M21-1 Manual  /  Part X, Subpart ii, Chapter 3, Section B

Adverse Action Proposal Period

M21-1, Part X, Subpart ii, Chapter 3, Section B

Overview

In This Section

This section contains the following topics:
TopicTopic Name
1General Information on the Adverse Action Proposal Period
2Responding to the Beneficiary
3Hearings Requested in Response to a Proposed Adverse Action
4Final Actions Related to Adverse Action Proposals

1. General Information on the Adverse Action Proposal Period

Introduction

This topic contains general information on the adverse action proposal period, including
  • definition of adverse action proposal period
  • basic rule for 65-day limit
  • calculating the adverse action proposal period, and
  • extending the adverse action proposal period.

Change Date

October 5, 2017

X.ii.3.B.1.a. Definition: Adverse Action Proposal Period

The adverse action proposal period is the control period between the date the notice of proposed adverse action is mailed to the beneficiary and the date that the final decision notice is sent. The minimum period for the proposed adverse action is 60 days.Important: Legally, the beneficiary has 60 days to respond. However, adverse action should not be taken until at least the 65th day to allow time for evidence to reach the development or authorization activity.

X.ii.3.B.1.b. Basic Rule: 65-Day Limit

Take no adverse action until at least the 65th day following the date of the notice of proposed adverse action, unless the beneficiary
  • specifically asks that the award be reduced or suspended to minimize any possible overpayment, or
  • submits documentary evidence confirming earlier oral information, which is sufficient to justify the proposed adverse action.

X.ii.3.B.1.c. Calculating the Adverse Action Proposal Period

The first day of the adverse action proposal period is the date that the notice of proposed adverse action is mailed to the beneficiary. The date of the letter is the date of the mailing for purposes of computing the time limits for the adverse action proposal period. Use the table below to compute the adverse action proposal period.
If the adverse action proposal period time limit expires on a ...Then ...
workday
  • exclude the first day of the adverse action proposal period, and
  • include the last day.
  • Saturday
  • Sunday, or
  • holiday
include the next workday following the weekend or holiday.
Reference: For more information on computing the time limit, see 38 CFR 3.110.

X.ii.3.B.1.d. Extending the Adverse Action Proposal Period

The adverse action proposal period may be extended for
  • the development of evidence
  • a hearing, if the hearing is requested within 30 days following the release of a notice of proposed adverse action
  • a hearing for a proposal of incompetency, if requested at any time before the Department of Veterans Affairs (VA) makes a final decision on the beneficiary’s competency
  • remailing of the proposed adverse action request when the notice is returned due to an incorrect address and a current address is subsequently identified, or
  • to allow time for an administrative action or a rating decision.
Note: When the adverse action proposal period is extended for one of the above reasons, the original end product (EP) and date of claim continue unchanged while the suspense date is extended.References: For more information on

2. Responding to the Beneficiary

Introduction

This topic contains information on responding to the beneficiary, including
  • receipt of insufficient evidence or no response within 60 days
  • responding to premature decision review requests
  • evidence received in 60 days requiring further development
  • requests by the beneficiary for VA to obtain evidence
  • evidence received
    • supporting the proposed adverse action
    • that is favorable to the claimant, and
    • in 60 days that was not reviewed prior to the final action, and
    • request for implementation of adverse action.

Change Date

December 4, 2025

X.ii.3.B.2.a. Receipt of Insufficient Evidence or No Response Within 60 Days

Follow the steps in the table below if the beneficiary either fails to respond within the 60-day period, or submits insufficient evidence to justify a change in the proposed action.
StepAction
1Is a rating decision needed because the proposed adverse action was initiated with a rating decision?
  • If yes, route the EP to the rating activity at the end of the due process period. The rating activity will make a decision and then route the EP to the authorization activity for processing.
  • If no, route the EP for authorization. The authorization activity will reduce, suspend, or terminate benefits using the appropriate effective date provisions.
    • Reference: For more information on reductions and discontinuances, see 38 CFR 3.500–3.505.
2Notify the beneficiary of the final decision.

X.ii.3.B.2.b. Responding to Premature Decision Review Requests

If the beneficiary requests decision review of a proposed adverse action, send the Decision Review Against Proposal notice and cancel any EP that was established for the decision review.Reference: For more information about creating the letter in the Veterans Benefits Management System (VBMS), see the VBMS Core User Guide.

X.ii.3.B.2.c. Evidence Received in 60 Days Requiring Further Development

If a beneficiary submits evidence that requires further development
  • continue payments
  • begin to develop and evaluate additional evidence
  • advance the pending issue suspense date for the proposed adverse action period for development of the evidence, and
  • hold all the material obtained until
    • reasonable efforts to obtain additional evidence have been exhausted, or
    • a final decision can be made.
Note: Lay statements, medical records, or other records that are material to the issue in which VA is proposing adverse action may be insufficient to justify a change in the proposed adverse action; however, this evidence may still provide sufficient information to warrant further development such as obtaining records or scheduling an examination.Exception: If the results of the development clearly indicate continuing entitlement to current benefits or new entitlement to greater benefits, notify the beneficiary and take appropriate award action.Reference: For more information on obtaining evidence after a proposed adverse action, see M21-1, Part X, Subpart ii, 3.B.2.d and e.

X.ii.3.B.2.d. Requests by the Beneficiary for VA to Obtain Evidence

Develop to request all relevant records identified by the beneficiary or representative during the 60-day response period. Do not take any action specified in the notice of proposed adverse action until VA has met its duty to assist.Exception: If the beneficiary submits a request for VA to obtain records that will not impact the decision, then request the evidence, but do not wait until VA receives the records to take the action specified in the notice of proposed adverse action.Reference: For more information on relevant records and reasonable efforts in obtaining records, see

X.ii.3.B.2.e. Evidence Received Supporting the Proposed Adverse Action

If the beneficiary sends documentary evidence that supports the proposed adverse action
  • make the adjustment, and
  • send the beneficiary a final decision notice of the implemented adverse action.

X.ii.3.B.2.f. Evidence Received That Is Favorable to the Claimant

Once a notice of proposed adverse action is sent, if new evidence establishes that the adverse action should not be taken, then
  • take appropriate action to amend or reverse the proposed action, and
  • send the beneficiary a final decision notice.
Reference: For more information on preparing a new rating decision following receipt of additional evidence that favorably impacts the outcome, see M21-1, Part X, Subpart ii, 3.D.1.g.

X.ii.3.B.2.g. Evidence Received in 60 Days That Was Not Reviewed Prior to the Final Action

If evidence received on or before the 60th day was not reviewed before the adverse action was taken, review the adverse action as described in the table below.
If ...Then ...
the additional evidence does not change the adverse decision
  • confirm and continue the decision, and
  • fully advise the beneficiary of this decision and provide procedural and review rights.
the additional evidence changes the adverse decisionprepare a revised rating decision and/or decision notice in accordance with the instructions in M21-1, Part X, Subpart ii, 3.D.1.g.
further development is needed
  • restore the beneficiary’s payments until development is completed and a final decision made
  • send a letter explaining the basis for resumed payments, and
  • include a warning that adverse action may be appropriate if the evidence does not support continued payments.

X.ii.3.B.2.h. Requests for Implementation of Adverse Action

If the beneficiary submits a written statement or other evidence or contacts VA by telephone in response to a notice of proposed adverse action confirming the validity of the evidence already of record and specifically asking that the proposed adverse action be implemented
  • take adverse rating and/or award action, and
  • send the final decision notice.
Important: Be extremely careful to ensure that the beneficiary is asking for final implementation of the adverse decision and not merely trying to minimize any overpayment during the 60-day period. If there is any uncertainty as to the beneficiary’s intentions, ask for clarification (use the telephone when appropriate). If clarification is not received, wait until the expiration of the adverse action proposal period before acting. Example: The Veteran responds to a notice of proposed adverse action by sending a statement that says, “Yes, my wife Ann died on March 9, 2000, but I didn’t know I had to report it. Please tell me how much I have to pay back, and don’t pay me more than I should be getting.” Since the Veteran is specifically requesting the adverse action, adjust the award and send a final decision notice.References: For more information on

3. Hearings Requested in Response to a Proposed Adverse Action

Introduction

This topic contains information about hearings requested in response to a proposed adverse action, including
  • determining the time limit for adverse action hearing requests
  • premature final action taken when a hearing was timely requested
  • processing an adverse action hearing request
  • failure to appear for an adverse action hearing
  • rescheduling adverse action hearings, and
  • regional office (RO) action upon cancellation of a hearing.

Change Date

May 7, 2025

X.ii.3.B.3.a. Determining the Time Limit for Adverse Action Hearing Requests

As stated in 38 CFR 3.105(i)(1), payments continue at their current rate if a beneficiary requests a hearing within 30 days of the date the notice of proposed adverse action is sent. If the 30-day time limit expires on a Saturday, Sunday, or holiday, include the next succeeding workday in the computation.Exception: For hearings requested in connection with proposed incompetency, a hearing requested at any time prior to the final rating must be held before final rating action is taken.References: For more information on

X.ii.3.B.3.b. Premature Final Action Taken When a Hearing was Timely Requested

If it is discovered that the beneficiary or the beneficiary’s representative requested a hearing within the applicable time period and final action was prematurely taken, then
  • restore the beneficiary’s payments
  • ensure the hearing is scheduled, and
  • notify the beneficiary and the beneficiary’s representative that
    • the action was in error, and
    • the proposed adverse action period will remain in effect until after the hearing is completed.
References: For more information on the

