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Updated Jun 30, 2021

In This Section
 
This section contains the following topics:
 
 

1.  General Information on the Prohibition Against Duplication of Benefits

Introduction

  
This topic contains general information on the prohibition against duplication of benefits, including

Change Date

  
July 12, 2015

XII.i.3.F.1.a.  Application of Prohibition Against Duplication of Benefits

  
The prohibition against duplication of benefits applies whenever the claimant receives a sum of money or property to settle a legal claim arising from the death of the Veteran.

XII.i.3.F.1.b.  Definition: Judgment

  
A judgment includes all of the following:
  • settlement
  • compromise
  • administrative award, or
  • tort award.

XII.i.3.F.1.c. Consideration of Judgments

  
It makes no difference
  • what the judgment amount to the claimant is called, or
  • whether the judgment compensates for
    • economic loss, such as loss of income, or
    • non-economic loss, such as pain and suffering.

XII.i.3.F.1.d.  Resolution of Tort Claims

  
A tort claim against the government is resolved by
  • General Counsel
  • the U.S. Attorney General, or
  • District Counsel.
Note:  The circumstances of the individual case determine who is responsible for resolving the tort claim.

XII.i.3.F.1.e.  Notification of Favorable Resolutions

  
In any case that is resolved in favor of the claimant the District Counsel refers notice of the results of the tort claim to the manager of the pension management center (PMC) having jurisdiction of the claim.

2.  Awards Involving the Prohibition Against Duplication of Benefits Under 38 U.S.C. 1151

Introduction

  
This topic contains information on awards involving the prohibition against duplication of benefits, including

Change Date

  
February 2, 2021

XII.i.3.F.2.a. Criteria for Deferring Award Action in DIC Awards Under 38 U.S.C. 1151

  
Dependency and Indemnity Compensation (DIC) awards under 38 U.S.C. 1151 are subject to offset effective the first of the month after the month during which the judgment becomes final.
 
Do not defer a DIC award just because a tort claim has been filed unless there is reason to believe it has been finalized.

XII.i.3.F.2.b.   Tort Claims Resolved Before December 1, 1962

  
An administrative award or settlement that became final before December 1, 1962, is a bar to all further payments of death compensation or DIC under 38 U.S.C. 1151.
 
A court judgment that became final before December 1, 1962, is not
  • a bar to payment of Death Compensation or DIC under 38 U.S.C. 1151, or
  • subject to offset, unless a bar or offset is provided for by the terms of the judgment, per 38 CFR 3.800.

XII.i.3.F.2.c.   Tort Claims Resolved on or After December 1, 1962

  
Regardless of the date of the incident on which the claim is based, the amount received by a claimant from a tort claim resolved on or after December 1, 1962, must be recouped from DIC benefits granted under 38 U.S.C. 1151 per 38 CFR 3.800.
 
Note:  If the Veteran was entitled to compensation under 38 U.S.C. 1151 and also won a tort judgment during his or her lifetime, DIC can be payable at the full rate assuming all other eligibility requirements are met.  The Veteran’s injury would have been the basis of the judgment, not the Veteran’s death.

XII.i.3.F.2.d.   Responsibility for Determining the Distribution of Monies to Other Beneficiaries

  
The individual distribution of monies must be determined if a judgment
  • is made to, or for, two or more persons (either in individual capacities, or as a personal representative(s) of the estate), and
  • involves a claimant whose award is subject to offset.
The PMC Manager should request that District Counsel determine the individual distribution of the
  • judgement award
  • settlement, or
  • compromise payment.

XII.i.3.F.2.e.   Effects of a Judgment on Pension Benefits

  
No offset is required if a tort claim is resolved in favor of a claimant who is
  • in receipt of pension, or
  • eligible for DIC under 38 U.S.C. 1151 but continues to receive pension instead of DIC.
Note:  The net proceeds of the judgment are countable income for pension purposes under 38 CFR 3.262(i) and 38 CFR 3.271(g).

