Phase-In of Full Concurrent Receipt of Military Retired Pay and Veterans Disability Compensation for Certain Military Retirees, 39213-39215 [05-13396]

Download as PDF Federal Register / Vol. 70, No. 129 / Thursday, July 7, 2005 / Proposed Rules § 1404.18 Procedures for requesting expedited panels. * * * * * (b) Upon receipt of a joint Request for Arbitration Panel (Form R–43) indicating that both parties desire expedited services, the OAS will refer a panel of arbitrators. * * * * * § 1404.20 [Removed] 14. Section 1404.20 is removed. § 1404.21 [Redesignated as § 1404.20] 15. Section 1404.21 is redesignated as § 1404.20. Dated: June 27, 2005. Maria A. Fried, General Counsel and Federal Register Contact. [FR Doc. 05–13362 Filed 7–6–05; 8:45 am] BILLING CODE 6732–01–M DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 3 RIN 2900–AM13 Phase-In of Full Concurrent Receipt of Military Retired Pay and Veterans Disability Compensation for Certain Military Retirees Department of Veterans Affairs. Proposed rule. AGENCY: ACTION: SUMMARY: The Department of Veterans Affairs (VA) is proposing to amend its regulations concerning concurrent receipt of military retired pay and veterans’ disability compensation. This proposed rule implements section 641 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108–136). This law permits certain veterans who are entitled to military retired pay and are receiving disability compensation for a service-connected disability or disabilities rated at 50 percent or higher to receive disability compensation as well as their military retired pay. The intended effect of the proposed regulation is to clearly state who is eligible for concurrent receipt of disability compensation and military retired pay, who must still waive military retired pay to receive disability compensation, and how to file such a waiver. Comments must be received on or before September 6, 2005. ADDRESSES: Written comments may be submitted by: mail or hand-delivery to Director, Regulations Management (00REG1), Department of Veterans Affairs, 810 Vermont Avenue, NW., DATES: VerDate jul<14>2003 16:01 Jul 06, 2005 Jkt 205001 Room 1068, Washington, DC 20420; fax to (202) 273–9026; e-mail to VAregulations@mail.va.gov; or, through https://www.Regulations.gov. Comments should indicate that they are submitted in response to ‘‘RIN 2900–AM13.’’ All comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1063B, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except holidays). Please call (202) 273–9515 for an appointment. FOR FURTHER INFORMATION CONTACT: Adrienne Foster, Consultant, Compensation and Pension Service (211), Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Ave., NW., Washington, DC 20420, (202) 273–7051. SUPPLEMENTARY INFORMATION: Section 641 of the National Defense Authorization Act for Fiscal Year 2004 (the Act), Public Law 108–136, amended section 1414 of title 10, United States Code. Section 641 permits certain veterans who are eligible for military retired pay and for veterans’ disability compensation for a single serviceconnected disability rated at 50 percent or higher, or a combination of serviceconnected disabilities rated 50 percent or higher, to receive concurrent payment of both military retired pay and disability compensation. Public Law 108–136 establishes a phase-in period from January 1, 2004, to December 31, 2013, during which the monthly amount of military retired pay payable to a qualified retiree will gradually increase. Section 642 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005, Public Law 108–375, amended section 1414 of title 10, United States Code, by eliminating the phase-in period for retirees receiving compensation for a disability rated as 100 percent. This amendment concerns entitlements administered by the Department of Defense (DoD) as well as VA. DoD must determine the phase-in amount for concurrent receipt. Regulations pertinent to this calculation or other matters specifically dealing with the receipt of military retired pay are the responsibility of DoD and are outside the scope of this proposed rulemaking. Section 1414(c) provides for the phase-in until December 31, 2013. (See 10 U.S.C. 1414(c).) This proposed rulemaking is solely related to the effect of this law on VA’s compensation payments. Background Section 1414 of title 10, U.S.C., as amended by the Act, provides in PO 00000 Frm 00020 Fmt 4702 Sfmt 4702 39213 subsection (a) that certain veterans are permitted to receive concurrent payment of military retired pay and veterans’ disability compensation, notwithstanding sections of the law that prohibit the duplication of benefits and require a waiver of military retired pay to receive disability compensation. (See 38 U.S.C. 5304, 5305.) Subject to the exception for retirees receiving compensation for a disability rated as 100 percent, from