M21-1 Manual  /  Part VI, Subpart ii, Chapter 4, Section B

Preparing and Adjusting Awards in Military Retired Pay (MRP) Cases

M21-1, Part VI, Subpart ii, Chapter 4, Section B

In This Section

This section contains the following topics:
TopicTopic Name
1General Information on Identifying MRP Cases in the Corporate Record
2Adjusting an Award Affected by MRP
3Handling Cases in Which a Service Department Has Not Yet Calculated the Amount of MRP It Will Pay a Veteran
4Department of Veterans Affairs (VA), Service Department, and Retired Pay Center (RPC) Responsibility for Avoiding and Collecting Overpayments
5Handling an Election of VA Benefits, a Reelection of VA Benefits, and an Election of MRP
6Removal of a Veteran From the Temporary Disability Retirement List (TDRL)
7Effect of a Reduction of Benefits Under 38 CFR 3.551 on MRP

1. General Information on Identifying MRP Cases in the Corporate Record

Introduction

This topic contains general information on identifying MRP cases in the corporate record, including
  • identifying an award requiring a waiver of MRP
  • confirming the retired pay indicator is active
  • instructions for activating the retired pay indicator in the corporate record
  • removing the retired pay indicator when entitlement to MRP is terminated
  • ensuring the Veteran’s branch of service and Social Security number (SSN) are recorded in the corporate record, and
  • data VA provides to military RPCs.

Change Date

June 5, 2025

VI.ii.4.B.1.a. Identifying an Award Requiring a Waiver of MRP

The retired pay indicator in the corporate record identifies a compensation or Section 306 Pension award of a Veteran who
  • must waive military retired pay (MRP) in order to receive compensation or pension, or
  • has waived MRP for the purpose of computation of civil service annuity, which is payable concurrently with Department of Veterans Affairs (VA) benefits.
Important:
  • Do not activate the retired pay indicator for a Veteran in receipt of current-law pension, per M21-1, Part VI, Subpart ii, 4.A.4.a.
  • When MRP has been waived for civil service annuity, MRP changes will continue to populate in the Veterans Information Solution (VIS) and the Beneficiary Identification and Records Locator Subsystem (BIRLS). However, do not withhold compensation for MRP after the date shown in VIS that MRP stopped.
References: For more information on

VI.ii.4.B.1.b. Confirming the Retired Pay Indicator Is Active

When processing an award to a Veteran whose service department awarded or will award MRP, confirm that the retired pay indicator is active by selecting the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen in the award-processing system.
  • If data regarding the Veteran’s MRP is displayed on the RETIRED PAY tab, and at least one entry under the RETIRED PAY TYPE field is other than DMDC, the retired pay indicator is active.
  • If no MRP data is displayed on the RETIRED PAY tab, activate the indicator by following the instructions in M21-1, Part VI, Subpart ii, 4.B.1.c.
Note: Once the retired pay indicator is activated, a banner reflecting receipt of retired pay will be displayed in the Veterans Benefits Management System – Awards (VBMS-A).Reference: For information on using VBMS-A, see the VBMS Awards User Guide.

VI.ii.4.B.1.c. Instructions for Activating the Retired Pay Indicator in the Corporate Record

Follow the instructions in the table below to activate the retired pay indicator in the corporate record.Important: Activate the retired pay indicator even if VA is not withholding or will not withhold benefits based on the Veteran’s receipt of MRP.
StepAction
1Select the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen in VBMS-A.Important: Do not delete any historical information displayed on the RETIRED PAY tab unless it is inaccurate.
2Click on the ADD button and manually enter the MRP data or click on the RETRIEVE BIRLS DATA button, which will automatically populate the fields on the tab with data pulled from BIRLS.Note: When the RETRIEVE BIRLS DATA button is utilized, it automatically populates the
  • EFFECTIVE DATE field with the first day of the month which must be edited to reflect the date MRP began when it is other than the first of the month (such as disability retirement or reaching retirement age for Veterans who retired from a Reserve component), and
  • RETIRED PAY TYPE field with an entry of DMDC. At least one entry must be edited to reflect the appropriate retired pay type (e.g. Regular Retired Pay).
Follow the instructions in the table below when a manual entry is required for any field on the RETIRED PAY tab.
FieldInstructions
RETIRED PAY TYPEA variety of sources/means exist for determining the proper entry. They include:
  • the Veteran’s DD Form 214, Certificate of Uniformed Service
  • VIS
  • the Defense Personnel Records Information Retrieval System (DPRIS)
  • the entry in the FAN CD (functional account number code) field on the ENTIT and MBRENT screens in the Defense Finance and Accounting Service (DFAS) Retired and Casualty Pay Subsystem (RCPS) (Army, Navy, Air Force, Space Force, and Marine Corps only)
  • telephone contact with DFAS (Army, Navy, Air Force, Space Force, and Marine Corps only) at 866-622-4602, and/or
  • telephone contact with the Coast Guard Retiree and Annuitant Services Branch (CGRASB) (for all uniformed services other than the Army, Navy, Air Force, Space Force, and Marine Corps) at 866-772-8724.
GROSS AMOUNTIf the Veteran’s service department has not yet determined the amount of MRP,
  • leave the GROSS AMOUNT field blank, and
  • follow the instructions in M21-1, Part VI, Subpart ii, 4.B.3.
Important: Do not enter 0.00, as doing so deactivates the retired pay indicator.
EFFECTIVE DATEEnter the date of entitlement to disability compensation (not the payment date) in the EFFECTIVE DATE field.
References: For more information on
  • updating the RETIRED PAY tab in VBMS-A, see the VBMS Awards User Guide, and
  • using

VI.ii.4.B.1.d. Removing the Retired Pay Indicator When Entitlement to MRP Is Terminated

The retired pay indicator must be deactivated if a service department discontinues the payment of MRP to a Veteran because entitlement to MRP has terminated, for example, removal of the Veteran from the Temporary Disability Retirement List (TDRL). Deactivate the retired pay indicator by
  • selecting the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen
  • clicking the ADD button
  • entering the type of MRP that was terminated in the RETIRED PAY TYPE field
  • entering the date payment of MRP ended in the EFFECTIVE DATE field, and
  • entering 0.00 in the GROSS AMOUNT field.
Important: If a service department awards a Veteran discharge pay after discontinuing MRP, it will be necessary to update the fields on the DISCHARGE PAY tab, as well.References: For more information on
  • taking the actions described in this block, see the VBMS Awards User Guide, and
  • removal of a Veteran from the TDRL, see M21-1, Part VI, Subpart ii, 4.B.6.

VI.ii.4.B.1.e. Ensuring the Veteran’s Branch of Service and SSN Are Recorded in the Corporate Record

A Veteran’s branch of service and Social Security number (SSN) must be recorded in the corporate record to ensure the proper exchange of information between VA and retired pay centers (RPCs). Ensure the branch of service in the corporate record is the same as the branch that is paying MRP.Reference: For more information on making entries and updates to the corporate record, see the Share Online Help.

