M21-1 Manual  /  Part XIII, Subpart i, Chapter 2, Section A

Automobile and Adaptive Equipment Allowance Under 38 U.S.C. Chapter 39

M21-1, Part XIII, Subpart i, Chapter 2, Section A

Overview

In This Section

This section contains the following topics:
TopicTopic Name
1Eligibility for Automobile and Adaptive Equipment Allowance
2Application for Automobile and Adaptive Equipment Allowance
3Rating Claims for Automobile and Adaptive Equipment Allowance
4Notifying Claimants of Automobile and Adaptive Equipment Allowance Eligibility
5Processing Claims for Automobile and Adaptive Equipment Allowance
6Processing and Paying Eligibility Requests and Certificates of Eligibility
7Processing Disagreements with Decisions on Automobile and Adaptive Equipment Allowance Claims

1. Eligibility for Automobile and Adaptive Equipment Allowance

Introduction

This topic contains information on eligibility for automobile and adaptive equipment allowance, including

  • eligibility requirements for financial assistance for a conveyance
  • issuing a certificate of eligibility
  • eligibility requirements for adaptive equipment
  • definition of adaptive equipment
  • Veterans who do not qualify for benefits
  • eligibility for 38 U.S.C. Chapter 31 beneficiaries
  • reduction of benefits due to a tort judgment or settlement, and
  • terminating entitlement to automobile and adaptive equipment allowance.

Change Date

December 11, 2023

XIII.i.2.A.1.a. Eligibility Requirements for Financial Assistance for a Conveyance

To be eligible for financial assistance in purchasing a new or used automobile (or other conveyance), a Veteran or service member must have acquired one of the following disabilities as a result of injury or disease incurred or aggravated during active military service, or as a result of medical treatment or examination, vocational rehabilitation, or compensated work therapy provided by the Department of Veterans Affairs (VA) (38 U.S.C. 1151):

XIII.i.2.A.1.b. Issuing a Certificate of Eligibility

A certificate of eligibility for financial assistance in the purchase of a new or used automobile or other conveyance may be made
  • in an amount not exceeding the amount specified in 38 U.S.C. 3902, and
  • if the eligibility requirements are met.
Prior to January 5, 2023, only one automobile allowance was authorized in the Veteran’s or service member’s lifetime except as specified in 38 U.S.C. 3903(a)(2), which was previously added by PL 112-154 to authorize VA to provide or assist in providing a second automobile or other conveyance when the
  • vehicle previously purchased with VA financial assistance was destroyed as a result of a natural or other disaster
  • destruction was not the Veteran’s or service member’s fault, and
  • Veteran or service member did not receive compensation for the loss from a property insurer.
Effective January 5, 2023, PL 117-333, Veterans Auto and Education Improvement Act of 2022, further amended 38 U.S.C. 3903(a) to change the general limitation on automobile allowance grants that previously restricted this to a once-in-a-lifetime benefit. As of the date of enactment of PL 117-333, VA may provide or assist in providing an additional automobile or other conveyance if more than 30 years have passed since the Veteran or service member most recently received VA financial assistance to purchase an automobile or other conveyance. Important:
  • PL 117-333 did not change the authority to provide or assist in providing a second automobile or other conveyance under the disaster replacement provisions of PL 112-154. A second automobile or other conveyance may still be provided under PL 112-154 when the requirements outlined above are met.
  • The law prohibits VA from making payments for automobile/conveyance grants directly to Veterans or service members. VA is required to pay the benefit to the seller.
Notes:
  • In accordance with the statutory language of 38 U.S.C. 3903(a)(2), the term second automobile allowance will continue to be used when referring to a subsequent automobile allowance under the disaster replacement provisions of PL 112-154, even if it may not technically be the second allowance the claimant receives.
  • In accordance with the statutory language of 38 U.S.C. 3903(a)(3), the term additional automobile allowance will be used when referring to a subsequent automobile allowance under the provisions of PL 117-333 (more than 30 years since the most recent automobile allowance).
  • The term automobile or other conveyance is not defined in the statute or regulation. It is written and interpreted broadly to allow VA the maximum authority to approve the financial assistance. The term encompasses a wide variety of drivable motorized vehicles including, but not limited to, cars and station wagons, sport utility vehicles, minivans or vans, pickup trucks, motor homes, and commercial trucks or farm machines such as a tractor, harvester, or combine.
  • The Chief Medical Director or designee makes the determination as to what is specifically necessary for the disability or individual, including whether a specific requested conveyance is or is not necessary for the disability or individual.
References: For more information on processing requests for
  • additional automobile allowance as authorized by PL 117-333, see M21-1, Part XIII, Subpart i, 2.A.5.b, and
  • second automobile allowance under the disaster replacement provisions of PL 112-154, see M21-1, Part XIII, Subpart i, 2.A.5.c.

