Burial Benefits, 76574-76589 [2013-29142]

Agencies

• DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 78, Number 243 (Wednesday, December 18, 2013)]
[Proposed Rules]
[Pages 76574-76589]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29142]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-A082


Burial Benefits

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to clarify, 
reorganize, and rewrite in plain language its regulations that govern 
entitlement to monetary burial benefits, which include burial 
allowances for service-connected and non-service-connected deaths, a 
plot or interment allowance, and reimbursement of transportation 
expenses. The amendments would also establish rules to support VA's 
automated payment of burial allowances to surviving spouses, conversion 
to flat-rate burial and plot or interment allowances that are equal to 
the maximum benefit authorized by law, and priority of payment to non-
spouse survivors.

DATES: VA must receive comments on or before January 17, 2014.

ADDRESSES: Written comments may be submitted through https://www.regulations.gov; by mail or hand-delivery to Director, Regulations 
Management (02REG), Department of Veterans Affairs, 810 Vermont Avenue 
NW., Room 1068, Washington, DC 20420; or by fax to (202) 273-9026. 
Comments should indicate that they are submitted in response to ``RIN 
2900-A082, Burial Benefits.'' Copies of comments received will be 
available for public inspection in the Office of Regulation Policy and 
Management, Room 1063B, between the hours of 8:00 a.m. and 4:30 p.m. 
Monday through Friday (except holidays). Please call (202) 461-4902 for 
an appointment. This is not a toll-free number. In addition, during the 
comment period,

[[Page 76575]]

comments may be viewed online through the Federal Docket Management 
System at https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Mr. Rob Watkins, Pension and Fiduciary 
Service (21PF), Veterans Benefits Administration, Department of 
Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420; (202) 
632-8863. This is not a toll-free number.

SUPPLEMENTARY INFORMATION: Under 38 U.S.C. chapter 23, VA has authority 
to pay benefits to certain deceased veterans' survivors and other 
persons for the veterans' burials and funerals, to include a burial 
allowance for non-service-connected deaths (38 U.S.C. 2302, 2303(a)) or 
a burial allowance for service-connected deaths (38 U.S.C. 2307). 
Congress also authorized VA to pay a plot or interment allowance for 
veterans who are eligible for burial in a national cemetery and who are 
not buried in such a cemetery (38 U.S.C. 2303(b)). Finally, Congress 
authorized VA to reimburse the cost of transportation of certain 
deceased veterans to the place of burial (38 U.S.C. 2303(a), 2308).
    VA implemented its authority under chapter 23 in subpart B of 38 
CFR part 3, specifically Sec. Sec.  3.1600 through 3.1612. However, 
these regulations are poorly organized and difficult to understand.
    The current rules are also flawed to the extent that they do not 
account for the current cost of a burial or funeral and inhibit VA's 
ability to automate the payment of burial benefits to certain 
beneficiaries. In a proposed rule published in the Federal Register on 
April 8, 2008 (73 FR 19,021), VA proposed to reorganize and rewrite in 
plain language provisions applicable to burial benefits. This proposed 
rule would build upon that earlier proposed rule. We propose to remove 
the current regulations and replace them with new Sec. Sec.  3.1700 
through 3.1713, which are written and organized for clarity and ease of 
use and are based, in part, upon the earlier proposed provisions. In 
addition, as described in detail below, we also propose to improve VA's 
delivery of these benefits by, among other things, automatically paying 
surviving spouses certain burial benefits when eligibility for those 
benefits can be determined from evidence of record, paying flat-rate 
burial and plot or interment allowances, and establishing a priority of 
payment for deceased veterans' survivors. We intend that these changes 
will allow VA to automate payment of a burial allowance to most 
surviving spouses and expedite the adjudication of all other burial 
benefits claims.

Background

    VA and its predecessor agencies have a long history of paying 
monetary benefits for deceased veterans' burial and funeral expenses. 
In 1917, Public Law 65-90 authorized a maximum payment of $100 for a 
deceased servicemember's burial expenses and transportation of the 
remains to the servicemember's home. In 1924, Public Law 68-242 
extended those benefits to certain veterans, but did not change the 
maximum benefit amount. Congress amended the law several times in 
subsequent years to add new entitlements and to increase the maximum 
benefit amount that VA may pay. However, the maximum burial allowance 
for non-service-connected death (``non-service-connected burial 
allowance''), currently $300, has not changed since the 1978 enactment 
of Public Law 95-479, the Veterans' Disability Compensation and 
Survivors' Benefits Act of 1978. While Congress increased the maximum 
burial allowance for service-connected death (``service-connected 
burial allowance'') in 1978 ($1,100), 1988 ($1,500), and 2001 ($2,000), 
there has been no recent increase, and with only a few exceptions (see 
38 U.S.C. 2303) these benefits are not indexed to inflation. Currently, 
in almost all burial benefits claims, VA pays the maximum benefit 
authorized by law.
    In a 2009 report, a congressional committee cited the National 
Funeral Directors Association's (NFDA) 2006 estimate for the average 
cost of a funeral ($7,323) and expressed concern that inflation had 
eroded the purchasing power of VA's burial benefits. See S. Rep. No. 
111-71, at 28-29. In response to this concern, Congress enacted section 
501 of the Veterans' Benefits Act of 2010 (Pub. L. 111-275), which 
increased (from $300 to $700) the burial allowance under section 
2303(a) for a veteran who died while hospitalized by VA and the plot or 
interment allowance under section 2303(b). The law also added section 
2303(c) to index the allowances paid under that section to inflation 
and ``preserve the purchasing power of the benefit[s].'' See S. Rep. 
No. 111-71 at 29.
    In 2007 and 2008, VA's Office of Policy and Planning (OPP) 
conducted a study to determine whether VA's burial program was 
achieving expected outcomes and to determine the program's impact on 
veterans and families. See Evaluation of the VA Burial Benefits 
Program: Final Report, available at https://www.va.gov/op3/docs/ProgramEvaluations/Final_Burial_Report_8-26-08.pdf. OPP found that 
funeral costs had increased at a greater pace than the cost of other 
services since 1990. OPP noted that in 1973, the service-connected 
burial allowance covered 72 percent of a veteran's funeral and burial 
expenses, and the non-service-connected allowance covered only 22 
percent of a veteran's funeral and burial expenses. The plot allowance 
covered only 54 percent of the cost of a deceased veteran's burial 
plot. According to OPP, by 2007, the value of these benefits had 
decreased significantly, and the service-connected burial allowance 
reimbursed only 23 percent of the cost of a veteran's burial, the non-
service-connected burial allowance reimbursed only 4 percent of the 
cost of a veteran's burial, and the plot or interment allowance 
reimbursed only 14 percent of the cost of a plot.
    The NFDA reports on its Web site, www.nfda.org, that the median 
cost of a funeral and burial was $7,045 in 2012. The reported cost did 
not include the cost of a vault or cemetery or other miscellaneous cash 
advance charges, such as charges for flowers or obituaries. Further, 
NFDA reports that the median cost for an adult burial and funeral in 
the United States had increased from $708 in 1960 to $7,045 in 2012. 
With one exception for plot or interment allowances paid to States, VA 
currently administers all monetary burial benefits on a reimbursement 
basis. In section 2302 regarding the non-service-connected burial 
allowance, Congress prescribed, ``the Secretary [of Veterans Affairs], 
in the Secretary's discretion, having due regard to the circumstances 
in each case, may pay a sum not exceeding $300 to such person as the 
Secretary prescribes to cover the burial and funeral expenses.'' In 
section 2303(a)(1)(A) regarding deaths in a VA facility, Congress 
authorized VA to ``pay the actual cost (not to exceed $700 . . .) of 
the burial and funeral.'' In section 2307 regarding the service-
connected burial allowance, Congress prescribed, ``the Secretary, upon 
the request of the survivors of such veteran, shall pay the burial and 
funeral expenses incurred in connection with the death of the veteran 
in an amount not exceeding . . . $2,000.'' Finally, in section 2303(b) 
regarding the plot allowance, Congress prescribed, ``the Secretary 
shall pay a sum not exceeding $700 . . . as a plot or interment 
allowance.''
    VA originally created a reimbursement-based benefits system to 
implement these statutes. The reimbursement system that VA implemented 
in its current burial regulations is burdensome for claimants and 
difficult for VA to administer. Further, this system does not best 
reflect

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what Congress intended. Legislative history demonstrates that Congress 
intended for payment of burial benefits to be uncomplicated and to draw 
on information within VA's control. For example, in passing the Omnibus 
Budget Reconciliation Act of 1981 (Public Law 97-35), Congress 
simplified the non-service-connected burial allowance criteria by 
linking eligibility to a veteran's entitlement to receive compensation 
or pension. Acknowledging increased burial benefits claims because of 
climbing death rates among World War II veterans, Congress' clear 
motivation was to make burial benefits ``easier to administer, i.e., 
through existing VA compensation and pension rolls.'' See S. Rep. No. 
139, 97th 1st Sess. 1981 at 999; see also S. Rep. No. 71, 111th Cong., 
1st Sess. 2009 at 28. We believe that automation of burial benefit 
payments and payment at a flat rate wherever possible based on data 
that VA maintains in its compensation and pension rolls is consistent 
with congressional intent in this regard.
    Under current regulations, after VA determines basic eligibility 
for burial, e.g., whether the veteran had qualifying service and was in 
receipt of disability compensation or pension, survivors or other 
persons who incurred burial expenses must submit statements and proof 
of payment to establish entitlement. This procedure complicates VA's 
adjudication of burial claims and payment of benefits. As a result, the 
claimant, or in some cases the service provider, has the burden of 
carrying the full cost of the funeral and burial pending VA's 
reimbursement. Moreover, the reimbursement process is inefficient 
because it requires the careful review of a claimant's actual expenses 
and a precise calculation of burial costs for small, one-time benefit 
payments, when the average cost of a burial almost always exceeds by 
far the statutory maximum rate that VA is authorized to pay. The 
reimbursement system also impedes VA's efforts to automate payment of 
burial benefits based on information in VA systems on the date of a 
veteran's death. We estimate that VA could automatically provide a 
burial allowance to approximately 62,000 surviving spouses annually 
based on information in VA systems, if we simply paid the maximum 
burial allowance authorized by Congress.
    Accordingly, we propose to amend VA's burial regulations to 
authorize the payment of flat-rate service-connected and non-service-
connected burial allowances and the plot or interment allowance at the 
statutory maximum amount. VA has determined that it is not 
administratively efficient to adjudicate each burial benefit claim on a 
reimbursement basis when it is clear that the average cost of a burial 
far exceeds the maximum benefit authorized by Congress.
    As of the end of April 2013, VA took an average of over 180 days to 
process a claim for burial benefits. The proposed rules would enable VA 
to process and pay an estimated 62,000 surviving spouses automatically, 
i.e., without application, in conjunction with the veteran's month-of-
death benefit payment. This would relieve those survivors of the need 
to cover the veteran's funeral and burial expenses up front and wait 
for VA to provide reimbursement. Additionally, the automation of 
payments, revised priority of claimants, and simplified adjudication 
process included in these proposed rules will result in significant 
savings of administrative resources. As a result, VA could divert those 
resources away from adjudicating these small, one-time benefits, and 
expedite the adjudication of all other benefits claims.