January 1, 2004, until December 31, 2013, payment to qualified retirees will be subject to a mathematical formula for the phase-in of full concurrent receipt. (See 10 U.S.C. 1414(c).) Special provisions, administered by DoD, exist with respect to concurrent receipt for Chapter 61 Disability Retirees. (See 10 U.S.C. 1201–1221.) A veteran, retired under Chapter 61 with 20 or more years of service, must waive a portion of his or her disability retired pay to receive disability compensation. Veterans retired under Chapter 61 with less than 20 years of service are not entitled to this benefit. Regulations Affected by the Amended Section 1414 The Act amends 10 U.S.C. 1414, which affects 38 CFR 3.750. The title of § 3.750 is ‘‘Retirement pay.’’ We propose to change the title of § 3.750 to ‘‘Entitlement to concurrent receipt of military retired pay and disability compensation.’’ This title more clearly conveys the content of the revised regulation. Current § 3.750(a) prohibits concurrent receipt of military retired pay and disability compensation. Proposed paragraph (a) defines military retired pay. Current paragraph (b) provides for election between military retired pay and disability compensation. We propose to move the information contained in current paragraph (b) to proposed paragraph (d). We propose in paragraph (b)(1), consistent with amended 10 U.S.C. 1414(a), to state that qualified veterans with a disability or disabilities rated at 50 percent or higher are entitled to concurrent receipt of both military retired pay and disability compensation benefits. To comply with amended 10 U.S.C. 1414(b), we propose in paragraph (b)(2) to state that veterans who retire under 10 U.S.C. Chapter 61 with 20 or more years of creditable service must waive a portion of their disability retired pay to receive disability compensation, but only to the extent that disability retired pay exceeds the amount of retired pay they would have received had they retired based on length of service. E:\FR\FM\07JYP1.SGM 07JYP1 39214 Federal Register / Vol. 70, No. 129 / Thursday, July 7, 2005 / Proposed Rules We propose in paragraph (b)(3) to state that Chapter 61 disability retirees who have less than 20 years of creditable service are not entitled to concurrent receipt. Proposed paragraph (b)(4) is a restatement, in plain language, of the rule in current paragraph (d) that recipients of improved pension are entitled to receive military retired pay at the same time, but that in determining entitlement to improved pension, military retired pay will be treated as countable income. Proposed paragraph (c) would amend the requirement that a veteran file a waiver of military retired pay in order to receive compensation benefits. All veterans eligible to receive military retired pay and disability compensation, but who are not qualified to receive them at the same time, must file a waiver of retired pay in order to receive compensation. Additionally, during the phase-in period, veterans must file a waiver even if they are eligible for concurrent receipt. By waiving military retired pay, eligible veterans will receive full disability compensation payments plus the appropriate phase-in amount of military retired pay from DoD. The phase-in period ends on December 31, 2013, and effective on January 1, 2014, a veteran eligible for concurrent receipt will no longer be required to file a waiver. We propose in paragraph (c) to state that a veteran may file the waiver with VA rather than requiring the veteran to file it with the service department. This reflects current VA practice, and we believe it would be helpful to inform veterans of this practice. The proposed rule also describes what actions on the part of a claimant will be construed as a waiver of military retired pay. In paragraph (c)(1), we propose to describe how one files a waiver of military retired pay. Paragraph (c)(2) would restate, in plain language, the rule in current paragraph (c), that filing an application for VA benefits constitutes an election to receive disability compensation and a waiver of military retired pay. Proposed paragraph (d)(1) would restate, in plain language, the rule in current paragraph (b), that the veteran may reelect between receipt of military retired pay and disability compensation and would make clear that this reelection may be made at any time. Proposed paragraph (d)(2) would restate the rule in current paragraph (b) concerning an election filed within 1 year of the date of notification of VA entitlement and that rule’s application to incompetent veterans. VerDate jul<14>2003 16:01 Jul 06, 2005 Jkt 205001 We have not included the provisions in § 3.750(d)(2) that state that recipients of old-law or section 306 pension must waive an equivalent amount of military retired pay. We propose to remove this section because no one may