M21-1 Manual / Part X, Subpart iii, Chapter 1, Section C

Adjusting Awards Involving an Aid and Attendance (A&A) Allowance

M21-1, Part X, Subpart iii, Chapter 1, Section C

Overview

In This Section

This section contains the following topics:

Topic	Topic Name
1	General Information on Discontinuation of the A&A Allowance Based on Hospitalization
2	Granting or Discontinuing an A&A Award During Hospitalization
3	Adjusting an A&A Award When a Veteran Leaves or Returns to a Hospital
4	Expedited Special Monthly Pension (SMP) Entitlement Determinations for Chronic Invalids Hospitalized at Department of Veterans Affairs (VA) Expense

1. General Information on Discontinuation of the A&A Allowance Based on Hospitalization

Introduction

This topic contains general information on discontinuation of the A&A allowance when a Veteran is hospitalized, including

regulatory requirements of 38 CFR 3.552
recovery of the cost of care
screening centrally automated reports
providing due process before adjusting benefits
actions to take after the due process period expires, and
determining the rate payable during hospitalization.

Change Date

February 14, 2025

X.iii.1.C.1.a. Regulatory Requirements of 38 CFR 3.552

The provisions of 38 CFR 3.552(b)(1) require the discontinuance of additional compensation or increased disability pension for aid and attendance (A&A) effective the first day of the second calendar month following the month of admission to a Department of Veterans Affairs (VA) medical center (VAMC), unless the disability is

paraplegia involving paralysis of both lower extremities together with the loss of anal and bladder control
Hansen’s disease, or
in pension cases only, blindness (visual acuity 5/200 or less) or concentric contraction of visual field to 5 degrees or less.

Exception: When a Veteran entitled to additional compensation under 38 U.S.C. 1114(r) is hospitalized at U.S. Government expense, discontinuance of A&A is required under 38 CFR 3.552(b)(2).References: For more information on
special monthly compensation (SMC) at the “L” level, see 38 CFR 3.350(b), and
SMC, including hospitalization adjustments to discontinue A&A, see M21-1, Part VIII, Subpart iv, 4.A.

X.iii.1.C.1.b. Recovery of the Cost of Care

Under 38 U.S.C. 1729, the U.S. has the right to recover or collect the cost of medical care VA furnishes to a Veteran for treatment of a non-service connected disability. Costs recoverable from insurance companies or other third parties liable under a healthcare contract are the amounts the Veteran or the service provider would be able to receive if the care had not been provided by the U.S. However, recovery of such costs does not limit the applicability of 38 CFR 3.552(b)(1).

X.iii.1.C.1.c. Screening Centrally Automated Reports

Follow the steps in the table below to screen centrally automated reports of Veterans who are in receipt of the A&A allowance and

currently active patients, or
discharged at government expense.

Step	Action
1	Screen the end product (EP) 330 established in connection with centrally automated reporting to ensure that its claim label accurately reflects the type of benefit the identified individual is receiving, making any necessary changes. *Note*: Adjusting the EP 330 to include the most appropriate compensation- or pension-specific claim label shown for centrally automated reporting, as outlined in M21-4, Appendix C, will route the work item for review and processing by Veterans Service Center or Pension Management Center personnel, as appropriate.
2	Screen each report against information in the corporate record and, if necessary, the claims folder to determine if an adjustment under 38 CFR 3.552 (as discussed in M21-1, Part X, Subpart iii, 1.C.1.a) is required.
3	Does the report require an adjustment under 38 CFR 3.552? If yes, go to the next step. If no, clear the pending EP 330 leave a note in the Veterans Benefits Management System (VBMS) that explains why no adjustment was necessary, and disregard the remaining steps in this table.
4	Upload to the claims folder all Compensation and Pension Record Interchange (CAPRI) documentation relevant to the period of hospitalization in question, including admission, hospital, and/or discharge summaries, and reports and records of treatment administered during hospitalization and, if applicable, following discharge.
5	If the beneficiary is receiving disability compensation, change the pending EP 330 to an EP 320 – Review Due to Hospitalization, and clear the EP 320, or pension, clear the pending EP 330.
6	Establish an EP 600 and follow the instructions in M21-1, Part X, Subpart iii, 1.C.1.d.

X.iii.1.C.1.d. Providing Due Process Before Adjusting Benefits

Notice of proposed adverse action is required before discontinuing the A&A allowance. Provide proper notification by

preparing two notices of proposed adverse action, sending
- one notice to the Veteran’s address of record, and
- one notice to the Veteran at the medical facility, and
incorporating into the notice of proposed adverse action a description of any potential action to be taken if the Veteran is receiving pension that is subject to further reduction under 38 CFR 3.551 (as explained in M21-1, Part X, Subpart iii, 1.D).

Reference: For more information on notices of proposed adverse action, see M21-1, Part X, Subpart ii, 3.A.

