Payments to Beneficiaries Who Are Eligible for More Than One Benefit, 56136-56154 [E7-19280]

Agencies

• DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 72, Number 190 (Tuesday, October 2, 2007)]
[Proposed Rules]
[Pages 56136-56154]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-19280]



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Part II





Department of Veterans Affairs





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38 CFR Part 5



 Payments to Beneficiaries Who Are Eligible for More Than One Benefit; 
Proposed Rule

Federal Register / Vol. 72, No. 190 / Tuesday, October 2, 2007 / 
Proposed Rules

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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 5

RIN 2900-AL95


Payments to Beneficiaries Who Are Eligible for More Than One 
Benefit

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to reorganize 
and rewrite in plain language provisions applicable to payments to 
beneficiaries who are eligible for more than one benefit. These 
revisions are proposed as part of VA's rewrite and reorganization of 
all of its compensation and pension rules in a logical, claimant-
focused, and user-friendly format. The intended effect of the proposed 
revisions is to assist claimants, beneficiaries, and VA personnel in 
locating and understanding these rules.

DATES: Comments must be received by VA on or before December 3, 2007.

ADDRESSES: Written comments may be submitted through 
www.Regulations.gov; by mail or hand-delivery to Director, Regulations 
Management (00REG), Department of Veterans Affairs, 810 Vermont Avenue, 
NW., Room 1068, Washington, DC 20420; or by fax to (202) 273-9026 (not 
a toll free number). Comments should indicate that they are submitted 
in response to ``RIN 2900-AL95-Payments to Beneficiaries Who Are 
Eligible for More than One Benefit.'' Copies of 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 
(not a toll free number) for an appointment. In addition, during the 
comment period, comments may be viewed online through the Federal 
Docket Management System (FDMS) at www.Regulations.gov.

FOR FURTHER INFORMATION CONTACT: William F. Russo, Director, 
Regulations Management (00REG), Department of Veterans Affairs, 810 
Vermont Avenue, NW., Washington, DC 20420, (202) 273-9515 (not a toll 
free number).

SUPPLEMENTARY INFORMATION: The Secretary of Veterans Affairs has 
established an Office of Regulation Policy and Management to provide 
centralized management and coordination of VA's rulemaking process. One 
of the major functions of this office is to oversee a Regulation 
Rewrite Project (the Project) to improve the clarity and consistency of 
existing VA regulations. The Project responds to a recommendation made 
in the October 2001 ``VA Claims Processing Task Force: Report to the 
Secretary of Veterans Affairs.'' The Task Force recommended that the 
compensation and pension regulations be rewritten and reorganized in 
order to improve the VA's claims adjudication process. Therefore, the 
Project began its efforts by reviewing, reorganizing, and redrafting 
the content of the regulations in 38 CFR part 3 governing the 
compensation and pension program of the Veterans Benefits 
Administration. These regulations are among the most difficult VA 
regulations for readers to understand and apply.
    Once rewritten, the proposed regulations will be published in 
several portions for public review and comment. This is one such 
portion. It includes proposed rules regarding payment to beneficiaries 
who are eligible for more than one benefit. After review and 
consideration of public comments, final versions of these proposed 
regulations will ultimately be published in a new part 5 in 38 CFR.

Outline

Overview of New Part 5 Organization
Overview of This Notice of Proposed Rulemaking
Table Comparing Current Part 3 Rules With Proposed Part 5 Rules
Content of Proposed Regulations
Payments to Beneficiaries Who Are Eligible for More Than One 
Benefit--General Provisions
    5.740 Definitions relating to elections.
    5.741 Persons who may make an election.
    5.742 Finality of elections; cancellation of certain elections.
    5.743 General effective dates for awarding, reducing, or 
discontinuing VA benefits because of an election.
Payments From Service Departments and the Effects of Those Payments 
on VA Benefits for Veterans
    5.745 Entitlement to concurrent receipt of military retired pay 
and VA disability compensation.
    5.746 Prohibition against receipt of active military service pay 
and VA benefits for the same period.
    5.747 Effect of military readjustment pay, disability severance 
pay, and separation pay on VA benefits.
    5.748 Concurrent receipt of VA disability compensation and 
retirement pay by certain officers of the Public Health Service.
Payments From Federal Agencies and the Effects of Those Payments on 
VA Benefits for Veterans and Survivors
    5.750 Election between VA benefits and compensation under the 
Federal Employees' Compensation Act for death or disability due to 
military service.
    5.751 Election between VA benefits and compensation under the 
Federal Employees' Compensation Act for death or disability due to 
Federal civilian employment.
    5.752 Procedures for elections between VA benefits and 
compensation under the Federal Employees' Compensation Act.
    5.753 Payment of VA benefits and civil service retirement 
benefits for the same period.
    5.754 Effect of payment of compensation under the Radiation 
Exposure Compensation Act of 1990 on payment of certain VA benefits.
Rules Concerning the Receipt of Multiple VA Benefits
    5.756 Prohibition against concurrent receipt of certain VA 
benefits based on the service of the same veteran.
    5.757 Elections between VA disability or death compensation and 
pension.
    5.758 Electing Improved Pension instead of Old-Law Pension or 
Section 306 Pension.
    5.759 Election between death compensation and dependency and 
indemnity compensation.
    5.760 Electing Improved Death Pension instead of dependency and 
indemnity compensation.
    5.761 Concurrent receipt of disability compensation, pension, or 
death benefits by a surviving spouse based on the service of more 
than one veteran.
    5.762 Payment of multiple VA benefits to a surviving child based 
on the service of more than one veteran.
    5.763 Payment of multiple VA benefits to more than one child 
based on the service of the same veteran.
    5.764 Payment of Survivors' and Dependents' Educational 
Assistance and VA death pension or dependency and indemnity 
compensation for the same period.
Non-inclusion of Other Part 3 Provisions
Endnote Regarding Amendatory Language
Paperwork Reduction Act
Regulatory Flexibility Act
Executive Order 12866
Unfunded Mandates
Catalog of Federal Domestic Assistance Numbers and Titles
List of Subjects in 38 CFR Part 5

Overview of New Part 5 Organization

    We plan to organize the part 5 regulations so that most of the 
provisions governing a specific benefit are located in the same 
subpart, with general provisions pertaining to all compensation and 
pension benefits also grouped together. We believe this organization 
will enable claimants, beneficiaries, and their representatives, as 
well as VA personnel, to find information relating to a specific 
benefit more quickly than the organization provided in current part 3.
    The first major subdivision would be ``Subpart A--General 
Provisions.'' It would include information regarding the scope of the 
regulations in new part 5, general definitions, and general policy 
provisions for this part. This

