In certain limited situations, VA may apportion Veterans Pension to a child whom a Veteran has given up for adoption.
  • 38 CFR 3.458(d) prohibits the apportioning of a Veteran’s benefits for a child the Veteran has given up for adoption.
  • See M21-1, Part VII, Subpart i, 3.B.5.b regarding the effect of the adoption of a Veteran’s child on the Veteran’s entitlement to Veterans Pension.
  • VAOPGCPREC 16-1994 describes conditions that may warrant an apportionment of Veterans Pension to a child that a Veteran has given up for adoption.
  • 38 CFR 3.58 prohibits the payment of additional disability compensation for a child that a Veteran has given up for adoption.
  • See M21-1, Part VII, Subpart i, 3.B.5 for more information about cases involving a child that has been given up for adoption.
 

VII.iii.1.A.1.g.  Apportionments as a Convenience on the Part of Beneficiaries

  
VA does not apportion benefits to a dependent as a convenience on the part of a beneficiary.  38 CFR 3.106 prohibits a beneficiary from renouncing a portion of their benefits so that VA may allocate them to another person. 

VII.iii.1.A.1.h.  Handling a Beneficiary’s Assertion That a Child Does Not Meet the Definition of a Child Under 38 CFR 3.57

  
If a claim for an apportionment involving a child is pending, and the beneficiary from whose benefits an apportionment may be paid asserts the child does not meet the definition of “child” under 38 CFR 3.57, follow the instructions in the table below.
 
Example:  A male Veteran whose benefits are subject to apportionment for a child submits a statement asserting that he did not father the child.
 
Step
Action
1
Is additional evidence required to establish that the child cannot be recognized as a child for VA purposes?
  • If yes, go to the next step.
  • If no, go to Step 5.
Examples:
  • Additional evidence might be required if the only evidence of record is a statement from a male Veteran that he did not father the child in question.
  • Additional evidence might not be required if the evidence of record includes the results of a paternity test.
2
Ask the beneficiary to provide additional evidence that supports their assertion. Allow the beneficiary 30 days to respond.
3
Did the beneficiary respond within 30 days?
  • If yes, go to the next step.
  • If no,
    • continue processing the claim for apportionment, and
    • disregard the remaining steps in this table.
4
Did the beneficiary provide evidence that is sufficient to establish that the child in question does not meet the definition of “child” under 38 CFR 3.57?
  • If yes, go to the next step.
  • If no,
    • continue processing the claim for apportionment, and
    • disregard the remaining steps in this table.
5
Deny the claim for apportionment of benefits to or for the child.
 
Note:  There is no requirement to document the denial described in this step on VA Form 21-441, Special Apportionment Decision.
6
Notify both the beneficiary and claimant of the decision, according to the instructions in M21-1, Part VII, Subpart iii, 1.A.3.m.
 
Note:  If VA is already apportioning benefits to or for a child, and the primary beneficiary asserts the child does not meet the definition of “child” under 38 CFR 3.57, follow the instructions in M21-1, Part VII, Subpart iii, 1.B.5.a.

VII.iii.1.A.1.i.  Restriction on the Concurrent Payment of Education Benefits and Apportioned Benefits

  
Use the table below to determine if the payment of VA education benefits (under 38 U.S.C. Chapter 33 or Chapter 35) to a claimant precludes them from receiving an apportionment of disability or survivors benefits.
 
If the claimant is a …
Then the payment of VA education benefits …
Reference
spouse
does not preclude the spouse from concurrently receiving an apportionment of a Veteran’s benefits.
  • child under age 18, or
  • child age 18 or older who is permanently incapable of self-support
does not preclude the child from concurrently receiving an apportionment of disability or survivors benefits, if the individual case warrants this action.
 
Note:  A special restorative training allowance may also be paid concurrently with an apportionment of disability or survivors benefits.

child age 18 or older who is capable of self-support
precludes the child from concurrently receiving an apportionment of disability or survivors benefits.
 
Note:  The child must elect which benefit they want to receive.  If the child elects VA education benefits, they are no longer eligible for an apportionment of disability or survivors benefits.
 
Exception:  There is no prohibition against the concurrent payment of an apportionment and VA education benefits under 38 U.S.C. 3319. There was also no prohibition if
  • the education benefit was payable under 38 U.S.C. 3311, and
  • the child began a program of education under this statute prior to August 1, 2011.
 

VII.iii.1.A.1.j.  Disclosing Information in the Claims Folder to the Beneficiary and/or Claimant

  
Following receipt of a request from either of the following individuals, disclose information in the claims folder that affects the payment or potential payment of an apportionment:
  • individual that is claiming an apportionment, and/or
  • beneficiary that is the subject of the apportionment claim.
When the Privacy Act forbids a total disclosure of correspondence or other submissions from either party to the other, separately furnish the information that is vital to the decision to be made.
 
Example:  “Information that is vital to the decision” usually includes the income and expenses of each party.

VII.iii.1.A.1.k.  Apportionments Involving a Beneficiary or Claimant That Resides in a Foreign Country

  
Any regional office (RO) may process an apportionment claim as long as the beneficiary is not a foreign resident.  The residency of the claimant is irrelevant in this case.
 
Only the ROs identified in M21-1, Part X, Subpart i, 3.A.2.a, may process an apportionment claim if the beneficiary is a foreign resident.
 
Reference:  For more information on handling cases in which the primary beneficiary or claimant resides in a foreign country, see M21-1, Part X, Subpart i, 3.B. 

 

2.  Actions That Precede a Decision on an Apportionment Claim
 
 

Introduction

  
This topic contains information on actions that precede a decision on an apportionment claim, including

Change Date

  
April 9, 2020

VII.iii.1.A.2.a.  First Steps Following Receipt of a Claim for an Apportionment

  
Follow the steps in the table below after receiving a claim for an apportionment.
 
Step
Action
1
Follow the instructions in M21-1, Part II, Subpart iii, 3.A.1, for placing the claim under EP control.
2
Determine whether a bar to the apportionment exists.
 
Notes: 
3
Does a bar to the apportionment exist?
  • If yes, go to the next step.
  • If no, go to Step 6.
4
Deny the claim for an apportionment without undertaking further development.
 
Note:  There is no requirement to document the denial described in this step on VA Form 21-441.
5
6
Is VA considering the claimant’s entitlement to an apportionment under the provisions of 38 CFR 3.452(c), 3.454, or 3.665(e)?
  • If yes, go to the next step.
  • If no, go to Step 9.
7
Exception:  Undertake the development described in M21-1, Part VII, Subpart iii, 1.A.2.d, if necessary.
 
Note:  There is no requirement to document on VA Form 21-441 decisions to grant or deny entitlement to an apportionment under the provisions of
8
Is the claimant entitled to an apportionment?
  • If yes,
  • If no, take the action described in Step 5 of this table.
9
Establish EP 600, Apportionment Due Process, under the beneficiary’s name, with a suspense date that expires 65 days in the future.
10
Follow the instructions in M21-1, Part VII, Subpart iii, 1.A.2.b.
11
Send a notice of proposed adverse action to the beneficiary that includes the content described in M21-1, Part VII, Subpart iii, 1.A.2.c.
12
Undertake the development described in M21-1, Part VII, Subpart iii, 1.A.2.d, if necessary.
 
Note:  Do not deny a claim for apportionment without taking the actions described in M21-1, Part VII, Subpart iii, 1.A.2.c and d, solely because the Veteran has only a 10- or 20-percent disability rating.  Without knowing the income and expenses of the claimant and the Veteran, it is practically impossible to determine whether an apportionment might be in order.
 