 3.1700 Types of VA Burial Benefits

    Current regulations do not provide any introductory description of 
the types of burial benefits that VA has authority to pay. Proposed 
Sec.  3.1700 would add clarity to the regulations by providing an up-
front explanation of VA burial benefits by benefit type. Proposed 
paragraph (a) would list burial benefits that are ``allowances'' or 
one-time monetary payments.
    While current burial regulations use the terms ``burial expenses'' 
and ``funeral expenses'' inconsistently, proposed paragraph (b) would 
clarify and liberalize VA's definition of ``burial.'' Under the 
proposed rule, the definition would be placed at the beginning of the 
subpart and expanded to ensure that readers know that VA pays burial 
benefits for all legal methods of disposing of a veteran's remains, 
including cremation, burial at sea, and medical school donation.
    Proposed paragraph (c) would provide references to VA regulations 
governing benefits for memorialization or interment of deceased 
veterans and certain survivors. We included the phrase ``or interment'' 
after ``memorialization'' to clarify the distinction between interment 
and memorialization. ``Interment'' refers to the burial of casketed 
remains in the ground or the placement or scattering of cremated 
remains. ``Memorialization'' means any action taken to honor the memory 
of a deceased individual. 38 CFR 38.600.

 3.1701 Deceased Veterans for Whom VA May Provide Burial Benefits

    Under the definition in 38 U.S.C. 101(2), a ``veteran'' is a person 
who served in ``the active military, naval, or air service, and who was 
discharged or released therefrom under conditions other than 
dishonorable.'' Under section 2302, VA has authority to pay for certain 
burial expenses if the veteran was in receipt of compensation or 
pension benefits at the time of death, and for certain expenses for 
veterans of ``any war'' or veterans released from active service ``for 
a disability incurred or aggravated in line of duty . . . and with 
respect to whom the Secretary determines--(A) that there is no next of 
kin or other person claiming the body of the deceased veteran, and (B) 
that there are not available sufficient resources to cover burial and 
funeral expenses.'' As discussed below in this preamble, section 104 of 
Public Law 112-260, effective January 10, 2014, will amend section 
2302(a)(2) by removing the wartime service and disability requirements 
for payment of the burial allowance for the unclaimed remains of 
veterans.
    The introductory text in current 38 CFR 3.1600 defines the term 
``veteran'' for burial benefit purposes as including a person who died 
during a period deemed to be active service under current 38 CFR 
3.6(b)(6) that was terminated by a discharge or release under 
conditions that are other than dishonorable. VA further addressed the 
applicable service requirements in current 38 CFR 3.1600(b)(3), 
3.1600(e), and 3.1601(a). We determined that these provisions could be 
clearer if VA addressed the service requirements for burial benefits in 
one place. Proposed Sec.  3.1701 would describe the basic eligibility 
criteria for payment of burial benefits for a deceased veteran. It 
would clarify that a veteran must be deceased, and that burial benefits 
for that veteran must be authorized by a specific provision of law. 
Proposed Sec.  3.1701 would also extend the definition of veteran to 
persons who died shortly after discharge or release from active service 
under 38 U.S.C. 106(c) as currently implemented by VA in Sec.  
3.6(b)(7).
    An example of a ``specific provision of law'' would be 46 U.S.C. 
11201(a), which prescribes burial allowance eligibility for Merchant 
Mariners who served between August 16, 1945, and December 31, 1946, and 
who meet the requirements of 46 U.S.C. 11201 through 11204, and are 
thus deemed to have served on active duty in the Armed Forces. Given 
this definition of

[[Page 76577]]

``veteran,'' we have determined that it would be unnecessary to include 
the provisions in current 38 CFR 3.1600(e) regarding categories of 
individuals who are not eligible for burial benefits in this proposed 
rule. Further, there are generally applicable provisions in title 38 of 
the CFR that prescribe the requirements for veteran status. There is no 
need to restate those provisions in proposed Sec.  3.1701.

 3.1702 Persons Who May Receive Burial Benefits; Priority of Payments

    Apart from claims submitted by a State, or by an agency or 
political subdivision of a State, for the plot or interment allowance 
in section 2303(b)(1), the burial laws in chapter 23 do not specify who 
may receive burial benefits. See 38 U.S.C. 2302 (providing that VA 
``may pay a sum not exceeding $300 to such person as the Secretary 
prescribes''); see also 38 U.S.C. 2307 (providing that VA ``shall pay 
the burial and funeral expenses incurred'' ``upon the request of the 
survivors'' without specifying which survivors VA shall pay). The law 
provides VA with discretion to prescribe who may be properly paid 
burial benefits.
    Current Sec. Sec.  3.1601 and 3.1602 prescribe who may sign a claim 
for the burial allowance and who may sign a claim for the plot or 
interment allowance; establish a priority of payment; and provide that, 
in some cases, VA will distribute burial benefits among payees. The 
current claimant-payment framework authorizes funeral directors to sign 
claims and prioritizes payment to funeral directors and other service 
providers before survivors. This system does not best reflect 
legislative intent and conflicts with VA's plan to automate and 
prioritize payment of burial benefits to surviving spouses. We 
therefore propose significant changes to VA's burial benefit claimant 
and payment regulations consistent with our authority to pay burial 
benefits. Significantly, we propose to establish a payment structure 
that authorizes VA to automatically pay surviving spouses when 
eligibility for burial benefits can be determined from the evidence of 
record.
    Proposed Sec.  3.1702(a) would describe in plain language VA's 
revised payment policy. VA would automatically pay the burial allowance 
to an eligible surviving spouse, regardless of a claim for that same 
benefit by other claimants, in conjunction with its payment of the 
month-of-death benefit prescribed in 38 CFR 3.20 and without the need 
for an application from the surviving spouse. As we describe in greater 
detail in the supplementary information on proposed Sec.  3.1703 
regarding claims for burial benefits, for purposes of these automated 
payments, the application would be the veteran's compensation or 
pension application and designation of a dependent spouse during the 
veteran's lifetime. VA would rely on the dependency information in its 
systems at the time of the veteran's death. At this time, VA does not 
have data to support automatic payments of burial benefits other than 
the burial allowance, but might automatically pay surviving spouses 
other VA burial benefits in the future when VA can determine 
eligibility for those benefits from the evidence of record.
    Proposed Sec.  3.1702(a) would establish priority for an eligible 
surviving spouse of record over all other potential claimants for 
burial benefits (except for the plot or interment allowance under 38 
U.S.C. 2303(b)(1), which is payable only to a State, agency, or 
political subdivision). The rule would clarify that a surviving spouse 
who receives an automatic payment under paragraph (a) may later seek 
additional burial benefits, e.g., the plot or interment allowance, 
reimbursement of transportation expenses, and the service-connected 
burial allowance where the non-service-connected burial allowance was 
automatically paid but the surviving spouse is eligible for the higher 
service-connected rate, by filing a claim for those benefits on the 
form prescribed by VA.
    Proposed Sec.  3.1702(b) would establish a priority for VA's 
payment of burial benefits, excluding those automatically paid under 
proposed paragraph (a) and State claims for a plot or interment 
allowance under proposed Sec. Sec.  3.1707 and 3.1708. Under the 
proposed rule, VA would pay, in order of precedence, a surviving 
spouse, child, or parent of the deceased veteran. If there is no 
surviving spouse, child, or parent to receive payment, VA would pay 
burial benefits to the executor or administrator of the deceased 
veteran's estate. Where there is no executor or administrator, VA would 
pay burial benefits based on a claim by a person acting on behalf of 
the deceased veteran's estate. VA would no longer prioritize payment to 
funeral directors or other service providers, but would pay survivors 
first with the expectation that survivors, particularly surviving 
spouses, would receive payments more quickly and thus be able to more 
expeditiously pay funeral directors and other service providers. The 
proposed rule would reinforce VA's proposed policy to pay a surviving 
spouse or family member first, and clarifies that VA will not divide or 
apportion payment of burial benefits among multiple claimants.

3.1703 Claims for Burial Benefits

    Under 38 U.S.C. 2304, ``[a]pplications for payments under section 
2302 . . . must be filed within 2 years after the burial of the 
veteran.'' Section 2302 authorizes VA to pay the non-service-connected 
burial allowance. Notwithstanding that there are no other statutory 
limitations on the filing of claims for burial benefits, the first 
sentence of current Sec.  3.1601(a) applies a 2-year time limit to 
``[c]laims for reimbursement or direct payment of burial and funeral 
expenses under Sec.  3.1600(b) (the non-service-connected burial 
allowance) and plot or interment allowance under Sec.  3.1600(f).'' The 
plot or interment allowance is authorized by 38 U.S.C. 2303(b), and 
therefore the statutory 2-year time limit does not apply to the plot or 
interment allowance. In proposed Sec.  3.1703(a), we would clarify that 
the 2-year statutory time limitation applies only to claims for the 
non-service-connected burial allowance. Proposed Sec.  3.1703(a)(2) 
specifies that claims for the non-service-connected burial allowance 
based on a corrected character of discharge must be filed no later than 
2 years from the date that the discharge was corrected. The proposed 
rule would also clarify that no other time limitations apply to claims 
for burial benefits.
    Proposed Sec.  3.1703(b) would describe the evidence that is needed 
to substantiate a claim for burial benefits. Under 38 U.S.C. 5101(a) 
and 5107(a), claimants must file a claim with VA and provide evidence 
supporting such a claim. Current Sec.  3.1601(b) implements sections 
5101(a) and 5107(a) by requiring all claimants to file a claim for any 
burial benefit. As described above in the supplementary information on 
proposed Sec.  3.1702, to facilitate automated payment of burial 
benefits VA would clarify in proposed Sec.  3.1703(b)(1) that a 
surviving spouse is not required to file a separate claim for the 
burial benefits for which automatic payment is prescribed in proposed 
Sec.  3.1702(a). For all other burial benefit claims, i.e., those not 
automatically paid under proposed Sec.  3.1702(a), VA would still 
require claimants seeking burial benefits to file a claim on the 
prescribed VA form.
    Under current law, e.g., 38 U.S.C. 2303(a)(1), VA generally 
reimburses claimants seeking burial benefits up to a statutory maximum 
amount. VA implemented this reimbursement framework in current Sec.  
3.1601(b)(1), which requires claimants to provide a ``[s]tatement of 
account'' showing the

[[Page 76578]]