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subpart was published as proposed on March 31, 2006. See 71 FR 16464.
    ``Subpart B--Service Requirements for Veterans'' would include 
information regarding a veteran's military service, including the 
minimum service requirement, types of service, periods of war, and 
service evidence requirements. This subpart was published as proposed 
on January 30, 2004. See 69 FR 4820.
    ``Subpart C--Adjudicative Process, General'' would inform readers 
about types of claims and filing procedures, VA's duties, rights and 
responsibilities of claimants and beneficiaries, general evidence 
requirements, and effective dates for new awards, as well as revision 
of decisions and protection of VA ratings. This subpart will be 
published as three separate Notices of Proposed Rulemaking (NPRMs) due 
to its size. The first, concerning the duties of VA and the rights and 
responsibilities of claimants and beneficiaries, was published as 
proposed on May 10, 2005. See 70 FR 24680. The second, covering general 
evidence requirements, effective dates for awards, revision of 
decisions, and protection of VA ratings, was published as proposed on 
May 22, 2007 (AM01). See 72 FR 28770.
    ``Subpart D--Dependents and Survivors'' would inform readers how VA 
determines whether an individual is a dependent or a survivor of a 
veteran. It would also provide the evidence requirements for these 
determinations. This subpart was published as proposed on September 20, 
2006. See 71 FR 55052.
    ``Subpart E--Claims for Service Connection and Disability 
Compensation'' would define service-connected compensation, including 
direct and secondary service connection. This subpart would inform 
readers how VA determines entitlement to service connection. The 
subpart would also contain those provisions governing presumptions 
related to service connection, rating principles, and effective dates, 
as well as several special ratings. This subpart will be published as 
three separate NPRMs due to its size. The first, concerning 
presumptions related to service connection, was published as proposed 
on July 27, 2004. See 69 FR 44614.
    ``Subpart F--Nonservice-Connected Disability Pensions and Death 
Pensions'' would include information regarding the three types of 
nonservice-connected pension: Improved Pension, Old-Law Pension, and 
Section 306 Pension. This subpart would also include those provisions 
that state how to establish entitlement to Improved Pension, and the 
effective dates governing each pension. This subpart would be published 
in two separate NPRMs due to its size. The portion concerning Old-Law 
Pension, Section 306 Pension, and elections of Improved Pension was 
published as proposed on December 27, 2004. See 69 FR 77578.
    ``Subpart G--Dependency and Indemnity Compensation, Death 
Compensation, Accrued Benefits, and Special Rules Applicable Upon Death 
of a Beneficiary,'' would contain regulations governing claims for 
dependency and indemnity compensation (DIC); death compensation; 
accrued benefits; benefits awarded, but unpaid at death; and various 
special rules that apply to the disposition of VA benefits, or proceeds 
of VA benefits, when a beneficiary dies. This subpart would also 
include related definitions, effective-date rules, and rate-of-payment 
rules. This subpart was published as two separate NPRMs due to its 
size. The portion concerning accrued benefits, death compensation, 
special rules applicable upon the death of a beneficiary, and several 
effective-date rules, was published as proposed on October 1, 2004. See 
69 FR 59072. The portion concerning DIC benefits and general provisions 
relating to proof of death and service-connected cause of death was 
published as proposed on October 21, 2005. See 70 FR 61326.
    ``Subpart H--Special and Ancillary Benefits for Veterans, 
Dependents, and Survivors'' would pertain to special and ancillary 
benefits available, including benefits for children with various birth 
defects. This subpart was published as proposed on March 9, 2007. See 
72 FR 10860.
    ``Subpart I--Benefits for Certain Filipino Veterans and Survivors'' 
would pertain to the various benefits available to Filipino veterans 
and their survivors. This subpart was published as proposed on June 30, 
2006. See 71 FR 37790.
    ``Subpart J--Burial Benefits'' would pertain to burial allowances.
    ``Subpart K--Matters Affecting the Receipt of Benefits'' would 
contain provisions regarding bars to benefits, forfeiture of benefits, 
and renouncement of benefits. This subpart was published as proposed on 
May 31, 2006. See 71 FR 31056.
    ``Subpart L--Payments and Adjustments to Payments'' would include 
general rate-setting rules, several adjustment and resumption 
regulations, and election-of-benefit rules. Because of its size, 
subpart L will be published in two separate NPRMs. The portion of 
subpart L that concerns payments to beneficiaries who are eligible for 
more than one benefit is the subject of this NPRM.
    The final subpart, ``Subpart M--Apportionments to Dependents and 
Payments to Fiduciaries and Incarcerated Beneficiaries,'' would include 
regulations governing apportionments, benefits for incarcerated 
beneficiaries, and guardianship.
    Some of the regulations in this NPRM cross-reference other 
compensation and pension regulations. If those regulations have been 
published in this or earlier NPRMs for the Project, we cite the 
proposed part 5 section. We also include, in the relevant portion of 
the Supplementary Information, the Federal Register page where a 
proposed part 5 section published in an earlier NPRM may be found. 
However, where a regulation proposed in this NPRM would cross-reference 
a proposed part 5 regulation that has not yet been published, we cite 
to the current part 3 regulation that deals with the same subject 
matter. The current part 3 section we cite may differ from its eventual 
part 5 counterpart in some respects, but we believe this method will 
assist readers in understanding these proposed regulations where no 
part 5 counterpart has yet been published. If there is no part 3 
counterpart to a proposed part 5 regulation that has not yet been 
published, we have inserted ``[regulation that will be published in a 
future Notice of Proposed Rulemaking]'' where the part 5 regulation 
citation would be placed.
    Because of its large size, proposed part 5 will be published in a 
number of NPRMs, such as this one. VA will not adopt any portion of 
part 5 as final until all of the NPRMs have been published for public 
comment.
    In connection with this rulemaking, VA will accept comments 
relating to a prior rulemaking issued as a part of the Project, if the 
matter being commented on relates to both rulemakings.

Overview of This Notice of Proposed Rulemaking

    This NPRM pertains to payments to claimants and beneficiaries who 
are eligible for more than one VA benefit or one VA benefit in addition 
to certain benefits from other Federal agencies. These regulations 
would be contained in proposed Subpart L of new 38 CFR part 5. Although 
these regulations have been substantially restructured and rewritten 
for greater clarity and ease of use, most of the basic concepts 
contained in these proposed regulations are the same as in their 
existing counterparts in 38 CFR part 3. However, a few substantive 
differences are proposed, as are some regulations that

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do not have counterparts in 38 CFR part 3.