X.ii.3.B.3.c. Processing an Adverse Action Hearing Request

Follow the steps in the table below when VA receives a request for a hearing after a notice of proposed adverse action.
If the hearing is requested ...Then ...
  • within 30 days of the notice of proposed adverse action, or
  • during the incompetency proposal period
  • follow the procedures at M21-1, Part II, Subpart iii, 3.A.2.a, to establish control for the hearing request
  • schedule and hold the hearing
  • mark the tracked item as received, and
  • make a final decision.
Important: If a hearing is requested within the applicable time limit as discussed in M21-1, Part X, Subpart ii, 3.B.3.a, do not take final action on the proposed adverse action until
  • the hearing is properly completed, or
  • the right to a hearing is otherwise discharged (such as due to cancellation or failure to appear without good cause).
more than 30 days after a notice of proposed adverse action but while the EP remains pending
  • follow the procedures at M21-1, Part II, Subpart iii, 3.A.2.a, to establish control for the hearing request under the pending EP
  • make a final decision under the pending EP
  • pend the EP for continuing control for the hearing request (if the hearing has not yet been performed)
  • schedule and hold the hearing
  • mark the tracked item as received, and
  • make a new decision under the pending EP based on the results of the hearing, if needed.
Important: If development is underway based on evidence submitted by the beneficiary, complete the development before making the final decision.
Note: A hearing must be provided unless the claimant or representative withdraws the request, regardless of the outcome of the final decision.References: For more information on

X.ii.3.B.3.d. Failure to Appear for an Adverse Action Hearing

Due process requires only that a beneficiary be afforded a reasonable opportunity for a personal hearing.If the beneficiary fails to appear for a scheduled hearing without good cause, and the 60-day adverse action proposal period has expired
  • make a decision based on the evidence of record
  • advise the beneficiary of the decision, and
  • advise the beneficiary that if a new hearing is still desired
    • to contact VA to schedule a hearing, and
    • the action just completed will be reconsidered in light of any evidence presented at that hearing.
References: For more information on

X.ii.3.B.3.e. Rescheduling Adverse Action Hearings

If the beneficiary failed to appear for a hearing due to good cause as discussed in 38 CFR 3.105(i),Example: A notice of proposed adverse action was sent to the Veteran for reduction of the evaluation of a service-connected (SC) disability due to improvement. The Veteran requested a hearing within 30 days of the notice. The Veteran failed to report for the hearing, but prior to VA rendering the final determination, notified VA that the absence was due to an unexpected hospitalization from which the Veteran has since been released. Since there was good cause for failure to report for the hearing, continue EP control for consideration of the reduced SC evaluation and reschedule the hearing on a priority basis. Note: If the beneficiary does not communicate or demonstrate good cause for failure to appear for the hearing until after notification of the final adverse action has been sent, such communication must be accompanied by a decision review election.References: For more information on

X.ii.3.B.3.f. RO Action Upon Cancellation of a Hearing

Use the table below to determine the action to take when a claimant requests cancellation of a hearing requested in response to a notice of proposed adverse action.
If the hearing was requested ...Then ...
  • within 30 days of the notice of proposed adverse action, or
  • during the incompetency proposal period
  • take appropriate regional office (RO) action to cancel the hearing
  • close the tracked item previously established for the hearing request, and
  • make a final decision at the expiration of the due process period, noting the cancellation of the requested hearing in the evidence listing for the rating decision.
more than 30 days after a notice of proposed adverse action
  • take appropriate RO action to cancel the hearing
  • close the tracked item previously established for the hearing request, and
  • use the table below to determine the appropriate method to provide confirmation of the cancellation of the requested hearing to the claimant.
If a final decision has ...Then ...
not been mademake a final decision at the expiration of the period for notice of proposed adverse action, reflecting the cancellation of the requested hearing in the evidence listing for the rating decision.
been made
  • clear the controlling EP, and
  • send the claimant a letter confirming cancellation of the hearing.
Reference: For more information on listing evidence in the rating decision, see M21-1, Part V, Subpart iv, 1.A.4.c.

4. Final Actions Related to Adverse Action Proposals

Introduction

This topic contains information on final actions related to adverse action proposals, including
  • procedure following the adverse action proposal period, and
  • clearing of EPs at end of the adverse action proposal period.

Change Date

July 27, 2023

X.ii.3.B.4.a. Procedure Following the Adverse Action Proposal Period

Claims processors must follow the steps in the table below at the end of the adverse action proposal period.
StepAction
1Compose the final decision notice with all of the required elements and language.Note: When completing the final decision notice, do not re-summarize any evidence referenced in the notice of proposed adverse action.References: For more information on
2Send the final decision notice to the beneficiary and the beneficiary's representative, if any. Reference: For more information on determining who receives a notice, see M21-1, Part I, Subpart i, 1.B.1.c.
3Clear any applicable EPs that were pending during the adverse action proposal period. Reference: For more information on EPs relevant to the adverse action proposal period, see
  • M21-4, Appendix B, and
  • M21-1, Part X, Subpart ii, 3.B.4.b.

X.ii.3.B.4.b. Clearing of EPs at End of the Adverse Action Proposal Period

Claims processors must ensure all relevant EPs are cleared at the end of the adverse action proposal period, to include
  • EP 600, and
  • EP 960.
Note: In cases where the notice of proposed adverse action is related to an administrative error, the EP 960 must be established and cleared at the time the claims processor is taking final action. References: For more information on

Source: VA M21-1 Adjudication Procedures Manual, M21-1, Part X, Subpart ii, Chapter 3, Section B (U.S. government work, reproduced for reference). Browse all sections →