XII.i.3.F.2.f. Effects of a Judgment on Parent’s DIC

  
Under 38 CFR 3.262(i), if a tort claim is concluded in favor of a parent in receipt of DIC
  • an offset is required, and
  • the net proceeds of the judgment are countable income for DIC purposes.

XII.i.3.F.2.g.   Notice of Proposed Adverse Action

  
Do not adjust an award to account for the receipt of proceeds of a judgment without providing a notice of proposed adverse action, unless the claimant
  • is the source of the information, and
  • understands how the judgment will affect the amount of benefits payable.

3.  Awards Involving the Prohibition Against Duplication of Benefits Not Under 38 U.S.C. 1151

Introduction
  
This topic contains general information on prohibition against duplication of benefits, including

Change Date

  
March 31, 2021

XII.i.3.F.3.a.  Identifying When DIC Must Be Recouped

  
DIC must be recouped in an amount equal to the money, and/or fair market value of the property received, if a claimant receives money or property of value based on any cause of action for damages for the death of the Veteran as a result of a
  • judicial or administrative proceeding
  • settlement
  • compromise, or
  • Radiation Exposure Compensation Act settlement payment.
Exception:  No offset is required if a settlement or judgement under the Federal Tort Claims Act 28 U.S.C. 2672 is concluded in favor of a survivor who is granted DIC under 38 U.S.C. 1310 (direct service connection).
 
Important:  Attorney’s fees, court costs, and other expenses incident to the civil claim are not deductible from the total amount awarded or accepted.
 
Notes:
  • Take award action even if the claimant has made a positive statement that a claim has been, or will be, made through court action or administrative channels.
  • The requirement for recoupment exists even if the award or settlement was made prior to the passage of Public Law 95-479.

XII.i.3.F.3.b.  Determining the Offset Effective Date

  
Do not make the offset required in the event of a judgment, compromise, or administrative award effective prior to the first day of the month following the month that such a judgment, compromise, or administrative award is granted.
 
The offset effective date should be the first day of the month after the month in which the judgment was made.
 
Example:  If the judgment was issued March 17, 2020, then the effective date of the offset would be April 1, 2020.
 
Note:  Explain the offset requirements of the law in the notification letter.

XII.i.3.F.3.c.  Requesting Updated Claimant Information

  
Upon initiation of recoupment, inform the claimant that, although no payment of DIC may be made until the amount received is recouped, the claimant must keep the Department of Veterans Affairs (VA) informed of his/her current address, marital status, and dependency changes so that there will be no delay in resuming benefits.

XII.i.3.F.3.d.  Preparing Awards That Include an Offset

  
The table below describes the actions to take to complete a DIC offset in the Veterans Benefits Management System (VBMS).
 
Step
Action
1
On the RECORD DECISIONS page in the AWARD ADJUSTMENTS screen, click the TORT FOR DIC ADJUSTMENTS tab.
2
Click the ADD button.
3
In the ORIGINAL BALANCE field, enter the amount to be recouped.
4
In the AWARD EFFECTIVE DATE field, enter the date the adjustments begin.
5
Click ACCEPT to save the entry to the decision grid.
6
When finished, click the DONE button.
 
Reference:  For more information on processing awards for DIC in VBMS, see the VBMS Awards User Guide.
 

4.  Determining the Offset Effective Dates and Amounts

Introduction

  
This topic contains information on determining the effective dates and amounts of offsets, including

Change Date

  
February 2, 2021

XII.i.3.F.4.a.   Determining the Final Date of a Judgment

  
When an offset is required, begin withholding benefits effective the first of the month after the month during which the judgment becomes final.
 
Use the information below to determine when various judgments are considered final.
 
If the judgment is an …
Then the …
administrative award
judgment is considered final on the date of approval.
Attorney General agreement
settlement or compromise entered into by the Attorney General after a suit has been filed is considered final when the agreement is approved by the court, even though a final order of dismissal may not be entered until a later date.
 