Table Comparing Current Part 3 Rules With Proposed Part 5 Rules

    The following table shows the relationship between the current 
regulations in part 3 and the proposed regulations contained in this 
NPRM:

------------------------------------------------------------------------
                                            Based in whole or in part on
   Proposed part 5 section or paragraph       38 CFR part 3 section or
                                               paragraph (or ``New'')
------------------------------------------------------------------------
5.740--Election...........................  3.701(b).
5.740--Initial election...................  New.
5.740--Reelection.........................  New.
5.740--Timely filed.......................  3.750(b) [third sentence].
5.741(a)..................................  3.155(a), 3.701(b), 13.55,
                                             13.57, 13.58, 13.59, and
                                             New.
5.741(b)..................................  3.155(b), 3.701(b).
5.742(a)..................................  3.702(d)(1) [second
                                             sentence] and 3.711 [second
                                             sentence].
5.742(b)..................................  New.
5.742(c)..................................  3.702(d)(1) [last sentence]
                                             and New.
5.742(d) and (e)..........................  New.
5.743(a)..................................  3.400(j)(1).
5.743(b)..................................  3.500(e) [first sentence],
                                             (i), and (x).
5.745.....................................  3.401(e) and 3.750.
5.746(a)..................................  3.654(a) [second sentence]
                                             and 3.700(a)(1)(ii).
5.746(b)..................................  3.654(a) [first sentence]
                                             and 3.700(a)(1)(i).
5.746(c)..................................  3.501(a) and 3.654(b)(1).
5.746(d)(1)...............................  3.654(b)(2) [first
                                             sentence].
5.746(d)(2)(i)............................  New.
5.746(d)(2)(ii)...........................  3.654(b)(2) [third and
                                             fourth sentences].
5.746(d)(3)...............................  New.
5.746(d)(4)...............................  3.654(b)(2) [second
                                             sentence].
5.746(d)(5)...............................  3.654(b)(2) [last sentence].
5.746(e)..................................  3.654(c) and
                                             3.700(a)(1)(iii).
5.747(a)(1)...............................  3.700(a)(2)(iii) [first
                                             sentence].
5.747(a)(2)...............................  3.700(a)(2)(iv).
5.747(b)..................................  3.700(a)(3).
5.747(c)(1)...............................  3.700(a)(5)(i) [first
                                             sentence].
5.747(c)(2)...............................  3.700(a)(5)(ii).
5.747(d)..................................  3.700(a)(2)(iii), (a)(3),
                                             and (a)(5)(i).
5.748.....................................  3.753.
5.750(a)(1)...............................  3.708(a)(1) and (a)(4).
5.750(a)(2)...............................  3.708(a)(2).
5.750(a)(3)...............................  New.
5.750(b)..................................  3.708(a)(3).
5.751(a)(1)...............................  3.708(b)(1) [first
                                             sentence].
5.751(a)(2)...............................  3.708(b)(1) [second
                                             sentence] and 3.958.
5.751(b)..................................  3.708(b)(2).
5.751(c)..................................  3.708(b)(1) [second and
                                             third sentences (excluding
                                             intervening cross
                                             reference)].
5.751(d)..................................  New.
5.751(e)..................................  3.708(a)(3) and 3.708(b)(1)
                                             [last sentence].
5.752.....................................  New.
5.753.....................................  3.710.
5.754(a)..................................  New.
5.754(b) and (c)..........................  3.715.
5.754(d)..................................  3.500(x).
5.756.....................................  3.700 [introduction].
5.757(a)..................................  3.701(a) [sentences one and
                                             two].
5.757(b)..................................  3.701(a) [sentences one and
                                             two].
5.757(c)..................................  3.701(a) and New.
5.757(d)..................................  3.701(a) [first and third
                                             sentences].
5.757(e)(1)...............................  3.701(a) [first and fourth
                                             sentences].
5.757(e)(2)...............................  New.
5.757(e)(3)...............................  3.701(a) [fifth sentence].
5.758(a)..................................  3.711 [first sentence].
5.758(b)..................................  3.711 [last sentence].
5.758(c)..................................  3.960(a).
5.758(d)..................................  3.701(a) [fifth sentence].
5.759(a)(1)(i)............................  3.702(a).
5.759(a)(1)(ii)...........................  3.702(d)(1).
5.759(a)(2)...............................  3.702(a).
5.759(b)..................................  3.702(c).
5.760.....................................  3.702(d)(2) and New.
5.761.....................................  3.700(b)(1).
5.762(a), (b).............................  3.700(b)(2).
5.762(c)..................................  3.659, 3.703, and
                                             3.503(a)(7).
5.763.....................................  3.704(a).
5.764(a)..................................  3.503(a)(8), 3.659(b),
                                             3.703(c), 3.707(a), and
                                             21.3023.
5.764(b), (c), and (d)....................  3.707 and 21.3023.
------------------------------------------------------------------------

    Readers who use this table to compare existing regulatory 
provisions with the proposed provisions, and who observe a substantive 
difference between them, should consult the text that appears later in 
this document for an explanation of significant changes in each 
regulation. Not every paragraph of every current part 3 section 
regarding the subject matter of this rulemaking is accounted for in the 
table. In some instances, other portions of the part 3 sections that 
are addressed in these proposed regulations will appear in subparts of 
part 5 that are being published separately for public comment. For 
example, a reader might find a reference to paragraph (a) of a part 3 
section in the table, but no reference to paragraph (b) of that section 
because paragraph (b) will be addressed in a separate NPRM. The table 
also does not include provisions from part 3 regulations that will not 
be carried forward to part 5. Such provisions are discussed 
specifically under the appropriate part 5 heading in this preamble. 
Readers are invited to comment on the proposed part 5 provisions and 
also on our proposals to omit those part 3 provisions from part 5.

Content of Proposed Regulations

Payments to Beneficiaries Who Are Eligible for More Than One Benefit--
General Provisions

5.740 Definitions Relating to Elections
    Proposed Sec.  5.740 defines four terms applicable to elections. 
The first definition is of the term ``election.'' Current Sec.  
3.701(b) provides that VA may accept a statement meeting the 
requirements of an informal claim as an election. The requirements of 
an informal claim are contained in the first two sentences of current 
Sec.  3.155(a). They are, essentially, any communication or action from 
a claimant or certain other listed persons that indicates an intent to 
apply for one or more VA benefits and that identifies the benefit(s) 
sought. Additionally, current Sec.  3.1(p) requires that all claims be 
in writing.
    We believe that it would be clearer to define an election directly, 
rather than through a reference to informal claims. We also note that 
there is an element inherent in the concept of an ``election'' that is 
not necessarily present in an informal claim, the element of choice, 
and that in practice VA requires that an election be signed by a person 
with authority to make the election. Considering all of these factors, 
we propose to define an election as ``any writing, signed by a person 
authorized by Sec.  5.741, `Persons who may make an election,' 
expressing a choice between two or more VA benefits to which the person 
is entitled, or between VA and other Federal benefits to which the 
person is entitled.'' No substantive change is intended by this 
definition.
    The next two terms that are defined are ``initial election'' and 
``reelection.'' An initial election is the first election that a person 
authorized by Sec.  5.741 makes between two or more benefits. A 
reelection is a later, different election between benefits that were 
the subject of an initial election. We note that ``initial election'' 
and ``reelection'' are not defined in part 3. We think that adding 
these definitions in part 5 will prove