elect to receive old-law or section 306 pension, and the number of individuals that currently receive such pensions because they waived retired pay is very small. This deletion would not effect the entitlement of current beneficiaries. Should the occasion arise, VA will adjudicate any new claim relying on existing statutory authority. Paperwork Reduction Act This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501–3521). Regulatory Flexibility Act The Secretary hereby certifies that this proposed regulatory amendment would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601– 612. This proposed amendment would not directly affect any small entities. Only VA beneficiaries could be directly affected. Therefore, pursuant to 5 U.S.C. 605(b), this proposed amendment is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604. Executive Order 12866 This document has been reviewed by the Office of Management and Budget under Executive Order 12866. Unfunded Mandates The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before developing any rule that may result in an expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any given year. This proposed rule would have no such effect on State, local, or tribal governments, or the private sector. Catalog of Federal Domestic Assistance Program Numbers The Catalog of Federal Domestic Assistance program numbers for this proposed rule are 64.104, 64.105, and 64.110. List of Subjects in 38 CFR Part 3 Administrative practice and procedure, Claims, Disability benefits, Pensions, Veterans. PO 00000 Frm 00021 Fmt 4702 Sfmt 4702 Approved: March 24, 2005. R. James Nicholson, Secretary of Veterans Affairs. For the reasons set forth in the preamble, 38 CFR part 3 is proposed to be amended as follows: PART 3—ADJUDICATION Subpart A—Pension, Compensation, and Dependency and Indemnity Compensation 1. The authority citation for part 3, subpart A continues to read as follows: Authority: 38 U.S.C. 501(a), unless otherwise noted. 2. Revise § 3.750 to read as follows: § 3.750 Entitlement to concurrent receipt of military retired pay and disability compensation. (a) Definition of military retired pay. For the purposes of this section, military retired pay is payment received by a veteran that is classified as military retired pay by the Service Department, including retainer pay, based on the recipient’s service as a member of the Armed Forces or as a commissioned officer of the Public Health Service, the Coast and Geodetic Survey, the Environmental Science Services Administration, or the National Oceanic and Atmospheric Administration. (b) Payment of both military retired pay and disability compensation or improved pension—(1) Compensation. Subject to paragraph (b)(2) of this section, a veteran with 20 or more creditable years of military service who is entitled to military retired pay and disability compensation for a serviceconnected disability rated 50 percent or more, or a combination of serviceconnected disabilities rated at 50 percent or more, under the schedule for rating disabilities (38 CFR part 4, subpart B), is entitled to receive both payments subject to the phase-in period described in paragraph (c) of this section. (2) Chapter 61 disability retirees retiring with 20 or more years of service. Disability retired pay payable under 10 U.S.C. Chapter 61 to a veteran with 20 or more years of creditable service may be paid concurrently with disability compensation to a qualifying veteran. However, in addition to any waiver required during the phase-in period under paragraph (c)(1)(ii) of this section, the veteran must waive his or her disability retired pay to receive disability compensation to the extent that disability retired pay exceeds the amount of retired pay the veteran would have received had the veteran retired based on length of service. E:\FR\FM\07JYP1.SGM 07JYP1 Federal Register / Vol. 70, No. 129 / Thursday, July 7, 2005 / Proposed Rules (3) Chapter 61 disability retirees retiring with less than 20 years of service. Veterans who receive disability retired pay under 10 U.S.C. Chapter 61 with less than 20 years of creditable service are not eligible for concurrent receipt. (4) Improved Pension. A veteran may receive improved pension and military retired pay at the same time without having to waive military retired pay. However, in determining entitlement to improved pension, VA will treat military retired pay in the same manner as countable income from other sources. (c) Waiver—(1) When a waiver is necessary. (i) A waiver of military retired pay is necessary in order to receive disability compensation when a veteran is eligible for both military retired pay and disability compensation but does not have a qualifying serviceconnected disability or disabilities rated at 50 percent or more. (ii) All veterans who are eligible to receive both