``name of the deceased veteran, the plot or interment costs, and the 
nature and cost of services rendered, and unpaid balance.'' As 
previously explained, VA proposes to pay to eligible claimants the 
maximum benefit specified in sections 2302 (non-service-connected 
burial allowance), 2303(b)(2) (plot or interment allowance), and 2307 
(service-connected burial allowance). Because VA would pay the maximum 
statutory benefit based solely on eligibility and a statement that 
burial expenses were incurred by a claimant who did not receive an 
automated payment, such claimants would no longer be required to 
provide a receipt or itemized bill to establish entitlement for these 
benefits. Based on the average cost of funeral and burial, estimated to 
exceed $7,045 as described above, and agency experience that in the 
vast majority of cases VA already pays the maximum benefit permitted by 
law, it is reasonable for VA to establish a rule whereby VA will pay 
automatically the statutory maximum benefit based on a presumption that 
the expenses incurred were at least equal to the statutory maximum, 
unless VA has evidence to the contrary on the date it receives notice 
of the veteran's death.
    Section 2307 directs VA to pay a service-connected burial allowance 
``upon the request'' of a veteran's survivors. No other burial statute 
includes specific language regarding a claim being required before 
benefits are paid. However, more generally, 38 U.S.C. 5101(a)(1) 
requires that a ``specific claim in the form prescribed by the 
Secretary . . . must be filed in order for benefits to be paid or 
furnished to any individual under the laws administered by the 
Secretary.'' VA proposes to pay the service-connected and non-service-
connected burial allowances automatically to a surviving spouse where 
VA has the necessary information in its compensation and pension 
records at the date of the veteran's death. For purposes of these 
payments, VA will consider the veteran's application for disability 
compensation or pension, and the veteran's designation of a dependent 
spouse during the veteran's lifetime, as the surviving spouse's 
``request'' for burial benefits under section 2307. By designating a 
spouse during his or her lifetime, a veteran can be considered to have 
indicated a desire for the spouse to receive the benefits to which he 
or she may become entitled incidental to the veteran's death. Coupled 
with the notification of death, which is typically provided by or on 
behalf of a surviving family member, VA will consider the claim 
requirements of 38 U.S.C. 5101(a)(1) met for purposes of paying a 
surviving spouse burial benefits when a veteran dies with a surviving 
spouse of record. This is a policy decision based on the specific 
nature of burial benefits which are relatively small, one-time 
payments. As discussed above, we estimate that these changes would 
enable VA to pay approximately 62,000 surviving spouses an automated 
burial benefit payment soon after the veteran's death and in 
conjunction with the month-of-death payment.
    Whereas sections 2302, 2303(b), and 2307 provide the Secretary 
discretion to pay a flat-rate ``sum'' or ``amount'' for burial 
benefits, sections 2303(a) and 2308 do not. Section 2303(a) expressly 
limits VA payment of benefits to the ``actual cost'' incurred by the 
claimant. Because of this statutory restriction, VA cannot pay flat 
rate burial benefits for a veteran who dies in a VA facility. In order 
to pay the section 2303(a) benefit, VA will require evidence of the 
actual cost incurred and continue to pay the burial allowance for this 
particular benefit on a reimbursement basis.
    Similarly, VA would still pay transportation benefits under section 
2308 on a reimbursement basis as provided in current regulations. This 
is because section 2308 specifies that the payment ``shall not exceed 
the cost of transportation to the national cemetery nearest the 
veteran's last place of residence in which burial space is available.'' 
Unlike under sections 2302, 2303(b), and 2307, this limitation on the 
amount requires VA to determine on a case-by-case basis the specific 
distance traveled and amounts paid. Because section 2308 does not 
establish a statutory maximum payment and therefore requires an 
individualized evaluation of costs, proposed Sec.  3.1703(b)(2) would 
require claimants to provide a receipt when seeking reimbursement for 
transportation expenses. The proposed rule permits claimants to provide 
a receipt showing costs incurred, the dates of the services rendered, 
the name of the deceased veteran who was transported, and the name of 
the person who paid the transportation charges. This information would 
be required so VA can ensure accuracy in its adjudication of claims for 
reimbursement of transportation expenses.
    Finally, the proposed paragraph would require that VA ``receive'' 
the evidence described, whereas current Sec.  3.1601(b) requires that 
the claimant ``submit'' such evidence. The proposed language mirrors 
the language of section 2304 and recognizes that VA may request 
additional evidence necessary to complete the application. See 38 
U.S.C. 2304.
    Proposed paragraph (b)(3) is derived from the second sentence of 
current Sec.  3.203(c), which states that in a claim for the non-
service-connected burial allowance, evidence of service that VA relied 
upon to award compensation or pension during the veteran's lifetime 
will be sufficient to prove military service for purposes of the burial 
allowance, unless VA has evidence on the date it receives notice of the 
veteran's death that creates doubt as to the correctness of that 
evidence of service. In proposed Sec.  3.1703(b)(3), we would expand 
upon the language in Sec.  3.203 to provide that VA may establish 
eligibility for any burial benefit based upon the evidence of service 
and disability that VA relied upon to grant disability compensation or 
pension during the veteran's lifetime, unless there is other evidence 
to the contrary.

3.1704 Burial Allowance Based on Service-Connected Death

    Section 2307 provides that when a veteran dies as a result of a 
service-connected disability or disabilities, VA will pay the greater 
of $2,000 or the amount payable under 5 U.S.C. 8134(a). Payments made 
under section 2307 are in lieu of payment under sections 2302 (non-
service-connected burial allowance) and 2303(b)(2) (plot or interment 
allowance and for burial of veterans whose death occurred while 
hospitalized by VA).
    VA implemented the ``service-connection'' requirement and payment 
limits in current 38 CFR 3.1600(a), which limits payment to the amount 
specified in section 2307 ($2,000). In current Sec. Sec.  3.1601 and 
3.1602, VA implemented a reimbursement process that requires claimants 
to submit evidence of the burial expenses they incurred, after which VA 
calculates the cost of the veteran's burial and pays on a reimbursement 
basis up to a statutory maximum. As previously discussed, the 
reimbursement requirement unnecessarily burdens claimants and hinders 
VA's ability to provide automated payments to survivors upon notice of 
death. Accordingly, VA proposes in Sec.  3.1704(a) to pay the service-
connected burial allowance at the statutory maximum rate.
    Together with the changes proposed in Sec.  3.1702 (prioritizing 
payment to surviving spouses), proposed Sec.  3.1704 would enable VA to 
automatically pay certain eligible surviving spouses the $2,000 
service-connected burial allowance upon notice of the veteran's death. 
VA's adoption of a flat-rate payment is justified for two reasons.

[[Page 76579]]

First, under 5 U.S.C. 8134(a), the Government may pay up to $800 for 
the funeral and burial expenses of an employee who dies in performance 
of his or her duty. Thus, the $2,000 service-connected burial allowance 
always constitutes the ``greater of'' the amounts payable under the 
statutes. Second, while the average cost of a burial in the United 
States has increased to over $ 7,045 (2012), the amount payable under 
section 2307 has not increased since 2001. See Public Law 107-103. 
Proposed paragraph (a) would prescribe the general rule regarding the 
service-connected burial allowance and would require that VA pay the 
maximum allowance specified in section 2307, unless VA has evidence on 
the date it receives notice of the veteran's death that the costs 
incurred were less than the statutory maximum. The last sentence of 
proposed paragraph (a) would clarify that, subject to proposed 
paragraph (c), payment of the service-connected burial allowance is in 
lieu of other burial allowances. Because the amount specified by 
section 2307 is greater than that specified by section 8134(a), the 
average cost of a burial far exceeds the $2,000 statutory maximum 
allowance, and VA already pays the statutory maximum benefit in over 78 
percent of claims (as indicated in a 2013 VA review of burial payments 
made over a five-month period), it is reasonable for VA to presume that 
the costs incurred met or exceeded the statutory maximum, unless VA has 
evidence to the contrary on the date it receives notice of the 
veteran's death.
    Proposed paragraph (b) states that veterans who die as a result of 
a service-connected disability or disabilities would be eligible for 
the service-connected burial allowance. The paragraph also would 
establish that eligibility for the service-connected burial allowance 
exists for veterans with a total service-connected disability rating on 
the date of death. Section 2307 requires VA to pay the service-
connected burial allowance when a veteran ``dies as the result of a 
service-connected disability or disabilities.'' Under 38 U.S.C. 501(a), 
VA has authority to prescribe rules necessary to carry out the laws 
administered by VA, including ``regulations with respect to the nature 
and extent of proof and evidence and the method of taking and 
furnishing them in order to establish the right to benefits under such 
laws.'' Consistent with this authority, VA has made a policy decision 
to automatically pay the service-connected burial allowance when the 
veteran died with a service-connected disability or disabilities rated 
totally disabling at the date of death, excluding a total disability 
rating based on individual unemployability. This automatic payment is 
based on a presumption that the veteran died as the result of a 
service-connected disability or disabilities, unless VA has evidence to 
the contrary on the date it receives notice of the veteran's death. In 
proposed Sec.  3.1704(b), we would clarify that VA pays the service-
connected burial allowance in such situations.
    VA's policy decision is supported by the fact that VA already pays 
the service-connected burial allowance in the majority of cases in 
which the veteran dies with a total service-connected disability 
rating. In fiscal year (FY) 2011 and FY 2012, VA paid the service-
connected burial allowance in 88 percent of claims in which, on the 
date of the veteran's death, the veteran was rated totally disabled for 
a service-connected disability or disabilities. Because VA already 
grants the service-connected burial allowance in the vast majority of 
such cases, we would prescribe a rule in proposed paragraph (b) that 
when a veteran dies with a total service-connected disability rating on 
the date of death, the veteran's eligible survivor is entitled to the 
service-connected burial allowance. This simplified criterion would 
facilitate the automatic payments VA contemplates. That automation, and 
the resultant reduction in VA's administrative workload, would enable 
VA to divert those resources to processing other claims for VA 
benefits. VA does not currently, however, have information to enable 
automated payment of the service-connected burial allowance to 
surviving spouses of veterans with less than a total service-connected 
disability rating, including surviving spouses of veterans with a total 
disability rating based on individual unemployability under 38 CFR 
4.16. Such spouses would receive an automated non-service-connected 
burial allowance payment and could seek additional burial benefits as 
prescribed in these proposed rules.
    Proposed paragraph (c)(1) restates the provisions for payment of 
transportation expenses for service-connected death in current Sec.  
3.1600(g). Proposed paragraph (c)(2) would authorize VA to pay States 
the plot or interment allowance for burial in a State veterans cemetery 
under proposed Sec.  3.1707(a), in addition to the service-connected 
burial allowance. This revision would reflect the amendment made to 38 
U.S.C. 2307 by section 501 of the Veterans Benefits Act of 2003 (Public 
Law 108-183). Prior to the enactment of Public Law 108-183, the 
statutes in chapter 23 did not authorize a separate plot or interment 
allowance in cases where VA paid the service-connected burial 
allowance.

 3.1705 Burial Allowance Based on Non-Service-Connected Death

    Section 2302(a) authorizes the Secretary, in the Secretary's 
discretion, to pay up to $300 to cover the burial and funeral expenses 
of a deceased veteran and the expense of preparing the body and 
transporting it to the place of burial. Current section 2302 limits 
eligibility for this burial allowance to two groups of veterans: (1) 
Veterans who were in receipt of VA disability compensation or pension 
at the time of death or who, but for their receipt of military 
retirement pay, would have been entitled to receive compensation at the 
time of death, and (2) veterans who served in a war or were released 
from active service due to disability incurred or aggravated in line of 
duty and whose body is held by a State (or political subdivision of the 
State) and for whom VA determines there is no next of kin and 
insufficient resources to pay for the veteran's funeral.
    Section 104 of Public Law 112-260, effective January 10, 2014, will 
amend section 2302(a)(2) by removing the wartime service, disability, 
and held-by-a-State requirements for payment of the non-service-
connected burial allowance for the unclaimed remains of indigent 
veterans. This liberalization would be implemented in proposed Sec.  
3.1708 and would not be part of proposed Sec.  3.1705.
    VA implemented section 2302(a) in current Sec. Sec.  3.1600(b) 
(prescribing eligibility) and 3.1601 (prescribing claim and evidentiary 
requirements). These regulations provide that VA will pay the non-
service-connected burial allowance on a reimbursement basis. VA's 
experience is that the current reimbursement process is burdensome for 
both claimants and VA and effectively prohibits VA from automating 
these small, one-time payments. We have determined that it is no longer 
practical to administer these benefits on a reimbursement basis when it 
is clear that the average cost of a burial far exceeds the maximum 
burial allowance authorized by Congress under section 2302(a). 
Accordingly, we propose in Sec.  3.1705(a) to pay the maximum burial 
allowance prescribed in section 2302 ($300) when a claimant is eligible 
for the benefit.
    Section 2302 provides VA with discretion, based on the 
circumstances in each case, to ``pay a sum not exceeding $300 to such 
person as the Secretary prescribes to cover the burial and funeral 
expenses of the deceased