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very helpful to the reader. The definitions are based on VA's current 
election regulations and no substantive change is intended.
    The last term defined is ``timely filed.'' We propose to state 
that, with respect to elections, ``timely filed'' means that a person 
authorized by Sec.  5.741 filed an election within 1 year of VA's 
notice that such an election is required. This definition is consistent 
with the definition of a ``timely filed'' election in current Sec.  
3.750(b). While that definition is in the context of an election 
between VA benefits and military retirement pay, the definition in fact 
applies to all elections. See 38 U.S.C. 5103(b), which provides that 
when VA notifies a claimant that information or evidence is necessary 
to substantiate a claim, such information or evidence must be received 
by VA within 1 year of the date such notice is sent.
5.741 Persons Who May Make an Election
    Proposed Sec.  5.741 describes persons who may make an election. 
Paragraph (a) lists persons who are authorized to sign an election. 
They include a claimant, a beneficiary, or a person authorized to act 
on behalf of a claimant or beneficiary. This list is based in part on 
current Sec.  3.155(a) and Sec.  3.701(b) and in part on long-standing 
VA practice. We have listed a beneficiary as a person authorized to 
sign an election, which is consistent with long-standing VA practice. 
We have also listed persons who are authorized to act on behalf of a 
claimant or beneficiary according to the requirements of certain VA 
regulations in part 13 of title 38 CFR, regarding fiduciaries. This is 
consistent with long-standing VA practice, and no substantive change is 
intended.
    Paragraph (b) of proposed Sec.  5.741 is also based on current 
Sec.  3.155(a), which states that Members of Congress or a claimant or 
beneficiary's duly authorized representative are able to file an 
informal claim. They are, therefore, able to communicate a claimant's 
or beneficiary's intent to elect a particular benefit, as per Sec.  
3.701(b). However, consistent with long-standing VA practice, they are 
not able to sign an election. Further, as stated in Sec.  3.155(b), a 
communication from certain representatives, namely a service 
organization, an attorney, or an agent, may not be accepted unless a 
power of attorney existed at the time the communication was written.
    In keeping with long-standing VA practice, paragraph (b) of 
proposed Sec.  5.741 states that VA will provide notice to the claimant 
or beneficiary of the right to make an election when it receives a 
communication from a Member of Congress or from a claimant or 
beneficiary's duly authorized representative. If VA receives an 
election signed by a person authorized to do so under Sec.  5.741(a) 
within 1 year of the notice, it will then consider the election to have 
been filed on the date it received the communication from the Member of 
Congress or the representative. These procedures are substantively 
consistent with rules in current Sec.  3.701(b), which permit VA to 
accept a statement meeting the requirements of an informal claim as an 
election, and in current Sec.  3.155, which permits VA to accept an 
informal claim from a Member of Congress or representative subject to 
confirmation through filing a benefit application within 1 year from 
the date VA sends the application. The end result would be the same 
under proposed Sec.  5.741(b) as it would be under current part 3 
rules; however, proposed Sec.  5.471(b) does not use the ``informal 
claim'' language, which lacks clarity in the context of benefit 
elections.
5.742 Finality of Elections; Cancellation of Certain Elections
    Proposed Sec.  5.742 states rules for determining when an election 
is ``final.'' As explained in the introductory paragraph of proposed 
Sec.  5.742, this section explains that a final election or reelection 
ordinarily may be changed only by cancellation under paragraph (d) or 
(e) of this section or by reelection, if authorized. The introductory 
paragraph also explains that other provisions of this part specify when 
reelection is authorized and when a final election or reelection is 
irrevocable.
    Provisions similar to proposed Sec.  5.742(a), (b), (d), and (e) 
were previously published as part of another part 5 NPRM, ``Elections 
of Improved Pension; Old-Law Pension and Section 306 Pension,'' which 
was published as proposed on December 27, 2004, 69 FR 77578. These 
provisions were contained in proposed Sec.  5.461(b). We now propose to 
remove that regulation (Sec.  5.461) and address these concepts in this 
NPRM in proposed Sec. Sec.  5.742 and 5.758 instead. This will help 
achieve consolidation of benefit election rules in this NPRM.
    Proposed Sec.  5.742(a) states that an election is final when a 
beneficiary (or someone authorized to act for the beneficiary under 
Sec.  5.741) has negotiated a check for the elected benefit. This is 
based on the last sentence of Sec.  3.702(d)(1) (which is applicable to 
elections of dependency and indemnity compensation (DIC)) and the 
second sentence of Sec.  3.711 (which is applicable to elections of 
Improved Pension). Although Sec.  3.702(d)(1) concerns DIC elections 
and Sec.  3.711 concerns pension elections, it is long-standing VA 
practice to apply this rule to other elections of benefits. We note 
that Sec.  3.711 refers to an exception to the rule that an election is 
final upon negotiation of a check. The exception is found in current 
Sec.  3.714. We have not included this exception in proposed Sec.  
5.742 because Sec.  3.714 is obsolete. VA proposed the removal of Sec.  
3.714 in a prior rewrite package (``Elections of Improved Pension; Old 
Law and Section 306 Pension,'' RIN 2900-AL83). See 69 FR 77578, 77587.
    The vast majority of VA beneficiaries now receive benefits by 
direct deposit or electronic funds transfer rather than by check. In 
such cases the rule regarding negotiating a check in proposed Sec.  
5.742(a) could not apply. To cover benefits received by direct deposit 
or electronic funds transfer, we have proposed new Sec.  5.742(b), 
which states that elections by beneficiaries who receive benefits by 
direct deposit or electronic funds transfer are final when the 
applicable financial institution receives the second payment of the 
elected benefit. This is consistent with long-standing VA practice. The 
reasoning is that a deposit in the beneficiary's account serves as 
notice that the elected benefits are being paid, just as receipt of a 
check is notice that the elected benefits are being paid.
    Proposed Sec.  5.742(c) provides a general rule that an election is 
final if the payee dies before negotiating a check or before receiving 
a second payment by direct deposit or electronic funds transfer. It is 
derived from the more specific provision contained in the last sentence 
of Sec.  3.702(d)(1), which states that an election of DIC is final 
even if the payee dies before negotiating a check. This expansion of 
the rule from Sec.  3.702(d)(1) is consistent with long-standing VA 
practice and allows for the orderly and consistent administration of 
payments to the estates of deceased beneficiaries. In proposed Sec.  
5.742(c), we have also added a provision addressing direct deposit and 
electronic funds transfer, which we have added to be consistent with 
proposed Sec.  5.742(b).
    Proposed Sec.  5.742(d) states that if VA determines that a 
beneficiary was incompetent when he or she elected a benefit, the 
election can be canceled. This is consistent with long-standing VA 
practice and helps ensure that incompetent beneficiaries receive all 
the benefits to which they are entitled under the law.