X.iii.1.C.1.e. Actions to Take After the Due Process Period Expires

Sixty-five days after sending the notice of proposed adverse action referenced in M21-1, Part X, Subpart iii, 1.C.1.d (or sooner, if the Veteran asks VA to take action to reduce the amount of potential overpayment),

discontinue payment of the A&A allowance effective the first day of the second calendar month following the month of admission
determine the rate payable during hospitalization, as outlined in M21-1, Part X, Subpart iii, 1.C.1.f
check CAPRI to determine whether the Veteran remains hospitalized, and
send the Veteran a decision notice communicating the adjustment.

If CAPRI records indicate the Veteran is no longer hospitalized, take the actions described in the table below, concurrent with the actions described in the preceding bullets.

Step

Action

If the Veteran is receiving

disability compensation,
- resume the payment of benefits at the A&A rate (under the pending EP 600), effective the date of discharge, and
- go to Step 3, or
- pension, go to the next step.

Follow the instructions in the table below.

If VA …	Then …
granted entitlement to A&A by rating decision prior to hospitalization	resume the payment of benefits at the A&A rate (under the pending EP 600), effective the date of discharge, and disregard the remaining steps in this table.
did *not* grant entitlement to A&A by rating decision prior to hospitalization	establish EP 120, using the date of discharge as the date of claim (DOC), and go to Step 4.

Was the pre-hospitalization A&A entitlement based on a rating determination of permanent and total (P&T) disability?

If yes, take no further action.
If no,
- establish EP 320 – Review Due to Hospitalization, using the date of discharge as the DOC, and
- go to the next step.

Refer the case to the rating activity for consideration of continued entitlement to A&A.

References: For more information on using

CAPRI, see the CAPRI User Manual, and
VBMS Awards for the purposes of processing award adjustments, see the VBMS Awards User Guide.

X.iii.1.C.1.f. Determining the Rate Payable During Hospitalization

Use the table below to determine the award rate payable when discontinuing the A&A allowance during hospitalization of the Veteran.

If the benefit is ...

Then ...

pension

award the housebound rate effective the date of reduction per 38 CFR 3.552(e), subject to further reduction under one of the following, as appropriate:

38 CFR 3.551(c), Section 306 Pension
38 CFR 3.551(d), current-law pension before February 1, 1990, or
38 CFR 3.551(e), current-law pension after January 31, 1990.

Notes:

If the Veteran is also eligible for service-connected compensation, and the reduction of pension results in compensation being the greater benefit,
- ask the Veteran whether they wish to elect compensation, and
- do not pay the greater benefit unless the election is received.
An election is not a claim. Rather, it represents a beneficiary’s confirmation of their choice to receive one type of benefit over another.
- VA does not require beneficiaries to use a prescribed form to make an election. Under 38 CFR 3.701(b), VA may accept as an election a statement from a beneficiary.
- An election does not need to meet the requirements of a complete claim, as defined in 38 CFR 3.160(a).
If the income for VA purposes (IVAP) exceeds the housebound rate, prepare an award with a withholding of the rate payable based on the A&A entitlement.

compensation

determine entitlement to the housebound or other appropriate hospitalized rate, as shown in the Disability Compensation – SMC Rates table, under whichever of the following provisions applies:

2. Granting or Discontinuing an A&A Award During Hospitalization

Introduction

This topic contains information on

granting an A&A award during hospitalization, and
discontinuing an A&A award during hospitalization.

Change Date

April 21, 2015

X.iii.1.C.2.a. Granting an A&A Award During Hospitalization

Use the table below to determine the appropriate actions to take when granting an A&A award during hospitalization of a Veteran.

If the grant ...	Then ...
is from an effective date prior to the first day of hospitalization	award the full benefit from the first day of the month following the effective date of entitlement reduce the benefit by discontinuing the A&A allowance effective the first day of the second calendar month following admission, in accordance with 38 CFR 3.552(a)(1), and award the housebound rate in pension cases, and applicable hospitalized rate in compensation cases.
involves an effective date of initial entitlement that is on or after the date of hospitalization	do not pay the A&A allowance until the date of discharge or release from the hospital, and pay the Veteran the housebound rate from the first day of the month following the date of the grant until the date of discharge, per 38 CFR 3.552(k). *Note*: Payment of the housebound rate is subject to the 38 CFR 3.551 reduction requirement in pension cases

X.iii.1.C.2.b. Discontinuing an A&A Award During Hospitalization

If entitlement to the A&A allowance or the housebound rate while hospitalized is discontinued by rating while the Veteran is hospitalized,

continue the hospitalized rate
send notice of proposed adverse action to the Veteran
set a control for 65 days from the date the notice of proposed adverse action is sent, and
reduce the award and send the Veteran a decision notice of the final action after the control period ends.

