In This Section

Introduction

• authorization responsibilities
• regular monthly benefits
• benefits awarded, and
• when payment is barred.

Change Date

XI.ii.3.E.1.a.  Authorization Responsibilities

• processing awards and disallowances of accrued benefits, and
• providing notification of the accrued benefits decision.

• processing awards and disallowances of accrued benefits, see the Veterans Benefits Management System (VBMS) Awards User Guide
• favorable findings, see 38 CFR 3.104(c), and
• notification requirements, see M21-1, Part VI, Subpart i, 1.B.1.b.

XI.ii.3.E.1.b.  Regular Monthly Benefits

• special allowance under 38 U.S.C. 1312(a), Restored Entitlement Program for Survivors, and
• insurance.

• special allowance under 38 U.S.C. 1312(a), see M21-1, Part XII, Subpart ii, 2.A, and
• insurance operations, see insurance publications.

XI.ii.3.E.1.c.  Benefits Awarded

XI.ii.3.E.1.d.  When Payment Is Barred

• any payment of accrued amounts to the wrongdoer, or
• the payment of an increased share, if in the same class of beneficiaries.

Introduction

• limitation on retroactive periods, and
• exceptions to the limitation on retroactive periods.

Change Date

XI.ii.3.E.2.a.  Limitation on Retroactive Periods

• payment of accrued benefits when death occurs
  • on or after January 1, 1958, but before October 9, 1996, see Public Law (PL) 85-857
  • on or after October 9, 1996, but before December 16, 2003, see PL 104-275, and
  • on or after December 16, 2003, see PL 108-183, and
• limitation of payment, see Terry v. Principi, 367 F.3d 1291 (Fed. Cir. 2004). 

XI.ii.3.E.2.b.  Exceptions to the Limitation on Retroactive Periods

Introduction

• paying accrued based on audit error worksheets (AEWs)
• computation of accrued amounts
• paying accrued benefits when a surviving spouse is entitled to MOD
• returned and canceled benefits payable as accrued
• recouping overpayments when computing accrued benefits, and
• determining accrued payable when deceased Veteran received military retired pay (MRP) and is entitled to compensation.

Change Date

XI.ii.3.E.3.a.  Paying Accrued Based on AEWs

XI.ii.3.E.3.b.  Computation of Accrued Amounts

XI.ii.3.E.3.c.  Paying Accrued Benefits When a Surviving Spouse Is Entitled to MOD

XI.ii.3.E.3.d.  Returned and Canceled Benefits Payable as Accrued

• benefits not negotiated prior to death, see M21-1, Part XI, Subpart ii, 3.E.4.
• the death of a beneficiary receiving educational benefits, see M22-4, Part 4, 11.27, and
• returned and cancellation of checks, see
  • 38 U.S.C. 5122, and
  • 38 CFR 3.1003.

XI.ii.3.E.3.e.  Recouping Overpayments When Computing Accrued Benefits

• VBMS Awards User Guide, and
• VBMS Rating User Guide.

XI.ii.3.E.3.f.  Determining Accrued Payable When Deceased Veteran Received MRP and Is Entitled to Compensation

• the amount of compensation benefits that can be paid as accrued, if any, or
• if full payment of compensation benefits can be paid as accrued because the
  • Veteran meets the CRDP eligibility requirement for the entire period covered by the award, and
  • compensation eligibility is after December 31, 2003.

Introduction

• definition of non-negotiated benefits
• non-negotiated benefits
  • payable, and
  • not payable
• inability to distribute non-negotiated benefits, and
• amounts not payable as accrued.

Change Date

XI.ii.3.E.4.a.  Definition:  Non-Negotiated Benefits

• payment of accrued as reimbursement, see M21-1, Part XI, Subpart ii, 3.E.11, and
• entitlement to
  • accrued benefits, see 38 U.S.C. 5121, and
  • non-negotiated benefits, see
    • 38 U.S.C. 5122, and
    • 38 CFR 3.1003.

XI.ii.3.E.4.b.  Non-Negotiated Benefits Payable

• handling canceled benefit payments, see
  • 38 U.S.C. 5122, and
  • 38 CFR 3.1003, and
• the auto established EP 290, generated when a payment is returned and proceeds are established, see M21-4, Appendix B, 290.

XI.ii.3.E.4.c.  Non-Negotiated Benefits Not Payable

• delivered after the payee’s death or representing payment for a period extending beyond the date of termination due to death, and/or
• in payment of a lump sum representing amounts withheld because of hospitalization or institutionalization of a Veteran without a spouse or child(ren) who was
  • competent and receiving Old-Law Pension, because the amounts would be payable as an accrued lump sum under 38 CFR 3.1001, or
  • incompetent and receiving any type of pension, because the amounts would not be payable to anyone under 38 CFR 3.1007.