Notes:
  • If, after reviewing the evidence of record, there is any question as to the date the judgment became final, request clarification from District Counsel.
  • The total amount to be recouped is the gross amount of the judgment awarded to the beneficiary.
Reference:  For more information on the prohibition against duplication of benefits, see M21-1, Part XII, Subpart i, 3.F.1.

XII.i.3.F.4.b.   Considering Retroactive Adjustments

  
Do not offset compensation for any period before the month following the date on which the settlement or judgment becomes final.
 
Note:  If the accounts receivable is waived or declared invalid, do not apply the amount of the debt or the waived amount to reduce the amount to be offset from future DIC benefits.
 
Reference:  For more information, see VAOPGCPREC 1-2010.

XII.i.3.F.4.c.   Example:  Retroactive Adjustment

  
Situation:  The rating activity later grants compensation effective March 16, 2020.  A judgment is final on June 15, 2020.
 
Action:  Do not offset any portion of the Veteran’s compensation benefits prior to July 1, 2020, the month following the date the judgment became final.

5.  Preparation of Awards

Introduction

  
This topic contains information on the preparation of awards, including

Change Date

  
July 12, 2015

XII.i.3.F.5.a.   VBMS Award Processing of DIC Under 38 U.S.C. 1151

  
Use the VBMS to process awards for DIC.
 
Reference:  For more information on processing awards for DIC in VBMS, see the VBMS Awards User Guide.

XII.i.3.F.5.b. Determining the DIC Benefit Payable Under 38 U.S.C. 1151

  
The survivors benefit payable under 38 U.S.C. 1151 is DIC per 38 CFR 3.800(b).

XII.i.3.F.5.c. Preparing Awards That Include an Offset

  
Follow the steps in the table below to prepare a DIC award in VBMS under 38 U.S.C. 1151 with an offset.
 
Step
Action
1
On the RECORD DECISIONS page in the AWARD ADJUSTMENTS screen, click the TORT FOR DIC ADJUSTMENTS tab.
2
Click the ADD button.
3
In the ORIGINAL BALANCE field, enter the amount to be recouped.
4
In the AWARD EFFECTIVE DATE field, enter the date the adjustments begin.
5
Click the ACCEPT button to save the entry to the decision grid.
6
When finished, click the DONE button.

6.  Providing Notice of Awards

Introduction

  
This topic contains information on providing notice of awards, including

Change Date

  
July 12, 2015

XII.i.3.F.6.a.   Preparing a Locally-Generated Letter

  
Prepare a locally-generated letter and compose the letter as follows:
  • do not refer to the award as arising out of 38 U.S.C. 1151 unless that was specifically claimed, and
  • indicate in the letter that
    • the claimant is entitled only to DIC, and
    • there is no independent entitlement to ancillary benefits unless entitlement exists based on disabilities which are service-connected without regard to the provisions of 38 U.S.C. 1151.
Reference:  For more information on entitlement to ancillary benefits, see M21-1, Part XII, Subpart i, 3.F.6.d.

XII.i.3.F.6.b.  Providing Notice of Offset and Related Requirements

  
Follow the instructions below when providing notice of an offset and related requirements.
 
If the award …
Then …
includes an offset
include the award and offset information in the locally-generated letter to the claimant.
does not provide for an offset
inform the claimant of the offset requirements of the law.
 
Note:  Include this information whether or not there is any indication that a tort claim has or will be filed.
is a zero-rate award in which a total offset is in effect until an amount equal to the judgment has been recouped
advise the claimant to keep VA informed of any changes of address.
 

XII.i.3.F.6.c.   Preparing a Denial

  
Prepare a formal denial of a 38 U.S.C. 1151 claim using a locally-generated letter to inform the claimant of the
  • evidence considered
  • reasons for the determination, and
  • procedural and appellate rights.
Important:  Do not refer to 38 U.S.C. 1151 or the circumstances that warranted the rating in the absence of a specific claim for benefits under 38 U.S.C. 1151.

XII.i.3.F.6.d.   Determining Entitlement to Ancillary Benefits

  
There is no entitlement to the following ancillary benefits if DIC was granted under 38 U.S.C. 1151: