M21-1 Manual  /  Part XI, Subpart ii, Chapter 3, Section E

Accrued Authorization and Notification

M21-1, Part XI, Subpart ii, Chapter 3, Section E

Overview

In This Section

This section contains the following topics
TopicTopic Name
1 General Information on Authorization and Notification
2Limitation on Retroactive Periods for Payment
3Determining Amount of Accrued
4Benefits Not Negotiated Prior to Death
5 Accrued Lump Sum for Old-Law Pension Cases
6Personal Funds of Patients (PFOP) Accounts
7PFOP Accrued Distinguished from Accrued Lump Sum
8Action by Local Finance Activity for PFOPs
9Transfer (Redeposit) of PFOP Funds
10Responsibilities of the Veterans Service Center (VSC) or Pension Management Center (PMC)
11Allowable Items for Reimbursement
12Claims Involving Political Subdivisions
13Establishing Shares of Claimants for Reimbursement
14Railroad Retirement Act Survivor Benefits
15Personal Funds and Accrued Benefits
16Jurisdiction and End Product (EP) Control

1. General Information on Authorization and Notification

Introduction

This topic contains general information on authorization and notification, including
  • authorization responsibilities
  • regular monthly benefits
  • benefits awarded, and
  • when payment is barred.

Change Date

March 6, 2024

XI.ii.3.E.1.a. Authorization Responsibilities

Notification requirements as described in M21-1, Part VI, Subpart i, 1.B.1.b apply to accrued benefit decision notices. The authorization activity is responsible for
  • processing awards and disallowances of accrued benefits, and
  • providing notification of the accrued benefits decision.
The table below describes
  • when and how to communicate favorable findings in accrued and substitution decision notices, and
  • the only situations that favorable findings can be communicated in accrued/substitution notifications.
Accrued/Substitution Favorable FindingsWhen to UseLetter Text
EligibilityUse when communicating to a(n) accrued/substitution claimant that they are an eligible claimant that bore expenses of last illness or burial.You are an eligible claimant who bore the expenses of last sickness or burial.
Substitute ClaimantUse when communicating to a claimant that they are recognized as a substitute claimant.You have been recognized as a substitute claimant.
References: For more information on

XI.ii.3.E.1.b. Regular Monthly Benefits

38 U.S.C. 5121 and 38 CFR 3.1000 govern entitlement to, and disposition of, all Department of Veteran Affairs (VA) benefits payable as regular monthly benefits except those excluded below and other periodic benefits, such as clothing allowance, to which a beneficiary was entitled at time of death, either on the basis of an existing decision or on evidence in file at the date of death. The only regular monthly benefits that cannot be paid as accrued benefits areNote: When regular monthly payments were being made under a combined award which included Naval Pension or special allowance, do not include the part which represents a benefit that cannot be paid as accrued benefits in the computation of the accrued benefit otherwise payable. References: For more information on

XI.ii.3.E.1.c. Benefits Awarded

Any benefits awarded are limited to any past-due benefits for the period between the effective date of the award and what would have been the effective date of discontinuance of the award as a result of the claimant’s death. Reference: For more information on the appropriate control measures for month of death (MOD) and accrued benefits payments outside of the MOD, see M21-1, Part XI, Subpart ii, 2.1.d.

XI.ii.3.E.1.d. When Payment Is Barred

The rules that govern the effect of adverse findings concerning wrongful and intentional killing of the Veteran or other beneficiaries apply equally to claimants for accrued benefits. The rules bar
  • any payment of accrued amounts to the wrongdoer, or
  • the payment of an increased share, if in the same class of beneficiaries.

2. Limitation on Retroactive Periods for Payment

Introduction

This topic contains information on time limitations, including
  • limitation on retroactive periods, and
  • exceptions to the limitation on retroactive periods.

Change Date

May 11, 2023

XI.ii.3.E.2.a. Limitation on Retroactive Periods

Use the table below to determine the actions to take on the retroactive period for payment of accrued benefits based on the date of the beneficiary’s or original claimant’s death.
If death occurred …Then the retroactive period is …
  • on or after January 1, 1958, but
  • before October 9, 1996
a maximum of one year, regardless of when benefits were accrued.
  • on or after October 9, 1996, but
  • before December 16, 2003
a maximum of two years, regardless of when benefits were accrued.
on or after December 16, 2003not limited.
References: For more information on
  • payment of accrued benefits when death occurs
    • on or after January 1, 1958, but before October 9, 1996, see Public Law (PL) 85-857
    • on or after October 9, 1996, but before December 16, 2003, see PL 104-275, and
    • on or after December 16, 2003, see PL 108-183, and
  • limitation of payment, see Terry v. Principi,367 F.3d 1291 (Fed. Cir. 2004).

XI.ii.3.E.2.b. Exceptions to the Limitation on Retroactive Periods

When accrued benefits are payable to the survivors or estate of a Nehmer class member under 38 CFR 3.816(f), there is no limitation in the retroactive period, regardless of the date of death.Note: Follow the Nehmer guidance in M21-1, Part VIII, Subpart i, 2.C.1.a-e when making the accrued claim decision for eligibility and payment. Reference: For more information on accrued benefits under Nehmer, see M21-1, Part VIII, Subpart i, 2.B.

3. Determining Amount of Accrued

Introduction

This topic contains information on determining the amount of accrued, including
  • paying accrued based on audit error worksheets (AEWs)
  • computation of accrued amounts
  • paying accrued benefits when a surviving spouse is entitled to MOD
  • returned and canceled benefits payable as accrued
  • recouping overpayments when computing accrued benefits, and
  • determining accrued payable when deceased Veteran received military retired pay (MRP) and is entitled to compensation.

Change Date

March 6, 2024

XI.ii.3.E.3.a. Paying Accrued Based on AEWs

Audit Error Worksheets (AEWs) represent unpaid VA compensation proceeds owed to a Veteran.VA uses AEWs to determine the amount of withheld benefits owed to a Veteran as a result of Veteran’s military retired pay (MRP), Concurrent Retirement Disability Pay (CRDP), or Combat Related Special Compensation (CRSC).When a Veteran dies prior to AEW processing, the survivors of the deceased Veteran may be entitled to accrued benefits.Hines Information Technology Center (ITC) generates the AEW, inserts it into the Veteran’s electronic claims folder (eFolder), and places the AEW under control by establishing an 840-work item.Accrued based on AEW is not payable when
  • there are no withholdings in VA systems covering the period on the AEW
  • the Veteran’s award was corrected for any CRDP/CRSC adjustments
  • a claim for accrued was not filed or not submitted timely, or
  • the withholdings for the AEW were not for MRP and the AEW was erroneously generated.
References: For more information on

XI.ii.3.E.3.b. Computation of Accrued Amounts

Use the table below to decide what computation is necessary.
If the accrued amounts must be computed through …Then computation is needed …
a date other than the last of the month preceding deathto determine what is payable through the
  • date of death for officer’s retirement pay and subsistence allowance
  • date of last attendance for educational allowances under Chapters 30, 32, 35, and 1606, Section 901, and the Omnibus Diplomatic Security and Anti-Terrorist Act, and
  • last day of the MOD, for amounts due to a deceased child receiving an apportioned share of a surviving spouse’s award (payable only as reimbursement).
the last day of the month preceding the MODfor any periodic monthly benefits in cases in which
  • payments were in suspense from a prior date
  • posthumous adjustments were made, including those required by an accrued rating
  • amounts were being withheld for
    • possible apportionment and subsequently denied, or
    • incompetency determination, or
  • benefits were delivered after death covering a period prior to the termination date.
Note: Ensure documentation of calculations made to determine the rate of accrued benefits are included in the eFolder. Important:
  • Use the Accrued Paid/Due Calculator to calculate the amount of accrued benefits that are payable in every case.
  • Upload an image of the calculation into the beneficiary’s eFolder.