military retired pay and disability compensation, except those receiving compensation for a disability rated 100 percent, must file a waiver in order to receive the maximum allowable amount of disability compensation during the phase-in period. The phasein period ends on December 31, 2013. After December 31, 2013, veterans retired under 10 U.S.C. chapter 61 who are eligible for concurrent receipt must still file a waiver under the circumstances described in paragraph (b)(2) of this section. (Authority: 10 U.S.C. 1414, 38 U.S.C. 5304, 5305) (2) How to file a waiver of military retired pay. A veteran may request a waiver of military retired pay in any written, signed statement, including a VA form, which reflects a desire to waive all or some military retired pay. The statement must be submitted to VA or to the Federal agency that pays the veteran’s military retired pay. VA will treat as a waiver an application for VA compensation filed by a veteran who is entitled to military retired pay. (d) Elections and the right to reelect either benefit. (1) A veteran who has filed a waiver of military retired pay under this section has elected to receive disability compensation. A veteran may reelect between benefits covered by this section at any time by submitting a written, signed statement to VA or to the Federal agency that pays the veteran’s military retired pay. (2) An election filed within 1 year from the date of notification of Department of Veterans Affairs entitlement will be considered as ‘‘timely filed’’ for effective date VerDate jul<14>2003 16:01 Jul 06, 2005 Jkt 205001 purposes. See § 3.401(e)(1). If the veteran is incompetent, the 1-year period will begin on the date that notification is sent to the next friend or fiduciary. In initial determinations, elections may be applied retroactively if the claimant was not advised of his or her right of election and its effect. (Authority: 38 U.S.C. 5304(a), 5305) [FR Doc. 05–13396 Filed 7–6–05; 8:45 am] BILLING CODE 8320–01–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 81 [Region II Docket No. R02–OAR–2005–NY– 0001; FRL–7934–3] Air Quality Redesignation for the 8Hour Ozone National Ambient Air Quality Standards; New York State Environmental Protection Agency (EPA). ACTION: Proposed rule. AGENCY: SUMMARY: On April 15, 2004, we, the Environmental Protection Agency (EPA) announced nationwide designations under the 8-hour ozone National Ambient Air Quality Standard (NAAQS). That action designated several counties in the Syracuse area as unclassifiable. The counties in the Syracuse area included in the designation were Onondaga, Madison, Cayuga and Oswego in the State of New York. This action proposes to redesignate the above counties to attainment. We are soliciting comments on this proposed action. DATES: Comments must be received on or before August 8, 2005. ADDRESSES: Submit your comments, identified by Regional Material in EDocket (RME) ID Number R02–OAR– 2005–NY–0001, by one of the following methods: 1. Federal eRulemaking Portal: https://www.regulations.gov. Follow the on-line instructions for submitting comments. 2. Agency Web site: https:// docket.epa.gov/rmepub/. RME, EPA’s electronic public docket and comment system, is EPA’s preferred method for receiving comments. Once in the system, select ‘‘quick search,’’ then key in the appropriate RME Docket identification number. Follow the online instructions for submitting comments. 3. E-mail: Werner.Raymond@epa.gov. 4. Mail: Raymond Werner, Chief, Air Programs Branch, Environmental Protection Agency Region 2, 290 PO 00000 Frm 00022 Fmt 4702 Sfmt 4702 39215 Broadway, New York, New York 10007– 1866. 5. Hand Delivery or Courier. Deliver your comments to: EPA Region 2, Air Programs Branch, 290 Broadway, New York, New York 10007–1866. Instructions: Direct your comments to RME ID Number R02–OAR–2005–NY– 0001. EPA’s policy is that all comments received will be included in the public docket without change and may be made available online at https:// docket.epa.gov/rmepub, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through RME, regulations.gov, or e-mail. The EPA RME website and the Federal regulations.gov website are ‘‘anonymous access’’ systems, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through RME or regulations.gov, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD–ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. Docket. All documents in the electronic docket are listed in the RME index at https://docket.epa.gov/rmepub/. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in RME or in hard copy at the Environmental Protection Agency, Air Programs Branch, 290 Broadway, New York, New York. EPA requests that you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The interested persons wanting to examine these documents should make an E:\FR\FM\07JYP1.SGM 07JYP1