[[Page 76580]]

veteran and the expense of preparing the body and transporting it to 
the place of burial.'' Here, the circumstances of such payments and the 
information available to us regarding the average cost of a burial 
support a rule under which VA would pay the statutory maximum benefit. 
Over a 5-month period in FY 2013, using the current reimbursement 
scheme, VA paid over 97 percent of approximately 12,400 burial 
claimants the maximum $300 payment. The regulatory requirement for 
survivors to submit statements and receipts supporting entitlement to a 
small, one-time payment when VA knows that the average cost of a burial 
is over $ 7,000 is unreasonable and unjustified from a program 
management perspective. Further, the nature of the benefit does not 
justify the time and expense required for VA to calculate a precise 
reimbursement or the delays that survivors currently experience. VA 
systems generally contain sufficient information to grant and pay this 
benefit, such as information identifying an eligible surviving spouse 
and information confirming basic eligibility, e.g., the deceased 
veteran's receipt of pension or compensation at the time of death. As a 
result, VA estimates that it could automate the adjudication and 
payment of approximately 62,000 burial claims annually without 
requiring an application from a surviving spouse under the provisions 
proposed in this rulemaking. Given that VA has authority to pay up to 
the maximum benefit, that it pays nearly all claimants the maximum 
benefit, that the reimbursement requirement delays the payment of 
benefits, and that VA could immediately pay thousands of surviving 
spouses upon notice of a veteran's death, the circumstances support our 
proposal to pay survivors the maximum benefit under Sec.  3.1705(a).
    Proposed paragraph (b) would prescribe eligibility requirements 
that are consistent with the requirements in current Sec.  3.1600(b)(1) 
and (2), except as noted below. Current Sec.  3.1600(b)(2) provides 
eligibility for the non-service-connected burial allowance if the 
deceased veteran had a ``reopened claim'' for pension or disability 
compensation pending at the time of the veteran's death. Rather than 
refer to a ``reopened claim,'' in proposed paragraph (b)(3)(ii) we 
would refer to a ``claim to reopen.'' The rationale for awarding the 
non-service-connected burial allowance based on a pending claim is that 
a veteran may have met the prerequisite for an award of the non-
service-connected burial allowance (i.e., the veteran would have been 
receiving pension or disability compensation when the veteran died) if 
the veteran had not died before VA granted the veteran's pending claim 
for compensation or pension. Thus, it is important that the veteran's 
claim to reopen was filed, but it matters less whether VA actually 
reopened the claim. In other words, the proposed language more 
accurately describes the regulatory requirement that the veteran 
initiate the claim-adjudication process during his or her lifetime and 
that the claim is still pending at the time of death. The use of the 
phrase ``claim to reopen'' rather than ``reopened claim'' is not a 
substantive change; it merely clarifies the intended effect of Sec.  
3.1600(b)(2). Finally, to account for the possibility of substitution 
under 38 U.S.C. 5121A, proposed paragraph (b)(3)(iii) extends 
eligibility for the non-service-connected burial allowance to a person 
with a pending claim who has substituted for a deceased veteran and 
whom VA has subsequently granted pension or disability compensation. 
The eligibility requirements in current Sec.  3.1600(b)(2) include a 
pending original claim for pension or compensation that would have been 
granted based upon the ``evidence of record'' on the date of death but 
for the veteran's death. We believe it would be helpful to clarify for 
the public the meaning intended by the phrase ``evidence of record.'' 
We propose to use ``evidence in the claims file on the date of the 
veteran's death,'' which is more explicit, and define that phrase in 
proposed paragraph (c). This is consistent with the manner in which VA 
adjudicates claims for accrued benefits by the survivors of deceased 
veterans (see 38 CFR 3.1000) and with VA's long-standing practice for 
adjudicating claims under Sec.  3.1600(b)(2). We also believe it is 
fair to claimants and places a reasonable burden upon VA adjudicators 
to be constructively in possession of evidence located in VA medical 
centers or similar VA facilities.
    Proposed paragraph (d) states that if the veteran had either an 
original claim or a claim to reopen pending at the time of death, but 
the information in the claims file is not sufficient to award pension 
or compensation effective before the date of death, VA will request 
such evidence. If the evidence is not received within 1 year from the 
date of the request, VA will not award the burial allowance. Current 
Sec.  3.1600(b)(2) does not reflect VA's intent because the provision 
governing additional evidence appears only in paragraph (b)(2)(ii), 
which addresses only reopened claims, and not in paragraph (b)(2)(i), 
which addresses original claims. We believe VA's intent would be 
clarified if the proposed regulation specifically refers to both a 
pending original claim and a pending claim to reopen.
    Proposed paragraph (e) would identify the additional burial 
benefits--plot or interment allowance and transportation 
reimbursement--potentially available in cases of non-service-connected 
death and would provide cross-references to the regulations governing 
those payments. Pursuant to section 2308, transportation reimbursements 
would be payable only if the veteran was in receipt of compensation 
rather than pension, or eligible for receipt of compensation but for 
receipt of military retired pay. Proposed paragraph (e) would reflect 
this limitation.

3.1706 Burial Allowance for a Veteran Who Died While Hospitalized by VA

    When a veteran dies while hospitalized by VA, section 2303(a) 
authorizes VA to pay the actual cost, not to exceed $700 (increased 
annually for inflation) toward the cost of the veteran's burial and 
funeral. Specifically, if the veteran died in a VA facility, as defined 
under 38 U.S.C. 2303(a)(2), to include an institution at which the 
veteran was receiving certain types of statutorily authorized care, 
e.g., a hospital, nursing home, or domiciliary care, in a non-VA 
facility for contract hospital care or medical services, in a VA-
contracted nursing home, or in a State home for hospital, nursing home, 
or domiciliary care, then VA pays the veteran's burial and funeral 
costs up to the statutory maximum. Additionally, VA pays the cost of 
transporting such veteran's remains to the place of burial in any 
State, as authorized by section 2303(a).
    Currently, there are two implementing regulations for this benefit, 
38 CFR 3.1600(c) and 38 CFR 3.1605. Having two regulations with 
different standards for the same benefit causes unnecessary confusion. 
In addition to addressing the eligibility of veterans who die in VA 
facilities (to include VA-contracted facilities and VA-paid State 
nursing homes), Sec.  3.1600(c) covers veterans who die while in 
transit to or from such facilities. Current Sec.  3.1605 provides 
additional and more complex criteria for ``[d]eath while traveling 
under prior authorization or while hospitalized by'' VA. Although 
current Sec.  3.1600(c) covers veterans who die while being transferred 
for purposes of specific types of care, current Sec.  3.1605(a) 
provides eligibility if a veteran dies on the way ``to or from a 
specified place'' for certain purposes including

[[Page 76581]]

examination while excluding ``hospitalization in the Philippines.'' 
Current Sec.  3.1605(b) denies eligibility for transportation expenses 
for ``retired persons hospitalized under section 5 of Executive Order 
10122 . . . issued pursuant to Public Law 351, 81st Congress, and not 
as Department of Veterans Affairs beneficiaries.'' Section 5 of 
Executive Order 10122 pertains to current and former servicemembers who 
were hospitalized for chronic diseases between May and October of 1950. 
Executive Order 10122 is more than half a century old and applied to a 
very small group of veterans. Therefore, the reference is obsolete.
    Current Sec.  3.1605(c) extends entitlement to the burial allowance 
to the following veterans who die while properly hospitalized by VA: 
(1) Discharged or rejected draftees; (2) members of the National Guard 
who reported for service in answer to the President's call for World 
War I, World War II, or Korean service, but when medically examined 
were not accepted for active military service; or (3) a veteran 
discharged under conditions other than dishonorable from a period of 
service other than a war period. With respect to the individuals 
described in Sec.  3.1605(c)(1) and (2) (draftees and National Guard 
members not accepted for active service), they are considered veterans 
and are eligible for burial benefits pursuant to current 38 CFR 3.7(o) 
if they suffer injury or disease while traveling to or from the place 
of acceptance for service. Regarding veterans discharged under 
conditions other than dishonorable from a period of service other than 
a war period, they are included in the definition of ``veteran'' under 
proposed Sec.  3.1701 and, as such, are eligible for burial benefits.
    Under current Sec.  3.1605(d), some veterans who die while 
temporarily absent from VA facilities are considered eligible for a 
burial allowance under section 2303(a). Current Sec.  3.1605(e) states, 
``[w]here a deceased person was not properly hospitalized, benefits 
will not be authorized under this section.'' Given that section 2303(a) 
is clear and specific as to the criteria for eligibility, we have 
determined that the provision in current Sec.  3.1605(e) is 
unnecessary.
    Currently, VA pays the allowance under Sec.  2303(a) on a dollar-
for-dollar, cost-reimbursement basis. Under proposed Sec.  3.1706, VA 
would continue to do so because of statutory language prescribing 
payment of ``actual cost[s].'' Accordingly, VA could not automatically 
pay claimants for section 2303(a) benefits the statutory maximum as a 
flat rate. Proposed Sec.  3.1706 would also combine in one regulation 
the broad definition of ``hospitalized by VA'' in current Sec.  
3.1600(c) and the highly technical description of veterans who die 
while en route to a facility in current Sec.  3.1605. Reimbursement of 
transportation expenses would be calculated based on proposed Sec.  
3.1709.

3.1707 Plot or Interment Allowances for Burial in a State Veterans 
Cemetery or Other Cemetery

    Under two circumstances, section 2303(b) authorizes VA to pay a 
plot or interment allowance for a veteran who, although eligible for 
burial in a national cemetery under 38 U.S.C. 2402, is not buried in a 
national cemetery. If the veteran is buried, without charge for the 
cost of the plot or interment in a State-owned cemetery (or section of 
a State-owned cemetery) used solely for the burial of persons who are 
eligible for burial in a national cemetery and of deceased Reservists 
or former Reservists who are not eligible for burial in a national 
cemetery, VA pays the State (or political subdivision of the State) 
$700 (increased for inflation) as a plot or interment allowance. If the 
veteran is eligible for the non-service-connected burial allowance or 
the burial allowance for veterans who die while hospitalized by VA 
(i.e., not eligible for the service-connected burial allowance), or if 
the veteran was discharged from active service for a service-connected 
disability and the veteran is buried in a cemetery other than one 
described in the previous sentence, VA pays a plot or interment 
allowance of up to $700 (increased for inflation).
    The current implementing regulations for the plot or interment 
allowance are 3.1600(f), 3.1601(a)(3), and 3.1604(d). Section 3.1600(f) 
divides claims for the plot or interment allowance into two categories. 
Paragraph (f)(1) provides the criteria for payment of the plot or 
interment allowance applicable to claims filed on or after December 16, 
2003; the deceased veteran must be eligible for burial in a national 
cemetery but buried elsewhere. Plot or interment allowance claims filed 
before December 16, 2003, are covered by the more complex criteria in 
paragraph (f)(2), which requires that the deceased veteran be eligible 
for the non-service-connected burial allowance or the burial allowance 
for death in a VA facility. See 38 CFR 3.1600(f)(2)(i). Respectively, 
paragraphs (f)(2)(ii) and (f)(2)(iii) allow claims for the plot or 
interment allowance when the deceased veteran served during a period of 
war or was discharged for a disability incurred in the line of duty. 
Paragraph (f)(2)(iv) repeats the statutory requirement that the 
deceased veteran is not buried in a national cemetery or other cemetery 
under the jurisdiction of the United States.
    The rules for what constitutes a plot or an interment expense for 
purposes of section 2303(b) are in current Sec.  3.1601(a)(3), while 
the rules for VA's payment of plot or interment allowance to a State 
(or a political subdivision of a State) are in current Sec.  3.1604(d).
    In proposed Sec.  3.1707, we would restructure and consolidate the 
current rules governing the plot or interment allowance and establish a 
flat-rate payment at the statutory maximum amount. VA currently pays 
States the enumerated statutory benefit for plot or interment 
allowance, i.e., a flat-rate payment, as required by section 
2303(b)(1). Additionally, paying individual claimants at the statutory 
maximum rate reflects the reality that the average cost of a burial 
plot exceeds the benefit amount. Furthermore, paying the maximum rate 
prescribed in section 2303(b)(2) would facilitate VA's efforts to 
efficiently pay the benefit.
    Proposed Sec.  3.1707(a) would replace current Sec.  3.1604(d) 
governing VA payment of the plot or interment allowance under section 
2303(b)(1) to a State (or a political subdivision of the State) that 
buried a veteran without charge for the plot or interment. Proposed 
Sec.  3.1707(b) would clarify that VA pays the plot or interment 
allowance without regard to whether any other burial benefits were 
provided for that veteran in the circumstances described in proposed 
Sec.  3.1707(b)(1)-(3). The proposed rule would not include the caveat 
in current Sec.  3.1604(d)(1)(v) limiting authorization of payments for 
veterans ``buried on or after October 1, 1978.'' It is unlikely that VA 
will receive claims for the plot or interment allowance, especially 
claims by a State, based upon a burial that occurred more than 30 years 
ago. We do not have record of receiving such a claim within the 
previous 3 years. Accordingly, we do not propose to include the 
provision.
    Proposed Sec.  3.1707(c) would govern payment of the plot or 
interment allowance for burials in a cemetery that is not a State 
cemetery. It would be substantively similar to current Sec.  3.1600(f); 
however, the proposed rule would contain a technical correction 
removing from a parenthetical reference in current Sec.  
3.1600(f)(2)(iii) extraneous language describing evidence showing a 
discharge from service due to disability. The substantive effect of the 
rule, as reorganized, would be consistent with other rules in 38 CFR 
part 3 that contain language similar to current Sec.  3.1600(f)(2)(iii) 
but without the technical error. See, e.g., 38 CFR