XI.ii.3.E.4.d.  Inability to Distribute Non-Negotiated Benefits

XI.ii.3.E.4.e.  Amounts Not Payable as Accrued

• No Accrued Payable, if none of the proceeds of the returned and canceled benefit payment is payable on the basis of either relationship or reimbursement.
• Amount Only Partially Paid, if less than the entire amount of the proceeds of the returned and canceled benefit payment is payable on the basis of either relationship or reimbursement.

• entitlement on the basis of relationship, see M21-1, Part XI, Subpart ii, 3.A.5, and
• establishing shares of claimants, see M21-1, Part XI, Subpart ii, 3.E.14.

Introduction

• disposition of Veterans Pension amounts under 38 CFR 3.1001 and 38 CFR 3.1007
• order of preference for accrued lump sum benefits
• time limitations for accrued lump sum benefits
• basis for computation of accrued lump sum
• change in disability and accrued lump sum
• retroactive increases for accrued lump sum, and
• distinguishing between accrued lump sum and accrued under 38 CFR 3.1000.

Change Date

XI.ii.3.E.5.a.  Disposition of Veterans Pension Amounts Under 38 CFR 3.1001 and 38 CFR 3.1007

• benefits not payable, see M21-1, Part XI, Subpart ii, 3.E.4.c, and
• reduction in benefits because of hospitalization in Old-Law Pension cases, see 38 CFR 3.551(b).

XI.ii.3.E.5.b.  Order of Preference for Accrued Lump Sum Benefits

XI.ii.3.E.5.c.  Time Limitations for Accrued Lump Sum Benefits

• A claim for accrued lump sum must be filed within five years from the date of the Veteran’s death.
• There is no time limit for the submission of evidence of an accrued claim.
• There is no restriction on the retroactive period that may be covered by an award of lump sum accrued benefits.

XI.ii.3.E.5.d.  Basis for Computation of Accrued Lump Sum

XI.ii.3.E.5.e.  Change in Disability and Accrued Lump Sum

XI.ii.3.E.5.f.  Retroactive Increases for Accrued Lump Sum

XI.ii.3.E.5.g.  Distinguishing Between Accrued Lump Sum and Accrued Under 38 CFR 3.1000

• basic entitlement to benefits under 38 U.S.C. 5121, see 38 CFR 3.1000
• reduction in benefits because of hospitalization in Old-Law Pension cases, see 38 CFR 3.551(b), and
• hospitalization of competent Veterans, see 38 CFR 3.1001.

Introduction

• PFOP under regional office (RO) control
• deaths on or after December 1, 1959, for PFOPs, and
• non-VA funds in a PFOP account.

Change Date

XI.ii.3.E.6.a.  PFOP Under RO Control

• establishment and handling of PFOP accounts, see M21-1, Part X, Subpart ii, 6.F.4, and
• PFOPs, see 38 CFR 3.1009.

XI.ii.3.E.6.b.  Deaths on or After December 1, 1959, for PFOPs

XI.ii.3.E.6.c.  Non-VA Funds in a PFOP Account

Introduction

• differences between PFOP and accrued lump sum
• limitations to gratuitous benefits in PFOP and accrued lump sum
• persons entitled to gratuitous benefits in PFOP and accrued lump sum, and
• effect of processing a notice of death.

Change Date

XI.ii.3.E.7.a.  Differences Between PFOP and Accrued Lump Sum

• PFOP accrued represents funds deposited by VA to the account of the incompetent Veterans.
• Accrued lump sum represents amounts withheld from awards to hospitalized, competent Veterans.

XI.ii.3.E.7.b.  Limitations to Gratuitous Benefits in PFOP and Accrued Lump Sum

• Claim for gratuitous funds must be filed within five years from the date of the Veteran’s death.
• There is no restriction on the retroactive period, which may be covered by the funds to be awarded.
• Once a claim has been filed, there is no time limit for the submission of evidence requested to perfect the claim.  When the claimant fails to submit requested evidence within one year in cases which have been referred to the authorization activity for certification of persons entitled, the authorization activity will, at the expiration of the established control period
  • inform the referring activity to transfer (redeposit) the funds to the applicable current appropriation, and
  • state the reason for redepositing the funds.

• hospitalization of competent Veterans, see 38 CFR 3.1001, and
• paying benefits to the person having custody and control of incompetent or minor beneficiaries, see 38 U.S.C. 5502(d).

XI.ii.3.E.7.c.  Persons Entitled to Gratuitous Benefits in PFOP and Accrued Lump Sum

• the special provisions restricting payment of PFOP accrued as reimbursement, see M21-1, Part XI, Subpart ii, 3.E.6
• who is eligible to receive payment of the PFOP, see 38 CFR 3.1009(a), and
• hospitalization of competent Veterans, see 38 CFR 3.1001.

XI.ii.3.E.7.d.  Effect of Processing a Notice of Death

Introduction

• analysis of PFOP accounts
• initiation of claims for gratuitous benefits from PFOPs, and
• gratuitous PFOP payable as reimbursement.

Change Date

XI.ii.3.E.8.a.  Analysis of PFOP Accounts

XI.ii.3.E.8.b.  Initiation of Claims for Gratuitous Benefits From PFOPs

• Registrar of the VA hospital or the finance activity in the RO having jurisdiction of the account
  • informs the person or persons of potential rights, and
  • furnishes the necessary application form, VA Form 21-6898, Application for Amounts on Deposit for Deceased Veteran, and
• RO processes the claim for payment by the finance activity in the hospital or by the Hines ITC.

XI.ii.3.E.8.c.  Gratuitous PFOP Payable as Reimbursement

Introduction

• cases in which there are no heirs within permitted class for gratuitous benefits from PFOP, and
• record of transfer (redeposit) of PFOP funds.

Change Date

XI.ii.3.E.9.a. Cases in Which There Are No Heirs Within Permitted Class for Gratuitous Benefits From PFOP

XI.ii.3.E.9.b.  Record of Transfer (Redeposit) of PFOP Funds

Introduction

• funds under VA hospital control, and
• accrued PFOP authorized by the VSC or PMC.

Change Date

XI.ii.3.E.10.a.  Funds Under VA Hospital Control

XI.ii.3.E.10.b.  Accrued PFOP Authorized by the VSC or PMC

• a claim for the gratuitous portion of funds in PFOP accounts under RO control (maintained by the Hines ITC) for payment as accrued, and
• VA hospital PFOP funds after transfer (redeposit) when reimbursement is the only basis for payment as PFOP accrued.

• dispose of the accrued gratuitous funds in the PFOP account by award or disallowance action, and
• notify the claimant of the action taken including the right of appeal.

• PFOP accounts, see M21-1, Part XI, Subpart ii, 3.E.6, and
• processing payment or disallowance of accrued benefits, see VBMS Awards User Guide.

Introduction

• accrued benefits used to reimburse
• claims for reimbursement
• example of a claim for reimbursement
• claims by a creditor
• cases in which
  • the estate is the claimant
  • the estate closed prior to the approval of an award, and
  • no administrator or executor is appointed, and
• claims not filed during lifetime.

Change Date

XI.ii.3.E.11.a.  Accrued Benefits Used to Reimburse

XI.ii.3.E.11.b.  Claims for Reimbursement

• paid the expenses of the last illness and/or burial of the deceased beneficiary, or
• is held responsible by the unpaid creditors for the payment of the deceased beneficiary’s bills.

• the types of benefits that can be paid as accrued, see M21-1, Part I, Subpart ii, 2
• development for accrued benefits and the right to substitute, see M21-1 Part XI, Subpart ii, 3.C, and
• claims applications and initial actions, see M21-1, Part II, Subpart iii, 1.A.

XI.ii.3.E.11.c.  Example:  Claim for Reimbursement

XI.ii.3.E.11.d. Claims by a Creditor

• all other creditors, and
• any person who
  • is shown to have an interest in the accrued benefits because of service rendered to the deceased beneficiary related to last illness or burial, and
  • holds the creditor responsible for the payment of their claim.

XI.ii.3.E.11.e.  Cases in Which the Estate Is the Claimant

XI.ii.3.E.11.f.  Cases in Which the Estate Closed Prior to the Approval of an Award

• obtain a certified copy of the discharge of the fiduciary, including the court order of distribution, and
• authorize payment to the distributees shown.

XI.ii.3.E.11.g. Cases in Which No Administrator or Executor Is Appointed

• Distribution of any amount due may be made to the person(s) entitled under the intestacy laws of the State of the decedent’s domicile.
• Payment to the estate can only be made if payment of the accrued benefit, based on relationship or reimbursement, is not applicable.
• If there is more than one estate representative, each person must complete a VA Form 21P-601.

XI.ii.3.E.11.h.  Claims Not Filed During Lifetime

Introduction

• payment of accrued as reimbursement
• medicinal expenses as reimbursable expenses
• nursing expenses as reimbursable expenses
• transportation expenses as reimbursable expenses
• miscellaneous items as reimbursable expenses, and
• burial payment made to accrued or substitute claimant.

Change Date

XI.ii.3.E.12.a.  Payment of Accrued as Reimbursement

XI.ii.3.E.12.b.  Medicinal Expenses as Reimbursable Expenses

XI.ii.3.E.12.c.  Nursing Expenses as Reimbursable Expenses

XI.ii.3.E.12.d.   Transportation Expenses as Reimbursable Expenses

• payment to an estate of burial benefits, see M21-1, Part XI, Subpart iii, 1.C.2
• handling death while traveling under prior authorization or while hospitalized by VA, see 38 CFR 3.1706, and
• handling payment of transportation costs, see 38 CFR 3.1709.

XI.ii.3.E.12.e.  Miscellaneous Items as Reimbursable Expenses

• ambulance or other conveyance to a hospital
• summoning or procuring medical assistance, and
• arranging for proper medical care from the commencement of the last illness.

XI.ii.3.E.12.f.  Burial Payment Made to Accrued or Substitute Claimant

Introduction

• by estate or personal funds, and
• to homes for the aged and infirm.

Change Date

XI.ii.3.E.13.a.  Payment by Estate or Personal Funds

XI.ii.3.E.13.b.  Payment to Homes for the Aged and Infirm

Introduction

• when the total expenses
  • do not exceed total accrued payable, and
  • exceed total accrued payable, and
• time limits for filing claims for accrued amounts payable as reimbursement.

Change Date

XI.ii.3.E.14.a. When the Total Expenses Do Not Exceed Total Accrued Payable

XI.ii.3.E.14.b. When the Total Expenses Exceed Total Accrued Payable

XI.ii.3.E.14.c. Time Limits for Filing Claims for Accrued Amounts Payable as Reimbursement

• basic entitlement to benefits under 38 U.S.C. 5121, see 38 CFR 3.1000
• hospitalization of competent Veterans, see 38 CFR 3.1001
• PFOP, see 38 CFR 3.1009, and
• payment of proceeds of non-negotiated payments, see M21-1, Part XI, Subpart ii, 3.E.4.

Introduction

• general policy for Railroad Retirement Act survivor benefits, and
• burial and last illness expenses and the Railroad Retirement Board (RRB) survivors benefit reimbursement.

Change Date

XI.ii.3.E.15.a.  General Policy for Railroad Retirement Act Survivor Benefits

XI.ii.3.E.15.b.  Burial and Last Illness Expenses and the RRB Survivors Benefit Reimbursement

• reimbursement for burial expenses in excess of those reimbursed by the RRB, and
• reimbursement for the last illness expenses.

Introduction

• borrowed money used to pay the expenses of last illness or burial
• joint accounts used to pay the expenses of last illness or burial, and
• acceptability of statements.

Change Date

XI.ii.3.E.16.a.  Borrowed Money Used to Pay the Expenses of Last Illness or Burial

XI.ii.3.E.16.b.  Joint Accounts Used to Pay the Expenses of Last Illness or Burial

XI.ii.3.E.16.c.  Acceptability of Statements

Introduction

• general jurisdiction of accrued claims and requests for substitution
• jurisdiction of accrued claims with an associated claim for Dependency and Indemnity Compensation (DIC)
• EP control for substitution and accrued claims
• examples of when to establish and dispose of EP 290
• disposition of the EP control for
  • unfavorable substitution decisions, and
  • favorable substitution decisions
• EP control and disposition for
  • pending legacy appeals
  • Appeals Modernization Act (AMA) Board of Veterans’ Appeals (Board) appeals
  • initial claims or claims of clear and unmistakable errors (CUEs), and
  • supplemental claims and higher-level reviews (HLRs), and
• claims in which the period to file a review has not expired.

Change Date

XI.ii.3.E.17.a. General Jurisdiction of Accrued Claims and Requests for Substitution

XI.ii.3.E.17.b.  Jurisdiction of Accrued Claims With an Associated Claim for DIC

XI.ii.3.E.17.c.  EP Control for Substitution and Accrued Claims

XI.ii.3.E.17.d.  Examples:  When to Establish and Dispose of EP 290

XI.ii.3.E.17.e.  Disposition of the EP Control for Unfavorable Substitution Decisions

XI.ii.3.E.17.f.  Disposition of the EP Control for Favorable Substitution Decisions