[[Page 56140]]

    Proposed Sec.  5.742(e) states that a beneficiary can cancel an 
election if he or she made the election based on erroneous information 
that was provided by VA. However, VA must determine that the 
information was erroneous based on the same evidence of record used 
previously to provide the erroneous information. One example of this 
rule's application would be if VA mistakenly informed a claimant or 
beneficiary that he or she would be entitled to a higher rate if a 
particular benefit were elected and then later determines that this was 
not the case (based on the same evidence of record at the time that VA 
mistakenly informed the claimant or beneficiary of his or her 
entitlement to a higher rate). This is consistent with long-standing VA 
practice and helps ensure that beneficiaries are not unfairly deprived 
of VA benefits.
    Note that when provisions similar to Sec.  5.742(d) and (e) were 
previously proposed as Sec.  5.461(b)(2) and (3), they provided that a 
request to cancel the election must be received within 1 year from the 
date that the election had become effective. Following internal 
reconsideration of this provision, we have determined that this 
limitation might be overly narrow in some cases. Therefore, proposed 
Sec.  5.742(d) and (e) contain no such limitation.
5.743 General Effective Dates for Awarding, Reducing, or Discontinuing 
VA Benefits Because of an Election
    Proposed Sec.  5.743(a) is based on current Sec.  3.400(j)(1), 
which states the general effective date rule for elections. (Other part 
5 provisions may contain specific additional effective date rules.) 
Under current Sec.  3.400(j)(1), unless otherwise provided, the 
effective date of an award of elected VA benefits is ``the date of 
receipt of election, subject to prior payments.'' The effective date is 
``subject to prior payments'' in order to avoid impermissible 
concurrent payment of benefits which a beneficiary cannot lawfully 
receive for the same time period. This could potentially occur when a 
person receiving Benefit A elects to receive Benefit B instead, and the 
award of Benefit B is retroactive for some period of time. Because 
Benefit A and Benefit B cannot be received for the same time period, VA 
would offset the payments already issued for Benefit A against the 
amount payable for Benefit B. Proposed paragraph (a)(2) provides for 
this offset. The reader should note that no substantive change is 
intended in paragraph (a)(2). The offset is provided for in current 
Sec.  3.400(j)(1), and proposed Sec.  5.743(a)(2) merely explains it in 
more detail.
    Section 3.400(j)(1) covers situations where a beneficiary elects a 
different benefit. It does not address situations where a claim is 
pending and an election is timely filed under Sec.  5.740(d). In such 
cases, VA's long-standing practice has been to assign an effective date 
that is the same as the effective date VA would assign for the awarded 
benefit if no election were required. We have added such language to 
Sec.  5.743(a) to address such situations.
    Paragraph (b) provides the effective date for reduction or 
discontinuance when VA reduces or discontinues a benefit because 
another benefit is elected. It is based on current Sec.  3.500(e) 
(first sentence), pertaining to Federal employees' compensation, Sec.  
3.500(i), pertaining to elections in general, and Sec.  3.500(x), 
pertaining to the Radiation Exposure Compensation Act of 1990. We have 
consolidated these three effective date provisions in proposed Sec.  
5.743(b). We note that part 3 regulations provide effective dates for 
reductions and discontinuances of VA benefits in terms of the last date 
of entitlement to payment at the previous rate. We believe that it is 
clearer to state that the effective date for a reduction or 
discontinuance is the first day of payment of the new reduced rate or 
``no-pay date,'' rather than as the last day of the old rate. This 
approach is consistent throughout the rewrite project. We have taken 
that approach in proposed paragraph (b).

Payments From Service Departments and the Effects of Those Payments on 
VA Benefits for Veterans

5.745 Entitlement to Concurrent Receipt of Military Retired Pay and VA 
Disability Compensation
    Proposed Sec.  5.745 pertains to the concurrent receipt of military 
retirement pay and VA disability compensation. It closely follows the 
language of current Sec.  3.750, which was recently amended. No 
substantive changes are proposed.
    Section 3.401(e) contains the effective date rules for elections 
between military retirement pay and VA disability compensation. We have 
incorporated these provisions into Sec.  5.745(e). No substantive 
change is intended.
5.746 Prohibition Against Receipt of Active Military Service Pay and VA 
Benefits for the Same Period
    Proposed Sec.  5.746(a) defines active military service pay. It is 
based on current Sec.  3.654(a) and Sec.  3.700(a)(1)(ii). We propose 
to state ``active military service pay'' rather than ``active service 
pay'' for clarity. No substantive change is intended.
    Proposed Sec.  5.746(b) states the general rule that VA will not 
pay disability compensation or pension for any period in which the 
veteran received active military service pay. It is based on Sec.  
3.700(a)(1)(i) and the first sentence of Sec.  3.654(a). However, we 
have not included the reference to ``retirement pay'' found in current 
Sec. Sec.  3.654(a) and 3.700(a)(1)(i), since VA does not administer 
any veteran's benefit titled ``retirement pay.'' VA previously paid 
emergency officers' retirement pay (EOR), which is no longer a viable 
benefit. Therefore, references to EOR would not be carried forward to 
new part 5. Although military retirement pay may also be discontinued 
when a veteran returns to active duty, VA does not administer that 
benefit.
    Proposed Sec.  5.746(c) states the effective date of discontinuance 
of payments for VA benefits during active duty status. It is based on 
current Sec. Sec.  3.501(a) and 3.654(b)(1). We propose to state that 
VA will discontinue payments ``effective the day the veteran begins 
active duty service.'' This is consistent with our proposal throughout 
the Rewrite Project to state effective dates for discontinuances as the 
actual day payment stops, rather than the last day benefits are paid.
    Title 10 U.S.C. 12316 gives veterans who return to active duty the 
right to continue to receive VA compensation or pension rather than 
active duty pay. This principle is not stated in current Sec.  3.654 
but we believe it is important for veterans to be aware of this right. 
Accordingly, we have included this information in proposed Sec.  
5.746(c).
    Proposed Sec.  5.746(d) concerns the resumption of payments for VA 
benefits after release from active duty. It is based on current Sec.  
3.654(b)(2). Current Sec.  3.654(b)(2) provides that compensation will 
be authorized based on the degree of disability found to exist at the 
time the award is resumed, and that the disability will be evaluated on 
the basis of all facts, including records from the service department 
relating to the most recent period of active service. The practical 
consequence of this is that while the effective date for the resumption 
of payments can be as early as the day following release from active 
duty, the award that will generate those payments can be delayed while 
VA evaluates the degree of current disability.
    In some cases, however, it might be clear from the record that the 
degree of impairment resulting from a service-connected disability had 
already become ``static'' when the veteran returned to active duty. A 
``static'' disability is one that has stabilized and