XI.ii.3.E.3.c. Paying Accrued Benefits When a Surviving Spouse Is Entitled to MOD

MOD benefits are not payable under accrued benefit awards.Example: The Veteran submitted a claim for increase based on coronary artery disease (CAD) on October 1, 2022. VA received a notice on June 1, 2023, indicating that the Veteran died on April 30, 2023, which was prior to the completion of their claim. The Veteran’s spouse submitted a claim for accrued benefits for CAD on July 9, 2023, and a rating decision granted a 60 percent evaluation for CAD effective October 1, 2022.Result: The accrued benefit should be calculated for the period of November 1, 2022, through March 31, 2023, the end of the month prior to the month the Veteran died. The MOD decision must be made under a separate award for the period of April 1, 2023, through April 30, 2023. This is the month in which the Veteran died.Reference: For more information on processing MOD payments, see M21-1, Part XI, Subpart ii, 2.1.d.

XI.ii.3.E.3.d. Returned and Canceled Benefits Payable as Accrued

Funds represented by any benefits delivered after death covering a period prior to, and extending beyond, the date of termination due to death, are payable as accrued and only with respect to the portion due and unpaid prior to the termination date.VBMS-Awards (VBMS-A) automatically populates any current proceeds in the appropriate field and calculates the accrued amount to be paid based on the proceeds as described in M21-1, Part XI, Subpart ii, 3.E.3.e. Note: Do not enter amounts in the LUMP SUM or COMPUTED AMOUNT fields when paying the full amount of proceeds available. Exception: When the claimant is only entitled to a partial amount of the available proceeds, enter the amount in the AMOUNT PAID BY CLAIMANT field and notify finance per M21-1, Part XI, Subpart ii, 3.E.4.e. References: For more information on
  • benefits not negotiated prior to death, see M21-1, Part XI, Subpart ii, 3.E.4.
  • the death of a beneficiary receiving educational benefits, see M22-4, Part 4, 11.27, and
  • returned and cancellation of checks, see

XI.ii.3.E.3.e. Recouping Overpayments When Computing Accrued Benefits

If the deceased beneficiary had an overpayment, it must be recouped before any accrued benefits may be paid. When an accrued award is established, VBMS-A will automatically populate any current proceeds, offsets, or personal funds of patients (PFOP) in the appropriate field. If there is an overpayment that should be deducted from the benefit, VBMS-A will automatically calculate the accrued amount based on any proceeds or offsets.Reference: For more information on processing awards, see the
  • VBMS Awards User Guide, and
  • VBMS Rating User Guide.

XI.ii.3.E.3.f. Determining Accrued Payable When Deceased Veteran Received MRP and Is Entitled to Compensation

If the deceased Veteran was in receipt of MRP and the accrued rating grants compensation benefits, the claims processor must determine
  • the amount of compensation benefits that can be paid as accrued, if any, or
  • if full payment of compensation benefits can be paid as accrued because the
    • Veteran meets the CRDP eligibility requirement for the entire period covered by the award, and
    • compensation eligibility is after December 31, 2003.
Follow the steps in the table below when taking award action on a deceased Veteran who received MRP.
StepAction
1Does the award involve compensation benefit eligibility after December 31, 2003?
2Does the Veteran meet the CRDP eligibility requirements as listed in M21-1, Part VI, Subpart ii, 4.A.6.b?
3Does the Veteran meet the full CRDP eligibility requirements as listed in M21-1, Part VI, Subpart ii, 4.A.2.f for any time period covered by the award?
  • If yes,
    • for the entire period covered by the award, go to the next step, or
    • for only a portion of the time period covered by the award, go to Step 5.
  • If no, go to Step 6.
4
  • Upload the documents verifying full CRDP eligibility into the Veteran’s eFolder, as instructed in M21-1, Part VI, Subpart ii, 4.A.2.g
  • pay accrued compensation without withholding for MRP, and
  • take no further action.
5
  • Upload the documents verifying full CRDP eligibility into the Veteran’s eFolder, as instructed in M21-1, Part VI, Subpart ii, 4.A.2.g
  • pay accrued compensation without withholding for MRP for the time period of the award that falls within the full CRDP eligibility requirements as listed in M21-1, Part VI, Subpart ii, 4.A.2.f, and
  • follow the procedures in M21-1, Part VI, Subpart ii, 4.B.1.d for the portion of the award that is not within the time period of full CRDP eligibility requirements, paying any accrued compensation, as calculated, and
    • if any compensation must still be withheld during the time period in which the Veteran meets the CRDP eligibility requirements, complete the actions in Step 6, continuing the end product (EP) at authorization for response from Compensation Service’s Military Pay Staff, or
    • take no further action if no compensation must be withheld during the time period in which the Veteran meets the CRDP eligibility requirements.
6
  • Send an encrypted e-mail to VAVBAWAS/CO/MILPAY using the following guidelines:
    • in the subject line, enter Accrued Case –[Veteran’s last name]
    • in the body of the e-mail, include the
      • Veteran’s name and claim number, and
      • following statement: Please aid in determining the amount of benefits that are due the survivor or estate based on the Veteran’s possible entitlement to Concurrent Retirement and Disability Pay, and
    • attach the VA Award Lines Template completed in accordance with the Instructions on Inputting VA Award Lines Template.
  • Postpone authorization of the award until Compensation Service’s Military Pay Staff responds.
Exception: This step does not apply to Nehmer claims. If paying accrued to a Nehmer class member follow the procedures in M21-1, Part VIII, Subpart i, 2.C.1.g.


4. Benefits Not Negotiated Prior to Death


Introduction

This topic contains information on benefits not negotiated prior to death, including
  • definition of non-negotiated benefits
  • non-negotiated benefits
    • payable, and
    • not payable
  • inability to distribute non-negotiated benefits, and
  • amounts not payable as accrued.

Change Date

June 28, 2015

XI.ii.3.E.4.a. Definition: Non-Negotiated Benefits

Payments made to the beneficiary but not negotiated prior to their death are not accrued benefits but are considered non-negotiated benefits. These are payable in the same manner as accrued benefits, but they are not subject to any restriction on either the retroactive period which may be covered by the amount payable or to the other time limits contained in that section of the law. Payment may also be made as reimbursement for last illness and burial expenses if there is no one within a permitted class. If payment cannot be made on the basis of relationship or reimbursement, it will be made to the deceased beneficiary’s estate, unless the funds will revert to the State. References: For more information on

XI.ii.3.E.4.b. Non-Negotiated Benefits Payable

38 U.S.C. 5122 and 38 CFR 3.1003 provide for the disposition of funds represented by benefit payments, the whole proceeds of which are for a period not extending beyond the effective date of termination for death, which were received but not negotiated by the payee and which were returned and canceled.38 U.S.C. 5122 applies to benefit payments to deceased Veterans or to their surviving spouses or dependents. This includes payment of any of the regular monthly benefits except special allowance under 38 U.S.C. 1312(a) or insurance.References: For more information on
  • handling canceled benefit payments, see
  • the auto established EP 290, generated when a payment is returned and proceeds are established, see M21-4, Appendix B, 290.

XI.ii.3.E.4.c. Non-Negotiated Benefits Not Payable

These policies do not apply to any benefit payments
  • delivered after the payee’s death or representing payment for a period extending beyond the date of termination due to death, and/or
  • in payment of a lump sum representing amounts withheld because of hospitalization or institutionalization of a Veteran without a spouse or child(ren) who was
    • competent and receiving Old-Law Pension, because the amounts would be payable as an accrued lump sum under 38 CFR 3.1001, or
    • incompetent and receiving any type of pension, because the amounts would not be payable to anyone under 38 CFR 3.1007.

XI.ii.3.E.4.d. Inability to Distribute Non-Negotiated Benefits

Any case in which all benefits payable cannot be paid based on relationship or as reimbursement of burial or last illness will be paid by the finance activity for settlement to the deceased beneficiary’s estate, provided the amount to be distributed will not revert to the State (escheat) because there is no one eligible to inherit it. The table below describes the stages for distributing non-negotiated benefits.
StageDescription
1The case is forwarded by memorandum to the finance activity.Note: Include a statement as to who is to be paid the amount available and that it will not revert to the State because there is no one eligible to inherit it.
2The finance activity prepares a 06A transaction based on the determination by the authorization activity that the administrator of the estate (or whoever is claiming the funds) is due those funds.Note: Once payment has been made, subsequent claims will not be recognized.Reference: For more information on handling canceled benefit payments to deceased payees, see

XI.ii.3.E.4.e. Amounts Not Payable as Accrued

When a claim is filed for the proceeds of non-negotiated benefit payments and it is determined that none or only a part of the amount is payable on the basis of relationship or reimbursement, notify the finance activity as noted in the bullets below.
  • No Accrued Payable, if none of the proceeds of the returned and canceled benefit payment is payable on the basis of either relationship or reimbursement.
  • Amount Only Partially Paid, if less than the entire amount of the proceeds of the returned and canceled benefit payment is payable on the basis of either relationship or reimbursement.
Note: If the amount from the proceeds of non-negotiated checks has been only partially paid as reimbursement, the remainder would be paid to the deceased payee’s estate, if it will not revert to the State (escheat).References: For more information on

5. Accrued Lump Sum for Old-Law Pension Cases

Introduction

This topic contains information on accrued lump sum for Old-Law Pension cases, including
  • disposition of Veterans Pension amounts under 38 CFR 3.1001 and 38 CFR 3.1007
  • order of preference for accrued lump sum benefits
  • time limitations for accrued lump sum benefits
  • basis for computation of accrued lump sum
  • change in disability and accrued lump sum
  • retroactive increases for accrued lump sum, and
  • distinguishing between accrued lump sum and accrued under 38 CFR 3.1000.

Change Date

February 9, 2016

XI.ii.3.E.5.a. Disposition of Veterans Pension Amounts Under 38 CFR 3.1001 and 38 CFR 3.1007

38 CFR 3.1001 provides for the disposition of Veterans Pension amounts in Old-Law Pension cases, withheld by reason of the hospitalization of a competent Veteran, as an accrued lump sum upon the Veteran’s death.38 CFR 3.1007 prohibits paying such withheld amounts as accrued in cases of incompetent Veterans.References: For more information on
  • benefits not payable, see M21-1, Part XI, Subpart ii, 3.E.4.c, and
  • reduction in benefits because of hospitalization in Old-Law Pension cases, see 38 CFR 3.551(b).

XI.ii.3.E.5.b. Order of Preference for Accrued Lump Sum Benefits

The accrued lump sum benefit under 38 CFR 3.1001, the amount withheld from hospitalized competent Veterans, is payable to the same persons in the same order of relationship as is the accrued benefit under 38 CFR 3.1000, except that the entitlement of children is not subject to age or marital status requirements.

XI.ii.3.E.5.c. Time Limitations for Accrued Lump Sum Benefits

The regulations regarding time limitations are listed below.
  • A claim for accrued lump sum must be filed within five years from the date of the Veteran’s death.
  • There is no time limit for the submission of evidence of an accrued claim.
  • There is no restriction on the retroactive period that may be covered by an award of lump sum accrued benefits.
Note: When the preferred claimant is under a legal disability at the time of the Veteran’s death, compute the five-year period from the date of termination or removal of the legal disability.

XI.ii.3.E.5.d. Basis for Computation of Accrued Lump Sum

The accrued amount that would have been payable to the Veteran as lump sum must be computed on the basis of the prior awards in file.

XI.ii.3.E.5.e. Change in Disability and Accrued Lump Sum

Use the table below to determine the actions to take when there is an accrued lump sum payable.
If …Then …
a rating of permanent and total (P&T) disability is discontinued by reason of a change in circumstances or conditionamounts withheld prior to the effective date of termination of the award are payable as accrued lump sum.
the P&T rating is considered erroneous for fraud or no legal basisthe award is retroactively terminated and the accrued lump sum is not payable.

XI.ii.3.E.5.f. Retroactive Increases for Accrued Lump Sum

Accrued lump sum is payable only for periods covered by an award (active or suspended) in effect at the date of the Veteran’s death.Note: Do not increase or create an accrued lump sum benefit by reason of an accrued rating or posthumous authorization decision relative to rates payable to the Veteran over a retroactive period. The amount payable is only the amount withheld as determined by awards in the claims folder.Reference: For more information on the evidence in the claims folder, see M21-1, Part XI, Subpart ii, 3.A.4.

XI.ii.3.E.5.g. Distinguishing Between Accrued Lump Sum and Accrued Under 38 CFR 3.1000

In some instances, when accrued lump sum is payable, there will also be the possibility of an amount being payable as accrued involving that portion of the award which was in the course of payment or in suspense at the date of the Veteran’s death.If a determination is made subsequent to the Veteran’s death that additional pension is payable, the additional benefit is payable as accrued subject to limitations contained in 38 U.S.C. 5121. The award of accrued lump sum is not affected by such posthumous action.References: For more information on

6. PFOP Accounts

Introduction

This topic contains information on PFOP accounts, including
  • PFOP under regional office (RO) control
  • deaths on or after December 1, 1959, for PFOPs, and
  • non-VA funds in a PFOP account.

Change Date

May 7, 2009

XI.ii.3.E.6.a. PFOP Under RO Control

This topic deals with the payment of only those PFOPs under regional office (RO) control and maintained by Hines ITC. It does not relate to PFOPs under the control of Directors of VA hospitals except as to certifications required of persons having eligibility to such funds.References: For more information on the

XI.ii.3.E.6.b. Deaths on or After December 1, 1959, for PFOPs

For incompetent Veterans who die on or after December 1, 1959, the date of enactment of PL 86-146, all gratuitous benefits which were paid under laws administered by VA and which were deposited in a PFOP account before, on, or after December 1, 1959, in a PFOP account, are payable to the identical classes of dependents as provided in M21-1, Part XI, Subpart ii, 3.A.5 (except that children are entitled regardless of age or marital status) or as reimbursement.

XI.ii.3.E.6.c. Non-VA Funds in a PFOP Account

Funds not deposited in the PFOP account by VA, but deposited by the Veteran or others, are excluded from application of this law and may be disposed of by the local finance activity only in accordance with the law and instructions in effect prior to enactment of PL 86-146.

7. PFOP Accrued Distinguished from Accrued Lump Sum

Introduction

This topic contains information on PFOP accrued distinguished from accrued lump sum, including
  • differences between PFOP and accrued lump sum
  • limitations to gratuitous benefits in PFOP and accrued lump sum
  • persons entitled to gratuitous benefits in PFOP and accrued lump sum, and
  • effect of processing a notice of death.

Change Date

June 4, 2004

XI.ii.3.E.7.a. Differences Between PFOP and Accrued Lump Sum

The differences between PFOP and accrued lump sum are basic and outlined below.
  • PFOP accrued represents funds deposited by VA to the account of the incompetent Veterans.
  • Accrued lump sum represents amounts withheld from awards to hospitalized, competent Veterans.
Note: Amounts withheld from awards to incompetent Veterans, for periods prior to, as well as subsequent to the rating of incompetency, are specifically prohibited from payment as accrued lump sum.Reference: For more information on hospitalized incompetent Veterans, see 38 CFR 3.1007.

XI.ii.3.E.7.b. Limitations to Gratuitous Benefits in PFOP and Accrued Lump Sum

The policies and procedures for payment of accrued lump sum are applicable in determining entitlement to gratuitous funds on deposit in PFOP, as listed below.
  • Claim for gratuitous funds must be filed within five years from the date of the Veteran’s death.
  • There is no restriction on the retroactive period, which may be covered by the funds to be awarded.
  • Once a claim has been filed, there is no time limit for the submission of evidence requested to perfect the claim. When the claimant fails to submit requested evidence within one year in cases which have been referred to the authorization activity for certification of persons entitled, the authorization activity will, at the expiration of the established control period
    • inform the referring activity to transfer (redeposit) the funds to the applicable current appropriation, and
    • state the reason for redepositing the funds.
References: For more information on
  • hospitalization of competent Veterans, see 38 CFR 3.1001, and
  • paying benefits to the person having custody and control of incompetent or minor beneficiaries, see 38 U.S.C. 5502(d).

XI.ii.3.E.7.c. Persons Entitled to Gratuitous Benefits in PFOP and Accrued Lump Sum

For death occurring on or after July 25, 1962, the classes of eligible payees for both PFOP and accrued lump sum are identical. Brothers, sisters, and non-dependent parents are not and never have been entitled to PFOP accrued on the basis of relationship. References: For more information on

XI.ii.3.E.7.d. Effect of Processing a Notice of Death

The Hines ITC maintains a running balance of amounts on deposit in PFOP accounts. If a notice of death transaction is processed at the Hines ITC on an account subject to a withholding for PFOP, the ITC notifies the field station of the amount on deposit in PFOP to the Veteran’s account and requests its disposition.

8. Action by Local Finance Activity for PFOPs

Introduction

This topic contains information on action by the local finance activity for PFOPs, including
  • analysis of PFOP accounts
  • initiation of claims for gratuitous benefits from PFOPs, and
  • gratuitous PFOP payable as reimbursement.

Change Date

 June 28, 2015

XI.ii.3.E.8.a. Analysis of PFOP Accounts

When notification of the death of an incompetent Veteran is received, the Hines ITC Accounting section analyzes the balance in the PFOP account to identify the funds derived from gratuitous VA benefits.The analysis is placed in the record maintained by the station having jurisdiction of the account. The original analysis is forwarded to the Veterans Service Center (VSC) or pension management center (PMC) having jurisdiction of the deceased Veteran’s claims folder.

XI.ii.3.E.8.b. Initiation of Claims for Gratuitous Benefits From PFOPs

Initial responsibility for obtaining claims from persons within the prescribed classes for the gratuitous funds on deposit in PFOP of a deceased incompetent Veteran is vested in the Registrar of the VA hospital or the finance activity in the RO having jurisdiction of the account.If it appears that there is someone in the prescribed class who may be entitled to the gratuitous portion or to a share of the PFOP account, the
  • Registrar of the VA hospital or the finance activity in the RO having jurisdiction of the account
  • RO processes the claim for payment by the finance activity in the hospital or by the Hines ITC.

XI.ii.3.E.8.c. Gratuitous PFOP Payable as Reimbursement

Although the local finance activity is initially responsible for dispatching claims for, and payment of, gratuitous PFOP funds on the basis of relationship, responsibility for payment of this accrued benefit as reimbursement is vested exclusively with the VSC or PMC based on the jurisdiction of the deceased Veteran’s claim folder.Note: As soon as the transfer (redeposit) of PFOP funds is made, take appropriate action.

9. Transfer (Redeposit) of PFOP Funds

Introduction

This topic contains information on transfer (redeposit) of PFOP funds, including
  • cases in which there are no heirs within permitted class for gratuitous benefits from PFOP, and
  • record of transfer (redeposit) of PFOP funds.

Change Date

June 4, 2004

XI.ii.3.E.9.a.
Cases in Which There Are No Heirs Within Permitted Class for Gratuitous Benefits From PFOP

When it appears that no individual within the prescribed class eligible to receive benefits on the basis of relationship has survived the Veteran, notify the finance activity. The finance activity immediately authorizes the transfer (redeposit) of the gratuitous portion of the PFOP funds to the applicable current appropriation. Transfer (redeposit) is also authorized if no claim has been received within one year from the date of the Veteran's death.

XI.ii.3.E.9.b. Record of Transfer (Redeposit) of PFOP Funds

The amount of funds transferred (redeposited) to the applicable current appropriation and the date of that action is made a matter of record. The Standard Form 1081, Voucher and Schedule of Withdrawals and Credits, or other document processed by the finance activity authorizing transfer (redeposit) of such funds is placed in the deceased Veteran’s claims folder.

10. Responsibilities of the VSC or PMC

Introduction

This topic contains information on the responsibilities of the VSC or PMC for PFOPs, including
  • funds under VA hospital control, and
  • accrued PFOP authorized by the VSC or PMC.

Change Date

 June 28, 2015

XI.ii.3.E.10.a. Funds Under VA Hospital Control

Prior to the transfer (redeposit) to the applicable current appropriation, the VSC or PMC having jurisdiction of the deceased Veteran’s claims folder is responsible only for the certificate of eligibility or the memorandum of non-entitlement, as outlined below.Note: The VSC or PMC does not notify a claimant of its determination when the claim has been referred to the VSC or PMC only for certification of entitlement. The activity referring the claim notifies the claimant and gives the right to appeal.The table below describes the stages for reviewing funds under VA hospital control.
StageDescription
1The administrative service of a VA hospital or the finance activity of an RO initially receives and reviews applications for the gratuitous funds on deposit in PFOP.
2Claims based on relationship with the permitted classes are forwarded to the VSC or PMC for review and, if necessary, development of the evidence to establish the eligibility and proper shares of the claimants.
3If it is determined that the claimant is a member of an eligible class, the claims processor
  • prepares a certificate of eligibility (original and one copy) for signature of the claims processor and an authorizer
  • files the signed copy of the certificate in the claims folder, and
  • returns the original signed certificate with the application to the originating activity.
Note: Since the claim will not remain in the claims folder, the certificate of eligibility must include the reasons for eligibility of each claimant and the proportion to which they are entitled. The certificate must have all essential data of the claim. The certificate of eligibility includes the reasons for eligibility of each claimant and the proportion to which they are entitled.
4If it is determined that the claimant has no entitlement to a share of the gratuitous funds on deposit in PFOP, the claims processor
  • prepares a memorandum of non-entitlement (original and one copy) for the approval of an authorizer, concisely stating the reasons the determination was made
  • files the signed copy of the memorandum of non-entitlement in the claims folder, and
  • returns the original signed memorandum of non-entitlement with the application to the originating activity.
Notes:
  • Incorporate into the memorandum all essential data in the claim so that the copy of the memorandum retained in the claims folder will be self-explanatory.
  • The claims processor and authorizer sign the original and the copy.

XI.ii.3.E.10.b. Accrued PFOP Authorized by the VSC or PMC

The VSC or PMC has complete responsibility for the development and final disposition of
  • a claim for the gratuitous portion of funds in PFOP accounts under RO control (maintained by the Hines ITC) for payment as accrued, and
  • VA hospital PFOP funds after transfer (redeposit) when reimbursement is the only basis for payment as PFOP accrued.
After completion of any necessary development
  • dispose of the accrued gratuitous funds in the PFOP account by award or disallowance action, and
  • notify the claimant of the action taken including the right of appeal.
References: For more information on
  • PFOP accounts, see M21-1, Part XI, Subpart ii, 3.E.6, and
  • processing payment or disallowance of accrued benefits, see VBMS Awards User Guide.

11. Allowable Items for Reimbursement

Introduction

This topic contains information on allowable items for reimbursement, including
  • payment of accrued as reimbursement
  • example of accrued paid as reimbursement
  • medicinal expenses as reimbursable expenses
  • nursing expenses as reimbursable expenses
  • transportation expenses as reimbursable expenses
  • miscellaneous items as reimbursable expenses, and
  • burial payment made to accrued or substitute claimant.

Change Date

January 12, 2026

XI.ii.3.E.11.a. Payment of Accrued as Reimbursement

Consider for reimbursement all reasonable expenses incident to the last illness and burial of a beneficiary, Veteran, and/or surviving spouse.An eligible claimant who bore the expense for last illness or final expenses is entitled to reimbursement as the person who provided the funds, up to the available amount of eligible accrued benefits.Reimbursement is limited to the available amount of eligible accrued benefits, even if the deceased beneficiary claimed those same funds as unreimbursed expenses to reduce their income for VA purposes (IVAP) on any income-based benefit program.Reference: For more information regarding the definition of last illness, see M21-1, Part IX, Subpart i, 3.D.3.b.

XI.ii.3.E.11.b. Example of Accrued Paid as Reimbursement

Situation: An adult child loans a parent (the Veteran’s surviving spouse) money for assisted living expenses. Subsequently, the surviving spouse claims those expenses as unreimbursed medical expenses on the survivor pension award to reduce the IVAP. When the surviving spouse dies, the adult child submits a claim for accrued benefits, claiming to have “bore” the expense for final illness.Result: VA can consider the claimed assisted living expenses for accrued benefits to reimburse the accrued claimant, even though the expenses were previously used to reduce the deceased beneficiary’s IVAP.Reference: For more information on bore the expense, see

XI.ii.3.E.11.c. Medicinal Expenses as Reimbursable Expenses

Bills covering the cost of medicines are not required if the claimant alleges that the medicine was paid for in cash and it is apparent that the amount claimed is reasonable and consistent with the character and duration of the last illness.Note: Approvable charges for medical treatment are limited to the actual period of the last illness.

XI.ii.3.E.11.d. Nursing Expenses as Reimbursable Expenses

VA may reimburse expenses incurred by the deceased beneficiary and paid for by the accrued claimant for registered and nonregistered nursing services rendered for the deceased beneficiary from, and including the established date of, commencement of the last illness through the date of death.For nonregistered nursing services performed by a member of the same household, however, only approve expenses incurred by the deceased beneficiary and paid for by the accrued claimant in an amount that does not exceed the cost of similar services in the community for such nonprofessional services.

XI.ii.3.E.11.e. Transportation Expenses as Reimbursable Expenses

The expenses incurred for transporting the body of a deceased Veteran or other beneficiary to the place of burial and for an attendant or escort to and from the place of burial are payable as reimbursement from accrued benefits without regard to the restrictions stated in 38 CFR 3.1706 and 38 CFR 3.1709 as to hospitalization by VA or shipment by Government bill of lading.If the expenses of transporting the body of a deceased Veteran were partially paid by VA in connection with a burial claim, only those expenses in excess of the amount paid by VA will be reimbursed.References: For more information on

XI.ii.3.E.11.f. Miscellaneous Items as Reimbursable Expenses

Charges for items essential to emergency treatment are allowed, including
  • ambulance or other conveyance to a hospital
  • summoning or procuring medical assistance, and
  • arranging for proper medical care from the commencement of the last illness.
Note: If the beneficiary is shown to have died under conditions which made it necessary to destroy furniture or bed clothing for sanitary reasons or if damage is incurred by fumigation, allow those charges based on the claimant’s affidavit, corroborated by two competent witnesses, stating the actual value of the articles destroyed or the damages incurred and the reason for the destruction.

XI.ii.3.E.11.g. Burial Payment Made to Accrued or Substitute Claimant

If VA paid burial benefits to the accrued or substitute claimant, subtract the amount of burial benefits paid from the claimed burial expenses.

12. Claims Involving Political Subdivisions

Introduction

This topic contains information on accrued benefits and political subdivisions, including payment
  • by estate or personal funds, and
  • to homes for the aged and infirm.

Change Date

December 28, 2017

XI.ii.3.E.12.a. Payment by Estate or Personal Funds

VA may not pay accrued benefits to any political subdivision of the U.S. as reimbursement. However, if either the estate of a deceased beneficiary or personal funds of an individual are used to pay an expense incurred by a political subdivision of the U.S. or of a foreign government in connection with the last illness and burial, then payment of an accrued amount to the estate of the deceased beneficiary or to the individual is allowed.Note: Do not pay the proceeds of non-negotiated checks to an estate if there is a statement of record from any source (public or private) that such benefit, if paid, will revert to the State (escheat).

XI.ii.3.E.12.b. Payment to Homes for the Aged and Infirm

Disallow any claim for reimbursement of expenses related to the beneficiary’s last illness or burial made by a home maintained entirely by public funds.Allow a claim for reimbursement if the beneficiary was a resident who was under contract to furnish their own support during life and effect burial at death.

13. Establishing Shares of Claimants For Reimbursement

Introduction

This topic contains information on establishing shares of claimants, including
  • when the total expenses
    • do not exceed total accrued payable, and
    • exceed total accrued payable, and
  • time limits for filing claims for accrued amounts payable as reimbursement.

Change Date

March 8, 2021

XI.ii.3.E.13.a.
When the Total Expenses Do Not Exceed Total Accrued Payable

When there are multiple eligible claimants that can be paid accrued as reimbursement and the total charges for expenses of the last illness and burial do not exceed the total amount of accrued payable, award each claimant an amount equal to their share as verified by receipted bills. Receipted bills for unpaid portions are not required if the unpaid creditors execute a reimbursement waiver by completing the Waiver of Reimbursement From All Unpaid Creditors part of VA Form 21P-601. Note: Development to additional heirs listed on the application is only required when the evidence shows they paid expenses.

XI.ii.3.E.13.b.
When the Total Expenses Exceed Total Accrued Payable

When the charges covering all expenses are shown on the claim and they exceed the total accrued payable, use the information in the table below to determine what action to take when there are multiple potentially eligible claimants for reimbursement.
If …Then …
  • two or more persons have paid the expenses of the last illness and burial from their personal funds, and
  • receipted bills or reimbursement waivers are submitted
pay each person the same proportion of accrued amount available as the proportion of total expenses each paid, not to exceed the amount each paid.
  • receipted bills are submitted by a claimant for only part of the expenses claimed, and
  • waivers are not furnished for the remaining unpaid charges
request that the claimant submit the necessary receipted bills or waivers for the remaining unpaid charges.
Note: Payment may also be made to one person after receiving the unconditional written consent of all other heirs and creditors.

XI.ii.3.E.13.c.
Time Limits for Filing Claims for Accrued Amounts Payable as Reimbursement

If the accrued amount is payable as reimbursement, establish a control for the expiration of the period within which additional claims for reimbursement may be filed. If the necessary evidence establishing the claimant’s entitlement to their full share is not received within the time limit allowed and a claim is not filed by any other claimant, award the claimant of record a proportionate share of the accrued amount payable based on the expenses supported by receipted bills or waivers.Exception: If there are proceeds of non-negotiated payments available for payment as reimbursement, do not apply the partial allowance procedures.Additionally, do not apply the procedures if an additional claim is timely made and the evidence requested is not subject to a time limitation. In these cases, inform the claimants that requested evidence must be submitted before any settlement may be made.If any additional claim is filed for accrued within the statutory time limit, extend the control period accordingly.References: For more information on

14. Railroad Retirement Act Survivor Benefits

Introduction

This topic contains information on Railroad Retirement Act survivor benefits, including
  • general policy for Railroad Retirement Act survivor benefits, and
  • burial and last illness expenses and the Railroad Retirement Board (RRB) survivors benefit reimbursement.

Change Date

December 28, 2017

XI.ii.3.E.14.a. General Policy for Railroad Retirement Act Survivor Benefits

If evidence indicates that the deceased beneficiary’s employment was covered by the Railroad Retirement Act and accrued VA benefits are available to be paid as reimbursement for burial expenses, request that the Railroad Retirement Board (RRB) furnish information as to whether or not survivor benefits were paid by that agency, and if so, to whom and in what capacity. Reference: For more information on requests from RRB, see M21-1, Part XI, Subpart iii, 1.C.4.b.

XI.ii.3.E.14.b. Burial and Last Illness Expenses and the RRB Survivors Benefit Reimbursement

If the RRB survivor's benefit has been paid or is payable to reimburse a person who paid the decedent’s burial expenses, the accrued amount payable by VA is available only as
  • reimbursement for burial expenses in excess of those reimbursed by the RRB, and
  • reimbursement for the last illness expenses.
Note:The RRB survivor's benefit is payable as reimbursement for burial expenses only. No offset is required in a claim for reimbursement for expenses of the last illness.

15. Personal Funds and Accrued Benefits

Introduction

This topic contains information on personal funds, including
  • borrowed money used to pay the expenses of last illness or burial
  • joint accounts used to pay the expenses of last illness or burial, and
  • acceptability of statements.

Change Date

December 28, 2017

XI.ii.3.E.15.a. Borrowed Money Used to Pay the Expenses of Last Illness or Burial

Money borrowed to pay the expenses of the last illness, burial, funeral, and transportation of the deceased beneficiary is considered the personal funds of the person who received the loan and not the funds of the lender.

XI.ii.3.E.15.b. Joint Accounts Used to Pay the Expenses of Last Illness or Burial

If the expenses of the last illness, burial, funeral, and transportation of the deceased beneficiary are paid from an account held jointly by the claimant and the decedent with the right of survivorship, consider that account to be the personal funds of the claimant. In any case in which conflicting evidence is of record as to whether the account was held jointly with the right of survivorship, resolve the conflict by requiring the claimant to furnish a statement from an official of the bank.

XI.ii.3.E.15.c. Acceptability of Statements

Accept a statement of account if it is receipted in accordance with accepted business practices, such as initialing or rubber-stamping. An affidavit or other statement from the claimant, as opposed to the creditor, purporting to show payments is not acceptable in lieu of a receipt. Bills or receipts submitted in support of a claim become part of the permanent record and are not returned. Reference: For more information on accrued award/disallowance processing, see M21-1, Part XI, Subpart ii, 3.E.1.


16. Jurisdiction and EP Control

Introduction

This topic contains information on jurisdiction and EP control of requests for substitution, including
  • general jurisdiction of accrued claims and requests for substitution
  • jurisdiction of accrued claims with an associated claim for Dependency and Indemnity Compensation (DIC)
  • EP control for initial substitution and accrued claims
  • examples of when to establish and dispose of EP 290
  • disposition of the EP control for
    • unfavorable substitution decisions, and
    • favorable substitution decisions
  • EP control and disposition for
    • pending legacy appeals
    • Appeals Modernization Act (AMA) Board of Veterans’ Appeals (Board) appeals
    • initial claims or claims of clear and unmistakable errors (CUEs)
    • supplemental claims and higher-level reviews (HLRs) that were pending at the time of death
    • supplemental claims and HLRs based on previous accrued decisions, and
    • supplemental claims and HLRs based on previous substitution decisions, and
  • claims in which the period to file a review has not expired.

Change Date

May 22, 2026

XI.ii.3.E.16.a. General Jurisdiction of Accrued Claims and Requests for Substitution

An accrued claim can result from the following claims or appeals pending at death:
  • initial claims
  • claims based on clear and unmistakable error (CUE)
  • supplemental claims
  • higher-level reviews (HLRs)
  • claims that have not been finally adjudicated (one-year decision review period has not expired)
  • legacy appeals, and
  • Appeals Modernization Act (AMA) Board of Veterans’ Appeals (Board) appeals.
In general, PMCs have jurisdiction of accrued claims and requests for substitution resulting from pension and/or survivors claims. VSCs have jurisdiction of accrued claims and requests for substitution resulting from compensation claims. However, if the Veteran’s claim or request for decision review pending at the time of death is intertwined with the cause of the Veteran’s death and there is a claim for service connection (SC) for the cause of the Veteran’s death pending, the PMC has jurisdiction.Exceptions:
  • HLRs and legacy appeals based on accrued claims are processed by a decision review operations center (DROC).
  • If the PMC can grant SC for the cause of death without making a decision on the Veteran’s claim for SC at the time of death, then the accrued claim or request for substitution is not intertwined. The accrued claim or request for substitution should be worked by the VSC of jurisdiction.
  • Nehmer related accrued claims and requests for substitution are the jurisdiction of the VSC. Legacy and AMA appeals are the jurisdiction of the DROCs.
Note: If an award of benefits from an accrued/substitution claim affects the rate of benefits paid for the MOD, the station processing the accrued/substitution claim must also correct the MOD payment by issuing the increase payment under a separate EP. In order to ensure the correct MOD payment amount is reflected in the corporate record, accrued benefits and MOD payments must be handled separately.Reference: For more information on the appropriate control measures for MOD and accrued benefits payments, see M21-1, Part XI, Subpart ii, 2.1.d.

XI.ii.3.E.16.b. Jurisdiction of Accrued Claims With an Associated Claim for DIC

 Use the table below to determine which office has jurisdiction over an accrued claim or request for substitution based on a deceased Veteran’s claim, request for decision review, or appeal when there is an associated claim for Dependency and Indemnity Compensation (DIC).
If the Veteran’s claim or request for decision review pending at the time of death is ...Then the claim, request for decision review, or appeal for substitution is worked by the ...
intertwined with the cause of the Veteran’s deathExample: The Veteran had a claim for SC for asthma pending at death and there is a pending survivor’s claim requiring a service-connected (SC) death determination. The death certificate lists asthma as a contributing factor.PMC of jurisdiction.
not intertwined with the cause of the Veteran’s death Example: The Veteran had a claim for SC for a right knee condition pending at death and there is a pending survivor’s claim requiring an SC death determination. The death certificate lists coronary artery disease as the cause of death.VSC of original jurisdiction. Important: Review the exception noted in M21-1, Part XI, Subpart ii, 3.E.16.a. Note: When a station determines that an accrued claim is not intertwined with the Veteran’s claim, request for decision review, or appeal pending at the time of death, they must document the decision on a deferred rating decision and save it to the eFolder.
pending appeal at the time of deathDROC of jurisdiction.

XI.ii.3.E.16.c. EP Control for Initial Substitution and Accrued Claims

Most often the request to substitute is received as part of a claim for accrued benefits.Establish EP 165 to record work credit for a valid initial request for accrued benefits. Use the appropriate accrued claim label when establishing an EP 165.Notes:
  • An EP (either 140 or 190, as appropriate) is authorized when a claim for survivors’ benefits is received in addition to the request for substitution and accrued.
  • A standard form is required to initiate a valid claim for accrued benefits. Only establish an accrued claim when a standard form is received as described in M21-1, Part XI, Subpart ii, 3.C.1.a.
  • In cases where DIC is granted by automation, and there was a claim pending at the time of the Veteran’s death, an EP 165 may be automatically established. Claims processors are required to process the EP 165.
Use the table below to determine the actions to take when a valid request to substitute a claim is received.
If a substitution ...Then ...
  • decision is required as part of the accrued claim, and
  • EP 165 is pending
  • establish EP 290, CPD with payee 00 and the appropriate substitution of claimantclaim label when all information is available to make a favorable or unfavorable substitution decision, and
  • clear EP 290 as a single action.
  • request is received upon the death of a claimant, and
  • without an accrued claim
Note: A VA Form 21P-0847, Request for Substitution of Claimant Upon Death of Claimant, from a surviving spouse can be a valid claim for accrued.		establish EP 290, CPD with payee 00 and the appropriate substitution of claimant claim label. If the substitution decision will be
  • unfavorable, clear EP 290 and notify the claimant of the unfavorable substitution decision, or
  • favorable, continue EP 290 to control for the processing of the claim that was pending at the time of the original claimant’s death and notify the substitution claimant of the favorable substitution decision as described in M21-1, Part XI, Subpart ii, 3.E.16.d Example 2.
Notes:
  • If the EP 290 left pending needs to be sent to rating activity, rate the claim under the pending EP 290.
  • If the request to substitute does not include complete evidence of eligibility, follow the procedures in M21-1, Part XI, Subpart ii, 3.C.3.e.
  • decision was favorable, and
  • an accrued application is received after EP 290 is continued
  • clear EP 290 to receive credit for the substitution decision previously made
  • establish EP 165 after EP 290 is cleared, and
  • if development was sent under EP 290 for the claim pending at the time of death and the time period for submission of evidence has not expired, manually add the tracked items in VBMS under EP 165 for all pending issues even if evidence was received or it is still outstanding to indicate development is pending.
Exception: If the accrued claim is based on benefits to which a survivor was entitled at the time of death, use the payee code associated with that beneficiary, rather than payee 00.Note: There should never be an EP 165 and an EP 290 pending concurrently based on a substitution request. References: For more information on

XI.ii.3.E.16.d. Examples: When to Establish and Dispose of EP 290

An accrued EP 165 should never be pending concurrently with an EP 290 based on an initial substitution request.Example 1: A surviving spouse submits a VA Form 21P-534EZ, Application for DIC, Survivors Pension, and/or Accrued Benefits, and an EP 190 is established. The Veteran had a claim pending at the time of death for pension with aid and attendance. No development is needed, and Survivors Pension benefits can be granted. Establish and send EP 165 to rating activity, promulgate EP 190, and perform a one-time clear of EP 290 to notify the claimant of the favorable substitution decision.Example 2: An adult descendant submits a VA Form 21P-0847 with verification showing they paid last expenses. The Veteran had a claim pending at time of death. Establish EP 290 and notify the claimant of the favorable substitution decision and continue EP 290 to process the claim pending at the time of the original claimant’s death. In the notification letter, explain that VA will continue to process the claim pending at the time of death but any money due cannot be paid unless an application for accrued is received timely.

XI.ii.3.E.16.e. Disposition of the EP Control for Unfavorable Substitution Decisions

An EP 290 with an appropriate substitution of claimantclaim label should be established and cleared when the claimant requesting substitution is notified of an unfavorable decision pertaining to the request for substitution.Follow the steps in the table below if the substitution decision is unfavorable.
StepAction
1Establish and clear an EP 290 with an appropriate substitution of claimant claim label and document the action with a VBMS note. Use the following language for the VBMS note: Review of EP 290. Claimant was notified of unfavorable substitution status on [Date]. Cleared the Substitution of Claimant EP 290 on [Date]. No additional action required on substitution request.
2Notify the claimant of the decision and provide appeal rights.Reference: For more information on language to use in the letter to deny substitution, see M21-1, Part XI, Subpart ii, 3.C.5.a.
3If award action is needed for the pending accrued EP, process EP 165 to provide a formal accrued decision to the claimant.

XI.ii.3.E.16.f. Disposition of the EP Control for Favorable Substitution Decisions

An EP 290 with an appropriate substitution of claimant claim label should be established and cleared when the claimant requesting substitution is notified of a favorable decision pertaining to the request for substitution.Follow the steps in the table below if the substitution decision is favorable.
StepAction
1Is an EP 165 for accrued pending?
  • If yes, go to Step 2.
  • If no, go to Step 3.
2
  • Establish and clear the EP 290 with an appropriate substitution of claimant claim label and document the action with a VBMS note. Use the following language for the VBMS note:
Review of EP 290. Claimant was notified of favorable substitution status on [Date]. Cleared the Substitution of Claimant EP 290 on [Date].
  • Go to Step 4.
3
  • Establish and continue EP 290 with an appropriate substitution of claimant claim label and document the action with a VBMS note. Use the following language for the VBMS note:

Review of EP 290. Claimant was notified of favorable substitution status on [Date]. Continued the Substitution of Claimant EP 290 on [Date] to process claim pending at time of original claimant’s death to completion.

  • Go to Step 4.

Exception: Do not continue EP 290 if there is a legacy or AMA appeal pending at the time of the original claimant’s death and an accrued claim was not received. An EP 290 is not needed to process a claim pending at the time of death to completion since the legacy appeal is controlled by EP 070/170 and Caseflow issues do not require an EP to be pending.

4Notify the claimant of the decision and provide appeal rights.Reference: For more information on language to use in letters when granting substitution see M21-1, Part XI, Subpart ii, 3.C.5.d.
5
  • If an EP 290 was continued and an accrued application is never received
    • process the claim pending at the time of the original claimant’s death to completion
    • clear EP 290, and
    • notify the claimant of the decision. If applicable, explain in the notification letter that any money due for accrued cannot be paid unless an application for accrued is received timely.
  • If an accrued application is received following a favorable substitution decision, follow the guidance in M21-1, Part XI, Subpart ii, 3.E.16.c.

XI.ii.3.E.16.g. EP Control and Disposition for Pending Legacy Appeals

Follow the steps in the table below to take action on a pending legacy appeal when VA receives a substitution claim.
StepAction
1Use the table below when determining if the claimant is a valid substitute claimant.
If the claimant ...Then ...
is a valid substitute claimantrefer to M21-1, Part XI, Subpart ii, 3.E.16.f and continue to next step. Notes:
  • The EP 170 or 070 controls the appeal.
  • Use the following language for the VBMS note:
    • Review of EP 290. Claimant was notified of favorable substitution status on [Date]. Cleared the Substitution of Claimant EP 290 on [Date]. Appeal EP will control the substitution request.
is not a valid substitute claimant
  • refer to M21-1, Part XI, Subpart ii, 3.E.16.e, and
  • disregard the remaining steps in this table.
2Establish an EP 170 or 070. An EP 170 or 070 is required for control of the legacy appeal which may need further review by the Board after the PMC or VSC makes a decision on the request to substitute. Use the table below to determine the actions to take for controlling the substitution appeal.
If ...Then ...
the legacy notice of disagreement (NOD), VA Form 9, Appeal to Board of Veterans’ Appeals, or remand is still pending in the Veterans Appeals Control and Locator System (VACOLS) and an EP 170 or 070 is pending Note: If the VACOLS record is pending but the appropriate EP was missing, establish an EP 070 or 170.
  • update the VACOLS record for substitution (name of substitute, etc.), and
  • transfer the VACOLS record to the DROC District of Columbia or special mission site.
  • the VACOLS record is dispatched in a historical status and the EP was cleared due to death of appellant, or
  • the legacy VACOLS record was dismissed by the Board due to death of appellant
if the legacy appeal was in
  • NOD status, contact oardroc.vbawas@va.gov for reactivation of the VACOLS record
  • Form 9 or remand status, or assigned to the Board, contact oarops.vbawas@va.gov to coordinate with the Board for reactivation of the record, and
  • NOD, Form 9, or remand status establish an EP (170 NODs and Form 9, or EP 070 for remands) for it to be routed to a DROC for processing.
3If a survivor’s claim is received, establish the appropriate EP with a date of claim (DOC) corresponding with the date VA received the survivor’s claim and adjudicate the claim. Do not allow EP 140 or EP 190 to remain pending.Exception: When the legacy appeal pending at death is inextricably intertwined with a claim for DIC and the cause of death, the DIC claim should be left pending until a decision is rendered on the legacy appeal unless entitlement to DIC can be granted. For the purposes of this section, inextricably intertwined means that the DIC and the cause of death claim is dependent upon the outcome of the legacy appeal decision and so the appeal claim must be resolved before the pending DIC/cause of death claim can be decided.
4Once a decision is rendered on the legacy appeal, the PMC should take any action pending on the inextricably intertwined EP 140.Note: When no accrued claim has been received, the DROC will maintain jurisdiction for all award action and/or notification provided to the substitute claimant concerning the legacy appeal.

XI.ii.3.E.16.h. EP Control and Disposition for AMA Board Appeals

Follow the steps in the table below to take action on an AMA Board appeal pending in Caseflow at the time of death when VA receives a substitution or accrued claim.
StepAction
1Follow the table below when determining if the claimant is a valid substitute claimant.
If the claimant ...Then ...
is a valid substitute claimant
  • follow guidance from M21-1, Part XI, Subpart ii, 3.E.16.f , and
  • notify the Office of Administrative Review (OAR) Operations.
Notes:
  • There is no EP control for this appeal. Caseflow controls it.
  • Use the following language for the VBMS note:
Review of EP 290. Claimant was notified of favorable substitution status on [Date]. Cleared the Substitution of Claimant EP 290 on [Date]. Caseflow will control the substitution request.
is not a valid substitute claimantrefer to M21-1, Part XI, Subpart ii, 3.E.16.e.
2Contact OAR at oarops.vbawas@va.gov to coordinate with the Board for reactivation of the record pending at the time of death in Caseflow.
3If a survivor’s claim is received, establish the appropriate EP with a DOC corresponding with the date VA received the survivor’s claim and adjudicate the claim. Do not allow EP 140 or 190 to remain pending. Exception: When the AMA Board appeal pending at death is inextricably intertwined with a claim for DIC and the cause of death, the DIC claim should be left pending until the Board renders a decision on the AMA Board appeal unless entitlement to DIC can be granted. For the purposes of this section, inextricably intertwined means that the DIC and the cause of death claim is dependent upon the outcome of the AMA Board appeal and so the appeal claim must be resolved before the pending DIC/cause of death claim can be decided.
4Once a decision is rendered on the AMA Board appeal, the PMC should take any action pending on the inextricably intertwined EP 140.Note: When no accrued claim has been received the DROC will maintain jurisdiction for all award action and/or notification provided to the substitute claimant concerning the AMA Board appeal.

XI.ii.3.E.16.i. EP Control and Disposition for Initial Claims or Claims of CUEs

Follow the steps in the table below to take action on an initial claim or claim for CUEs pending at the time of death when VA receives a substitution or accrued claim.Note: If a survivor’s claim is received, establish the appropriate EP with the DOC the VA received the survivors claim.
StepAction
1Use the table below when determining if the claimant is a valid substitute claimant.
If the claimant ...Then ...
is a valid substitute claimantrefer to M21-1, Part XI, Subpart ii, 3.E.16.f.
is not a valid substitute claimantrefer to M21-1, Part XI, Subpart ii, 3.E.16.e.
2If award action is needed for the accrued claim and a standard form for accrued is received, establish EP 165 if there is no EP pending. Adjudicate the accrued claim and notify the claimant.If a standard form for accrued is not received, notify the claimant of the decision for the initial claim or CUE pending at the time of original claimant’s death. If applicable, also explain in the notification letter that any money due for accrued cannot be paid unless an application for accrued is received timely. Note: If accrued benefits are awarded to a survivor who is also receiving pension, establish an EP 150 using the date of the accrued notification letter as the DOC. Add a note in VBMS to document the reason for the EP 150. National Work Queue will route the EP 150 to a PMC to determine the impact, if any, of the accrued benefits on the pension entitlement.
3If applicable, fully adjudicate the claim for survivor’s benefits, granting or denying the claim as appropriate. Do not allow the EP 140 or 190 to remain pending. Exception: When the initial claim or claim for CUE pending at death is inextricably intertwined with a claim for DIC and the cause of death, both EPs must be worked together unless entitlement to DIC is granted.

XI.ii.3.E.16.j. EP Control and Disposition for Supplemental Claims and HLRs that were Pending at the Time of Death

Follow the steps in the table below to take action on a supplemental claim or HLR pending at the time of death when VA receives an initial substitution or initial accrued claim.Note: VSC related HLRs are processed by a DROC.
StepAction
1
  • If an accrued claim is received and there is no accrued EP pending, establish EP 165, and attach special issue
    • RO Special Issue 9 for supplemental claims, or
    • RO Special Issue 8 for HLRs.
or
  • If a substitution request is received without a standard form for accrued establish EP 290 with appropriate substitution of claimant claim label, and attach special issue
    • RO Special Issue 9 for supplemental claims, or
    • RO Special Issue 8 for HLRs.
Note: Do not establish EPs 030 and 040 while processing initial substitution or accrued claims.
2Use the below table when determining if the claimant is a valid substitute claimant.
If the claimant ...Then ...
is a valid substitute claimantrefer to M21-1, Part XI, Subpart ii, 3.E.16.f. Do not clear EP 290 after notifying the claimant of the substitution decision. EP 290 should be left pending until an accrued application is received or a decision on the supplemental claim or HLR is complete.
is not a valid substitute claimantrefer to M21-1, Part XI, Subpart ii, 3.E.16.e.
3If a survivor’s claim is received, establish the appropriate EP with the DOC corresponding with the date VA received the survivor’s claim and fully adjudicate the claim for survivor’s claim, granting or denying the claim as appropriate. Do not allow the EP 140 or 190 to remain pending.Exception: When the supplemental claim or HLR pending at the time of death is inextricably intertwined with a claim for DIC and the cause of death, the DIC claim should be left pending until a decision is rendered on the supplemental claim or HLR unless entitlement to DIC can be granted. For the purposes of this section, inextricably intertwined means that the DIC and the cause of death claim is dependent upon the outcome of the supplemental claim or HLR decision so the supplemental claim or HLR must be resolved before the pending DIC/cause of death claim can be decided.
4Once a decision is rendered on the supplemental claim or HLR, the PMC should take any action pending on the inextricably intertwined EP 140. Note: When no accrued claim has been received, the DROC will maintain jurisdiction for all award action and/or notification provided to the substitute claimant concerning the supplemental or HLR claim.

XI.ii.3.E.16.k. EP Control and Disposition for Supplemental Claims and HLRs Based on Previous Accrued Decisions

The appropriate EP 030 or EP 040 will be established to control a supplemental claim or HLR that was received in response to a previous accrued decision.Follow the steps in the table below to take action on a supplemental claim or HLR received in response to an accrued decision.Notes:
  • The EP 030 or 040 should be established with the payee code that corresponds with the claimant that submitted the HLR or supplemental claim. For example, if a surviving spouse submitted the supplemental claim or HLR, use payee 10.
  • Use Personal Computer-Generated Letters (PCGL) to notify claimants of decisions on these claims.
If accrued benefits are ...Then ...
payable
  • establish an EP 165 under the primary beneficiary’s payee code (code 00 for a Veteran, code 10 for a surviving spouse, etc.) If a rating decision is needed, it must be associated with the EP 165,
  • cancel the appropriate EP 030/040 with the following VBMS note: “accrued benefits are payable, the claim will be processed under EP 165”, and
  • complete the remaining actions to grant the accrued benefits and release a decision notice
Note: If the decision is a partial grant with duty to assist error(s), pay the partial grant under the EP 165 and continue the EP 165 to control the duty to assist error.
  • confirmed and continued, or
  • denied
  • continue processing under the EP 030/040
  • add a remark to the award print describing the decision, and
  • release a decision notice.

XI.ii.3.E.16.l. EP Control and Disposition for Supplemental Claims and HLRs Based on Previous Substitution Decisions

The appropriate EP 030 or EP 040 will be established to control a supplemental claim or HLR that was received in response to a previous substitution decision.Follow the steps in the table below to take action on a supplemental claim or HLR received in response to a substitution decision.Notes:
  • The EP 030 or 040 should be established with the payee code that corresponds with the claimant that submitted the HLR or supplemental claim. For example, if a surviving spouse submitted the supplemental claim or HLR, use payee 10.
  • Use PCGL to notify claimants of decisions on these claims.
If substitution is ...Then ...
granted
  • process under the EP 030/040, and do not continue the EP at authorization
  • add a remark to the award print describing the decision
  • release a decision notice, and
  • if applicable, process a corresponding accrued benefit claim.
  • confirmed and continued, or
  • denied
  • process under the EP 030/040
  • add a remark to the award print describing the decision, and
  • release a decision notice.
References: For more information on language to use in a letter to

XI.ii.3.E.16.m. Claims in Which the Period to File a Review Has Not Expired

When reviewing a substitution claim, if there is claim of record in which the period to file a review has not expired, a substitute claimant may exercise those review rights. However, the claimant must use the appropriate form. Use the table below to determine the process when a substitute claimant did/did not submit the required AMA review form.
If the substitute claimant ...Then follow the ...
submitted the required AMA review formsteps in M21-1, Part XI, Subpart ii, 3.E.16.j.
did not submit the required AMA review formprocess in M21-1, Part XI, Subpart ii, 3.B.3.c. Notes:
  • If there is
    • only an EP 165 pending, change it to an EP 290, or
    • no EP pending, establish EP 290 with the appropriate substitution of claimant claim label, and
    • clear it to issue a decision on substitution status.
  • If there is an accompanying EP 140 or 190, no additional EP 165 will be established. However, a one-time clear of EP 290 with the appropriate substitution of claimant claim label is warranted to issue a decision on the substitution status.

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