### Section D. DIC in Nonservice-Connected (NSC) Death Cases

#### Overview

+------------+---------------------------------------------------------+
| #          | > This section contains the following topics:           |
| #### In th |                                                         |
| is Section |                                                         |
+------------+---------------------------------------------------------+

  ------------ ---------------------------------------------- ------------
  Topic        Topic Name                                     See Page

  18           General Information on DIC Payable in NSC      3-D-2
               Death Cases                                    

  19           Rating Activity Review to Determine if Cause   3-D-4
               of Death Is Service-Connected (SC)             

  20           Prohibition Against Duplication of Benefits    3-D-6
  ------------ ---------------------------------------------- ------------

#### 18. General Information on DIC Payable in NSC Death Cases 

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains general information on Dependency |
| troduction | > and Indemnity Compensation (DIC) payable in           |
|            | > nonservice-connected (NSC) death cases. It includes   |
|            | > information on                                        |
|            |                                                         |
|            | -   considering entitlement to DIC under the provisions |
|            |     of 38 U.S.C. 1318                                   |
|            |                                                         |
|            | -   identifying qualifying disabilities under 38 U.S.C. |
|            |     1151 and 38 U.S.C.1160                              |
|            |                                                         |
|            | -   determining when DIC is not payable under 38 U.S.C. |
|            |     1318, and                                           |
|            |                                                         |
|            | -   establishing a surviving spouse's entitlement to    |
|            |     DIC under 38 U.S.C. 1318.                           |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > November 16, 2006                                     |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a.   | > Pay Dependency and Indemnity Compensation (DIC) under |
| Considerin | > the provisions of [38 U.S.C.                          |
| g Entitlem | > 1318](http://straylight.law.cornell.edu               |
| ent to DIC | /uscode/html/uscode38/usc_sec_38_00001318----000-.html) |
|  Under the | > to a surviving spouse or children in the same manner  |
|  Provision | > as if the death were service-connected (SC), if a     |
| s of 38 U. | > veteran was in receipt of, or entitled to receive,    |
| S.C. 1318  | > compensation for a totally disabling SC disability    |
|            |                                                         |
|            | -   for ten or more years immediately preceding death   |
|            |                                                         |
|            | -   continuously for a period of not less than five     |
|            |     years from the date of separation from service      |
|            |     until death, or                                     |
|            |                                                         |
|            | -   for a period of not less than one year immediately  |
|            |     preceding death for a former prisoner of war who    |
|            |     died after September 30, 1999.                      |
|            |                                                         |
|            | > ***Important***: A total rating based on individual   |
|            | > unemployability (IU) meets the total disability       |
|            | > requirement under [38 CFR                             |
|            | > 3.22](http://                                         |
|            | www.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_22.DOC). |
|            | >                                                       |
|            | > ***Reference***: This benefit is payable under the    |
|            | > authority of [38 U.S.C.                               |
|            | > 1318](http://straylight.law.cornell.edu/              |
|            | uscode/html/uscode38/usc_sec_38_00001318----000-.html). |
+------------+---------------------------------------------------------+

Continued on next page

18\. General Information on DIC Payable in NSC Death Cases, Continued

+------------+---------------------------------------------------------+
| ####       | > The following disabilities qualify for payment of DIC |
| # b. Ident | > under [38 U.S.C.                                      |
| ifying Qua | > 1318](http://straylight.law.cornell.edu/              |
| lifying Di | uscode/html/uscode38/usc_sec_38_00001318----000-.html): |
| sabilities |                                                         |
|  Under 38  | -   a disability acquired under [38 U.S.C.              |
| U.S.C. 115 |     1151](http://straylight.law.cornell.edu             |
| 1 and 38 U | /uscode/html/uscode38/usc_sec_38_00001151----000-.html) |
| .S.C. 1160 |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   after discharge from service as a result of         |
|            |     treatment in a Department of Veterans Affairs (VA)  |
|            |     medical facility, or                                |
|            |                                                         |
|            | -   as a result of vocational rehabilitation training   |
|            |     under any VA-administered law, and                  |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   disabilities for which disability compensation was  |
|            |     granted for paired organs or extremities under [38  |
|            |     U.S.C.                                              |
|            |     1160](http://straylight.law.cornell.edu/            |
|            | uscode/html/uscode38/usc_sec_38_00001160----000-.html). |
|            |                                                         |
|            | > ***Reference***: See M21-1MR, Part IV, Subpart iii,   |
|            | > 3.G for information on benefits under [38 U.S.C.      |
|            | > 1151](http://straylight.law.cornell.edu/              |
|            | uscode/html/uscode38/usc_sec_38_00001151----000-.html). |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > DIC under [38 U.S.C.                                  |
| # c. Ident | > 1318](http://straylight.law.cornell.edu               |
| ifying Sit | /uscode/html/uscode38/usc_sec_38_00001318----000-.html) |
| uations Wh | > is *not* payable if the                               |
| en DIC Is  |                                                         |
| Not Payabl | -   cause of death is found to have been the result of  |
| e Under th |     the veteran's own willful misconduct per M21-1MR,   |
| e Provisio |     Part III, Subpart v, 1.D, or                        |
| ns of 38 U |                                                         |
| .S.C. 1318 | -   veteran's death is wrongfully and intentionally     |
|            |     caused by the claimant per M21-1MR, Part III,       |
|            |     Subpart v, 1.F.24.                                  |
|            |                                                         |
|            | > ***Notes***:                                          |
|            |                                                         |
|            | -   Entitlement to DIC under the provisions of [38      |
|            |     U.S.C.                                              |
|            |     1318](http://straylight.law.cornell.edu             |
|            | /uscode/html/uscode38/usc_sec_38_00001318----000-.html) |
|            |     does not establish entitlement to other benefits    |
|            |     based on SC death, such as the \$2,000 burial       |
|            |     allowance.                                          |
|            |                                                         |
|            | -   The provisions of [38 U.S.C.                        |
|            |     1318](http://straylight.law.cornell.edu             |
|            | /uscode/html/uscode38/usc_sec_38_00001318----000-.html) |
|            |     establish potential entitlement *only* to benefits  |
|            |     under [38 U.S.C. Chapter                            |
|            |     13](http://straylight.law.cornell.ed                |
|            | u/uscode/html/uscode38/usc_sup_01_38_10_II_20_13.html). |
|            |                                                         |
|            | -   A surviving spouse may be considered for            |
|            |     entitlement to an NSC pension if entitlement to DIC |
|            |     cannot be established because the veteran's death   |
|            |     was due to the veteran's willful misconduct.        |
+------------+---------------------------------------------------------+

Continued on next page

18\. General Information on DIC Payable in NSC Death Cases, Continued

+------------+---------------------------------------------------------+
| ####       | > In order to establish entitlement to DIC under [38    |
| # d. Estab | > U.S.C.                                                |
| lishing th | > 1318](http://straylight.law.cornell.edu/              |
| e Survivin | uscode/html/uscode38/usc_sec_38_00001318----000-.html), |
| g Spouse's | > a surviving spouse must have been married to the      |
|  Entitleme | > veteran for                                           |
| nt to DIC  |                                                         |
| Under 38 U | -   at least one year immediately preceding the         |
| .S.C. 1318 |     veteran's death, or                                 |
|            |                                                         |
|            | -   any period, if a child was born to them during or   |
|            |     before the marriage.                                |
+------------+---------------------------------------------------------+

#### 19. Rating Activity Review to Determine if Cause of Death Is Service-Connected (SC)

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on rating activity    |
| troduction | > review to determine if the cause of death is          |
|            | > service-connected (SC). It includes information on    |
|            |                                                         |
|            | -   action by rating activity to determine cause of     |
|            |     death                                               |
|            |                                                         |
|            | -   deferred cause of death determinations              |
|            |                                                         |
|            | -   consideration for payment under 38 U.S.C. 1318 if   |
|            |     the rating activity denies service connection for   |
|            |     the cause of death, and                             |
|            |                                                         |
|            | -   consideration for a veteran not compensated due to  |
|            |     retired pay.                                        |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > November 16, 2006                                     |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > Refer cases to the rating activity to determine if    |
| ### a. Act | > the cause of death was SC.                            |
| ion by Rat | >                                                       |
| ing Activi | > The rating activity reviews all cases in which the    |
| ty to Dete | > veteran was rated totally disabled at the time of     |
| rmine Caus | > death for consideration as to whether the cause of    |
| e of Death | > death is service-connected.                           |
|            | >                                                       |
|            | > ***Reference***: For more information on referrals    |
|            | > for ratings decisions when death occurs after         |
|            | > service, see M21-1MR, Part III, Subpart ii, 7.5.      |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | If development is needed to determine service           |
| # b. Decis | connection for cause of death, and eligibility to       |
| ion on Cau | payment under [38 U.S.C.                                |
| se of Deat | 1318](http://straylight.law.cornell.edu                 |
| h Deferred | /uscode/html/uscode38/usc_sec_38_00001318----000-.html) |
|            | exists, the                                             |
|            |                                                         |
|            | -   rating activity                                     |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   prepares a rating decision granting entitlement to  |
|            |     this benefit                                        |
|            |                                                         |
|            | -   defers the issue of service connection for cause of |
|            |     death, and                                          |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   authorization activity                              |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   prepares an award using special law (SL) code 19,   |
|            |     and                                                 |
|            |                                                         |
|            | -   annotates the award "Decision of SC death           |
|            |     deferred."                                          |
|            |                                                         |
|            | > ***Note***: If a subsequent rating action establishes |
|            | > service connection for the cause of death             |
|            |                                                         |
|            | -   remove the SL code 19, and                          |
|            |                                                         |
|            | -   notify the beneficiary of the change in status.     |
+------------+---------------------------------------------------------+