XIII.i.2.A.1.c. Eligibility Requirements for Adaptive Equipment

A Veteran or service member who qualifies for the automobile allowance also qualifies for adaptive equipment. To be eligible to receive only adaptive equipment (as opposed to the automobile allowance), the Veteran or service member must be entitled to disability compensation for ankylosis of one or both knees or hips based on Notes:
  • The adaptive equipment benefit may be paid more than once, and it may be paid to either the seller or the Veteran/service member.
  • Adaptive equipment may not be provided for more than two vehicles at a time or during any four-year period.
References: For more information on

XIII.i.2.A.1.d. Definition: Adaptive Equipment

The term adaptive equipment includes, but is not limited to
  • power steering
  • power brakes
  • power window lifts
  • power seats
  • special equipment necessary to assist the eligible person into and out of the automobile or other conveyance, and
  • nonarticulating trailers solely designed to transport powered wheelchairs, powered scooters, or other similar mobility devices.

XIII.i.2.A.1.e. Veterans Who Do Not Qualify for Benefits

Even though compensation for disability of paired service-connected (SC) and non-service-connected (NSC) organs is payable under 38 CFR 3.383, Veterans do not qualify for the automobile and adaptive equipment allowance based on bilateral visual impairment if the impairment of vision in one eye is due to an NSC disease or injury. Notes:

Reference: For more information on entitlement to compensation for loss of paired SC and NSC organs or extremities, see 38 U.S.C. 1160.

XIII.i.2.A.1.f. Eligibility for 38 U.S.C. Chapter 31 Beneficiaries

Automobile adaptive equipment may be furnished to a beneficiary under 38 U.S.C. Chapter 31 if Veteran Readiness and Employment Service determines that the equipment is necessary to
  • overcome an employment handicap to which an SC disability materially contributes, and
  • achieve the goals of the program of rehabilitation.
Reference: For more information on eligibility, see 38 CFR 21.216(a)(3).

XIII.i.2.A.1.g. Reduction of Benefits Due to a Tort Judgment or Settlement

Automobile or adaptive equipment benefits must be reduced by an “offset amount” in cases where a judgment or settlement of a tort claim against the United States is granted for disability established under 38 U.S.C. 1151, if the tort judgment or settlement
  • becomes final
    • on or after December 10, 2004, but
    • before the date VA awards the automobile or adaptive equipment allowance, and
  • includes an amount specifically designated for automobiles or adaptive equipment.
Notes:
  • Contact local District Counsel to determine whether a judgment or settlement qualifies for offset.
  • If the offset amount exceeds the amount of the automobile or adaptive equipment benefits awarded, the excess amount is offset against VA compensation.
Reference: For more information on tort claims and compensation under 38 U.S.C. 1151, see M21-1, Part VIII, Subpart iv, 6.C.

XIII.i.2.A.1.h. Terminating Entitlement to Automobile and Adaptive Equipment Allowance

At the time a decision is authorized that rescinds or terminates a Veteran’s eligibility for the automobile and adaptive equipment allowance, claims processors must notify the Veterans Health Administration (VHA) Prosthetic and Sensory Aids Service (PSAS). Send e-mail notification, with a copy of the rating decision Narrative and Codesheet, to VHA-PSAS (VHAPSASBenefits@va.gov) and upload the e-mail to the Veteran’s claims folder.