VI.ii.4.B.1.f. Data VA Provides to Military RPCs

The data VA provides to RPCs includes data pertaining to all original and reopened awards and any supplemental award actions if all of the following criteria are met:
  • the entitlement type is disability compensation or Dependency and Indemnity Compensation
  • authorization of an award (including automated cost-of-living adjustments), and
  • the Veteran’s SSN is recorded in the corporate record.

2. Adjusting an Award Affected by MRP

Introduction

This topic contains information on adjusting awards that are affected by MRP, including
  • processing an award to a Veteran in receipt of MRP
  • determining the effective date of entitlement and the effective date of payment
  • deadline for authorizing awards
  • RPC action when the rate of compensation exceeds the rate of MRP
  • processing an award when the rate of compensation exceeds the rate of MRP
  • determining the effective date for a reduced award, and
  • tax exemption of MRP and notifying the Veteran of eligibility.

Change Date

January 26, 2026

VI.ii.4.B.2.a. Processing an Award to a Veteran in Receipt of MRP

Withhold benefits to prevent the concurrent payment of VA benefits and MRP when concurrent payment is prohibited.To calculate the amount of benefits to withhold, use the Retired Pay Withholding Calculator, which is accessible on the Military Pay webpage.Exceptions: Do not withhold for MRP when
  • processing the initial compensable disability ratingand the Veteran meets full Concurrent Retirement and Disability Pay (CRDP) requirements described in M21-1, Part VI, Subpart ii, 4.A.2.f (claims processors must upload the documentation described in the first row of the table in M21-1, Part VI, Subpart ii, 4.A.2.g), or
  • restoring benefits VA previously reduced (e.g., restoring the payment of additional compensation for dependents that were removed for failure to return VA Form 21-0538, Mandatory Verification of Dependents), and written correspondence is obtained from the RPC certifying no retroactive adjustments to MRP were completed to account for the reduction of VA benefits. Certification from the RPC may not be obtained from RCPS or by telephone.
Notes:
  • For the purposes of this block, the term initial compensable disability rating means the first rating decision that VA
    • grants entitlement to special monthly compensation (SMC), and/or
    • assigns a service-connected (SC) evaluation of 10 percent or higher.
  • When restoring benefits VA previously reduced and withholding for MRP is required, in the decision notice, invite the Veteran to submit proof from the respective RPC, showing no retroactive adjustments to MRP were completed to account for the reduction of VA benefits for the time period of the reduction. If the Veteran submits the evidence requested, adjust the withholding of compensation for MRP accordingly.
References: For more information on

VI.ii.4.B.2.b. Determining the Effective Date of Entitlement and the Effective Date of Payment

Apply the provisions of

  • 38 CFR 3.400 when determining the effective date of entitlement to a benefit, and
  • 38 CFR 3.31 when determining the effective date of payment of a benefit.

Reference: For an explanation of the difference between the effective date of payment and effective date of entitlement, see M21-1, Part VI, Subpart i, 1.A.2.b.

VI.ii.4.B.2.c. Deadline for Authorizing Awards

On Compensation Service’s online calendar, the following entry will appear monthly, usually around the middle of each month: Stop retired pay withholding effective[month/day/year], if award authorized before[cutoff time].Awards with a retired pay withholding shall not be authorized from[cutoff time]to[one hour following cutoff time]on[month/day/year]. On or after[one hour following cutoff time]on[month/day/year]stop retired pay withholding with a[month/day/year] effective date.All awards that increase a Veteran’s compensation effective the first day of the current month, based on a corresponding reduction in the Veteran’s MRP, must be authorized by the cutoff time on the date referenced in the above paragraph.If authorization is not accomplished by the cutoff time on the referenced date, the award must be regenerated to reflect the increase in compensation (and reduction in MRP) from the first day of the following month.Rationale: If the award is authorized after the cutoff time on the referenced date without regenerating the award as described, the Veteran’s RPC will not have sufficient time to reduce the Veteran’s MRP from the first day of the current month. The one-hour moratorium allows the Hines Information Technology Center time to start the file that is used by the RPCs for this purpose.Note: For quality review purposes, the timestamp on award prints is shown as Eastern Standard Time (or Eastern Daylight Time, when in effect).

VI.ii.4.B.2.d. RPC Action When the Rate of Compensation Exceeds the Rate of MRP

Any time RPCs receive data showing a Veteran’s monthly rate of compensation exceeds the monthly rate of MRP, the RPC automatically releases to the station of origination (SOO)

  • a certification of the gross MRP, and
  • the effective dates of any rate changes in the Veteran’s MRP for the previous two years.

Upon receipt of the notice described above from an RPC, the SOO must

  • review the military payment history, and
  • initiate payment of any previously withheld compensation that exceeds the amount of MRP for the same period.

Note: If the information referenced in this block does not exist in the claims folder but is relevant to award processing, it may be obtained

  • through RCPS (for Air Force, Army, Navy, Space Force, and Marine Corps retirees only)
  • by calling CGRASB at 1-866-772-8724, or
  • through VIS.

Reference: For more information on using

VI.ii.4.B.2.e. Processing an Award When the Rate of Compensation Exceeds the Rate of MRP

When processing an award and the monthly rate of compensation exceeds the monthly rate of MRP,

  • begin the award effective the earliest date that entitlement is established, as determined under the basic rules of 38 CFR 3.400 and 38 CFR 3.31, and
  • pay the difference between the rate of compensation and the rate of MRP from the start of the award until the date that the payment of compensation at the full rate may be authorized, as determined by M21-1, Part VI, Subpart ii, 4.B.2.c.

For the periods authorizing the differential rate,

  • show the amount not paid because of receipt of MRP as a retired pay withholding, and
  • zero out the MRP withholding on the award line that reflects payment of compensation at the full rate.

Reference: For more information on making award adjustments involving MRP in VBMS-A, see the VBMS Awards User Guide.

VI.ii.4.B.2.f. Determining the Effective Date for a Reduced Award

Retroactively reduce benefits in accordance with existing laws and regulations (38 CFR 3.501).

VI.ii.4.B.2.g. Tax Exemption of MRP and Notifying the Veteran of Eligibility

Anytime VA pays a Veteran less than the full rate of disability compensation because the Veteran was in receipt of MRP, VA must notify the Veteran that MRP in an amount equal to the amount of compensation VA withheld (because of the Veteran’s receipt of MRP) is tax exempt. Include the following text in the corresponding decision notice to notify the Veteran of the tax exemption: Include the following text in the corresponding decision notice to notify the Veteran of the tax exemption:Because VA compensation is not taxable, you may be entitled to a tax exemption during the period VA withheld your compensation; the amount of the exemption would be the amount of compensation VA withheld based on your receipt of military retired pay. Subsequent changes in the amount of compensation VA withholds based on your receipt of military retired pay may affect the tax exemption. Please contact the Internal Revenue Service with questions about your tax liability.