[[Page 56141]]

is unlikely to either progress or improve. For example, the impairment 
resulting from an injury may remain permanently the same after the 
injury has fully healed. In the case of such static service-connected 
disabilities, the processing of resumed payments need not be delayed to 
reassess current impairment because impairment is not expected to 
change.
    Accordingly, we propose to provide in proposed Sec.  5.746(d)(2)(i) 
that VA will resume payments for service-connected disabilities at the 
same disability level that was in effect immediately prior to entering 
active duty if the evidence of record shows that the level of 
disability was static at the time of entry. This proposed provision is 
consistent with long-standing VA practice and prevents unnecessary 
delays in resuming VA disability compensation payments for veterans 
returning from military service where the degree of impairment for a 
service-connected disability is already known. This would not preclude 
the veteran from requesting an increase if he or she believed the 
disability had worsened. As provided in proposed Sec.  5.746(d)(2)(ii), 
other disabilities (which may have gotten better or worse during the 
period of active duty) would continue to be evaluated before resumed 
payments are awarded.
    Proposed new Sec.  5.746(d)(3) clarifies how the provisions of 
current Sec.  3.31, concerning delayed beginning dates for certain VA 
benefit payments, applies to payments resumed under Sec.  5.746(d). 
With one exception, Sec.  3.31 does not apply because its application 
is limited to ``original, reopened, or increased awards'' and does not 
apply to awards that ``provide only for continuity of entitlement with 
no increase in rate of payment.'' See Sec.  3.31(b). The exception is 
that Sec.  3.31 does apply to the portion of the payment that 
represents the amount of the increase if the disability evaluation is 
increased.
    Members of the Reserves and National Guard cannot receive both 
training pay and VA compensation or pension payments at the same time. 
However, they may waive their VA benefits in order to receive their 
training pay, which may be a greater amount. Proposed Sec.  5.746(e) 
combines and updates the rules relating to waiver of VA benefits while 
on training duty that are located in current Sec. Sec.  3.654(c) and 
3.700(a)(1)(iii). We have omitted a now obsolete reference to 
``retirement pay'' for the reasons noted above. We have clarified that 
the waivers apply to pay received by Reservists and National Guard 
members for active duty for training or inactive duty for training and 
included a cross reference to Sec.  5.23, which explains how VA 
classifies Reserve and National Guard duty. (The text of proposed Sec.  
5.23 may be found at 69 FR 4833.) We have also clarified that while VA 
does continue to accept prospective waivers, each waiver is good for 
not more than 1 year. In most cases, VA generates annual waiver forms 
to send to veterans based upon training duty data provided by the 
Department of Defense.
5.747 Effect of Military Readjustment Pay, Disability Severance Pay, 
and Separation Pay on VA Benefits
    Proposed Sec.  5.747 is derived from current Sec.  3.700(a)(2) 
through (5). We propose not to repeat current Sec.  3.700(a)(2)(i) and 
(ii), concerning readjustment pay under former 10 U.S.C. 687 and 3814, 
because they are no longer necessary. These sections of title 10, 
United States Code, were repealed by Sec. Sec.  109(a) and 214 of the 
Defense Officer Personnel Management Act (the Act) in 1980. Public Law 
96-513, 94 Stat. 2835, 2870 and 2885. The repeal was effective 
September 15, 1981. Public Law 96-513, section 701(a), 94 Stat. 2955.
    Although a savings provision was included in the Act, which allows 
persons who were on active duty on September 14, 1981, and were 
subsequently involuntarily separated from service, to elect payment 
under repealed 10 U.S.C. 687 and 3814, it is unlikely that there are 
still any eligible recipients. Therefore it is unlikely that the 
application of Sec.  3.700(a)(2)(i) and (ii) would be required under 
proposed new part 5. Should that be necessary in a specific case, VA 
may always proceed under the applicable statutes.
    Proposed Sec.  5.747(a) pertains to lump-sum readjustment pay. 
Paragraph (a)(1) of proposed Sec.  5.747 repeats nearly verbatim the 
first sentence of current Sec.  3.700(a)(2)(iii). It describes the 
recoupment of lump-sum readjustment from VA compensation. Paragraph 
(a)(2) is derived from 3.700(a)(2)(iv), and describes the prohibition 
against recoupment of lump-sum readjustment pay from VA compensation 
awarded for a subsequent period of service.
    Proposed Sec.  5.747(b) is derived from current Sec.  3.700(a)(3) 
and restates the conditions under which VA will recoup disability 
severance pay from a subsequent award of VA disability compensation. We 
have not included provisions regarding nondisability severance pay 
because it is highly unlikely that there will be any remaining eligible 
recipients. Nondisability severance pay was authorized under former 10 
U.S.C. 8786, which was repealed by the Act in 1980. Although the 
savings provision allows personnel who were on active duty on September 
14, 1981, to be awarded nondisability severance pay, it is highly 
unlikely that it would still be awarded, since, due to the passage of 
time, such personnel would now be eligible for retirement benefits. The 
purpose of nondisability severance pay was to provide for service 
members who were involuntarily separated from the military prior to 
eligibility for retirement benefits. Now that these personnel would 
more than likely be eligible for retirement benefits, we believe a 
regulation pertaining to nondisability severance pay is no longer 
necessary.
    We note that Sec.  3.700(a)(3) indicates that VA will recoup the 
total amount of disability severance pay from an award of VA 
compensation when entitlement to VA compensation was established on or 
after September 15, 1981, even if the award for VA compensation is not 
for the same disability for which disability severance pay was granted. 
While this may be true for recoupment of nondisability severance pay, 
this proposed rule would explain that it is not true for disability 
severance pay. Under 10 U.S.C. 1212(c), VA must only recoup disability 
severance pay from VA compensation when the VA compensation is for the 
same disability for which disability severance pay was granted.
    The current regulation reflects an ambiguity existing between two 
statutes. Section 1212(c) permits VA to recoup disability severance pay 
from VA compensation when the VA compensation is for the same 
disability for which disability severance pay was granted. However, 10 
U.S.C. 1174(h)(2) states more broadly that if a veteran received 
separation pay, severance pay, or readjustment pay under any provision 
of law based on service in the armed forces, VA must deduct the ``total 
amount'' of such payment from VA disability compensation payments to 
the veteran. The current provision in section 3.700(a)(3) may suggest 
the view that the general rule stated in section 1174(h)(2) supersedes 
the more specific, but earlier-enacted rule in section 1212(c). 
However, the Supreme Court has stated that ``it is a commonplace of 
statutory construction that the specific governs the general.'' Morales 
v. TWA, 504 U.S. 374, 384 (1992). Further, section 1161 of title 38, 
United States Code, which governs VA disability compensation awards, 
continues to refer to 10 U.S.C. 1212(c), rather than 10 U.S.C. 
1174(h)(2), as the statute governing payment of disability compensation 
in cases involving

[[Page 56142]]