Note: If the IVAP exceeds the housebound rate, see M21-1, Part X, Subpart iii, 1.C.1.f.

3. Adjusting an A&A Award When a Veteran Leaves or Returns to a Hospital

Introduction

This topic contains information on adjusting an award when a Veteran is discharged from, granted an authorized absence from, or returns after an absence from a hospital, including

resuming the payment of benefits at the A&A rate upon discharge from a hospital
adjusting for hospital absences of 30 days or more
actions to take when
- an authorized absence of 30 days or more occurs during an initial period of hospitalization, and
- a Veteran returns from an authorized absence of 30 days or more
example of a report of a 30-day authorized absence received during an initial period of hospitalization
retroactive adjustments for hospital absences of less than 30 days, and
readmission for hospitalization following an irregular discharge.

Change Date

February 14, 2025

X.iii.1.C.3.a. Resuming the Payment of Benefits at the A&A Rate Upon Discharge From a Hospital

After receiving a notice of discharge from VA hospitalization, follow the steps in the table below.

Step

Action

Did the Contract Nursing Home (CNH) Report of Admissions/Discharges referenced in M21-1, Part X, Subpart iii, 1.A, serve as the notice of discharge?

If yes, go to the next step.
If no, go to Step 4.

If the Veteran is receiving

disability compensation,
- change the pending EP 330 to EP 320 – Review Due to Hospitalization, using the date of discharge as the DOC, and
- go to Step 5, or
- pension, go to the next step.

Follow the instructions in the table below.

If …	Then …
VA granted entitlement to A&A by rating decision prior to hospitalization	change the EP 330 to EP 135 – PMC-Hospitalization Adjustment, resume the payment of benefits at the A&A rate, effective the date of discharge, and disregard the remaining steps in this table.
VA did *not* grant entitlement to A&A by rating decision prior to hospitalization	disregard the remaining steps in this table, and follow the instructions in M21-1, Part X, Subpart iii, 1.D.6.b.

Change the pending EP 330 to an EP

320 – Review Due to Hospitalization, if the beneficiary is receiving disability compensation, or
135 – PMC-Hospitalization Adjustment, if the beneficiary is receiving pension.

Resume the payment of benefits at the A&A rate, effective the date of discharge from hospitalization.
If the Veteran is receiving
- disability compensation, go to the next step, or
- pension, disregard the remaining steps in this table.

Was the pre-hospitalization A&A entitlement based on a rating determination of P&T disability?

If yes, take no further action.
If no,
- leave the EP 320 pending at authorization of the action described in Step 5, and
- go to the next step.

Upload to the claims folder all CAPRI documentation relevant to the period of hospitalization in question, including

hospital and/or discharge summaries, and
reports and records of treatment administered during hospitalization and, if applicable, following discharge.

Refer the case to the rating activity for consideration of continued entitlement to A&A.

Reference: For more information on the A&A allowance for Veterans in receipt of pension and in a nursing home, see M21-1, Part IX, Subpart ii, 1.B.2.

X.iii.1.C.3.b. Adjusting for Hospital Absences of 30 Days or More

Adjust benefit payments for authorized absences from the hospital of 30 days or more as follows:

After receiving a report showing an authorized absence of 30 days or more, amend compensation or pension to restore payment at the full A&A rate effective the date the Veteran left the hospital, under 38 CFR 3.401(a)(2).
After receiving a report showing hospitalization resumed, discontinue the additional allowance for A&A effective the date of readmission to a VA hospital or the resumption of hospitalization at VA expense, under 38 CFR 3.556(a)(2), for Section 306 Pension. Reduce Section 306 Pension to $50.

X.iii.1.C.3.c. Actions to Take When an Authorized Absence of 30 Days or More Occurs During an Initial Period of Hospitalization

Under 38 CFR 3.556(a)(1), do not continue a reduced payment for Section 306 Pension when a report showing non-bed care status or authorized absence of 30 days or more is received during an initial period of hospitalization. When notice of non-bed care status or authorized absence of 30 days or more is received, restore the regular pension rate for Section 306 Pension effective the date of departure from the hospital. For Section 306 Pension, if entitlement to the A&A allowance had been established, resume payment at the A&A rate effective the date of departure from the hospital.

X.iii.1.C.3.d. Actions to Take When a Veteran Returns From an Authorized Absence of 30 Days or More

Take the following actions under 38 CFR 3.556(a)(2) when a Veteran resumes hospitalization after an authorized absence of 30 days or more:

discontinue any allowance for A&A from the date of readmission, and
reduce Section 306 Pension to $50 effective the date of readmission, under 38 CFR 3.551(c).

X.iii.1.C.3.e. Example: Report of a 30-Day Authorized Absence Received During an Initial Period of Hospitalization

Situation: A Veteran receiving Section 306 Pension at the A&A rate is

admitted for VA hospitalization on August 10
granted a 30-day absence on November 15, and
readmitted for VA hospitalization on January 5 of the following year.