VII.iii.1.A.2.b.  Estimating the Amount of Benefits VA Should Withhold for an Apportionment

  
Before taking the actions described in the remaining blocks of this topic, it is necessary to estimate the amount of benefits VA should apportion to the claimant.  As discussed in M21-1, Part VII, Subpart iii, 1.A.2.e, the estimated amount of the apportionment will tentatively be withheld from the beneficiary’s award pending a final decision on the apportionment claim.
 
Claims processors must make the estimate described in the above paragraph without the benefit of the evidence and information they request from the claimant and beneficiary per the instructions in M21-1, Part VII, Subpart iii, 1.A.2.c and d.
 
When making the estimate, claims processors must
  • consider the additional amount VA pays the beneficiary for dependents
  • apply the provisions of the applicable regulations referenced in M21-1, Part VII, Subpart iii, 1.A.3.e, and
  • bear in mind that when making a final decision on an apportionment claim, claims processors may only apportion an amount that is equal to or less than the estimated amount.  They may not apportion a greater amount without
    • issuing another notice of proposed adverse action to the beneficiary, and
    • allowing the beneficiary 65 days to respond.

VII.iii.1.A.2.c.  Issuing Notice of a Proposed Adverse Action

  
After estimating the amount of benefits VA should withhold for an apportionment, prepare a notice of proposed adverse action that
  • informs the beneficiary
    • of the pending claim for an apportionment of benefits
    • of the proposed amount and effective date of any interim withholding
    • of the statutory authority for granting an apportionment (38 U.S.C. 5307)
    • of the effective date from which VA proposes to commence the apportionment, and
    • that the award will be reduced by the monthly amount of the apportionment VA authorizes, and
  • asks the beneficiary to
    • complete and return VA Form 21-0788, and
    • respond within 60 days, after which time VA will decide the apportionment claim unless the beneficiary provides good cause for extending the time limit for a response.
Unless the provisions of 38 CFR 3.450 are not for consideration in determining the claimant’s entitlement to an apportionment, also inform the beneficiary that if they are not contributing to the claimant’s support, they must provide VA with an explanation for not doing so. 
 
Notes:  Consider the following when proposing an effective date (under 38 CFR 3.400(e)):
  • The granting of an apportionment on an original claim occurs when VA receives the request for an apportionment before it begins paying disability or survivors benefits to the primary beneficiary.
  • The granting of an apportionment on an other-than-original claim occurs when VA receives the request for an apportionment after it begins paying disability or survivors benefits to the primary beneficiary.
Reference:  For more information on the required elements of a notice of proposed adverse action, see M21-1, Part X, Subpart ii, 3.A.2.

VII.iii.1.A.2.d.  Undertaking Development With the Claimant 

  
It is often unnecessary to undertake development with a claimant that has submitted a completed VA Form 21-0788.  When additional evidence or information is needed from a claimant in order to make an equitable decision, prepare and send to the claimant a development letter that
  • asks the claimant to provide the missing evidence or information within 30 days, and
  • informs the claimant VA will make a decision based on the evidence of record after the 30-day response period has passed, unless they provide good cause for extending the time limit for a response.
Notes: 
  • If a completed VA Form 21-0788 from the claimant is not already of record (because the claimant filed the claim prior to March 24, 2015), ask the claimant to complete and return the form within 30 days.
  • When the development described in this block is necessary, undertake it at the same time the notice of proposed adverse action referenced in M21-1, Part VII, Subpart iii, 1.A.2.c, is prepared and sent to the beneficiary.
Reference:  For more information on reviewing forms for completeness and handling variances, see M21-1, Part II, Subpart iii, 1.A.4.

VII.iii.1.A.2.e.  Establishing the Estimated Withholding

  
After taking the actions described in the previous blocks of this topic, amend the beneficiary’s award by establishing a withholding of the estimated amount of the apportionment, effective the first of the month following the month in which the beneficiary’s response period (for the notice described in M21-1, Part VII, Subpart iii, 1.A.2.c) ends.
 
Example:  An estranged spouse files an apportionment claim on April 17.  The notice of proposed adverse action is sent to the beneficiary on May 22.  The withholding is effective August 1.
 