2. Application for Automobile and Adaptive Equipment Allowance

Introduction

This topic contains information on applications for automobile and adaptive equipment allowance, including
  • applying for
    • automobile allowance, and
    • adaptive equipment only, and
  • handling incomplete applications for the automobile allowance or adaptive equipment.

Change Date

September 5, 2019

XIII.i.2.A.2.a. Applying for Automobile Allowance

A formal claim on VA Form 21-4502, Application for Automobile or Other Conveyance and Adaptive Equipment, is required if the Veteran or service member is applying for the automobile allowance. The application for an automobile or other conveyance is considered an application for the adaptive equipment specified for the claimant’s disability by directive of the Chief Medical Director. The instructions on the VA Form 21-4502contain a list of adaptive equipment that has been preapproved for particular disabilities. Notes: References: For more information on

XIII.i.2.A.2.b. Applying for Adaptive Equipment Only

A formal claim on a VA Form 10-1394, Application for Adaptive Equipment – Automobile or Other Conveyance, is required if the Veteran or service member is entitled to adaptive equipment only. Typically, this form is provided by the outpatient clinic to the Veteran or service member for forwarding to the finance activity or submitted by the prosthetics department on the Veteran’s or service member’s behalf to the local finance activity. A VA Form 10-1394is also required for approval of equipment not specified on the VA Form 21-4502 for the Veteran’s or service member’s particular disability.Notes:
  • There is no time limit for filing a claim for adaptive equipment based on ankylosis.
  • Upon receipt of the application, before referring the claim to the rating activity
    • establish an EP as directed in M21-4, Appendix B
    • for initial claims, select the claim label Vehicular Adaptive Equipment, and
    • send the claimant the notice required under 38 U.S.C. 5103, when needed.
  • There are several claim labels that can be appropriate in initial claims for adaptive equipment only. In most cases involving SC compensation, use Vehicular Adaptive Equipment as provided above. However, the DRAS Vehicular Adaptive Equipment or IDES Vehicular Adaptive Equipment labels may be needed in some cases.
  • Where one of the adaptive-equipment-only claim labels is applicable, it is important that it is properly applied to ensure appropriate prioritization through NWQ. NWQ prioritizes the distribution of initial adaptive equipment claims using the claim label.
References: For more information on

XIII.i.2.A.2.c. Handling Incomplete Applications for the Automobile Allowance or Adaptive Equipment

If an application from a person on active duty is incomplete in any essential part or the medical evidence or service status is insufficiently documented
  • return the application to the VA prosthetics department, if it is responsible for the deficiency; otherwise
  • advise the service member of the deficiency, and
  • ask the service member to obtain the necessary evidence.

3. Rating Claims for Automobile and Adaptive Equipment Allowance

Introduction

This topic contains information on rating claims for automobile or adaptive equipment allowance, including

  • referring automobile or adaptive equipment claims to the rating activity
  • when to prepare a rating decision for automobile or adaptive equipment eligibility
  • definition of deep partial thickness and full thickness burns, and
  • determining eligibility based on burn injury.

Change Date

November 6, 2017

XIII.i.2.A.3.a. Referring Automobile or Adaptive Equipment Claims to the Rating Activity

If prior rating decisions do not establish the existence of a qualifying SC disability, refer the claim to the rating activity following completion of any necessary development.

XIII.i.2.A.3.b. When to Prepare a Rating Decision for Automobile or Adaptive Equipment Eligibility

Prepare a rating decision whenever
  • a claim for automobile or adaptive equipment is received from a Veteran or service member and the issue has not been previously considered, or
  • the issue of eligibility for automobile or adaptive equipment is inferred from a disability rating that fulfills the applicable disability criteria.
Important: If the Veteran or service member submits a claim for a subsequent automobile allowance, process the request in accordance with the instructions M21-1, Part XIII, Subpart i, 2.A.5.b or c, as applicable.