disability severance pay. Accordingly, the provision in this proposed 
rule that VA will recoup disability severance pay from VA disability 
compensation only where both awards involve the same disability more 
accurately reflects the requirements of the governing statutes. For the 
reasons stated above, provisions regarding nondisability severance pay 
are no longer necessary and are not included in proposed Sec.  5.747.
    Proposed Sec.  5.747(c) pertains to recoupment of separation pay 
and special separation benefits. Paragraph (c)(1) of proposed Sec.  
5.747 repeats nearly verbatim the first sentence of current Sec.  
3.700(a)(5)(i). It describes the recoupment of separation pay from VA 
compensation. Paragraph (c)(2) of proposed Sec.  5.747 is derived from 
current Sec.  3.700(a)(5)(ii), and describes the prohibition against 
recoupment of separation pay from VA compensation awarded for a 
subsequent period of service.
    Proposed Sec.  5.747(d) states the amount VA must recoup from VA 
disability compensation for lump-sum readjustment pay, disability 
severance pay, separation pay, or special separation benefits paid to 
veterans upon their separation from service. It consolidates portions 
of current Sec. Sec.  3.700(a)(2)(iii), (a)(3), and (a)(5)(i).
    There is one change concerning the amount of special separation 
benefits awarded under 10 U.S.C. 1174a that VA must recoup. Current 
Sec.  3.700(a)(5) provides, in part, that VA will recoup the full 
amount of special separation benefits paid on or before September 30, 
1996, but will reduce the amount recouped by the amount of Federal 
income tax withheld from special separation benefits paid after 
September 30, 1996. That was accurate at the time that Sec.  
3.700(a)(5) was drafted. However, section 8208 of the Transportation 
Equity Act for the 21st Century, Public Law 105-178, 112 Stat. 107, 495 
(1998), extended the provision allowing the deduction of Federal income 
tax withholding back to December 5, 1991, the date that section 1174a 
was added to title 10, United States Code. Public Law 102-190, section 
661(a)(1), 105 Stat. 1290, 1394 (1991). Thus, the deduction of Federal 
income tax withheld from the amount VA must recoup applies to all 10 
U.S.C. 1174a special separation benefits. Proposed Sec.  5.747(d)(2) 
reflects this change.
5.748 Concurrent Receipt of VA Disability Compensation and Retirement 
Pay by Certain Officers of the Public Health Service
    Proposed Sec.  5.748 is based on current Sec.  3.753 with no 
substantive change. We have added authority citations.

Payments From Federal Agencies and the Effects of Those Payments on VA 
Benefits for Veterans and Survivors

5.750 Election Between VA Benefits and Compensation Under the Federal 
Employees' Compensation Act for Death or Disability Due to Military 
Service
    Proposed Sec.  5.750 is based on current Sec.  3.708(a), pertaining 
to benefits payable under the Federal Employees' Compensation Act 
(FECA), based on service in the U.S. Armed Forces before January 1, 
1957. (FECA compensation is also payable based on Federal civilian 
employment, which is the subject of proposed Sec.  5.751.) Paragraph 
(a)(1) of proposed Sec.  5.750 is based on current Sec.  3.708(a)(1) 
and (a)(4). Current Sec.  3.708(a)(1) is entitled ``initial election.'' 
We have changed this to ``election required,'' because ``initial 
election'' might imply that a reelection is possible. Under 5 U.S.C. 
8116(b), however, an election between VA benefits and FECA compensation 
generally is irrevocable and thus is not subject to a subsequent 
reelection (with an exception noted in proposed Sec.  5.750(a)(2)). 
Thus, the title has been changed to ``election required.'' In addition, 
we have added a provision indicating that an election between VA 
benefits and FECA compensation is irrevocable, aside from the exception 
provided for in proposed Sec.  5.750(a)(2). We believe that providing 
this clarification will be helpful to the reader. No substantive change 
is intended.
    Paragraph (a)(2) of proposed Sec.  5.750 is based on current Sec.  
3.708(a)(2). We have changed the heading from ``right of reelection'' 
to ``right to elect DIC in lieu of FECA compensation at any time.'' We 
believe the heading ``right of reelection'' is too broad, and may imply 
that any election involving FECA compensation is subject to reelection. 
As noted above, this is not the case. We believe the new, more specific 
heading, is more accurate and more helpful to the reader. No 
substantive change is intended. The basis for allowing a one-time 
election of DIC is the statutory provision under 38 U.S.C. 1316, which 
prohibits any return to FECA compensation once DIC has been granted.
    Paragraph (a)(3) of proposed Sec.  5.750 provides that if a veteran 
makes an election of FECA compensation instead of VA disability 
compensation for a particular disability, and the veteran subsequently 
is awarded increased VA compensation based on a subsequent increased 
impairment of that disability, the veteran may elect to receive FECA 
compensation or VA compensation as to that additional disability. The 
basis for this policy is that the increase in payment is considered a 
new award that is subject to an initial election.
    Paragraph (b) of proposed Sec.  5.750 is based on current Sec.  
3.708(a)(3), and involves the effect of a surviving spouse's election 
of FECA compensation or VA benefits on the rights of children. We have 
divided the provisions of current Sec.  3.708(a)(3) into proposed Sec.  
5.750(b)(1) and (b)(2). Proposed Sec.  5.750(b)(1) addresses situations 
where the rights of the child are controlled by the surviving spouse. 
Proposed Sec.  5.750(b)(2) addresses situations where the rights of the 
child are independent of the surviving spouse.
    We have added an authority citation at the end of proposed Sec.  
5.750, which includes section 8116(b) of title 5, United States Code, 
which is the statute governing elections between VA benefits and FECA 
compensation, section 501(a) of title 38, United States Code, which is 
the statute authorizing the Secretary of VA to prescribe regulations 
that are necessary or appropriate to carry out the laws administered by 
VA, and section 1316(b) of title 38, United States Code, which is the 
statute pertaining to elections between DIC and FECA compensation.
5.751 Election Between VA Benefits and Compensation Under the Federal 
Employees' Compensation Act for Death or Disability Due to Federal 
Civilian Employment
    Proposed Sec.  5.751 is based primarily on current Sec. Sec.  
3.708(b) and 3.958, regarding FECA compensation for death or disability 
due to Federal civilian employment. However, paragraph (d) of proposed 
Sec.  5.751 is new.
    Proposed Sec.  5.751(a)(1) is based on current Sec.  3.708(b)(1), 
and states the requirement that an individual must make an election 
between FECA compensation and VA disability compensation or dependency 
and indemnity compensation (DIC) if both FECA compensation and VA 
benefits are awarded based on the same disability or death.
    Proposed Sec.  5.751(a)(2) is based on current Sec. Sec.  
3.708(b)(1) and 3.958. It states that an individual may receive FECA 
compensation and VA benefits at the same time if there was an award 
prior to September 13, 1960, approving such

[[Page 56143]]