Note:  Do not change the dependency status in the corporate record until final action is taken to grant the apportionment.
 
Reference:  For more information on processing awards and adjustments in
the Veterans Benefits Management System (VBMS) Awards, see the VBMS Awards User Guide.

VII.iii.1.A.2.f.  Handling a Request for a Hearing

  
If, within 30 days of the release of the notice of VA’s proposal to withhold benefits from a beneficiary’s award, the beneficiary requests a hearing, and a final decision cannot be made before the end of the 65-day control period, amend the effective date of the withholding so that payments to the beneficiary are not reduced until after a final decision on the apportionment claim is made.
 
Note:  Since a hearing is a form of development for evidence in conjunction with a claim, leave the controlling EPs pending until the final decision is made.

 
 

3.  Deciding an Apportionment Claim and Notification of a Decision on an Apportionment Claim
 

 

Introduction

  
This topic contains information on deciding an apportionment claim and notifying the beneficiary and claimant of the decision, including

Change Date

  
February 19, 2025

VII.iii.1.A.3.a.  Using Information VA Form 21-0788 Provides When Deciding a Claim 

  
Once completed, VA Form 21-0788 provides decision makers with
  • the amount of monetary support the beneficiary is providing to the claimant, if any, and
  • information about the net worth and monthly income and expenses of the
    • beneficiary
    • claimant, and
    • claimant’s custodian, if applicable.
Consider income and expenses the beneficiary and claimant (and the claimant’s custodian, if applicable) individually report on the form when determining
  • whether an apportionment would create a financial hardship on the beneficiary and their dependent(s) (this is relevant only when considering entitlement to an apportionment under 38 CFR 3.451)
  • whether the claimant has a financial need for the apportionment (this is relevant only when considering entitlement to an apportionment under 38 CFR 3.451, 3.454(b), or 3.665(e)), and
  • the amount of benefits VA should apportion.
Exception:  Income and expenses reported on VA Form 21-0788 are irrelevant in determining the amount of an apportionment if the amount is dictated by regulation.  Such is the case with apportionments granted under the provisions of 38 CFR 3.454(a) unless the claimant is the Veteran’s dependent parent.
 
Note:  VA normally accepts as credible and accurate the entries claimants and beneficiaries make on VA Form 21-0788.  However, if a claimant or beneficiary reports, for example, an expense that is clearly inflated, claims processors may request documentary proof of the expense from the claimant or beneficiary.
 
Reference:  For more information on determining entitlement to an apportionment under 38 CFR 3.451 when the claimant is experiencing financial hardship, but paying an apportionment would create a hardship for the beneficiary and their dependent(s), see the fourth row of the table in M21-1, Part VII, Subpart iii, 1.A.3.b.

VII.iii.1.A.3.b.  
Actions to Take Following Expiration of the Claimant’s 30-Day Response Period

  
If VA sent a development letter to a claimant that requested completion of VA Form 21-0788 (because the claimant filed the claim prior to March 24, 2015) or requested additional evidence or information, follow the instructions in the table below after the claimant’s 30-day response period expires.
 