[[Page 76582]]

3.3(a)(1)(ii), 3.12a(d)(2). We would consolidate within proposed Sec.  
3.1707(c), essentially unchanged, the current definitions of ``plot,'' 
``burial plot,'' and ``plot or interment expenses.''

3.1708 Burial of a Veteran Whose Remains Are Unclaimed

    Currently, section 2302(a)(2) authorizes VA to pay up to $300 for a 
veteran of any war or a veteran who was discharged or released from 
active service for a service-connected disability, whose remains are 
unclaimed and held by a State (or political subdivision of the State), 
and for whom VA determines there are insufficient resources to cover 
burial and funeral expenses. Effective January 10, 2014, section 104 of 
Public Law 112-260 will amend section 2302(a)(2) such that VA may pay 
the non-service-connected burial allowance for any deceased veteran 
based upon a VA finding that there is no next of kin or other person 
claiming the remains and that there are insufficient resources to cover 
the cost of the veteran's burial and funeral. Essentially, the Public 
Law eliminates from section 2303(a)(2) the requirement for either 
wartime service or for discharge based on disability incurred in line 
of duty so that the Secretary may pay benefits if the remains of an 
indigent veteran are unclaimed.
    VA implemented current section 2302(a)(2) in Sec.  3.1600(b)(3). 
Proposed Sec.  3.1708 would implement the liberalizing provisions of 
Public Law 112-260 by eliminating the wartime service, disability, and 
held-by-a-State requirements in current Sec.  3.1600(b)(3).
    Current Sec.  3.1601(b)(5) requires a written certification by a 
responsible State official that no one is claiming the veteran's 
remains and there are not sufficient resources available in the 
veteran's estate to cover burial and funeral expenses. Under current 
Sec.  3.1603, a claimant seeking benefits for purposes of burying the 
unclaimed remains of a deceased veteran must search for friends and 
relatives of that deceased veteran and provide a statement documenting 
unsuccessful efforts to locate any friends or relatives to claim that 
deceased veteran's remains. Proposed Sec.  3.1708 removes the 
requirement that claimants provide a statement showing the efforts made 
to locate relatives or friends because VA no longer considers this 
information necessary and requiring such information is inconsistent 
with our efforts to improve the efficiency of claim processing.
    Finally, effective January 10, 2014, section 104 of Public Law 112-
260 will amend section 2308 to extend eligibility for the 
transportation reimbursement for burial in a national cemetery where VA 
determines the veteran's remains are unclaimed as described under 38 
U.S.C. 2302(a)(2)(A). Proposed paragraph (c) would reflect this 
expanded benefit eligibility.

3.1709 Transportation Expenses for Burial in a National Cemetery

    Under 38 U.S.C. 2308, VA has authority to reimburse certain 
transportation expenses of a veteran's remains to a national cemetery 
when the veteran's death resulted from a service-connected disability 
or the veteran was in receipt of, or entitled to receive, disability 
compensation at the time of death. As described above, section 104 of 
Public Law 112-260 will amend the statute, effective January 10, 2014, 
to authorize VA to pay (in addition to the existing categories of 
eligible beneficiaries) for the transportation of unclaimed remains of 
certain veterans. Paragraphs (b) and (d) of proposed Sec.  3.1709 are 
derived from and consistent with current Sec.  3.1600(g). Proposed 
paragraph (b)(4) would implement Public Law 112-260 by permitting VA to 
reimburse the transportation expenses for unclaimed veterans' remains.
    VA reimburses claimants for the cost of transporting a veteran's 
remains to the place of burial, subject to applicable limits, (1) when 
a veteran dies while hospitalized by VA (38 U.S.C. 2303(a)), or (2) 
when a veteran dies as the result of a service-connected disability or 
was in receipt of or entitled to disability compensation (38 U.S.C. 
2308). Proposed paragraph (e) restates current Sec.  3.1606 with only 
minor technical changes. We do not intend any substantive changes.
    Neither section 2303 nor 2308 specifies what specific 
transportation costs are reimbursable by VA. Current Sec.  3.1606, 
however, limits reimbursement of transportation costs to specifically 
enumerated charges. The current rule is confusing for claimants and 
unnecessarily restricts VA's discretion to reimburse any reasonable 
transportation costs for which we receive a claim and sufficient 
supporting evidence as described in proposed 3.1703(b)(2). Therefore, 
proposed Sec.  3.1709(d) states simply that VA will reimburse any 
reasonable transportation expense, including but not limited to the 
costs of shipment via common carrier and costs of transporting the 
remains to the place of burial. Proposed paragraph (d)(2) would clarify 
that a reasonable expense would be the usual and customary charge made 
to the general public. The proposed rule implements the governing 
statutes while providing VA the flexibility to reimburse claimants for 
any reasonable expense for which they submit a claim.

3.1710 Escheat (Payment of Burial Benefits to an Estate With No Heirs)

    Proposed Sec.  3.1710 restates current Sec.  3.1602(d). We do not 
intend any substantive change by moving the current provisions to 
proposed Sec.  3.1710.

3.1711 Effect of Contributions by Government, Public, or Private 
Organizations

    Sections 2302 and 2303(b) contain specific language that limits 
veterans' burial benefits if the veterans' burial and funeral expenses 
have been paid for, in part or in full, by certain governmental and 
non-governmental organizations. Section 2302(b) states, with respect to 
the non-service-connected burial allowance, that ``no deduction shall 
be made from the burial allowance'' unless the expenses incurred were 
covered by payment from the United States, a State, any agency or 
political subdivision of the United States or a State, or the veteran's 
employer. Section 2303(b)(2) states, with respect to the plot or 
interment allowance, that VA shall pay a plot or interment allowance 
unless any part of the veteran's plot or interment expenses were paid 
for or assumed by a State, or an agency or political subdivision 
thereof, or by the veteran's former employer. VA is not required to 
deduct contributions from other sources. Section 2303(a) (providing 
burial allowance for death in a VA facility), section 2307 (providing 
the service-connected burial allowance), and section 2308 (providing 
for reimbursement of transportation expenses) do not require VA to 
reduce benefits paid based on contributions from other sources.
    VA implemented these provisions in current Sec.  3.1604 regarding 
payments from non-VA sources. Consistent with VA's current 
reimbursement-based system, VA reduces burial benefits based on 
contributions from other sources. Current Sec.  3.1604(a) prescribes a 
reduction of benefits based upon contributions from Federal or State 
governments, employers, and ``other public or private organization[s] 
such as a lodge, union, fraternal or beneficial organization, society, 
burial association or insurance company.'' Additionally, Sec.  3.1604 
applies to all burial benefits, including service-connected burial 
allowance and transportation reimbursement.
    Proposed Sec.  3.1711 would liberalize VA's policy regarding 
contributions from other sources to ensure the

[[Page 76583]]

broadest possible delivery of benefits. The proposed rule would 
eliminate the requirement for VA to consider contributions from other 
sources when awarding the non-service-connected burial allowance. Such 
consideration is unnecessary for two reasons. First, as stated 
previously, the average cost of a funeral and burial (estimated at over 
$7,000) far exceeds the amount of the benefit ($300). Data shows that 
almost 98 percent of claimants for the non-service-connected burial 
allowance already receive payment at the statutory maximum rate even 
when contributions from other sources are considered. It is unnecessary 
for VA to consider contributions from other sources when we already pay 
the maximum rate in virtually every case and where contributions from 
government and employer sources rarely if ever cover the complete costs 
of funeral and burial such that a claimant would not be eligible for 
the non-service-connected burial allowance. Second, withholding payment 
of the burial allowance until VA obtains evidence of contributions 
would frustrate VA's efforts to automate this benefit. Where 
permissible, VA plans to automatically pay a burial allowance to the 
surviving spouse of record based on evidence in its systems immediately 
upon notice of the veteran's death based on a presumption that 
contributions from other sources will not cover the complete costs of 
funeral and burial, unless VA has evidence on the date that it receives 
notice of the veteran's death that the expenses incurred were less. VA 
cannot perform this automation if it must also wait for any potential 
contributions, which may or may not happen, to consider the impact of 
such contributions on the award of benefits. Because the benefit amount 
is so small and the cost of funeral and burial so great, and in order 
to foster VA's efforts to automate, we would establish a rule that 
those who are eligible for the non-service-connected burial allowance 
are eligible for the full, statutory maximum burial allowance without 
regard to any potential contributions from government or employer 
sources.
    Current Sec.  3.1604(a)(1) and (2) describe instances in which 
contributions by another source would not bar payment of burial 
benefits, including where contribution results from ``[a] contract or 
policy which provides for payment at death.'' The proposed rule would 
not include this treatment. The proposed rule would specify that VA 
will only consider contributions from a government or employer source. 
Because the proposed rule would be clear, we do not need to discuss the 
contributions that do not bar payment of burial benefits.
    Proposed paragraph (a) would describe how VA will account for 
contributions toward a veteran's plot or interment expenses. If VA 
receives a claim for plot or interment allowance and has evidence that 
a government or employer source contributed toward the veteran's plot 
or interment expenses, VA will pay the statutory maximum plot or 
interment allowance ($700) minus the amount of any contribution to that 
expense paid by all such sources.
    Proposed paragraph (b)(1) is derived from current Sec.  
3.1604(b)(1) and (2). The proposed paragraph differs from the current 
rule in several respects. Current Sec.  3.1604(b)(1) proscribes VA's 
payment of burial benefits where the veteran is entitled to similar 
benefits under the United States Employees' Compensation Act or other 
similar laws. By specifically referencing the Employees' Compensation 
Act, the rule may be misread to apply only when the deceased veteran 
was a Federal employee. However, section 2302(b) requires VA to 
withhold the non-service-connected burial allowance ``in any case where 
specific provision is otherwise made for payment of expenses of 
funeral, transportation, and interment under any other Act.'' We 
propose to use language that is similar to the statutory language to 
ensure that the law is given its full, intended effect.
    In addition, current Sec.  3.1604(b)(1) states that, where a law 
specifically provides for ``payment of the expenses of funeral, 
transportation, and interment out of Federal funds, burial allowance 
will not be authorized.'' The proposed rule would clarify that this bar 
is applicable only to the non-service-connected burial allowance. 
Although section 2302(b) bars payment of the non-service-connected 
burial allowance under those circumstances, section 2307 contains no 
such bar for the service-connected burial allowance. Likewise, section 
2303 contains no such bar for the burial allowance paid for veterans 
who die in a VA facility or for the plot or interment allowance.
    Proposed paragraph (b)(1) also specifies that VA will pay the non-
service-connected burial allowance if another Federal law permits, but 
does not specifically require, payment of the veteran's funeral and 
burial expenses using funds due, or accrued to the credit of, the 
deceased veteran. As discussed previously, VA proposes to establish a 
rule that any contribution that may or may not be made by another 
Federal source will not cover the full cost of the veteran's funeral 
and burial and will not negate entitlement to the non-service-connected 
burial allowance at the maximum rate.
    Proposed paragraph (b)(2) is derived from current Sec.  
3.1604(b)(3) and would provide that VA will not pay or will recoup the 
non-service-connected burial allowance for deaths occurring during 
active or for other deaths for which the service department pays the 
burial, funeral, or transportation expenses. This paragraph is 
necessary because 38 U.S.C. 2302(b) requires deduction from the non-
service-connected burial allowance when the expenses incurred are 
``covered by the amount actually paid therefor by the United States.'' 
Particularly relevant to this analysis, 10 U.S.C. 1482(b) authorizes 
the service departments to pay funeral expenses for servicemembers who 
die in a duty status covered in 10 U.S.C. 1481. Thus, if VA learns that 
a service department has already paid a survivor burial expenses, then 
VA may deny the claim or recoup an automatic payment for non-service-
connected burial allowance. Proposed paragraph (b)(3) would provide 
that in those limited cases where a veteran dies while hospitalized at 
the expense of the U.S. government and benefits would be payable under 
10 U.S.C. 1482(b) and a provision under subpart B, only one of these 
benefits is payable. This rule is consistent with VA's current policy.