Agencies

[Federal Register Volume 70, Number 129 (Thursday, July 7, 2005)]
[Proposed Rules]
[Pages 39213-39215]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-13396]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AM13


Phase-In of Full Concurrent Receipt of Military Retired Pay and 
Veterans Disability Compensation for Certain Military Retirees

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Veterans Affairs (VA) is proposing to amend 
its regulations concerning concurrent receipt of military retired pay 
and veterans' disability compensation. This proposed rule implements 
section 641 of the National Defense Authorization Act for Fiscal Year 
2004 (Public Law 108-136). This law permits certain veterans who are 
entitled to military retired pay and are receiving disability 
compensation for a service-connected disability or disabilities rated 
at 50 percent or higher to receive disability compensation as well as 
their military retired pay. The intended effect of the proposed 
regulation is to clearly state who is eligible for concurrent receipt 
of disability compensation and military retired pay, who must still 
waive military retired pay to receive disability compensation, and how 
to file such a waiver.

DATES: Comments must be received on or before September 6, 2005.

ADDRESSES: Written comments may be submitted by: mail or hand-delivery 
to Director, Regulations Management (00REG1), Department of Veterans 
Affairs, 810 Vermont Avenue, NW., Room 1068, Washington, DC 20420; fax 
to (202) 273-9026; e-mail to VAregulations@mail.va.gov; or, through 
https://www.Regulations.gov. Comments should indicate that they are 
submitted in response to ``RIN 2900-AM13.'' All comments received will 
be available for public inspection in the Office of Regulation Policy 
and Management, Room 1063B, between the hours of 8 a.m. and 4:30 p.m., 
Monday through Friday (except holidays). Please call (202) 273-9515 for 
an appointment.

FOR FURTHER INFORMATION CONTACT: Adrienne Foster, Consultant, 
Compensation and Pension Service (211), Veterans Benefits 
Administration, Department of Veterans Affairs, 810 Vermont Ave., NW., 
Washington, DC 20420, (202) 273-7051.

SUPPLEMENTARY INFORMATION: Section 641 of the National Defense 
Authorization Act for Fiscal Year 2004 (the Act), Public Law 108-136, 
amended section 1414 of title 10, United States Code. Section 641 
permits certain veterans who are eligible for military retired pay and 
for veterans' disability compensation for a single service-connected 
disability rated at 50 percent or higher, or a combination of service-
connected disabilities rated 50 percent or higher, to receive 
concurrent payment of both military retired pay and disability 
compensation. Public Law 108-136 establishes a phase-in period from 
January 1, 2004, to December 31, 2013, during which the monthly amount 
of military retired pay payable to a qualified retiree will gradually 
increase. Section 642 of the Ronald W. Reagan National Defense 
Authorization Act for Fiscal Year 2005, Public Law 108-375, amended 
section 1414 of title 10, United States Code, by eliminating the phase-
in period for retirees receiving compensation for a disability rated as 
100 percent.
    This amendment concerns entitlements administered by the Department 
of Defense (DoD) as well as VA. DoD must determine the phase-in amount 
for concurrent receipt. Regulations pertinent to this calculation or 
other matters specifically dealing with the receipt of military retired 
pay are the responsibility of DoD and are outside the scope of this 
proposed rulemaking. Section 1414(c) provides for the phase-in until 
December 31, 2013. (See 10 U.S.C. 1414(c).) This proposed rulemaking is 
solely related to the effect of this law on VA's compensation payments.

Background

    Section 1414 of title 10, U.S.C., as amended by the Act, provides 
in subsection (a) that certain veterans are permitted to receive 
concurrent payment of military retired pay and veterans' disability 
compensation, notwithstanding sections of the law that prohibit the 
duplication of benefits and require a waiver of military retired pay to 
receive disability compensation. (See 38 U.S.C. 5304, 5305.) Subject to 
the exception for retirees receiving compensation for a disability 
rated as 100 percent, from January 1, 2004, until December 31, 2013, 
payment to qualified retirees will be subject to a mathematical formula 
for the phase-in of full concurrent receipt. (See 10 U.S.C. 1414(c).)
    Special provisions, administered by DoD, exist with respect to 
concurrent receipt for Chapter 61 Disability Retirees. (See 10 U.S.C. 
1201-1221.) A veteran, retired under Chapter 61 with 20 or more years 
of service, must waive a portion of his or her disability retired pay 
to receive disability compensation. Veterans retired under Chapter 61 
with less than 20 years of service are not entitled to this benefit.

Regulations Affected by the Amended Section 1414

    The Act amends 10 U.S.C. 1414, which affects 38 CFR 3.750. The 
title of Sec.  3.750 is ``Retirement pay.'' We propose to change the 
title of Sec.  3.750 to ``Entitlement to concurrent receipt of military 
retired pay and disability compensation.'' This title more clearly 
conveys the content of the revised regulation.
    Current Sec.  3.750(a) prohibits concurrent receipt of military 
retired pay and disability compensation. Proposed paragraph (a) defines 
military retired pay.
    Current paragraph (b) provides for election between military 
retired pay and disability compensation. We propose to move the 
information contained in current paragraph (b) to proposed paragraph 
(d). We propose in paragraph (b)(1), consistent with amended 10 U.S.C. 
1414(a), to state that qualified veterans with a disability or 
disabilities rated at 50 percent or higher are entitled to concurrent 
receipt of both military retired pay and disability compensation 
benefits.
    To comply with amended 10 U.S.C. 1414(b), we propose in paragraph 
(b)(2) to state that veterans who retire under 10 U.S.C. Chapter 61 
with 20 or more years of creditable service must waive a portion of 
their disability retired pay to receive disability compensation, but 
only to the extent that disability retired pay exceeds the amount of 
retired pay they would have received had they retired based on length 
of service.