XIII.i.2.A.3.c. Definition: Deep Partial Thickness and Full Thickness Burns

Deep partial thickness burns occur when there is complete destruction of the epidermis and severe damage to the dermal layer. Full thickness burns occur when there is complete destruction of the epidermis and dermis. There may also be damage to the underlying subcutaneous fat layer.

XIII.i.2.A.3.d. Determining Eligibility Based on Burn Injury

To determine eligibility for financial assistance in the purchase of an automobile or other conveyance and adaptive equipment based on burn injury, the rating activity should
  • look for any full thickness or deep partial thickness scars that cause contracture and limit motion of one or more extremities or the trunk and
  • review medical and lay statements for credible evidence that the burn injury precludes effective operation of an automobile.
Notes:
  • If the extent or cause of the limitation is not clear, request an examination for the joint or joints affected to clarify the extent of the disability and/or its link to the SC injury.
  • Do not request a medical opinion as to whether the functional limitation of the severe burn scar prevents effective operation of an automobile. This is a legal, rather than a medical, determination.
Reference: For more information on considering issues within the scope of the claim, see M21-1, Part V, Subpart ii, 3.A.2.

4. Notifying Claimants of Automobile and Adaptive Equipment Allowance Eligibility

Introduction

This topic contains information on notifying claimants of awards and denials, including notifying claimants of
  • potential automobile allowance eligibility, and
  • the reason for denial of the automobile allowance claim.

Change Date

August 8, 2025

XIII.i.2.A.4.a. Notifying Claimants of Potential Automobile Allowance Eligibility

Use the table below to inform the claimant of potential eligibility after receiving the rating decision.
If the Veteran or service member is eligible for …Then …
the automobile allowance
  • furnish VA Form 21-4502, if one is not of record, and
  • instruct the claimant to
    • complete all items in Sections I and II, and
    • return the form to the nearest VA regional office (RO).
adaptive equipment only
  • furnish VA Form 10-1394, and
  • instruct the claimant to
    • complete all items in Part I, and
    • return the completed form to the nearest VA medical facility.

XIII.i.2.A.4.b. Notifying Claimants of the Reason for Denial of the Automobile Claim

If an application is not approved, fully inform the claimant of the
  • evidence considered
  • findings favorable to the claimant under 38 CFR 3.104(c), and
  • reason for denial.
References: For more information on
  • completing the rating decision narrative, see M21-1, Part V, Subpart iv, 1.A, and
  • disagreements related to a denial of a claim for automobile and adaptive equipment allowance, see M21-1, Part XIII, Subpart i, 2.A.7.

5. Processing Claims for Automobile and Adaptive Equipment Allowance

Introduction

This topic contains information on processing claims for automobile and adaptive equipment allowance, including
  • reviewing VA Form 21-4502 and determining prior payment status
  • processing requests for
    • additional automobile allowance based on PL 117-333, and
    • second automobile allowance based on destruction as a result of natural or other disaster
  • entitlement based on vehicle lease, and
  • determining whether the vehicle is purchased or leased.