Actions:

Reduce the Veteran’s award to
- the housebound rate, effective October 1, under 38 CFR 3.552(b)(1), and
- $50, effective November 1.
Resume the payment of pension at the A&A rate effective November 15, the date of the authorized absence of 30 days or more.
Reduce the Veteran’s award to $50 effective January 5, the date of readmission to the hospital.

X.iii.1.C.3.f. Retroactive Adjustments for Hospital Absences of Less Than 30 Days

Make no adjustment to pay benefits at the A&A rate for periods of authorized absence of less than 30 days until after discharge from hospitalization. When a retroactive award is prepared to resume the full A&A rate, from a date earlier than the date of discharge in order to cover several short periods of authorized absence from hospitalization, annotate the award to show the total number of days of absence. Example:Situation:

A Veteran entitled to special monthly pension (SMP) at the A&A rate
- was admitted to a VAMC for hospitalization on September 15, and
- received a regular discharge on December 12.
- While hospitalized, the Veteran had an authorized absence from
  - November 8 through November 11, and
  - November 21 through November 24.
Actions:
- Reduce the Veteran’s award to the hospitalized rate effective November 1, under 38 CFR 3.552(b)(1).
- Restore SMP at the A&A rate, following the regular discharge, effective December 4. This adjusted effective date allows for the eight days of authorized absence.

X.iii.1.C.3.g. Readmission for Hospitalization Following an Irregular Discharge

If notice is received of a Veteran’s readmission for hospitalization

within six months of the date of an irregular discharge, discontinue the allowance for A&A effective the date of readmission, per 38 CFR 3.552(b)(3), or
six months or more after the date of an irregular discharge, discontinue the allowance for A&A effective the first day of the second calendar month following the month of readmission.

Important: Follow the due process procedures described in M21-1, Part X, Subpart iii, 1.C.1.d, before taking the actions described in the preceding bullets.Reference: For a definition of irregular discharge, see M21-1, Part X, Subpart iii, 1.B.3.g.

4. Expedited SMP Entitlement Determinations for Chronic Invalids Hospitalized at VA Expense

Introduction

This topic contains information on expedited SMP entitlement determinations for Veterans who are chronic invalids, including

rationale for expediting an SMP entitlement determination, and
actions taken by the
- medical facility, and
- regional office (RO).

Change Date

July 1, 2019

X.iii.1.C.4.a. Rationale for Expediting an SMP Entitlement Determination

In some instances, an expedited determination of entitlement to SMP may be warranted. There are Veterans who are patients in VAMCs or maintained by VA in other hospitals who

are permanently and totally disabled, and
may be entitled to SMP by rating decision because they require A&A or are housebound due to chronic invalidism or incapacity for self-care.

These individuals do not require hospital treatment and might leave the VAMCs and return to their homes or enter private nursing homes if they were assured prior to leaving that they would receive the increased pension because VA recognizes they require A&A or are housebound. In addition, if rated as being in need of regular A&A, such individuals may also be entitled to housebound benefits while still hospitalized.

X.iii.1.C.4.b. Actions Taken by the Medical Facility

After identifying the type of case described in M21-1, Part X, Subpart iii, 1.C.4.a, the VAMC or the Chief, Medical Administrative Specialist (MAS), determines whether

it is medically feasible to authorize the Veteran’s discharge from the hospital
the Veteran is willing to accept discharge, and
arrangements can be made to ensure adequate care of the Veteran at home or at some other suitable place.

If the conditions described in the preceding bullets are met, the Chief, MAS, or other authorized medical center official

X.iii.1.C.4.c. Actions Taken by the RO

The table below describes how the RO processes the VA Form 21-2680referenced in M21-1, Part X, Subpart iii, 1.C.4.b.

Stage	Description
1	The rating activity determines whether the Veteran requires A&A or is housebound. *Notes*: If the rating activity decides the Veteran requires A&A, it will also indicate on the rating decision whether the Veteran remains entitled to benefits at the A&A rate while hospitalized. In pension cases, the rating activity only determines eligibility for consideration of the increased maximum annual pension rate (MAPR). A Veteran is not entitled to pension at the A&A or housebound rate if their income exceeds the corresponding MAPR.
2	After the rating activity makes a decision, the authorization activity takes action to award the A&A rate, or hospitalized rate if the rating activity decided the Veteran is not entitled to benefits at the A&A rate while hospitalized.
3	After receiving a discharge report, the authorization activity adjusts the award to pay benefits at the A&A rate effective the date of discharge.

Notes:

The DOC may be the date of a VA examination or the date of admission for hospitalization.
If evidence of eligibility for SMP is received within one year of the notification of basic pension eligibility, A&A may be paid from the effective date of the award of basic pension.

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