3. Handling Cases in Which a Service Department Has Not Yet Calculated the Amount of MRP It Will Pay a Veteran


Introduction

This topic contains instructions for handling cases in which a service department has not yet calculated the amount of MRP it will pay a Veteran, including
  • actions to take prior to authorization when the amount of a Veteran’s MRP is unknown
  • updating the award-processing system based on data displayed in RCPS
  • awarding benefits after determining the amount of a Veteran’s MRP has not yet been calculated
  • review and processing of
    • end product (EP) 290, and
    • EPs 290 that involve a Veteran who retired from the Coast Guard, National Oceanic and Atmospheric Administration (NOAA), or U.S. Public Health Service (PHS)
    • handling cases in which the date of retirement or separation falls on the 31st day of a month, and
    • adjusting a running award of disability compensation when the amount of a Veteran’s MRP was previously unknown.

Change Date

June 5, 2025

VI.ii.4.B.3.a. Actions to Take Prior to Authorization When the Amount of a Veteran’s MRP Is Unknown

Follow the instructions in the table below immediately prior to authorization of an award to a Veteran when the amount of MRP to which the Veteran is entitled is unknown.
StepAction
1Follow the instructions in the table below.
If the Veteran retired from the …Then go to …
  • Army
  • Navy
  • Air Force
  • Space Force, or
  • Marine Corps
Step 4.
  • Coast Guard,
  • National Oceanic and Atmospheric Administration (NOAA), or
  • U.S. Public Health Service (PHS)
the next step.
2Contact CGRASB at 866-772-8724 and ask whether the amount of the Veteran’s MRP has been calculated.
3Has the amount of the Veteran’s MRP been calculated?
  • If yes,
    • ask CGRASB for the amount(s) and the effective date(s) of payment(s) of MRP
    • document the information obtained from CGRASB on VA Form 27-0820, Report of General Information, and upload the form into the Veteran’s electronic claims folder (eFolder)
    • update the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen in the award-processing system based on information CGRASB provided, and
    • disregard the remaining steps in this table.
  • If no,
    • disregard the remaining steps in this table, and
    • follow the instructions in Step 2 of the procedure outlined in M21-1, Part VI, Subpart ii, 4.B.3.b.
4Access RCPS by logging into the Defense Information Systems Agency (DISA) Multi-Host Internet Access Portal (MIAP).
5Once RCPS opens, enter the following text in the upper, left-hand corner of the screen: HUNT[enter a space or comma, the Veteran’s nine-digit SSN, and a comma]ENTIT. Example: HUNT 999999999,ENTIT
6Press Enter on the keyboard.
7Does the SELECTED ENTITLEMENT DATA screen appear after pressing Enter?
  • If yes, the Veteran’s service department has calculated the amount of MRP it will pay the Veteran.
    • Follow the instructions in M21-1, Part VI, Subpart ii, 4.B.3.b, for updating the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen in the award-processing system.
    • Pay compensation in accordance with the instructions in M21-1, Part VI, Subpart ii, 4.B.2.
  • If no, the Veteran’s service department has not yet calculated the amount of MRP it will pay the Veteran. Follow the instructions in the table below.
If the message …Then …
THE REQUESTED DATA FIELDS ARE BLANK FOR THIS SSN appears at the bottom of the NRPS INQUIRY DIRECTORY screenfollow the instructions in Step 2 of the procedure outlined in M21-1, Part VI, Subpart ii, 4.B.3.b.
THE REQUESTED INFORMATION DOES NOT EXIST FOR THIS SSN appears at the bottom of the NRPS INQUIRY DIRECTORY screen
  • request the Veteran’s retirement orders through DPRIS to confirm the Veteran retired
  • upload the orders into the Veteran’s eFolder when they arrive, and
  • follow the instructions in Step 2 of the procedure outlined in M21-1, Part VI, Subpart ii, 4.B.3.b.
Notes:
  • In order to gain access to RCPS, users must navigate to the Military Pay webpage and follow the access request instructions found in the How to Register for an AMPS Account – External User Only.
    • Upon completion, the access request is automatically routed to the following individuals/destinations, in sequential order:
      • the user’s immediate supervisor
      • the information security officer or human resource (HR) office, and
      • DFAS.
    • User guides for supervisors and information security/HR officers are also available on the Military Pay webpage.
  • When necessary, users may
    • reset RCPS by pressing the Pause/Break key on the keyboard, or
    • unlock a frozen RCPS screen by pressing the Esc key on the keyboard.
  • Do not log out of the DISA MIAP in order to maintain access throughout the day.
  • Claims processors may also obtain RCPS data by contacting DFAS via telephone at 1-866-622-4602.
References: For more information on using

VI.ii.4.B.3.b. Updating the Award-Processing System Based on Data Displayed in RCPS

The table below contains instructions for updating the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen in the award-processing-system based on data displayed on the SELECTED ENTITLEMENT DATA screen in RCPS.
StepAction
1Has the Veteran’s service department calculated the amount of MRP it will pay the Veteran?
  • If yes, go to Step 3.
  • If no, go to the next step.
2
  • On the RETIRED PAY tab,
    • enter the retirement date (separation date plus one day) in the EFFECTIVE DATE field, and
    • leave the GROSS AMOUNT field blank.
  • Disregard the remaining steps in this table and follow the instructions in M21-1, Part VI, Subpart ii, 4.B.3.c.
Important: Do not enter 0.00 in the GROSS AMOUNT field, as doing so deactivates the retired pay indicator.
3Look at the fields that appear along the right side of the SELECTED ENTITLEMENT DATA screen in RCPS. Is the amount displayed in the PR GP (prior gross pay) field $0.00?
  • If yes,
    • enter the date displayed in the CURR GP EFF DT (current gross pay effective date) field and the amount displayed in the CURR GP (current gross pay) field into the EFFECTIVE DATE and GROSS AMOUNT fields, respectively, on the RETIRED PAY tab in the award-processing-system, and
    • disregard the remaining step in this table.
  • If no, go to the next step.
4Follow the instructions in the table below.
If …Then …
the same date is displayed in the CURR GP EFF DT and PR GP EFF DT (prior gross pay effective date) fieldsenter the date displayed in the CURR GP EFF DT field and the amount displayed in the CURR GP field into the EFFECTIVE DATE and GROSS AMOUNT fields, respectively, on the RETIRED PAY tab in the award-processing-system.
different dates are displayed in the CURR GP EFF DT and PR GP EFF DT fields
  • enter the date displayed in the PR GP EFF DT field and the amount displayed in the PR GP field into the EFFECTIVE DATE and GROSS AMOUNT fields, respectively, on the RETIRED PAY tab in the award-processing-system
  • click on the ADD button on the RETIRED PAY tab
  • enter the date displayed in the CURR GP EFF DT field and the amount displayed in the CURR GP field into the EFFECTIVE DATE and GROSS AMOUNT fields, respectively, on the RETIRED PAY tab, and
  • click on the DONE button on the RETIRED PAY tab.
Reference: For more information on using VBMS-A, see the VBMS Awards User Guide.

VI.ii.4.B.3.c. Awarding Benefits After Determining the Amount of a Veteran’s MRP Has Not Yet Been Calculated

Withhold all disability compensation when a withholding for MRP is required in accordance with the instructions in M21-1, Part VI, Subpart ii, 4.B.2.a-c, and fewer than six months have passed since the Veteran retired without the service department calculating the amount of MRP. When a withholding for MRP is required, establish end product (EP) 290 after authorizing the award by
  • using the current date as the date of claim and the claim label
    • IDES Retired Pay Waiver/Election when processing an Integrated Disability Evaluation System (IDES) case, or
    • BDD Retired Pay Waiver/Election when processing any other type of case
    • entering Awaiting MRP Information as an associated contention, and
    • adding the appropriate tracked item as identified in M21-4 Appendix D, with a suspense date that is 10 days from the current date.
    Exception: Do not withhold all disability compensation if a Veteran is already receiving disability compensation on the date of retirement. Under such circumstances, withhold only the amount of any increase in compensation to which the Veteran is entitled. Important: Do not withhold for MRP if
    • six or more months have passed since the Veteran retired and the Veteran’s service department has not yet calculated MRP, or
    • the effective date and authorization of the award is before the corresponding retired pay cutoff date/time, as described in M21-1, Part VI, Subpart ii, 4.B.2.c.

VI.ii.4.B.3.d. Review and Processing of EPs 290

Follow the instructions in the table below for every EP 290 that was established in accordance with the instructions in M21-1, Part VI, Subpart ii, 4.B.3.c.
StepAction
1Follow the instructions in the table below.
If the Veteran retired from the …Then …
  • Army
  • Navy
  • Air Force
  • Space Force, or
  • Marine Corps
go to the next step.
  • Coast Guard
  • NOAA, or
  • PHS
  • disregard the remaining steps in this table, and
  • follow the instructions in M21-1, Part VI, Subpart ii, 4.B.3.e.
2Access RCPS by logging into the DISA MIAP.
3Once RCPS opens, enter the following text in the upper, left-hand corner of the screen: HUNT[enter a space or comma, the Veteran’s nine-digit SSN, and a comma]ENTIT. Example: HUNT 999999999,ENTIT
4Press Enter on the keyboard.
5Does the SELECTED ENTITLEMENT DATA screen appear after pressing Enter?
  • If yes,
    • follow the instructions in M21-1, Part VI, Subpart ii, 4.B.3.b to update the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen, and
    • go to Step 10.
  • If no, go to the next step.
6Have six months passed since the date of separation?
  • If yes, go to the next step.
  • If no, go to Step 9.
7Remove the withholding for MRP effective the date the withholding first began on or after the last retirement date. Important: Do not enter 0.00 in the GROSS AMOUNT field when updating the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen, as doing so deactivates the retired pay indicator. Leave the field blank instead.
8
  • Notify the Veteran of the action taken, and
  • disregard the remaining steps in this table.
9Follow the instructions in the table below.
If the message …Then …
THE REQUESTED INFORMATION DOES NOT EXIST FOR THIS SSN appears at the bottom of the NRPS INQUIRY DIRECTORY screen
  • disregard the remaining steps in this table
  • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
  • repeat the steps in this table during the next review of the EPs 290 that were established in accordance with the instructions in M21-1, Part VI, Subpart ii, 4.B.3.c.
THE REQUESTED DATA FIELDS ARE BLANK FOR THIS SSN appears at the bottom of the NRPS INQUIRY DIRECTORY screengo to the next step.
10In RCPS, enter the following text in the upper, left-hand corner of the screen: HUNT[enter a space or comma, the Veteran’s nine-digit SSN, and a comma]VA. Example: HUNT 999999999,VA
11Are the ACTUAL DED DT (actual deduction date) and ACTUAL AMT (actual amount) fields on the VA WAIVER screen populated with data?
  • If yes, go to Step 16.
  • If no, go to the next step.
Notes:
  • The amount displayed in the ACTUAL AMT field represents the amount of MRP waived. If the amount in this field equals or exceeds the amount of the Veteran’s MRP, then the Veteran’s MRP has been waived in full.
  • The number displayed in the ACTUAL DED DT field represents the effective date (YYYYMMDD) of the waiver.
  • If 0.00 appears in the ACTUAL AMT field, the MRP waiver was $0.00 as of the date displayed in the ACTUAL DED DT field.
  • If two or more columns of data are displayed on the VA WAIVER screen,
    • disregard the data in all but the first column of data if the date displayed in the ACTUAL DED DT field is the same in all columns, or
    • use the data displayed in all of the columns if at least one of the dates displayed in the ACTUAL DED DT field does not match.
12Have 10 working days passed since the award action described in M21-1, Part VI, Subpart ii, 4.B.3.c, was authorized?
  • If yes, go to Step 15.
  • If no, go to the next step.
13Did the SELECTED ENTITLEMENT DATA screen referenced in Step 5 appear after taking the actions described in Steps 3 and 4?
  • If yes, go to the next step.
  • If no,
    • stop here
    • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
    • repeat the steps in this table during the next review of the EPs 290 that were established in accordance with the instructions in M21-1, Part VI, Subpart ii, 4.B.3.c.
14Does the amount of MRP the Veteran receives exceed the gross monthly amount of the Veteran’s disability compensation?
  • If yes,
    • clear the EP 290, and
    • disregard the remaining steps in this table.
  • If no,
    • withhold from the Veteran’s award the gross monthly amount of MRP from the date compensation is payable following separation to the date the withholding for MRP ended
    • notify the Veteran of the action taken, and
    • disregard the remaining steps in this table.
15
  • Send an email to VAVBAWAS/CO/MILPAY that includes (in the body of the email message) the
    • Veteran’s claim number, and
    • statement Sending per instructions in Step 15 of the procedure outlined in M21-1 VI.ii.4.B.3.d.
  • Take no further action until the Military Pay Staff responds with further instructions.
16Follow the instructions in the table below.
If the …Then …
  • date in the ACTUAL DED DT field matches the date the withholding of disability compensation (as referenced in M21-1, Part VI, Subpart ii, 4.B.3.c) ceased, and
  • amount of the Veteran’s MRP is unknown
  • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
  • repeat the steps in this table during the next review of the EPs 290 that were established in accordance with the instructions in M21-1, Part VI, Subpart ii, 4.B.3.c.
  • date in the ACTUAL DED DT field matches an effective date of the award of disability compensation, and
  • amount in the ACTUAL AMT field is greater than $0.00
  • make the appropriate entries on the RETIRED PAY tab of the AWARD ADJUSTMENTS screen in the award-processing system to reduce the amount of disability compensation VA withheld by the amount displayed in the ACTUAL AMT field, effective the date displayed in the ACTUAL DED DT field, and
  • notify the Veteran of the action taken.
Caution: Do not adjust the Veteran’s award for any periods prior to the date displayed in the ACTUAL DED DT field. Notes:
  • date in the ACTUAL DED DT field matches the date the withholding of disability compensation (as referenced in M21-1, Part VI, Subpart ii, 4.B.3.c) ceased
  • amount in the ACTUAL AMT field matches the amount of disability compensation VA paid from the date in the ACTUAL DED DT field, and
  • Veteran’s MRP is less than the amount of disability compensation to which the Veteran is entitled
  • make the appropriate entries on the RETIRED PAY tab of the AWARD ADJUSTMENTS screen in the award-processing system to reduce the amount(s) of disability compensation withheld for MRP to the gross monthly amount(s) of MRP the Veteran received prior to the date in the ACTUAL DED DT field, and
  • notify the Veteran of the action taken.
Note: The award adjustment described in this cell releases to the Veteran all disability compensation that exceeds the amount of gross monthly MRP.
  • date in the ACTUAL DED DT field matches the date the withholding of disability compensation (as referenced in M21-1, Part VI, Subpart ii, 4.B.3.c) ceased
  • amount in the ACTUAL AMT field matches the amount of disability compensation VA paid from the date in the ACTUAL DED DT field, and
  • Veteran’s MRP is equal to or exceeds the gross amount of disability compensation to which the Veteran is entitled
no further action is necessary except to clear the pending EP 290.
date in the ACTUAL DED DT field is later than the date the withholding of disability compensation (as referenced in M21-1, Part VI, Subpart ii, 4.B.3.c) ceased Note: VA may have overpaid the Veteran in this case.
  • send an email to VAVBAWAS/CO/MILPAY that includes (in the body of the email message) the
    • Veteran’s claim number, and
    • statement Sending per instructions in Step 16 of the procedure outlined in M21-1 VI.ii.4.B.3.d, and
  • take no further action until the Military Pay Staff responds to the email.

VI.ii.4.B.3.e. Review and Processing of EPs 290 That Involve a Veteran Who Retired From the Coast Guard, NOAA, or PHS

Follow the instructions in the table below for every EP 290 that
  • was established in accordance with the instructions in M21-1, Part VI, Subpart ii, 4.B.3.c, and
  • involves a Veteran who retired from the
    • Coast Guard
    • NOAA, or
    • PHS.
StepAction
1Contact CGRASB at 866-772-8724 and ask whether
  • the amount of the Veteran’s MRP has been calculated, and/or
  • a VA waiver has been posted.
2Has the amount of the Veteran’s MRP been calculated, or has a VA waiver been posted?
  • If yes,
    • ask CGRASB for the amount(s) and effective date(s) of
      • payment(s) of MRP, and/or
      • the VA waiver
    • document the information obtained from CGRASB on VA Form 27-0820 and upload the form into the Veteran’s eFolder, and
    • go to Step 6.
  • If no, go to the next step.
3Has the EP 290 been pending more than six months from the date of separation?
  • If yes, go to the next step.
  • If no,
    • stop here
    • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
    • repeat the steps in this table during the next review of the EPs 290 that were established in accordance with the instructions in M21-1, Part VI, Subpart ii, 4.B.3.c.
4Remove the withholding for MRP effective the date the withholding first began on or after the last retirement date. Important: Do not enter 0.00 in the GROSS AMOUNT field when updating the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen, as doing so deactivates the retired pay indicator. Leave the field blank instead.
5
  • Notify the Veteran of the action taken, and
  • disregard the remaining steps in this table.
6Has the amount of the Veteran’s MRP been calculated?
  • If yes,
    • follow the instructions in M21-1, Part VI, Subpart ii, 4.B.3.b, for updating the RETIRED PAY tab on the MILITARY PAYMENT INFORMATION screen, and
    • go to the next step.
  • If no, go to the next step.
7Was VA waiver information received from CGRASB as described in Step 2?
  • If yes, go to Step 11.
  • If no, go to the next step.
8Have 10 working days passed since the award action described in M21-1, Part VI, Subpart ii, 4.B.3.c, was authorized?
  • If yes, go to the next step.
  • If no, go to Step 10.
9
  • Send an email to VAVBAWAS/CO/MILPAY that includes (in the body of the email message) the
    • Veteran’s claim number, and
    • statement Sending per instructions in Step 9 of the procedure outlined in M21-1 VI.ii.4.B.3.e.
  • Take no further action until the Military Pay Staff responds with further instructions.
10Does the amount of MRP the Veteran receives exceed the gross monthly amount of the Veteran’s disability compensation?
  • If yes,
    • clear the EP 290, and
    • disregard the remaining steps in this table.
  • If no,
    • withhold from the Veteran’s award the gross monthly amount of MRP from the date compensation is payable following separation to the date the withholding for MRP ended
    • notify the Veteran of the action taken, and
    • disregard the remaining steps in this table.
11Follow the instructions in the table below.
If …Then …
  • the effective date of the VA waiver matches the date the withholding of disability compensation (as referenced in M21-1, Part VI, Subpart ii, 4.B.3.c) ceased, and
  • the amount of the Veteran’s MRP is unknown
  • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
  • repeat the steps in this table during the next review of the EPs 290 that were established in accordance with the instructions in M21-1, Part VI, Subpart ii, 4.B.3.c.
  • the effective date of the VA waiver matches an effective date of the award of disability compensation, and
  • the amount of the VA waiver is greater than $0.00
  • make the appropriate entries on the RETIRED PAY tab of the AWARD ADJUSTMENTS screen to reduce the amount of disability compensation VA withheld by the amount of the VA waiver from the effective date of the VA waiver, and
  • notify the Veteran of the action taken.
Caution: Do not adjust the Veteran’s award for any periods prior to the effective date of the VA waiver. Notes:
  • The award adjustment described in this cell releases to the Veteran disability compensation VA withheld from the effective date of the VA waiver in the amount of the VA waiver.
  • If the amount of the VA waiver is less than the amount of disability compensation VA withheld for MRP,
    • continue the EP 290 at authorization
    • notify the Veteran of the action taken
    • update the tracked item suspense date to reflect a date that is 10 days from the current date, and
    • repeat the steps described in M21-1, Part VI, Subpart ii, 4.B.3.e, until all the actions required to close out the EP are completed.
  • the effective date of the VA waiver matches the date the withholding of disability compensation (as referenced in M21-1, Part VI, Subpart ii, 4.B.3.c) ceased
  • the amount of the VA waiver matches the amount of disability compensation VA paid from the effective date of the VA waiver, and
  • the Veteran’s MRP is less than the gross amount of disability compensation to which the Veteran is entitled
  • make the appropriate entries on the RETIRED PAY tab of the AWARD ADJUSTMENTS screen to reduce the amount(s) of disability compensation VA withheld for MRP to the gross monthly amount(s) of MRP the Veteran received prior to the effective date of the VA waiver, and
  • notify the Veteran of the action taken.
Notes: The award adjustment described in this cell releases to the Veteran all disability compensation that exceeds the amount of gross monthly MRP.
  • the effective date of the VA waiver matches the date the withholding of disability compensation (as referenced in M21-1, Part VI, Subpart ii, 4.B.3.c) ceased
  • the amount of the VA waiver matches the amount of disability compensation VA paid from the effective date of the VA waiver, and
  • the Veteran’s MRP is equal to or exceeds the gross amount of disability compensation to which the Veteran is entitled
no further action is necessary except to clear the pending EP 290.
the effective date of the VA waiver is later than the date the withholding of disability compensation (as referenced in M21-1, Part VI, Subpart ii, 4.B.3.c) ceased Note: VA may have overpaid the Veteran in this case.
  • send an email to VAVBAWAS/CO/MILPAY that includes (in the body of the email message) the
    • Veteran’s claim number, and
    • statement Sending per instructions in Step 11 of the procedure outlined in M21-1 VI.ii.4.B.3.e, and
  • take no further action until the Military Pay Staff responds to the email.

VI.ii.4.B.3.f. Handling Cases In Which the Date of Retirement or Separation Falls on the 31st Day of a Month

If the date of a Veteran’s retirement (the day following the date of separation) falls on the 31st day of a month, enter the first day of the month that follows the date of retirement in the EFFECTIVE DATE field on the RETIRED PAY tab of the MILITARY PAYMENT INFORMATION screen in the award-processing system. Rationale: The 31st day of a month is not a pay date for MRP purposes. Therefore, when the retirement date falls on this day, MRP starts on the first day of the following month.

VI.ii.4.B.3.g. Adjusting a Running Award of Disability Compensation When the Amount of a Veteran’s MRP Was Previously Unknown

The table below contains instructions that are unique to the adjustment of a running award of disability compensation when the amount of a Veteran’s MRP was unknown on the most recent award. Important:
  • Before taking the actions described in the table below, follow the instructions in M21-1, Part VI, Subpart ii, 4.B.3.a, to ensure the amount of MRP to which the Veteran is entitled remains unknown.
  • If six months have passed since the Veteran retired, and the Veteran’s service department has not yet calculated MRP, it is unnecessary to establish a withholding for MRP.
StepAction
1Follow the instructions in the table below.
If the Veteran retired from the …Then go to …
  • Army
  • Navy
  • Air Force
  • Space Force, or
  • Marine Corps
the next step.
  • Coast Guard
  • NOAA, or
  • PHS
Step 3.
2
  • Follow the instructions in the table below.
  • Disregard the remaining steps in this table.
If the ACTUAL DED DT and ACTUAL AMT fields on the VA WAIVER screen in RCPS ...Then ...
  • contain no data, and
  • the amount of MRP is known
withhold any increase in disability compensation in accordance with M21-1, Part VI, Subpart ii, 4.B.2.
  • contain no data, and
  • the amount of MRP is unknown
  • withhold any increase in disability compensation, and
  • establish EP 290 by following the instructions in M21-1, Part VI, Subpart ii, 4.B.3.c.
  • contain data, and
  • the amount of MRP is known
  • pay disability compensation in the amount displayed in the ACTUAL AMT field from the date in the ACTUAL DED DT field, and
  • withhold the remaining amount in accordance with M21-1, Part VI, Subpart ii, 4.B.2.
Important: Do not withhold disability compensation that VA paid prior to the date displayed in the ACTUAL DED DT field.
  • contain data, and
  • the amount of MRP is unknown
  • follow the instructions in the preceding row, and
  • establish EP 290 after authorizing the award by following the instructions in M21-1, Part VI, Subpart ii, 4.B.3.c
3Contact CGRASB at 866-772-8724 and ask whether
  • the amount of the Veteran’s MRP has been calculated, and/or
  • a VA waiver has been posted.
4Has the amount of the Veteran’s MRP been calculated, or has a VA waiver been posted?
  • If yes,
    • ask CGRASB for the amount(s) and effective date(s) of
      • payment(s) of MRP, and/or
      • the VA waiver
    • document the information obtained from CGRASB on VA Form 27-0820 and upload the form into the Veteran’s eFolder, and
    • go to Step 6.
  • If no, go to the next step.
5
  • Withhold any increase in disability compensation
  • establish EP 290 by following the instructions in M21-1, Part VI, Subpart ii, 4.B.3.c, and
  • disregard the remaining step in this table.
6Follow the instructions in the table below.
If the …Then …
amount and effective date of MRP is known, but CGRASB reports no VA waiver has postedwithhold any increase in disability compensation in accordance with M21-1, Part VI, Subpart ii, 4.B.2.
  • amount and effective date of MRP are known, and
  • amount of the VA waiver is known
  • pay disability compensation in the amount of the VA waiver from the effective date of the VA waiver, an
  • withhold the remaining amount in accordance with M21-1, Part VI, Subpart ii, 4.B.2.
Important: Do not withhold disability compensation that VA paid prior to the effective date of the VA waiver.
amount and effective date of the VA waiver are known, but the amount of MRP is unknown
  • follow the instructions in the preceding row
  • establish EP 290 after authorizing the award by following the instructions in M21-1, Part VI, Subpart ii, 4.B.3.c.

4. VA, Service Department, and RPC Responsibility for Avoiding and Collecting Overpayments

Introduction

This topic contains information on VA’s, the service departments’, and the RPCs’ responsibility for

  • avoiding overpayments, and
  • collecting an overpayment.

Change Date

April 26, 2021

VI.ii.4.B.4.a. Responsibility for Avoiding Overpayments

To avoid the creation of an overpayment in a Veteran’s account,

  • VA is responsible for processing awards that use effective dates determined in accordance with M21-1, Part VI, Subpart ii, 4.B.2
  • the service department is responsible for contacting VA to inquire whether or not a Veteran eligible for MRP is already in receipt of VA benefits, and
  • the RPCs are responsible for the timely processing of waivers based on VA awards.

VI.ii.4.B.4.b. Responsibility for Collecting an Overpayment

Use the table below to determine who is responsible for collecting an overpayment.
If …Then …
concurrent payments of MRP and compensation or Section 306 Pension are made without
  • an election, or
  • the establishment of an effective waiver
VA is responsible for collecting the overpayment.Important: VA is responsible for collecting the overpayment even if VA received no notice that MRP had been awarded.
  • VA benefits have already been awarded, and
  • the Veteran later becomes entitled to MRP
the service department is responsible for sending an inquiry to VA and collecting any resulting overpayment.
VA fails to award benefits from the proper date, resulting in a duplicate payment of compensation and MRPVA is responsible for collecting the overpayment.
  • VA processes an award correctly, and
  • the RPC fails to make a timely waiver adjustment
the RPC is responsible for collecting the resulting overpayment.
Note: A General Counsel memorandum for file, dated September 18, 1972, determined that 38 U.S.C. 3104(a) (now 38 U.S.C. 5304(a)), prohibiting concurrent payment of VA benefits and MRP, does not preclude the application of 38 U.S.C. 3012(b)(10) (now 38 U.S.C. 5112(b)(10)), which permits a reduction of VA benefits effective the date last paid (the date in the LAST PAID DATE field on the CURRENT AND HISTORICAL AWARD INFORMATION page in VBMS) if the previous payment was solely VA error. That General Counsel memorandum was found to be consistent with the decision in VAOPGCPREC 2-1990.

5. Handling an Election of VA Benefits, a Reelection of VA Benefits, and an Election of MRP

Introduction

This topic contains instructions for handling an election of VA benefits, a reelection of VA benefits, and an election of MRP, including

  • handling an election of MRP from a Veteran in receipt of 306 Pension
  • determining whether a Veteran may reelect Section 306 Pension after waiving the benefit
  • handling
    • an election of MRP from a Veteran in receipt of disability compensation, and
    • a reelection of disability compensation
    • determining the effective date of an award when VA denied the prior claim because the Veteran elected MRP
    • special consideration of Veterans hospitalized for an SC disability, and
    • awarding benefits when VA Form 21-651 is timely received from a Veteran in a VA or service hospital.

Change Date

January 26, 2026

VI.ii.4.B.5.a. Handling an Election of MRP From a Veteran in Receipt of Section 306 Pension

A Veteran receiving Section 306 Pension may elect to receive MRP. An election of MRP does not bar subsequent election of other benefits administered by VA.Note: The effective date of reelection of VA benefits is governed by 38 CFR 3.401(e)(3).Reference: For more information on a Veteran’s right to elect MRP and reelect VA benefits, see 38 CFR 3.750.

VI.ii.4.B.5.b. Determining Whether a Veteran May Reelect Section 306 Pension After Waiving the Benefit

Although a Veteran may waive Section 306 Pension in order to receive MRP, VA might not allow the Veteran to reelect the same VA benefit at a later date.Entitlement to Section 306 Pension is not protected under 38 CFR 3.960 if the disability or annual income did not continuously meet protected pension eligibility criteria from the date pension was waived through the date of receipt of the reelection. Before paying Section 306 Pension to a Veteran who waived pension to receive MRP, request evidence to determine if the Veteran would have been continuously entitled to Section 306 Pension for the entire period that the pension payments were waived. Absent evidence of continuous entitlement, the Veteran can no longer receive Section 306 Pension. If entitlement to current-law pension exists, VA may pay this benefit to the Veteran.

VI.ii.4.B.5.c. Handling an Election of MRP From a Veteran in Receipt of Disability Compensation

Follow the steps in the table below when a Veteran in receipt of disability compensation checks a box on an application for VA benefits (such as the box in Block 26 of VA Form 21-526EZ, Application for Disability Compensation and Related Compensation Benefits)rejecting receipt of VA compensation in lieu of MRP.Exceptions:
  • As stated in M21-1, Part VI, Subpart ii, 4.A.2.a, a waiver of MRP is not required when a Veteran is eligible for full Concurrent Retirement and Disability Pay.
  • If a Veteran who is not eligible for MRP checks the box referenced in the preceding paragraph,
    • disregard the steps in the table below, and
    • notify the Veteran that VA cannot act on the election because there is no eligibility for MRP.
    • StepAction
    1
    • Establish EP 290.
    • Add Potential Under/Overpayment as a special issue.
    2Attempt to contact the Veteran by telephone to confirm the election of MRP over disability compensation.
    3Were attempts to contact the Veteran by telephone successful?
    • If yes, go to the next step.
    • If no,
      • clear the EP 290, and
      • go to Step 9.
    4Did the Veteran confirm the election of MRP over disability compensation?
    • If yes,
      • discontinue the payment of disability compensation effective the date of receipt of the election
      • notify the Veteran of the action taken, and
      • disregard the remaining steps in this table.
    • If no, go to the next step.
    5
    • Ask the Veteran to
      • complete VA Form 21-651, including Blocks 2 through 5 (even though the form indicates VA is responsible for completing those blocks), and
      • sign and return the form to VA within 24 hours.
    • Inform the Veteran that VA will initiate action to discontinue disability compensation if the form is not returned within 24 hours.
    Note: Inform the Veteran of the opportunity to provide the form electronically via use of VA claims submission service websites.
    6Create the appropriate tracked item for return of VA Form 21-651, as identified in M21-4, Appendix D, with a suspense date that is five business days from the current date.
    7Did the Veteran indicate an intent to provide the form electronically?
    8Did the Veteran return VA Form 21-651within the allotted time period?
    • If yes,
      • clear the pending EP 290
      • notify the Veteran that VA received VA Form 21-651 and, accordingly, will make no adjustments to the award, and
      • disregard the remaining steps in this table.
    • If no,
      • clear the EP 290, and
      • go to the next step.
    9
    • Establish EP 600.
    • Add Potential Under/Overpayment as a special issue.
    10Issue a notice of proposed adverse action that informs the Veteran that
    • VA intends to discontinue disability compensation effective the date VA received the election
    • the Veteran’s election will result in the creation of an overpayment, and
    • if the Veteran wishes to withdraw the election, VA Form 21-651 must be completed, signed, and returned within 60 days.
    Rationale for providing due process:
    • An election of MRP over VA benefits is not listed as an exception (in 38 CFR 3.103(b)(3)) to the requirement that VA provide due process before reducing a beneficiary’s award.
    • Veterans often mistakenly check the box on VA forms that elects not to receive VA compensation in lieu of MRP. Providing due process ensures Veterans have an opportunity to confirm the election to waive disability compensation in order to receive MRP.
    Reference: For more information about issuing notice of a proposed adverse action, see M21-1, Part X, Subpart ii, 3.A.
    11Did the Veteran return VA Form 21-651within 65 days?
    • If yes,
      • clear the pending EP 600, and
      • notify the Veteran that VA will not take the action it proposed in Step 10.
    • If no,
      • discontinue the payment of disability compensation effective the date of receipt of the election, and
      • notify the Veteran of the action taken..
    Important: References:

VI.ii.4.B.5.d. Handling Reelection of Disability Compensation

When a Veteran, whose disability compensation VA discontinued because the Veteran elected MRP, later reelects disability compensation,

  • resume the payment of disability compensation, effective the date of receipt of the election, and
  • establish a withholding for the MRP according to the instructions in M21-1, Part VI, Subpart ii, 4.B.2.a.

Reference: M21-1, Part XI, Subpart ii, 3.A.3, contains instructions for handling an election that is pending when a Veteran dies.