Change Date

August 8, 2025

XIII.i.2.A.5.a. Reviewing VA Form 21-4502 and Determining Prior Payment Status

Follow the steps in the table below to determine whether prior payment has been made following receipt and review of VA Form 21-4502, with claimant-completed entries in Sections
  • I, Veteran/Service Member's Identification Information, and
  • II, Application Information.
StepAction
1Does the claims folder contain a copy of a prior VA Form 21-4502 annotated by the finance activity indicating prior payment of the automobile allowance?
  • If yes, go to Step 8.
  • If no, go to the next step.
Important: Historically, when a VA Form 21-4502 was processed, the form was filed in the left flap of a paper claims folder. However, it is important to review the entire paper claims folder or electronic claims folder (eFolder) to identify a prior payment.
2Does the claimant’s corporate record show one or more of the following corporate flashes:
  • Auto Allowance Paid – Initial
  • Second Auto Allowance Paid – Catastrophe, or
  • Addl Auto Allowance Paid – 30+ years?
  • If yes, go to Step 8.
  • If no, go to the next step.
Note: The corporate flashes listed above are added by the finance activity when payment of an automobile allowance is authorized. Reference: For more information on corporate flashes, see M21-4, Appendix E, 1.b.
3Does the Share M15 screen display
  • a Y in the Auto Allowance Paid field, or
  • the terminal digit of the year in which the last payment was made in the Auto Adaptive Equipment field?
  • If yes, go to Step 8.
  • If no, go to the next step.
4Did a prior rating decision establish eligibility to the automobile or adaptive equipment allowance?
  • If yes, go to Step 6.
  • If no,
    • send a Section 5103 notice to the claimant
    • refer the claim to the rating activity for consideration after the duty-to-notify/assist response period has expired, and
    • go to the next step.
5Did the rating activity establish eligibility to either the automobile or adaptive equipment allowance?
  • If yes, go to Step 9.
  • If no,
    • deny the claim, and
    • notify the claimant accordingly.
Reference: For more information on decision notice requirements, see M21-1, Part VI, Subpart i, 1.B.1.b.
6Does either of the following situations apply?
  • There is indication that adaptive equipment payments have been made.
  • There is any other evidence indicating a prior automobile allowance may have been paid.
  • If yes,
    • send a request to the finance activity to
      • review for prior payment, and
      • provide the most recent payment date of automobile allowance, if prior payment was made, and
    • after the finance activity completes the review and returns the requested information,
      • place the response in the claims folder, and
      • go to the next step.
  • If no, go to Step 9.
7Does the finance activity’s review show that a prior payment for an automobile or conveyance was made?
  • If yes, go to the next step.
  • If no, go to Step 9.
8Follow the instructions in the table below.
If the claim is for …Then …
an automobile or conveyance, and the Veteran or service member is not contending entitlement to a second allowance based on the disaster replacement provisions of PL 112-154process the claim in accordance with M21-1, Part XIII, Subpart i, 2.A.5.b.
an automobile or conveyance and the Veteran or service member
  • is contending entitlement to a second allowance based on the disaster replacement provisions of PL 112-154, and
  • has not previously received a second allowance under the provisions of PL 112-154
process the claim in accordance with M21-1, Part XIII, Subpart i, 2.A.5.c.
an automobile or conveyance and the Veteran or service member
  • is contending entitlement to a second allowance based on the disaster replacement provisions of PL 112-154, but
  • previously received a second allowance under the provisions of PL 112-154
process the claim in accordance with M21-1, Part XIII, Subpart i, 2.A.5.b. Note: If a second allowance under the disaster replacement provisions of PL 112-154 was previously paid, then the claim must be considered under the general provisions for additional automobile allowance authorized by PL 117-333.
adaptive equipment
  • prior payment does not necessarily disqualify the application, and
  • go to the next step.
9Complete VA Form 21-4502, Section III, Certificate of Eligibility, by entering all the qualifying disabilities.
10Have VA Form 21-4502 signed (in wet or digital/electronic format) by the Veterans Service Center Manager (VSCM) or by a designee no lower than coach.Reference: For more information on signatures, see M21-1, Part II, Subpart i, 2.B.2.
11
  • Release the VA Form 21-4502 with Section III completed to the applicant along with the decision notification letter
  • clear the pending EP, and
  • if there is a claim for adaptive equipment, refer the claim to the finance activity.
References: For more information on
  • decision notice requirements, see M21-1, Part VI, Subpart i, 1.B.1.b, and
  • the requirement of referring claims for adaptive equipment to the finance activity, see M21-1, Part XIII, Subpart i, 2.A.6.f.
12Place a copy of the VA Form 21-4502 in the claims folder.