[[Page 39214]]

    We propose in paragraph (b)(3) to state that Chapter 61 disability 
retirees who have less than 20 years of creditable service are not 
entitled to concurrent receipt.
    Proposed paragraph (b)(4) is a restatement, in plain language, of 
the rule in current paragraph (d) that recipients of improved pension 
are entitled to receive military retired pay at the same time, but that 
in determining entitlement to improved pension, military retired pay 
will be treated as countable income.
    Proposed paragraph (c) would amend the requirement that a veteran 
file a waiver of military retired pay in order to receive compensation 
benefits. All veterans eligible to receive military retired pay and 
disability compensation, but who are not qualified to receive them at 
the same time, must file a waiver of retired pay in order to receive 
compensation. Additionally, during the phase-in period, veterans must 
file a waiver even if they are eligible for concurrent receipt. By 
waiving military retired pay, eligible veterans will receive full 
disability compensation payments plus the appropriate phase-in amount 
of military retired pay from DoD. The phase-in period ends on December 
31, 2013, and effective on January 1, 2014, a veteran eligible for 
concurrent receipt will no longer be required to file a waiver.
    We propose in paragraph (c) to state that a veteran may file the 
waiver with VA rather than requiring the veteran to file it with the 
service department. This reflects current VA practice, and we believe 
it would be helpful to inform veterans of this practice. The proposed 
rule also describes what actions on the part of a claimant will be 
construed as a waiver of military retired pay. In paragraph (c)(1), we 
propose to describe how one files a waiver of military retired pay. 
Paragraph (c)(2) would restate, in plain language, the rule in current 
paragraph (c), that filing an application for VA benefits constitutes 
an election to receive disability compensation and a waiver of military 
retired pay.
    Proposed paragraph (d)(1) would restate, in plain language, the 
rule in current paragraph (b), that the veteran may reelect between 
receipt of military retired pay and disability compensation and would 
make clear that this reelection may be made at any time. Proposed 
paragraph (d)(2) would restate the rule in current paragraph (b) 
concerning an election filed within 1 year of the date of notification 
of VA entitlement and that rule's application to incompetent veterans.
    We have not included the provisions in Sec.  3.750(d)(2) that state 
that recipients of old-law or section 306 pension must waive an 
equivalent amount of military retired pay. We propose to remove this 
section because no one may elect to receive old-law or section 306 
pension, and the number of individuals that currently receive such 
pensions because they waived retired pay is very small. This deletion 
would not effect the entitlement of current beneficiaries. Should the 
occasion arise, VA will adjudicate any new claim relying on existing 
statutory authority.

Paperwork Reduction Act

    This document contains no provisions constituting a collection of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed regulatory 
amendment would not have a significant economic impact on a substantial 
number of small entities as they are defined in the Regulatory 
Flexibility Act, 5 U.S.C. 601-612. This proposed amendment would not 
directly affect any small entities. Only VA beneficiaries could be 
directly affected. Therefore, pursuant to 5 U.S.C. 605(b), this 
proposed amendment is exempt from the initial and final regulatory 
flexibility analysis requirements of sections 603 and 604.

Executive Order 12866

    This document has been reviewed by the Office of Management and 
Budget under Executive Order 12866.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before developing any rule that may result in an expenditure 
by State, local, or tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any given year. This proposed rule would have no such 
effect on State, local, or tribal governments, or the private sector.

Catalog of Federal Domestic Assistance Program Numbers

    The Catalog of Federal Domestic Assistance program numbers for this 
proposed rule are 64.104, 64.105, and 64.110.

List of Subjects in 38 CFR Part 3

    Administrative practice and procedure, Claims, Disability benefits, 
Pensions, Veterans.

    Approved: March 24, 2005.
R. James Nicholson,
Secretary of Veterans Affairs.