If …
Then …
the claimant responded, but the evidence of record fails to justify the granting of an apportionment
  • deny the pending claim
  • document the denial on VA Form 21-441
  • clear the pending EPs, and
  • send notification of the decision to the claimant and beneficiary.
Exception:  There is no requirement to document on VA Form 21-441 decisions to grant or deny entitlement to an apportionment under the provisions of
the claimant did not respond and the evidence of record fails to justify the granting of an apportionment
evidence of record justifies the granting of an apportionment, but
  • the suspense date of the EP 600 has not passed, and
  • the beneficiary has not yet responded to the corresponding notice of proposed adverse action
  • adjust the suspense date of the EP 130 so it matches the suspense date of the EP 600, and
  • take no further action until the earlier of the following events:
    • the beneficiary responds to the notice of proposed adverse action, or
    • the suspense date of the EP 600 passes.
  • VA is determining entitlement to an apportionment under 38 CFR 3.451
  • the claimant provided evidence of financial hardship, and
  • payment of an apportionment would create a hardship for the beneficiary (Veteran or surviving spouse) and their dependent(s)
  • deny the apportionment claim based on
    • the evidence received (if both parties respond within 65 days), or
    • the evidence of record (if only one or neither party responds within 65 days)
  • document the denial on VA Form 21-441
  • clear the pending EPs, and
  • send notification of the decision to the claimant and beneficiary.
Important:  Do not deny an apportionment claim on the basis that granting the claim would create a hardship for the primary beneficiary unless the primary beneficiary completed and returned VA Form 21-0788.
  • VA is determining entitlement to an apportionment under 38 CFR 3.451
  • the claimant provided evidence of financial hardship, and
  • payment of an apportionment would not create a hardship on the part of the beneficiary (Veteran or surviving spouse) and their dependent(s)
  • grant the apportionment claim based on
    • the evidence received (if both parties respond within 65 days), or
    • the evidence of record (if only one or neither party responds within 65 days)
  • document the decision on VA Form 21-441
  • clear the pending EPs, and
  • send notification of the decision to the claimant and beneficiary.
 

VII.iii.1.A.3.c.  Considering Evidence VA Receives After Making a Decision But Before the Due-Process Period Ends

  
Follow the instructions in the table below when
  • VA decides an apportionment claim before the end of the 65-day due-process period that is afforded the beneficiary, and
  • VA receives new evidence after making the decision but before the end of the 65-day due-process period.  
If the new evidence …
Then …
will change the outcome of the decision
prepare a new apportionment decision.
will not change the outcome of the decision
  • annotate the evidence to reflect that it does not affect the decision, and
  • notify the beneficiary and claimant that VA considered the new evidence but did not conclude that a revision of the prior decision was in order. 
Note:  To annotate the evidence in VBMS, add the annotation in the SUBJECT field under DOCUMENT PROPERTIES.
 

VII.iii.1.A.3.d.  Beneficiaries That Fail to Explain Why They Are Providing No Support

  
If a beneficiary that is providing no support to a claimant fails to provide an explanation for not doing so (as requested in the notice of proposed adverse action referenced in M21-1, Part VII, Subpart iii, 1.A.2.c), make a decision that is based on the other evidence of record.
 
If a conflict arises regarding the amount of support a beneficiary provides a claimant, ask the beneficiary to submit proof of their contributions, such as cancelled checks and/or receipts.
 
Exception:  Disregard the instructions in this block if the provisions of 38 CFR 3.450 are not for consideration when determining entitlement to an apportionment.

VII.iii.1.A.3.e.  Determining the Amount of an Apportionment

  
Except as noted in the table below, the regulation under which VA grants entitlement to an apportionment dictates the amount of benefits VA may apportion.  (M21-1, Part VII, Subpart iii 1.A.1.d, identifies the regulations under which VA may grant entitlement to an apportionment.)
 
Examples:
  • 38 CFR 3.450 allows for the apportionment of “all or part” of a beneficiary’s VA benefits.
  • 38 CFR 3.451 “ordinarily” allows for the apportionment of between 20- and 50-percent of a beneficiary’s VA benefits.
If the benefit is …
Then determine the amount to apportion under the provisions of …
disability compensation
38 CFR 3.451 if entitlement to the apportionment was granted under the provisions of 38 CFR 3.450 or 3.451.
 
Authority:  38 CFR 3.453.
DIC
38 CFR 3.461(b)(1) if entitlement to the apportionment was granted under the provisions of 38 CFR 3.450.
Section 306 or Old Law survivors pension
38 CFR 3.460(b) if entitlement to the apportionment was granted under the provisions of 38 CFR 3.450.
 
Note:  The “apportionment . . . rates approved by the Under Secretary of Benefits” that are referenced in 38 CFR 3.460(b) are viewable in the historical M21-1, Part I, Appendix B, Section I.
 
Important: 
  • VA typically apportions to a surviving child the amount of additional VA benefits the surviving spouse receives for the child if the
    • apportionment was granted under 38 CFR 3.450, and
    • benefit is DIC or Section 306 or Old Law survivors pension.
  • The additional amount of benefits to which a surviving spouse is entitled based on the need of the aid and attendance of another person is not apportionable if the benefit is
    • current-law Survivor’s Pension, or
    • DIC or Section 306 or Old Law survivors pension and the apportionment was granted under 38 CFR 3.450.

VII.iii.1.A.3.f.  Rounding the Apportioned Amount

  
Choose an even dollar amount (no cents) when determining the amount of an apportionment.
 
Important:  If multiple apportionees are sharing a single apportionment, and dividing the single apportionment among the apportionees results in an apportionment to each apportionee that includes a fraction of a cent, drop the fraction of a cent, per 38 CFR 3.112.  Do not, however, round the amount of the individual apportionments in such a case to an even dollar amount. 
 
Example:  An apportionment of $550.00 to three children would result in an apportionment of $183.33 to each child.
  

VII.iii.1.A.3.g.  Preparing VA Form 21-441 for a Favorable or Unfavorable Apportionment Decision

  
Document both favorable and unfavorable decisions on claims for apportionment using VA Form 21-441.
 
Exceptions:  For exceptions to the requirement described in the preceding paragraph, see
Important: 
  • If a claimant’s entitlement to an apportionment is considered under the provisions of both 38 CFR 3.450 and 38 CFR 3.451 but entitlement is ultimately denied, explain on VA Form 21-441 why entitlement could not be granted under either of the regulations.
  • If a decision is made to grant an apportionment for a child that is under the age of 18, indicate on VA Form 21-441 that the apportionment for the child will end when the child turns 18.
  • Do not attach a copy of the VA Form 21-441 to decision notices for the primary beneficiary and claimant.

VII.iii.1.A.3.h.  Effect of Deferred Awards on Pending Apportionment Claims

  
Use the table below to determine what award actions may be taken while one or more awards are deferred.
 
If an award is deferred for …
Then process the …
one or more pending apportionment claims
primary beneficiary’s award for the required withheld amount either
  • alone, or
  • with the award to any other apportionee.
Note:  The pending apportionee award may be processed at any time after the primary beneficiary’s corporate record is established, without the need to process another primary beneficiary award.
an incompetent primary beneficiary due to the appointment of a fiduciary
apportionee’s award without waiting for resolution of the deferred issue.
 

VII.iii.1.A.3.i.  Determining the Effective Date of an Apportionment and the Appropriate Award Action to Take After Making an Apportionment Decision

  
After making a decision to grant an apportionment, use the table below to determine the
  • effective date for the apportioned award, and
  • appropriate award action to take.
If the apportionment is …
Then …
granted, and the primary beneficiary’s award was running at the time the apportionment claim was received
  • retroactively adjust the award of the primary beneficiary effective the first day of the month after the date the apportionment claim was received, creating any resulting overpayment against the primary beneficiary, and
  • make the apportionee award effective the first day of the month after the date the apportionment claim was received. 
Exception:  Follow the instructions in M21-1, Part VII, Subpart iii, 1.A.3.j if

  • the apportionment is to a child for whom VA was previously apportioning benefits until the child turned 18, and
  • VA received the child’s apportionment claim within one year of the child’s 18th birthday. 
Reference:  For more information on the actions described in the bullets above, see
granted, and the apportionment claim was received with or before the primary beneficiary’s original claim
pay the apportionment on the basis of the facts found.
 
Note:  Payment of the apportionment may be from the same effective date as the effective date of the primary beneficiary’s award.
granted and the apportioned amount is greater than the withheld amount
  • pay the apportionment for the amount previously withheld
  • determine the additional amount to be apportioned, as well as the effective date, and
  • send the primary beneficiary a notice of proposed adverse action covering the additional amount.
denied
restore to the beneficiary all funds that were withheld in anticipation of an apportionment.
 
Note:  An apportionment award for a child that is under the age of 18 must reflect termination of the apportionment on the date the child turns 18.

VII.iii.1.A.3.j.  Commencing an Apportionment to a Child For Whom VA Was Previously Apportioning Benefits Until the Child Turned 18  

  
After deciding to grant an apportionment to a child for whom VA was previously apportioning benefits until the child turned 18, follow the instructions in
  • the table below if VA received the child’s apportionment claim within one year of their 18th birthday, or
  • M21-1, Part VII, Subpart iii, 1.A.3.i if VA received the child’s apportionment claim one or more years after their 18th birthday. 
If the child …
Then …
continuously attended school after turning 18
 
 
  • begin paying the apportionment to the child effective the first of the month following the child’s 18th birthday, and
  • adjust the primary beneficiary’s award to reflect payment of the apportionment from the same effective date. 
References:  For more information on
did not attend school for a period of time after turning 18
  • begin paying the apportionment to the child effective the first of the month following the date the child began attending school, and
  • adjust the primary beneficiary’s award to reflect payment of the apportionment from the same effective date.
 
Important:  It might be necessary, under the circumstances described in this block, to require separate VA Forms 21-674, Request for Approval of School Attendance, from the primary beneficiary and the child.
  • The primary beneficiary must submit VA Form 21-674 as certification of school attendance for the purpose of establishing entitlement to additional benefits for the child.  VA may use the same VA Form 21-674 to establish the child’s eligibility for an apportionment as a school child.
  • Unless the primary beneficiary submits VA Form 21-674, the child must submit VA Form 21-674 to establish eligibility for an apportionment as a school child.  VA may not use a VA Form 21-674 that a child submits to establish the primary beneficiary’s entitlement to additional benefits for the child.

VII.iii.1.A.3.k.  Distributing the Available Amount for an Institutionalized Veteran

  
Withhold the difference between the total award and the monthly rate payable on behalf of the Veteran when
  • an institutionalized Veteran is to be paid only a portion of the total award, and
  • less than the full balance is apportioned to a dependent. 
Note:  The situation described in this block may be encountered when VA receives a claim for apportionment from a parent or estranged spouse while the Veteran resides in a VA nursing home or domiciliary. 
 
Reference:  For more information on adjustments due to hospitalization, see

VII.iii.1.A.3.l.  Effect of Rate Changes on the Primary Award

  
A Veteran’s award may be subject to future rate changes that will not be reflected in an apportionee’s award.
 
Example:  The Veteran’s award (total award) will be prospectively reduced based on a reduction in her combined disability rating from 100 percent to 80 percent.  However, there is no change in the apportioned amount.
 
An apportionee award must not provide for any future rate change for any period beyond the last future rate provided for by the Veteran’s award.

VII.iii.1.A.3.m.  Notifying the Beneficiary and Claimant of the Apportionment Decision

  
Advise both the primary beneficiary and the claimant of the apportionment decision and furnish them notice of
  • the effective date of payment, if the apportionment is granted
  • the amount of the apportionment, if granted
  • the reasons for the decision
  • the evidence used to make the decision 
  • their rights to representation, and
  • the right to appeal the decision by filing a notice of disagreement (NOD) with the Board of Veterans Appeals (Board) within 60 days from the date of the decision notice, as provided in
Exception:  There is no requirement to notify a beneficiary that VA has denied a claim for an apportionment if VA decided the apportionment claim without issuing the notice of proposed adverse action described in M21-1, Part VII, Subpart iii, 1.A.2.c.  (VA does not issue a notice of proposed adverse action to beneficiaries before deciding apportionment claims under the provisions of 38 CFR 3.452(c), 3.454, or 3.665(e).)
 
Important: 
  • If a decision is made to grant an apportionment for a child that is under the age of 18, inform the claimant in the decision notice that the apportionment to that child will automatically end when the child turns 18.  At that point in time, if the child wishes to continue receiving the apportionment, they must submit a claim, using VA Form 21-0788, and certify school attendance, using VA Form 21-674.
  • An apportionment claim is a contested claim.
    • Attach VA Form 20-0998, Your Right to Seek Review of Our Decision, to decision notices involving an apportionment claim.
    • Claimants have 60 days – not one year – to appeal a decision to the Board on a contested claim.
    • Decision review options outside of an appeal to the Board do not exist for decisions on contested claims.
  • Because contested claims commonly involve specific, factual findings that are favorable to one party but not the other, decision notices communicating the outcome of a contested claim, such as an apportionment claim, need not identify or discuss
    • findings found favorable to the claimant under 38 CFR 3.104(c), or
    • elements required to grant the claim that were not met.

VII.iii.1.A.3.n.  Handling Evidence Received After the Appeal Period Ends

  
Treat additional evidence in support of a previously denied claim for an apportionment that an RO receives after the 60-day appeal period ends as a new claim for an apportionment.  If the claimant did not include VA Form 21-0788 with the additional evidence, follow the instructions in M21-1, Part II, Subpart iii, 2.G.1.a, for handling the claimant’s action as a request for an application.
 
Exception:  If an appeal of the prior decision on the apportionment claim is pending with the Board, forward the additional evidence to the Board according to the instructions in M21-1, Part II, Subpart i, 1.A.

 

4.  Handling a Claim for Apportionment When a Veteran’s Award Is Being Offset Under 38 U.S.C. 1151 or Withheld Due to the Receipt of Separation Benefits

 

Introduction

  

This topic contains information on handling a claim for apportionment when a Veteran’s award is being offset under 38 U.S.C. 1151 or withheld due to the receipt of separation benefits, including

Change Date

   February 19, 2025

VII.iii.1.A.4.a.  Effect of an Offset or Withholding of a Veteran’s Entire Award on a Claim for Apportionment

  
In some cases, a Veteran’s total award must be
  • offset under 38 U.S.C. 1151, or
  • withheld to recoup separation benefits the Veteran received.
In such cases, the Veteran’s award is not subject to apportionment until the offset or withholding ends.
 
Exception:  When a Veteran, whose disability compensation is being withheld in its entirety to recoup separation benefits, is incarcerated following conviction of a felony, VA must reduce the withholding to the amount specified in 38 CFR 3.665(d), effective the 61st day of incarceration. 
 
Once VA makes the reduction, the remaining disability compensation (which was unavailable for apportionment prior to incarceration because of the withholding) becomes available for apportionment.  When incarceration ends, the apportionment ends, as well, and withholding of the Veteran’s entire award resumes.

References:  For more information on

VII.iii.1.A.4.b.  Actions to Take Following Receipt of a Claim for Apportionment When a Veteran’s Entire Award Is Being Offset or Withheld

  
Following receipt of an apportionment claim for a Veteran whose entire award is being offset under 38 U.S.C. 1151, or withheld to recoup separation benefits,
  • deny the apportionment claim
  • inform the claimant(s) that
    • there are no monetary benefits available for apportionment, and
    • they may submit a new apportionment claim when funds are anticipated to be available (include the approximate date recoupment/offset is scheduled to terminate)
  • attach VA Form 20-0998, and
  • clear the pending EP.

VII.iii.1.A.4.c.  Action to Take if Only Part of a Veteran’s Award Is Being Offset or Withheld

  
In some cases,
  • a Veteran is entitled to benefits for two or more disabilities, and
  • the amount to be recouped is only the amount payable for the disability(ies) which resulted in
    • an award under 38 U.S.C. 1151, or
    • the payment of disability severance pay.

In such cases,

  • determine the amount to be apportioned or withheld on the basis of the balance of compensation payable to the Veteran, not on the basis of the total award, and
  • do not make an apportionment if the balance of compensation does not permit payment of a reasonable amount to any apportionee. 

References:  For information on