XIII.i.2.A.5.b. Processing Requests for Additional Automobile Allowance Based on PL 117-333

Follow the steps in the table below to process claims for additional automobile allowance based on the provisions of PL 117-333 (additional allowance authorized if more than 30 years have passed since the most recent automobile allowance). Important: If the claim is for a second automobile allowance based on destruction by natural or other disaster and a second allowance under PL 112-154 has not previously been paid, process the claim in accordance with M21-1, Part XIII, Subpart i, 2.A.5.c.
StepAction
1Did the prior payment review (described in M21-1, Part XIII, Subpart i, 2.A.5.a) confirm the date that the most recent automobile allowance was paid?
  • If yes, go to Step 3.
  • If no, go to the next step.
2When there is evidence of prior payment of an automobile allowance but the most recent payment date is unclear,
  • send a request to the finance activity for the most recent payment date of automobile allowance, and
  • after the finance activity returns the requested information,
    • place the response in the claims folder, and
    • go to the next step.
3In the eFolder in the Veterans Benefits Management System (VBMS), edit the SUBJECT field of the VA Form 21-4502 to identify the evidence that shows the date the most recent automobile allowance payment occurred. Note: The most recent automobile allowance payment could be an initial (first-time) automobile allowance or a subsequent payment, such as a second automobile allowance granted under PL 112-154. Reference: For more information on editing document properties, see the VBMS User Guide.
4Did the prior payment review and/or response from the finance activity confirm that the most recent automobile allowance was paid more than 30 years ago?
  • If yes, go to the next step.
  • If no,
    • deny the claim, and
    • notify the claimant accordingly.
Reference: For more information on decision notice requirements, see M21-1, Part VI, Subpart i, 1.B.1.b.
5Complete VA Form 21-4502, Section III, Certificate of Eligibility, by entering all the qualifying disabilities.
6Have VA Form 21-4502 signed (in wet or digital/electronic format) by the VSCM or by a designee no lower than a coach.Reference: For more information on signatures, see M21-1, Part II, Subpart i, 2.B.2.
7
  • Release the VA Form 21-4502 with Section III completed to the applicant, and
  • send a decision notification letter that includes the language shown below, inserted as free text following VBMS-generated language.
Please note, although your application with Section III, Certificate of Eligibility, is completed and signed for obtaining an additional automobile allowance, you may not be eligible to receive adaptive equipment on the purchased vehicle if there are at least two automobiles or other conveyances for which you have received adaptive equipment within the past four years. (38 CFR 17.158(a)).The only exception to 38 CFR 17.158(a) is when there is an event that is beyond the control of the eligible person, such as where the vehicle was lost due to fire, theft, accident, or court action, when repairs are so costly as to be prohibitive, or a different vehicle is required due to a change in the eligible person's physical condition. Important: Please contact your local Veterans Health Administration (VHA) Prosthetic and Sensory Aids Service (PSAS) prior to obtaining any (new or used) adaptive equipment. VA may deny claims for payment or reimbursement if eligibility has not been established or eligibility for new or used adaptive equipment is not verified by VHA.

​​​​​​​

Reference: For more information on decision notice requirements, see M21-1, Part VI, Subpart i, 1.B.1.b.

8
  • Clear the pending EP, and
  • if there is a claim for adaptive equipment, refer the claim to the finance activity.
Reference: For more information on the requirement of referring claims for adaptive equipment to the finance activity, see M21-1, Part XIII, Subpart i, 2.A.6.f.
9Place a copy of VA Form 21-4502 in the claims folder.

XIII.i.2.A.5.c. Processing Requests for Second Automobile Allowance Based on Destruction as a Result of Natural or Other Disaster

ROs must refer all claims for a second automobile allowance based on the disaster replacement provisions of PL 112-154 to Compensation Service for an advisory opinion, unless review of the claims folder demonstrates that the second allowance under PL 112-154 was previously paid.Follow the steps in the table below to route claims for second automobile allowances based on PL 112-154 to Compensation Service for review.Important: If a second automobile allowance under PL 112-154 was previously paid, process the claim as a claim for additional automobile allowance in accordance with M21-1, Part XIII, Subpart i, 2.A.5.b.
StepAction
1Prepare a memorandum using the format prescribed in M21-1, Part X, Subpart v, 1.A.1.h, and in it, include the following:
  • Veteran’s or service member’s name
  • file number
  • date of previous automobile allowance grant
  • make, model, and year of vehicle purchased with previous grant
  • circumstances surrounding the vehicle’s destruction, including date (month, day, and year) of destruction
  • city and state where vehicle was located at the time of destruction
  • description of the disaster and damage done to the vehicle, and
  • verbal or written confirmation certifying to VA that the Veteran or service member has not received compensation from an insurer for the loss.
2Treat the memorandum as the equivalent of an administrative decision, and follow the instructions in M21-1, Part X, Subpart v, 1.C.2.i to obtain and document all required signatures.
3Upload the memorandum and any other relevant documentation to the eFolder in VBMS.
4Add the
  • Compensation Service Review – Opinion special issue indicator to at least one contention, and
  • Compensation Service Case Review tracked item.
5Is the claim being processed in the NWQ environment?
  • If yes, take no further action, as the claim will be routed to Compensation Service automatically.
  • If no, manually broker the claim to Compensation Service (Washington DC).
Important: Send any questions concerning the processing or referral of requests for second automobile allowances under PL 112-154 to VAVBAWAS/CO/214DADVISORYANDSRT. References: For more information on
  • eligibility requirements for a second automobile allowance based on destruction as a result of natural or other disaster, see
  • NWQ claims processing, see the NWQ Playbook, and
  • brokering claims, see the VBMS Core User Guide.

XIII.i.2.A.5.d. Entitlement Based on Vehicle Lease

The transfer of possession of a vehicle under a contract amounting to a lease does not qualify for the automobile allowance under 38 U.S.C. 3902(a).

XIII.i.2.A.5.e. Determining Whether the Vehicle Is Purchased or Leased

Use the table below to determine whether the vehicle is purchased or leased.
When the …Then the agreement is a …
applicant and vendor are absolutely bound at the outset to a purchase and salepurchase.
  • applicant
    • retains the option of considering the payments as rent, and
    • is not obligated to purchase the vehicle at the end of the lease period, or
  • dealer retains the right to take the car back even after the applicant meets all the payments due
lease.

6. Processing and Paying Eligibility Requests and Certificates of Eligibility

Introduction

This topic contains information on processing and paying eligibility requests and certificates of eligibility, including
  • payment if the vehicle was purchased before adjudicative action established eligibility
  • receiving eligibility requests for vehicles acquired prior to receipt of allowance
  • processing eligibility requests for vehicles acquired prior to receipt of allowance
  • finance activity responsibility to record and report the payment
  • preventing duplicate payment, and
  • referring adaptive equipment claims to the finance activity.

Change Date

August 8, 2025

XIII.i.2.A.6.a. Payment if the Vehicle Was Purchased Before Adjudicative Action Established Eligibility

Ordinarily, an application on VA Form 21-4502 is completed and approved by the authorization activity to certify eligibility before the claimant takes possession of, or title to, the vehicle. However, payment of the automobile allowance is not precluded if the vehicle was purchased before the adjudicative action establishing eligibility, provided the claimant was actually eligible on the date on which the claimant signed the sales contract. The claimant’s eligibility is controlled by the effective date of the qualifying disability.

XIII.i.2.A.6.b. Receiving Eligibility Requests for Vehicles Acquired Prior to Receipt of Allowance

The Veterans Service Center (VSC) receives requests in duplicate for eligibility data for reimbursement of adaptive equipment for a vehicle acquired prior to receipt of the automobile allowance from the medical center or outpatient clinic. The request identifies the claimant and the reason for the request. Example: “Was claimant eligible under 38 U.S.C. 3902 on [Date expense was incurred for purchase, installation, repair, or reinstallation of adaptive equipment]?”