3.1712 Effect of Forfeiture on Payment of Burial Benefits

    Proposed Sec.  3.1712(a) would restate, in plain language, current 
Sec.  3.1609(a). There are only two substantive changes in proposed 
paragraph (b). The first is to remove the provision of current Sec.  
3.1609(b) regarding a Presidential pardon regarding a treasonous or 
subversive act during the veteran's lifetime. There is no such 
provision in 38 U.S.C. 6103 or 6104.
    The second substantive change is to specify that ``burial 
benefits'' will not be paid if the veteran or claimant forfeited rights 
to such benefits based on treasonous or subversive activities. This 
would include transportation reimbursement, whereas the current Sec.  
3.1609(b) limits payments of only the ``[b]urial and plot or interment 
allowance.'' Section 6104(a) bars receipt of all benefits if a veteran 
is guilty of treasonous acts, and section 6104(c) removes the 
Secretary's discretion to pay the veteran's dependents any portion of 
benefits forfeited after September 1, 1959. Similarly, section 6105 
bars receipt of any benefit for both veterans and their dependents for 
veterans convicted of subversive activities. The proposed rule 
clarifies

[[Page 76584]]

that no burial benefit shall be awarded based on veterans convicted of 
crimes described in section 6104 or 6105.

 3.1713 Eligibility Based on Status Before 1958

    We propose to remove current 38 CFR 3.954, Burial allowance, and 
address its provisions in proposed 3.1713. Under 38 U.S.C. 2305, those 
who are entitled to burial benefits as of December 31, 1957, but who do 
not meet the service requirements contained in chapter 23, are 
nevertheless entitled to burial benefits. Current Sec.  3.954 states 
that veterans entitled to burial benefits under any law in effect on 
December 31, 1957, are entitled to a burial allowance even if the 
veteran does not meet the service requirements of chapter 23. The 
distinction in the current rule between entitlement to burial benefits 
and entitlement to a burial allowance is inconsistent with section 2305 
and difficult to administer.
    The proposed rule would restate current Sec.  3.954 but would 
correct its technical error. The proposed rule, in line with section 
2305, would state that veterans whose eligibility for burial benefits 
was established under laws in effect as of December 31, 1957, would be 
eligible for burial benefits even if the veteran does not meet the 
service requirements of the current rules.

Paperwork Reduction Act

    The Office of Management and Budget (OMB) assigns a control number 
for each collection of information it approves. Except for emergency 
approvals under 44 U.S.C. 3507(j), VA may not conduct or sponsor, and a 
person is not required to respond to, a collection of information 
unless it displays a currently valid OMB control number.
    The proposed rule at 38 CFR 3.1703, as it concerns applications for 
burial, constitutes a collection of information under the provisions of 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). The 
information collection requirement for Sec.  3.1703 is currently 
approved by OMB and has been assigned OMB control numbers 2900-0003. 
However, VA has determined that provisions in the proposed rule, 
including automated burial payments and reduced evidentiary 
requirements, will reduce the information collection burden. 
Accordingly, under section 3507(d) of the Act, VA has submitted a copy 
of this rulemaking action to OMB for its review of the collection of 
information.
    Burial claims are submitted on VA Form 21-530, Application for 
Burial Benefits. Such forms may include a claim for up to three 
distinct burial benefits: burial allowance, plot and interment 
allowance, and transportation reimbursement. Those eligible for a 
service-connected burial allowance are not entitled to a plot or 
interment allowance, but nearly all claimants who are eligible for a 
burial allowance may be eligible for reimbursement of approved 
transportation costs. Claimants can apply for all three burial benefits 
using the same form, or may submit separate forms for each portion of 
their burial claim. Because those in receipt of automated burial 
allowance payments would still be entitled to other benefits which 
require filing a claim, the proposed rules would not necessarily reduce 
the total number of claims for burial benefits VA receives. The rules 
would, however, greatly reduce the evidence required to support a claim 
and thereby reduce the amount of time VA needs to process the claim. 
Consistent with the proposed amendments, VA intends to revise the 
instructions to VA Form 21-530 to remove references to receipts or 
statements of account when such documentation would no longer be 
required.
    We are requesting comments on the collection of information 
provisions contained in Sec.  3.1703. Comments must be submitted by 
February 18, 2014.
    Comments on the collections of information should be submitted to 
the Office of Management and Budget, Attention: Desk Officer for the 
Department of Veterans Affairs, Office of Information and Regulatory 
Affairs, Washington, DC 20503, or faxed to (202) 395-6974, with copies 
mailed or hand delivered to: Director, Office of Regulation Policy and 
Management (02REG), Department of Veterans Affairs, 810 Vermont Avenue 
NW., Room 1068, Washington, DC 20420. Comments should indicate that 
they are submitted in response to ``RIN 2900-AO82.''
    Summary of collection of information: The proposed rule at Sec.  
3.1703 contains collections of information under the Paperwork 
Reduction Act (44 U.S.C. 3501-3521) concerning applications for VA 
burial benefits.
    Description of the need for information and proposed use of 
information: This information is needed to determine eligibility for VA 
monetary burial benefits.
    Estimated number of respondents per year: 150,000.
    Estimated frequency of responses per year: On occasion.
    Estimated total annual reporting and recordkeeping burden: 37,500 
hours.
    The Department considers comments by the public on collections of 
information in--
     Evaluating whether the collections of information are 
necessary for the proper performance of the functions of the 
Department, including whether the information will have practical 
utility;
     Evaluating the accuracy of the Department's estimate of 
the burden of the collections of information, including the validity of 
the methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collections of information on 
those who are to respond, including responses through the use of 
appropriate automated, electronic, mechanical, or other technological 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of responses.
     OMB is required to make a decision concerning the 
collections of information contained in this rule between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment to the Office of Management and Budget is best 
assured of having its full effect if the Office of Management and 
Budget receives it within 30 days of publication. This does not affect 
the deadline for the public to comment on the proposed rule.

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule 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). Although this proposed rule would affect some small 
entities, specifically funeral homes, it would not have a significant 
economic impact on those entities. Under current regulations, the 
funeral home engaged by a deceased veterans' survivor to handle the 
veteran's burial, may seek direct reimbursement from VA for certain 
expenses in lieu of collecting payment from the survivor. To facilitate 
automation of VA's burial benefit payments, this proposed rule would 
discontinue direct payment of a survivor's burial benefits to a funeral 
home. While this change might create some additional administrative 
burden for funeral homes, it would not have a significant economic 
impact under the Regulatory Flexibility Act. Funeral homes would 
collect the full amount of their bill for services rendered in burying 
a veteran from the veteran's

[[Page 76585]]

survivors. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is 
exempt from the initial and final regulatory flexibility analysis 
requirements of sections 603 and 604.

Executive Order 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action'' requiring review by OMB unless OMB 
waives such review, as ``any regulatory action that is likely to result 
in a rule that may: (1) Have an annual effect on the economy of $100 
million or more or adversely affect in a material way the economy, a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities; (2) Create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) Materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined, and it has 
been determined to be a significant regulatory action under the 
Executive Order because it is likely to result in a rule that may raise 
novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in the Executive 
Order. VA's impact analysis can be found as a supporting document at 
https://www.regulations.gov, usually within 48 hours after the 
rulemaking document is published. Additionally, a copy of the 
rulemaking and its impact analysis are available on VA's Web site at 
https://www1.va.gov/orpm/, by following the link for ``VA Regulations 
Published.''

Comment Period

    Although Executive Order 12866 generally requires that agencies 
afford the public a 60-day comment period, VA has determined that there 
is good cause to limit the public comment period for this proposed rule 
to 30 days. This rulemaking is necessary to implement VA's decision to 
liberalize burial benefits in order to facilitate automation of 
payments to surviving spouses and other claimants. It is also necessary 
to implement the statutory changes included in Public Law 112-260 to 
increase the availability of benefits for veterans whose remains are 
unclaimed. Accordingly, we provided a 30-day comment period for the 
public to comment on the proposed provisions.

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 issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any 1 year. This proposed rule would have no such effect 
on State, local, and tribal governments, or on the private sector.

Catalog of Federal Domestic Assistance Numbers and Titles

    The Catalog of Federal Domestic Assistance program numbers and 
titles for this proposed rule are 64.100, Automobiles and Adaptive 
Equipment for Certain Disabled Veterans and Members of the Armed 
Forces; 64.101, Burial Expenses Allowance for Veterans; 64.102, 
Compensation for Service-Connected Deaths for Veterans' Dependents; 
64.104, Pension for Non-Service-Connected Disability for Veterans; 
64.105, Pension to Veterans Surviving Spouses, and Children; 64.106, 
Specially Adapted Housing for Disabled Veterans; 64.109, Veterans 
Compensation for Service-Connected Disability; 64.110, Veterans 
Dependency and Indemnity Compensation for Service-Connected Death; 
64.115, Veterans Information and Assistance; and 64.127, Monthly 
Allowance for Children of Vietnam Veterans Born with Spina Bifida.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. Jose D. 
Riojas, Chief of Staff, Department of Veterans Affairs, approved this 
document on July 29, 2013, for publication.

List of Subjects in 38 CFR Part 3

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

    Dated: December 3, 2013.
Robert C. McFetridge,
Director, Regulation Policy and Management, Office of the General 
Counsel, Department of Veterans Affairs.

    For the reasons stated in the preamble, the Department of Veterans 
Affairs proposes to amend 38 CFR part 3 as follows:

PART 3--ADJUDICATION

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

0
1. The authority citation for part 3, subpart A continues to read as 
follows:

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


Sec.  3.954  [Removed]

0
2. Remove Sec.  3.954.
0
3. Revise subpart B to read as follows:
Subpart B--Burial Benefits

Burial Benefits: General

Sec.
3.1700 Types of VA burial benefits.
3.1701 Deceased veterans for whom VA may provide burial benefits.
3.1702 Persons who may receive burial benefits; priority of 
payments.
3.1703 Claims for burial benefits.

Burial Benefits: Allowances & Expenses Paid By VA

3.1704 Burial allowance based on service-connected death.
3.1705 Burial allowance based on non-service-connected death.
3.1706 Burial allowance for a veteran who died while hospitalized by 
VA.
3.1707 Plot or interment allowances for burial in a State veterans 
cemetery or other cemetery.
3.1708 Burial of a veteran whose remains are unclaimed.
3.1709 Transportation expenses for burial in a national cemetery.

Burial Benefits: Other

3.1710 Escheat (payment of burial benefits to an estate with no 
heirs).
3.1711 Effect of contributions by government, public, or private 
organizations.
3.1712 Effect of forfeiture on payment of burial benefits.
3.1713 Eligibility based on status before 1958.

    Authority:  105 Stat, 386, 38 U.S.C. 501(a), 2302-2308, unless 
otherwise noted.

[[Page 76586]]

Subpart B--Burial Benefits

Burial Benefits: General


Sec.  3.1700  Types of VA burial benefits.

    (a) Burial benefits. VA provides the following types of burial 
benefits, which are discussed in Sec. Sec.  3.1700 through 3.1712:
    (1) Burial allowance based on service-connected death;
    (2) Burial allowance based on non-service-connected death;
    (3) Burial allowance for a veteran who died while hospitalized by 
VA;
    (4) Burial plot or interment allowance; and
    (5) Reimbursement for transportation of remains.
    (b) Definition. For purposes of this subpart, burial means all the 
legal methods of disposing of the remains of a deceased person, 
including, but not limited to, cremation, burial at sea, and medical 
school donation.
    (c) Cross references. (1) Other benefits and services related to 
the memorialization or interment of a deceased veteran and certain 
survivors include the following:
    (i) Burial in a national cemetery (see Sec. Sec.  38.600 and 38.617 
through 38.629 of this chapter);
    (ii) Presidential memorial certificates (see 38 U.S.C. 112);
    (iii) Burial flags (see Sec.  1.10 of this chapter); and
    (iv) Headstones or markers (see Sec. Sec.  38.630 through 38.633 of 
this chapter).
    (2) The provisions of Sec. Sec.  3.1702 through 3.1711 do not apply 
to any of the programs listed in paragraph (c)(1) of this section.


Sec.  3.1701  Deceased veterans for whom VA may provide burial 
benefits.

    For purposes of providing burial benefits under subpart B of this 
part, the term ``veteran'' means the same as provided in 38 U.S.C. 
101(2). A veteran must be deceased, and burial benefits for that 
veteran must be authorized by a specific provision of law. For purposes 
of the non-service-connected burial allowance under 38 U.S.C. 2302, the 
term ``veteran'' includes a person who died during a period deemed to 
be active military, naval, or air service under Sec.  3.6(b)(7).

(Authority: 38 U.S.C. 101(2), 2302, 2303, 2307, 2308)

Sec.  3.1702  Persons who may receive burial benefits; priority of 
payments.

    (a) Automatic payments to eligible surviving spouse. VA will 
automatically pay a burial benefit to an eligible surviving spouse when 
VA is able to determine eligibility based on evidence of record as of 
the date of the veteran's death. VA may grant additional burial 
benefits, including the plot or interment allowance and reimbursement 
for transportation, to the surviving spouse or any other eligible 
person in accordance with paragraph (b) of this section and based on a 
claim described in Sec.  3.1703.
    (b) Priority of payments. (1) Except for claims a State, or an 
agency or political subdivision of a State, files under Sec.  3.1707, 
Plot or interment allowance for burial in a State veterans cemetery or 
other cemetery, or Sec.  3.1708, Burial of a veteran whose remains are 
unclaimed, VA will pay, upon the death of a veteran, the living person 
first listed as follows:
    (i) His or her surviving spouse;
    (ii) His or her children (first to file);
    (iii) His or her parents (first to file) or the surviving parent.
    (2) In all other cases, VA will pay the executor or administrator 
of the estate of the deceased veteran. If no executor or administrator 
has been appointed, VA may pay burial benefits based on a claim filed 
by a person acting for such estate who will distribute the burial 
benefits to the person or persons entitled to such distribution under 
the laws of the veteran's last State of residence.
    (3) In the case of a Veteran whose remains are unclaimed, VA will 
pay the person or entity that provided burial services.
    (4) VA will pay burial benefits to a single representative of the 
categories in paragraph (b)(1) of this section. VA will not divide 
applicable burial benefits among claimants; it is the responsibility of 
the recipient to distribute benefits as may be required.

(Authority: 38 U.S.C. 2302, 2303, 2307)



Cross Reference: Sec.  3.1(i) for the definition of ``State''.


Sec.  3.1703  Claims for burial benefits.

    (a) When claims must be filed--(1) General rule. Except as provided 
in paragraph (a)(2) of this section, VA must receive a claim for the 
non-service-connected burial allowance no later than 2 years after the 
burial of the veteran. There are no other time limitations to file 
claims for burial benefits under subpart B of this part.
    (2) Correction of character of discharge. If the non-service-
connected burial allowance was not payable at the time of the veteran's 
death or burial because of the character of the veteran's discharge 
from service, VA may pay the allowance if a competent authority 
corrects the deceased veteran's discharge to reflect a discharge under 
conditions other than dishonorable. Claims for the non-service-
connected burial allowance must be filed no later than 2 years after 
the date that the discharge was corrected.
    (b) Supporting evidence--(1) General rule. In order to pay burial 
benefits, VA must receive all of the following:
    (i) A claim, except as provided in Sec.  3.1702(a);
    (ii) Proof of the veteran's death in accordance with Sec.  3.211, 
Death; and
    (iii) For persons listed under Sec.  3.1702(b), except as provided 
in Sec.  3.1702(a), a statement certifying that the claimant incurred 
burial, plot or interment, or transportation costs of the deceased 
veteran.
    (2) Reimbursement of transportation expenses. In order to pay 
transportation costs, VA must receive a receipt, preferably on 
letterhead, showing who paid the costs, the name of the deceased 
veteran, the specific transportation expenses incurred, and the dates 
of the services rendered.
    (3) Eligibility based on evidence of record. VA may establish 
eligibility for benefits in this subpart based upon evidence of service 
and disability that VA relied upon to grant disability compensation or 
pension during the veteran's lifetime, unless VA has some other 
evidence on the date that it receives notice of the veteran's death 
that creates doubt as to the correctness of that evidence.

(Authority: 38 U.S.C. 2304, 5107(a))

Burial Benefits: Allowances and Expenses Paid By VA


Sec.  3.1704  Burial allowance based on service-connected death.

    (a) General rule. VA will pay the maximum burial allowance 
specified in 38 U.S.C. 2307 for the burial and funeral expenses of a 
veteran described in paragraph (b) of this section, unless VA has 
evidence on the date it receives notice of the veteran's death that the 
expenses incurred were less than that amount. Payment of the service-
connected burial allowance is in lieu of other allowances authorized by 
subpart B of this part, except those allowances listed in paragraph (c) 
of this section.
    (b) Eligibility. A burial allowance is payable under this section 
for a veteran who died as a result of a service-connected disability or 
disabilities. VA will presume, unless it has evidence to the contrary 
on the date it receives notice of the veteran's death, that a veteran 
died as a result of a service-connected disability or disabilities if, 
at the date of death, the veteran was rated totally disabled for a 
service-connected disability or disabilities, excluding a

[[Page 76587]]

total disability rating based on individual unemployability.
    (c) Additional allowances available based on service-connected 
death. In addition to the service-connected burial allowance authorized 
by this section:
    (1) VA may reimburse for transportation expenses related to burial 
in a national cemetery under Sec.  3.1709, Transportation expenses for 
burial in a national cemetery; and
    (2) VA may pay the plot or interment allowance for burial in a 
State veterans cemetery under Sec.  3.1707(a), Plot or interment 
allowance.

(Authority: 38 U.S.C. 2303, 2307, 2308)



Cross Reference: Sec.  3.1(i), for the definition of ``State''.


Sec.  3.1705  Burial allowance based on non-service-connected death.

    (a) General rule. VA will pay the maximum burial allowance 
specified in 38 U.S.C. 2302 for the burial and funeral expenses of a 
veteran described in paragraph (b) of this section, unless VA has 
evidence on the date it receives notice of the veteran's death that the 
expenses incurred were less than that amount. Payment of the non-
service-connected burial allowance is subject to other applicable 
regulations in subpart B of this part.
    (b) Eligibility. A burial allowance is payable under this section 
for a veteran who, on the date of death:
    (1) Was receiving VA pension or disability compensation;
    (2) Would have been receiving disability compensation but for the 
receipt of military retired pay; or
    (3) Had pending any of the following claims:
    (i) An original claim for pension or disability compensation, and 
the evidence in the claims file on the date of death and any evidence 
received under paragraph (d) of this section is sufficient to grant 
pension or disability compensation effective before the date of death; 
or
    (ii) A claim to reopen a previously denied pension or disability 
compensation claim, based on new and material evidence, and the 
evidence in the claims file on the date of the veteran's death and any 
evidence received under paragraph (d) of this section is sufficient to 
reopen the claim and grant pension or disability compensation effective 
before the date of death; or
    (iii) A claim for which a person would be eligible to substitute 
for the deceased veteran under 38 U.S.C. 5121A, Substitution in case of 
death of claimant, and that claim, once processed to completion by the 
substitute, results in the grant of pension or disability compensation 
effective before the date of death.
    (c) Evidence in the claims file on the date of the veteran's death 
means evidence in VA's possession on or before the date of the deceased 
veteran's death, even if such evidence was not part of the VA claims 
file on or before the date of death.
    (d) Requesting additional evidence. If the veteran had either an 
original claim or a claim to reopen pending on the date of death and 
there is sufficient evidence in VA's possession to support an award of 
compensation or pension prior to the date of death, but VA determines 
that additional evidence is needed to confirm that the deceased would 
have been entitled prior to death, VA will request such evidence. If VA 
does not receive such evidence within 1 year after the date of the 
request, it will deny the claim.
    (e) Additional allowances available based on non-service-connected 
death. In addition to the non-service-connected burial allowance 
authorized by this section:
    (1) VA may reimburse for transportation expenses related to burial 
in a national cemetery under Sec.  3.1709, Transportation expenses for 
burial in a national cemetery, but only if eligibility under paragraphs 
(b) of this section is based on a pending claim for, or award of, 
disability compensation, or eligibility for disability compensation but 
for receipt of military retired pay, rather than a claim for, or award 
of, pension; and
    (2) VA may pay the plot or interment allowance for burial in a 
State veterans cemetery under Sec.  3.1707(a), Plot or interment 
allowance.

(Authority: 38 U.S.C. 2302, 2303, 2304, 2308)



Cross Reference: Sec.  3.1(i), for the definition of ``State''.


Sec.  3.1706  Burial allowance for a veteran who died while 
hospitalized by VA.