receipt. In such cases, an election between FECA compensation and VA 
benefits is not required.
    Proposed Sec.  5.751(b) is based on current Sec.  3.708(b)(2) and 
states that there is no prohibition against concurrent payment of FECA 
compensation and VA compensation if entitlement to each benefit is 
based on a different disability or death. An election between FECA 
compensation and VA benefits is not required in such cases.
    Proposed Sec.  5.751(c) is based on current Sec.  3.708(b)(1) and 
states that a Federal civilian employee's election between FECA 
compensation and VA benefits for the same disability is irrevocable, 
with the exception of the situation addressed in paragraph (d) of 
proposed Sec.  5.751.
    Paragraph (d) of proposed Sec.  5.751, which is similar to 
paragraph (a)(3) of proposed Sec.  5.750, provides for the situation 
where a veteran has elected FECA compensation, but later there is an 
increase in the disability which would warrant an increase in VA 
compensation. The veteran may elect between FECA compensation and VA 
compensation as to that additional disability. The basis for this 
policy is that the increase in payment is considered a new award that 
is subject to an initial election.
    Paragraph (e)(2) of proposed Sec.  5.751 is based on current Sec.  
3.708(b)(1) and states that a child who is eligible for DIC or other VA 
benefits independent of a surviving spouse may receive those benefits 
concurrently with the payment of FECA compensation to the surviving 
spouse. We have added paragraph (e)(1) to address a situation where the 
surviving spouse's election controls the rights of a child. This is the 
same provision as found in current Sec.  3.708(a)(3) and proposed Sec.  
5.750(b)(1), which apply to elections involving FECA compensation based 
on disability or death due to military service. The provision equally 
applies to elections involving FECA compensation based on a disability 
or death due to civilian employment, so we have included it in proposed 
Sec.  5.751(e)(1).
    We have added an authority citation at the end of proposed Sec.  
5.751, which includes section 8116(b) of title 5, United States Code, 
which is the statute governing elections between VA benefits and FECA 
compensation, and section 501(a) of title 38, United States Code, which 
is the statute authorizing the Secretary of VA to prescribe regulations 
which are necessary or appropriate to carry out the laws administered 
by VA.
5.752 Procedures for Elections Between VA Benefits and Compensation 
Under the Federal Employees' Compensation Act
    This is a new regulation which sets out the special election 
procedures that apply to elections between VA benefits and compensation 
under the Federal Employees' Compensation Act (FECA). Unlike other 
elections involving VA benefits, an election between VA benefits and 
FECA compensation is made with the U.S. Department of Labor's Office of 
Workers' Compensation Programs (OWCP), not with VA. The procedures 
described in proposed Sec.  5.752 are based on long-standing VA 
practice; no substantive change to these procedures is intended.
5.753 Payment of VA Benefits and Civil Service Retirement Benefits for 
the Same Period
    Proposed Sec.  5.753 is a restatement of current Sec.  3.710 
without substantive change.
5.754 Effect of Payment of Compensation Under the Radiation Exposure 
Compensation Act of 1990 on Payment of Certain VA Benefits
    Proposed Sec.  5.754 is based on current Sec.  3.715, which was 
recently amended, pertaining to the concurrent receipt of Radiation 
Exposure Compensation Act of 1990 (RECA) compensation and VA benefits. 
In addition, we have added paragraph (d), which is based on current 
Sec.  3.500(x), regarding the effective date of discontinuance or 
reduction of VA benefits due to receipt of RECA compensation. In 
keeping with the practice used throughout proposed part 5, we have 
reframed this discontinuance effective date rule in terms of the first 
day that benefits are not paid rather than in terms of the last day 
benefits are paid. In addition, we have changed the cite to current 
Sec.  3.309(d), which appears in current Sec.  3.715, to Sec.  5.268, 
``Service connection for diseases presumed to be due to exposure to 
ionizing radiation,'' which was published as proposed on July 27, 2004. 
See 69 FR 44614.

Rules Concerning the Receipt of Multiple VA Benefits

5.756 Prohibition Against Concurrent Receipt of Certain VA Benefits 
Based on the Sservice of the Same Veteran
    Proposed Sec.  5.756 is based on portions of the introduction to 
Sec.  3.700 that relate to disability and death compensation, 
dependency and indemnity compensation (DIC), and pension benefits. The 
text has been simplified and restructured for clarity. No substantive 
changes are intended.
    Paragraph (a) of proposed Sec.  5.756 is based on the first 
sentence of current Sec.  3.700. We note that this sentence refers to 
veterans, because it states that not more than one award will be paid 
to any person ``based on his or her own service.'' Although the first 
sentence of current Sec.  3.700 refers to ``compensation,'' we have 
specified in proposed Sec.  5.756 that this is ``disability 
compensation.''
    Paragraph (b) of proposed Sec.  5.756 is based on the second 
sentence of current Sec.  3.700. Although Sec.  3.700 refers to 
``dependents,'' proposed Sec.  5.756(b) refers to ``survivors,'' which 
is the term used throughout Part 5 to refer to persons who may receive 
benefits based on the death of a veteran. Dependents of a VA 
beneficiary are not entitled to compensation, pension, or DIC in their 
own right, and the prohibition on payment of multiple benefits 
therefore is not applicable to dependents. We note that dependents may 
receive apportionments of amounts otherwise payable to VA 
beneficiaries. In such cases, however, the prohibition on multiple 
benefits and the rights of election apply to the beneficiary, rather 
than the apportionee, except where a statute or regulation expressly 
provides otherwise (see proposed Sec.  5.757(e)(3)). Additionally, 
although the second sentence of current Sec.  3.700 refers to 
``compensation,'' we have specified that this is ``death 
compensation.'' This is not a substantive change, because the current 
rule has no application to awards of disability compensation, a benefit 
awarded only to living veterans. The reader should see the discussion 
in the preamble regarding proposed Sec.  5.757 for a further 
explanation of the effort to be more specific when referring to 
compensation.
    Although the introduction to Sec.  3.700 includes references to 
other benefits, including emergency officers', regular or reserve 
retirement pay, and naval pension, these references have not been 
repeated in proposed Sec.  5.756, for the following reasons. Regarding 
emergency officers' retirement pay, we note that there are no longer 
any veterans receiving this benefit. Therefore, there are no 
regulations pertaining to this benefit that will be included in 
proposed part 5. Regarding military retirement pay, we plan to 
specifically address the concurrent receipt of military retirement pay 
and VA benefits in another regulation, Sec.  5.745. Regarding naval 
pension, we note that the concurrent receipt of naval pension and VA 
benefits will be addressed in subpart H of proposed part 5 in a 
separate NPRM.

[[Page 56144]]

5.757 Elections Between VA Disability or Death Compensation and Pension
    Paragraphs (a) and (b) of proposed Sec.  5.757(a) are based on 
portions of the first two sentences of current Sec.  3.701(a). The 
first sentence of current Sec.  3.701(a) states that, except as 
otherwise provided, a person entitled to receive pension or 
compensation under more than one law or section of a law administered 
by VA may elect to receive either benefit, regardless of whether it is 
the greater or lesser benefit, even though the election reduces the 
benefits payable to his or her dependents. The second sentence of 
current Sec.  3.701(a) states that such person may at any time elect or 
reelect the other benefit. These two sentences of current Sec.  
3.701(a) have been slightly reworded and reorganized into paragraph (a) 
of proposed Sec.  5.757, pertaining to elections between disability 
compensation and pension, and paragraph (b) of proposed Sec.  5.757, 
pertaining to elections between death compensation and pension. We have 
not included the provisions regarding the effect of an election on 
dependents and survivors in these new paragraphs, however. Instead, we 
have included them in paragraphs (d) and (e)(1) of proposed Sec.  
5.757. These paragraphs, as discussed below, deal exclusively with the 
effect of an election on a dependent or survivor.
    There are several matters that we seek to clarify in proposed Sec.  
5.757. First, we note that some current part 3 regulations are not 
specific about what is included when the term ``compensation'' is used. 
This could lead to misinterpretation. Therefore, we are attempting to 
be more specific in part 5. When current Sec.  3.701 refers to 
``compensation,'' it is referring to disability or death compensation 
and not dependency and indemnity compensation (DIC). In that r