    For the reasons set forth in the preamble, 38 CFR part 3 is 
proposed to be amended as follows:

PART 3--ADJUDICATION

Subpart A--Pension, Compensation, and Dependency and Indemnity 
Compensation

    1. The authority citation for part 3, subpart A continues to read 
as follows:

    Authority: 38 U.S.C. 501(a), unless otherwise noted.

    2. Revise Sec.  3.750 to read as follows:


Sec.  3.750  Entitlement to concurrent receipt of military retired pay 
and disability compensation.

    (a) Definition of military retired pay. For the purposes of this 
section, military retired pay is payment received by a veteran that is 
classified as military retired pay by the Service Department, including 
retainer pay, based on the recipient's service as a member of the Armed 
Forces or as a commissioned officer of the Public Health Service, the 
Coast and Geodetic Survey, the Environmental Science Services 
Administration, or the National Oceanic and Atmospheric Administration.
    (b) Payment of both military retired pay and disability 
compensation or improved pension--(1) Compensation. Subject to 
paragraph (b)(2) of this section, a veteran with 20 or more creditable 
years of military service who is entitled to military retired pay and 
disability compensation for a service-connected disability rated 50 
percent or more, or a combination of service-connected disabilities 
rated at 50 percent or more, under the schedule for rating disabilities 
(38 CFR part 4, subpart B), is entitled to receive both payments 
subject to the phase-in period described in paragraph (c) of this 
section.
    (2) Chapter 61 disability retirees retiring with 20 or more years 
of service. Disability retired pay payable under 10 U.S.C. Chapter 61 
to a veteran with 20 or more years of creditable service may be paid 
concurrently with disability compensation to a qualifying veteran. 
However, in addition to any waiver required during the phase-in period 
under paragraph (c)(1)(ii) of this section, the veteran must waive his 
or her disability retired pay to receive disability compensation to the 
extent that disability retired pay exceeds the amount of retired pay 
the veteran would have received had the veteran retired based on length 
of service.

[[Page 39215]]

    (3) Chapter 61 disability retirees retiring with less than 20 years 
of service. Veterans who receive disability retired pay under 10 U.S.C. 
Chapter 61 with less than 20 years of creditable service are not 
eligible for concurrent receipt.
    (4) Improved Pension. A veteran may receive improved pension and 
military retired pay at the same time without having to waive military 
retired pay. However, in determining entitlement to improved pension, 
VA will treat military retired pay in the same manner as countable 
income from other sources.
    (c) Waiver--(1) When a waiver is necessary. (i) A waiver of 
military retired pay is necessary in order to receive disability 
compensation when a veteran is eligible for both military retired pay 
and disability compensation but does not have a qualifying service-
connected disability or disabilities rated at 50 percent or more.
    (ii) All veterans who are eligible to receive both military retired 
pay and disability compensation, except those receiving compensation 
for a disability rated 100 percent, must file a waiver in order to 
receive the maximum allowable amount of disability compensation during 
the phase-in period. The phase-in period ends on December 31, 2013. 
After December 31, 2013, veterans retired under 10 U.S.C. chapter 61 
who are eligible for concurrent receipt must still file a waiver under 
the circumstances described in paragraph (b)(2) of this section.

(Authority: 10 U.S.C. 1414, 38 U.S.C. 5304, 5305)


    (2) How to file a waiver of military retired pay. A veteran may 
request a waiver of military retired pay in any written, signed 
statement, including a VA form, which reflects a desire to waive all or 
some military retired pay. The statement must be submitted to VA or to 
the Federal agency that pays the veteran's military retired pay. VA 
will treat as a waiver an application for VA compensation filed by a 
veteran who is entitled to military retired pay.
    (d) Elections and the right to reelect either benefit. (1) A 
veteran who has filed a waiver of military retired pay under this 
section has elected to receive disability compensation. A veteran may 
reelect between benefits covered by this section at any time by 
submitting a written, signed statement to VA or to the Federal agency 
that pays the veteran's military retired pay.
    (2) An election filed within 1 year from the date of notification 
of Department of Veterans Affairs entitlement will be considered as 
``timely filed'' for effective date purposes. See Sec.  3.401(e)(1). If 
the veteran is incompetent, the 1-year period will begin on the date 
that notification is sent to the next friend or fiduciary. In initial 
determinations, elections may be applied retroactively if the claimant 
was not advised of his or her right of election and its effect.

(Authority: 38 U.S.C. 5304(a), 5305)


[FR Doc. 05-13396 Filed 7-6-05; 8:45 am]
BILLING CODE 8320-01-P
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