    (a) General rule. VA will pay up to the maximum burial allowance 
specified in 38 U.S.C. 2303(a) for the burial and funeral expenses of a 
veteran described in paragraph (b) of this section.
    (b) Eligibility. A burial allowance is payable under this section 
for a veteran whose death was not service-connected and who died while 
hospitalized by VA. For purposes of this allowance, a veteran was 
hospitalized by VA if the veteran:
    (1) Was properly admitted to a VA facility (as described in 38 
U.S.C. 1701(3)) for hospital, nursing home, or domiciliary care under 
the authority of 38 U.S.C. 1710 or 1711(a);
    (2) Was transferred or admitted to a non-VA facility (as described 
in 38 U.S.C. 1701(4)) for hospital care under the authority of 38 
U.S.C. 1703;
    (3) Was transferred or admitted to a nursing home for nursing home 
care at the expense of the U.S. under the authority of 38 U.S.C. 1720;
    (4) Was transferred or admitted to a State nursing home for nursing 
home care for which payment is authorized under the authority of 38 
U.S.C. 1741;
    (5) Was traveling under proper prior authorization, and at VA 
expense, to or from a specified place for purpose of examination, 
treatment, or care; or
    (6) Was hospitalized by VA pursuant to any of paragraphs (b)(1) 
through (4) of this section but was not at the facility at the time of 
death and was:
    (i) On authorized absence that did not exceed 96 hours at the time 
of death;
    (ii) On unauthorized absence for a period not in excess of 24 hours 
at the time of death; or
    (iii) Absent from the facility for a period not in excess of 24 
hours of combined authorized and unauthorized absence at the time of 
death.
    (c) Hospitalization in the Philippines. Hospitalization in the 
Philippines under 38 U.S.C. 1731, 1732, and 1733 does not meet the 
requirements of this section.
    (d) Additional allowances available based on death while 
hospitalized by VA. In addition to the burial allowance authorized by 
this section:
    (1) VA will reimburse for the expense of transporting the remains 
of a person described in paragraph (b) of this section to the place of 
burial subject to the limitations of Sec.  3.1709 and where the death 
occurs within a State and:
    (i) The place of burial is in the same State or any other State; or
    (ii) The place of burial is in Canada or Mexico. However, 
reimbursement for transportation of the remains for such burial is 
authorized only from the place of death within a State to the port of 
embarkation within a State, or to the border limits of the United 
States.
    (2) VA may pay the plot or interment allowance for burial in a 
veterans cemetery under Sec.  3.1707, Plot or interment allowance.

(Authority: 38 U.S.C. 2303(a), 2308)



Cross Reference: Sec.  3.1(z) for the definition of ``nursing home'' 
and Sec.  3.1(i) for the definition of ``State''.


Sec.  3.1707  Plot or interment allowances for burial in a State 
veterans cemetery or other cemetery.

    (a) General eligibility. For a veteran who was eligible for burial 
in a national cemetery under 38 U.S.C. 2402, but was not buried in a 
national cemetery or

[[Page 76588]]

other cemetery under the jurisdiction of the U.S., VA will pay the 
allowances described below, provided all criteria are met.
    (b) Plot or interment allowance for burial in a State veterans 
cemetery. VA will pay the plot or interment allowance in the amount 
specified in 38 U.S.C. 2303(b)(1) (without regard to whether any other 
burial benefits were provided for that veteran) to a State, or an 
agency or political subdivision of a State, that provided a burial plot 
or interment for the veteran without charge if the State, or agency or 
political subdivision of the State:
    (1) Is claiming the plot or interment allowance for burial of the 
veteran in a cemetery, or section of a cemetery, owned by the State or 
agency or subdivision of the State;
    (2) Did not charge for the expense of the plot or interment; and
    (3) Uses the cemetery or section of a cemetery solely for the 
interment of:
    (i) Persons eligible for burial in a national cemetery; and
    (ii) In a claim based on a veteran's death after October 31, 2000, 
either:
    (A) Deceased members of a reserve component of the Armed Forces not 
otherwise eligible for interment in a national cemetery; or
    (B) Deceased former members of a reserve component of the Armed 
Forces not otherwise eligible for interment in a national cemetery who 
were discharged or released from service under conditions other than 
dishonorable.
    (c) Plot or interment allowance payable based on burial in other 
than a State veterans cemetery. Unless VA has evidence on the date it 
receives notice of the veteran's death that the expenses incurred were 
less, VA will pay the maximum plot or interment allowance specified in 
38 U.S.C. 2303(b)(2) to a claimant who incurred plot or interment 
expenses relating to the purchase of a burial plot for a deceased 
veteran if the veteran is buried in a cemetery other than a cemetery 
described in paragraphs (b)(1) and (b)(3) of this section and:
    (1) The veteran is eligible for a burial allowance under Sec.  
3.1705, Burial allowance based on non-service-connected death;
    (2) The veteran is eligible for a burial allowance under Sec.  
3.1706, Burial allowance for a veteran who died while hospitalized by 
VA;
    (3) The veteran was discharged from active service for a disability 
incurred or aggravated in line of duty (VA will accept the official 
service record of such discharge as proof of eligibility for the plot 
or interment allowance and VA will disregard any previous VA 
determination made in connection with a claim for monetary benefits 
that the disability was not incurred or aggravated in line of duty); or
    (4) The veteran, at the time of discharge from active service, had 
a disability, shown by official service records, which in medical 
judgment would have justified a discharge for disability.
    (d) Definitions. For purposes of subpart B of this part, plot or 
burial plot means the final disposal site of the remains, whether it is 
a grave, mausoleum vault, columbarium niche, or other similar place. 
Plot or interment expenses are those expenses associated with the final 
disposition of the remains and are not confined to the acts done within 
the burial grounds but may include the removal of remains for burial or 
interment.

(Authority: 38 U.S.C. 501(a), 2303(b))



Cross Reference: Sec.  3.1(i), for the definition of ``State''.


Sec.  3.1708  Burial of a veteran whose remains are unclaimed.

    (a) General. VA will pay the maximum burial allowance specified in 
38 U.S.C. 2302 for the burial and funeral expenses of a veteran 
described in paragraph (b) of this section, unless VA has evidence on 
the date it receives notice of the veteran's death that the expenses 
incurred were less than that amount.
    (b) Eligibility. A burial allowance is payable under this section 
for a veteran if the Secretary determines that:
    (1) There is no next of kin or other person claiming the remains of 
the deceased veteran; and
    (2) There are not sufficient resources available in the veteran's 
estate to cover the burial and funeral expenses.
    (c) Additional allowance for transportation of unclaimed remains. 
VA may reimburse for transportation expenses related to burial in a 
national cemetery under Sec.  3.1709, Transportation expenses for 
burial in a national cemetery, for a veteran described in paragraph (b) 
of this section.
    (d) Burial. When VA determines that a veteran's remains are 
unclaimed, the Director of the VA regional office in the area in which 
the veteran died will immediately complete arrangements for burial in a 
national cemetery or, at his or her option, in a cemetery or cemetery 
section meeting the requirements of paragraph (a) of Sec.  3.1707, Plot 
or interment allowance.

(Authority: 38 U.S.C. 2302(a))



Cross Reference: Sec.  3.1(i) for the definition of ``State''.


Sec.  3.1709  Transportation expenses for burial in a national 
cemetery.

    (a) General. VA will reimburse the costs of transportation, subject 
to paragraph (d) of this section, of a veteran's remains for burial in 
a national cemetery for a veteran described in paragraph (b) of this 
section.
    (b) Eligibility. VA will reimburse for the expense incurred, 
subject to paragraph (d) of this section, to transport a veteran's 
remains for burial in a national cemetery if:
    (1) The veteran died as the result of a service-connected 
disability;
    (2) The veteran was receiving service-connected disability 
compensation on the date of death;
    (3) The veteran would have been receiving service-connected 
disability compensation on the date of death, but for the receipt of 
military retired pay or non-service-connected disability pension; or
    (4) The Secretary determines the veteran is eligible for a burial 
allowance under Sec.  3.1708.
    (c) Amount payable. The amount payable under this section will not 
exceed the cost of transporting the remains to the national cemetery 
closest to the veteran's last place of residence in which burial space 
is available, and is subject to the limitations set forth in paragraph 
(e) of this section.
    (d) Reimbursable transportation expenses. (1) VA will reimburse 
reasonable transportation expenses, including but not limited to the 
costs of shipment via common carrier (i.e., procuring permits for 
shipment, a shipping case, sealing of the shipping case, and applicable 
Federal taxes) and costs of transporting the remains to the place of 
burial.
    (2) A reasonable transportation expense is an expense that is usual 
and customary in the context of burial transportation, with a 
corresponding charge that is the usual and customary charge made to the 
general public for the same or similar services.

(Authority: 38 U.S.C. 2303, 2308)

Burial Benefits: Other


Sec.  3.1710  Escheat (payment of burial benefits to an estate with no 
heirs).

    VA will not pay burial benefits if the payment would escheat (that 
is, would be turned over to the State because there are no heirs to the 
estate of the person to whom such benefits would be paid).

(Authority: 38 U.S.C. 501(a))

Sec.  3.1711  Effect of contributions by government, public, or private 
organizations.

    (a) Contributions by government or employer. With respect to claims 
for a

[[Page 76589]]

plot or interment allowance under Sec.  3.1707, if VA has evidence that 
the U.S., a State, any agency or political subdivision of the U.S. or 
of a State, or the employer of the deceased veteran has paid or 
contributed payment to the veteran's plot or interment expenses, VA 
will pay the claimant up to the lesser of:
    (1) The allowable statutory amount; or
    (2) The amount of the total plot or interment expenses minus the 
amount of expenses paid by any or all of the organizations described in 
this paragraph (a).
    (b) Burial expenses paid by other agencies of the U.S. (1) Burial 
allowance when Federal law or regulation also provides for payment. VA 
cannot pay the non-service-connected burial allowance when any Federal 
law or regulation also specifically provides for the payment of the 
deceased veteran's burial, funeral, or transportation expenses. 
However, VA will pay the non-service-connected burial allowance when a 
Federal law or regulation allows the payment of burial expenses using 
funds due, or accrued to the credit of, the deceased veteran (such as 
Social Security benefits), but the law or regulation does not 
specifically require such payment. In such cases, VA will pay the 
maximum amount specified in 38 U.S.C. 2302.
    (2) Payment by military service department. VA will not pay or will 
recoup the non-service-connected burial allowance for deaths occurring 
during active service or for other deaths for which the service 
department pays the burial, funeral, or transportation expenses.
    (3) When a veteran dies while hospitalized. When a veteran dies 
while hospitalized at the expense of the U.S. government (including, 
but not limited to, death in a VA facility) and benefits would be 
otherwise be payable under 10 U.S.C. 1482 and a provision of this 
subpart B, only one of these benefits is payable. VA will attempt to 
locate a relative of the veteran, in the priority order described in 
Sec.  3.1702(b), or person entitled to reimbursement and will ask that 
person to elect between these benefits.

(Authority: 38 U.S.C. 2302, 2303(b))

Sec.  3.1712  Effect of forfeiture on payment of burial benefits.

    (a) Forfeiture for fraud. VA will pay burial benefits, if otherwise 
in order, based on a deceased veteran who forfeited his or her right to 
receive benefits due to fraud under Sec.  3.901, Fraud. However, VA 
will not pay burial benefits to a claimant who participated in 
fraudulent activity that resulted in forfeiture under Sec.  3.901.
    (b) Forfeiture for treasonable acts or for subversive activity. VA 
will not pay burial benefits based on a period of service commencing 
before the date of commission of the offense if either the veteran or 
the claimant has forfeited the right to all benefits except insurance 
payments under Sec.  3.902, Forfeiture for treasonable acts, or Sec.  
3.903, Forfeiture for subversive activities, because of a treasonable 
act or subversive activities, unless the offense was pardoned by the 
President of the U.S.

(Authority: 38 U.S.C. 6103, 6104, 6105)



Cross Reference: Sec.  3.1(aa), for the definition of ``fraud.''


Sec.  3.1713  Eligibility based on status before 1958.

    When any person dies who had a status under any law in effect on 
December 31, 1957, that afforded entitlement to burial benefits, burial 
benefits will be paid, if otherwise in order, even though such status 
does not meet the service requirements of 38 U.S.C. chapter 23.

(Authority: 38 U.S.C. 2305)


[FR Doc. 2013-29142 Filed 12-17-13; 8:45 am]
BILLING CODE 8320-01-P