XIII.i.2.A.6.c. Processing Eligibility Requests for Vehicles Acquired Prior to Receipt of Allowance

After receiving eligibility requests for vehicles acquired prior to receipt of the automobile allowance, use the table below to determine eligibility.
If …Then …
the claimant has not previously filed a claim for the automobile allowance and adaptive equipmentdetermine basic eligibility as described in M21-1, Part XIII, Subpart i, 2.A.1.
  • there is evidence of entitlement or non-entitlement on record, or
  • a determination of basic eligibility has already been made
  • determine the eligibility of the claimant for an automobile allowance on the date furnished by the medical facility
  • annotate the request form to show Claimant (was) (was not) eligible on [date furnished by the medical facility]
  • add a copy of the eligibility request in the claims folder, and
  • return the annotated form to the requester.
a request for eligibility for adaptive equipment only is received (based on SC ankylosis)review the claims folder to determine if the Veteran or service member is entitled. If the Veteran/service member is entitled, annotate the request to show
  • eligibility because of SC ankylosis (LOU) of one or both knees or hips.
  • If eligibility is not established, furnish a copy of the rating decision.

XIII.i.2.A.6.d. Finance Activity Responsibility to Record and Report the Payment

When the VA Form 21-4502 with Section IV, Receipt for Automobile or Other Conveyance and Adaptive Equipment, completed by the claimant is returned and scheduled for payment, the finance activity Note: If VA Form 21-4502 is received in the VSC with Sections III and IV already completed, the claims processor must
  • cancel the pending EP, if one was established, and
  • route the form to the finance activity for processing.
Reference: For more information on corporate flashes, see M21-4, Appendix E, 1.b.

XIII.i.2.A.6.e. Preventing Duplicate Payment

The VSC permanently retains the annotated copy(ies) of VA Form 21-4502 in the claims folder to prevent duplicate payment in the event a subsequent claim is received and the criteria for a subsequent (second or additional) automobile allowance provided in 38 U.S.C. 3903(a) are not met.Reference: For more information on the circumstances in which a subsequent automobile allowance may be warranted, see M21-1, Part XIII, Subpart i, 2.A.1.b.

XIII.i.2.A.6.f. Referring Adaptive Equipment Claims to the Finance Activity

Refer all claims for adaptive equipment to the finance activity. The finance activity will determine if the adaptive equipment is preapproved for reimbursement based upon the effective date of entitlement, the Veteran’s SC disability, or specific authorization by the local VA outpatient clinic. If it is not, then the finance activity will forward the claim to the outpatient clinic serving the applicant's residence. The designee of the Chief Medical Director will consider the claim. The prosthetic department will signify its approval by completing VA Form 10-1394. This form is then returned to finance for payment. These claims may be independent of any initial or subsequent application for an automobile, and may involve repair, replacement, or reinstallation of adaptive equipment.

7. Processing Disagreements With Decisions on Automobile and Adaptive Equipment Allowance Claims

Change Date

March 1, 2019

XIII.i.2.A.7.a. Disagreements With Decisions on Automobile and Adaptive Equipment Allowance Claims

Use the table below to determine the next steps when the claimant files a disagreement relating to the denial of a claim for automobile and adaptive equipment allowance.
If …Then the …
the denial resulted from a determination that the criteria for basic eligibility were not metauthorization activity addresses the disagreement and processes any pending legacy appeals.
  • the claimant has established basic eligibility to the automobile allowance and adaptive equipment, and
  • the issue is the result of denial by the medical facility for certain adaptive equipment
  • authorization activity transfers the claims folder to the medical facility to prepare a decision on the issue, and
  • medical facility returns the decision and claims folder to the authorization activity for release of the decision.
a legacy substantive appeal is filed because of denial by the medical facilityauthorization activity forwards the claims folder to the medical facility for processing and certification of the legacy appeal.

Source: VA M21-1 Adjudication Procedures Manual, M21-1, Part XIII, Subpart i, Chapter 2, Section A (U.S. government work, reproduced for reference). Browse all sections →