VI.ii.4.B.5.e. Determining the Effective Date of an Award When VA Denied the Prior Claim Because the Veteran Elected MRP

Follow the instructions in the table below when
  • VA denies a Veteran’s claim for disability compensation because the Veteran elected MRP, and
  • the Veteran files a subsequent claim on a form that includes a waiver of MRP one year or more after VA notified the Veteran of the denial.
Note: Follow the instructions in the last sub-bullet in M21-1, Part VI, Subpart ii, 4.A.3.c, if VA receives the subsequent claim within one year of the date VA notified the Veteran of the denial.
If ...Then award compensation for the disability (if otherwise in order) effective the first of the month following the date ...
the rating activity
  • granted SC for a new disability based on the subsequent claim, and
  • assigned a compensable disability rating to the disability
of entitlement shown on the new rating decision.
the initial rating decision included a grant of SC for a disability with a compensable disability rating and
  • the rating activity determined in the initial rating decision that the disability was static (no future examination was required), or
  • the rating activity reevaluated the disability based on the subsequent claim but determined no change in the current disability rating is warranted.
VA received the subsequent claim.
the rating activity granted an increase in the disability rating assigned to a disability based on the subsequent claimthe new rating decision shows the Veteran is entitled to the increased disability rating.
Important:
  • The policies described in the table above also apply if
    • VA denies a Veteran’s claim for disability compensation because the Veteran elected MRP
    • the Veteran files a subsequent claim on a form that does not include a waiver of MRP one year or more after VA notified the Veteran of the denial, and
    • the Veteran waives MRP within one year of the decision notice regarding the subsequent claim.
  • Payments of disability compensation may be subject to the withholding referenced in M21-1, Part VI, Subpart ii, 4.B.2.a, until the Veteran’s RPC makes corresponding adjustments to MRP.

VI.ii.4.B.5.f. Special Consideration of Veterans Hospitalized for an SC Disability

When all of the conditions listed below are met, notify the Veteran of the VA benefits that are payable and tell the Veteran that if a formal election is filed within one year of the date of the notice, eligibility for VA benefits will be established from the date of hospitalization:
  • VA receives notice from a VA medical center or military treatment facility of a Veteran’s hospitalization for an SC disability
  • a waiver of the Veteran’s MRP is not currently in effect, and
  • it appears the VA benefits that are payable would be greater than the Veteran’s MRP.
Note: If a rating under 38 CFR 4.29 or 4.30 is involved, inform the Veteran of the temporary nature of the VA benefits.Reference: For more information on the forms a Veteran may submit to waive MRP, see M21-1, Part VI, Subpart ii, 4.A.2.

VI.ii.4.B.5.g. Awarding Benefits When VA Form 21-651 Is Timely Received From a Veteran in a VA or Service Hospital

If, after receiving the notice discussed in M21-1, Part VI, Subpart ii, 4.B.5.f, a Veteran submits VA Form 21-651 within one year of the date of the notice, award benefits effective the date of hospitalization.Notes:

6. Removal of a Veteran From the TDRL

Introduction

This topic contains information on the effect of a Veteran’s removal from the TDRL, including

  • general information on the removal of a Veteran from the TDRL
  • removal from the TDRL of a Veteran
    • in receipt of VA benefits, and
    • who is not receiving VA benefits, and
    • awarding of severance pay following removal of a Veteran from the TDRL.

Change Date

January 26, 2026

VI.ii.4.B.6.a. General Information on the Removal of a Veteran From the TDRL

VA may become aware of a Veteran’s removal from the TDRL through

  • notification from an RPC
  • notification from the Veteran, or
  • routine review of the Veteran’s claims folder.

In any case,

  • follow the procedures in
    • M21-1, Part VI, Subpart ii, 4.B.6.b, if the Veteran is receiving VA benefits
    • M21-1, Part VI, Subpart ii, 4.B.6.c, if the Veteran is not receiving VA benefits, or
    • M21-1, Part VI, Subpart ii, 4.B.6.d, if the Veteran was awarded severance pay, and
  • inform the Veteran of rights regarding the reinstatement of benefits.

VI.ii.4.B.6.b. Removal From the TDRL of a Veteran in Receipt of VA Benefits

If an RPC provides notice that a Veteran in receipt of compensation is no longer receiving MRP, follow the instructions in M21-1, Part VI, Subpart ii, 4.B.1.d for removing the retired pay indicator from the corporate record.

VI.ii.4.B.6.c. Removal From the TDRL of a Veteran Who Is Not Receiving VA Benefits

When a Veteran who never filed a claim for VA benefits or whose claim VA denied due to the Veteran’s receipt of MRP is removed from the TDRL, send a letter to the Veteran’s last known address of record that

VI.ii.4.B.6.d. Awarding of Severance Pay Following Removal of a Veteran From the TDRL

RPCs occasionally notify VA that a Veteran in receipt of compensation has been
  • removed from the TDRL, and
  • awarded severance pay.
In these cases, review the instructions unique to recoupment of disability severance pay, as discussed in M21-1, Part VI, Subpart ii, 2.3, and, if necessary, send the Veteran notice of proposed adverse action before adjusting benefits. Unless the Veteran submits evidence within 65 days that demonstrates VA should not take the proposed action, follow the instructions in the table below.
StepAction
1Prepare an amended award in accordance with instructions in M21-1, Part VI, Subpart ii, 2.
2Follow the instructions in M21-1, Part VI, Subpart ii, 4.B.1.d for removing the retired pay indicator from the corporate record.
3Begin withholding VA benefits to recoup the severance pay effective the date in the LAST PAID DATE field on the CURRENT AND HISTORICAL AWARD INFORMATION page in VBMS.
4Send a decision notice to the Veteran that fully explains the actions taken.
References: For more information on

7. Effect of a Reduction of Benefits Under 38 CFR 3.551 on MRP

Change Date

April 26, 2021

VI.ii.4.B.7.a. Handling the Reduction of a Veteran’s Award Under 38 CFR 3.551

Unlike pension, MRP is not subject to reduction when a Veteran is hospitalized at VA expense.If a Veteran is hospitalized and has waived a portion of MRP to receive Section 306 Pension,
  • VA reduces the Veteran’s award under 38 CFR 3.551, and
  • the Veteran’s RPC
    • makes the appropriate adjustment to the Veteran’s MRP based on the award data VA transmits to the RPC, and
    • notifies VA of changes in the Veteran’s hospitalization status if the RPC receives such information first.
Rationale: This reciprocal action ensures the Veteran receives full entitlement, but not in excess thereof, on each benefit, per 38 U.S.C. 5305.Reference: For more information on reducing a Veteran’s award under 38 CFR 3.551, see M21-1, Part X, Subpart iii, 1.D.

Source: VA M21-1 Adjudication Procedures Manual, M21-1, Part VI, Subpart ii, Chapter 4, Section B (U.S. government work, reproduced for reference). Browse all sections →