Continued on next page

19\. Rating Activity Review to Determine if Cause of Death Is
Service-Connected (SC), Continued

+------------+---------------------------------------------------------+
| ##### c    | > The rating activity must consider entitlement to      |
| . Consider | > payment under [38 U.S.C.                              |
| ation for  | > 1318](http://straylight.law.cornell.edu               |
| Payment Un | /uscode/html/uscode38/usc_sec_38_00001318----000-.html) |
| der 38 U.S | > if                                                    |
| .C. 1318 i |                                                         |
| f SC Death | -   service connection for cause of death is denied,    |
|  Is Denied |     and                                                 |
|            |                                                         |
|            | -   the veteran had a totally disabling SC condition at |
|            |     the time of death.                                  |
|            |                                                         |
|            | > Use the table below to determine the appropriate      |
|            | > action to take if the rating activity determines that |
|            | > the cause of death is not SC.                         |
+------------+---------------------------------------------------------+

+----------------------------------+-----------------------------------+
| If the rating activity ...       | Then ...                          |
+----------------------------------+-----------------------------------+
| -   denies service connection    | -   prepare an award using SL     |
|     for the cause of death, and  |     code 19, and                  |
|                                  |                                   |
| -   grants entitlement to        | -   annotate the award to read    |
|     payment as if death were SC  |     "*DIC awarded per [38 U.S.C.  |
|                                  |     1318](http://straylight.law.  |
|                                  | cornell.edu/uscode/html/uscode38/ |
|                                  | usc_sec_38_00001318----000-.html) |
|                                  |     based on rating dated*        |
|                                  |     **\[date\]**."                |
+----------------------------------+-----------------------------------+
| denies                           | include a remark that these       |
|                                  | issues were considered in any     |
| -   service connection for the   | denial or pension award prepared. |
|     cause of death, and          |                                   |
|                                  |                                   |
| -   payment under [38 U.S.C.     |                                   |
|                                  |                                   |
|   1318](http://straylight.law.co |                                   |
| rnell.edu/uscode/html/uscode38/u |                                   |
| sc_sec_38_00001318----000-.html) |                                   |
+----------------------------------+-----------------------------------+

+------------+---------------------------------------------------------+
| #          | > Refer a case to the rating activity for a             |
| #### d. Co | > determination as to whether or not total benefits     |
| nsideratio | > would have been payable if a veteran was              |
| n for a Ve |                                                         |
| teran Not  | -   rated totally disabled due to SC disability for the |
| Compensate |     required period, but                                |
| d Due to R |                                                         |
| etired Pay | -   not in receipt of compensation due to receipt of    |
|            |     retired pay.                                        |
+------------+---------------------------------------------------------+

#### 20. Prohibition Against Duplication of Benefits

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on the prohibition    |
| troduction | > against duplication of benefits. It includes          |
|            | > information on                                        |
|            |                                                         |
|            | -   identifying when DIC must be recouped               |
|            |                                                         |
|            | -   determining the offset effective date               |
|            |                                                         |
|            | -   requesting updated claimant information, and        |
|            |                                                         |
|            | -   preparing awards that include an offset.            |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > December 13, 2005                                     |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > DIC *must* be recouped in an amount equal to the      |
| a. Identif | > money, and/or fair market value of the property       |
| ying When  | > received, if a claimant receives money or property of |
| DIC Must B | > value based on any cause of action for damages for    |
| e Recouped | > the death of the veteran as a result of a             |
|            |                                                         |
|            | -   judicial or administrative proceeding               |
|            |                                                         |
|            | -   settlement                                          |
|            |                                                         |
|            | -   compromise, or                                      |
|            |                                                         |
|            | -   Radiation Exposure Compensation Act (RECA)          |
|            |     settlement payment.                                 |
|            |                                                         |
|            | > ***Important***: Attorney's fees, court costs, and    |
|            | > other expenses incident to the civil claim are not    |
|            | > deductible from the total amount awarded or accepted. |
|            | >                                                       |
|            | > ***Notes***:                                          |
|            |                                                         |
|            | -   Take award action even if the claimant has made a   |
|            |     positive statement that a claim has been, or will   |
|            |     be, made through court action or administrative     |
|            |     channels.                                           |
|            |                                                         |
|            | -   The requirement for recoupment exists even if the   |
|            |     award or settlement was made prior to the passage   |
|            |     of *Public Law (PL) 95-479*.                        |
|            |                                                         |
|            | > ***Reference***: For more information on duplication  |
|            | > of benefits see M21-1MR, Part IV, Subpart iii, 3.G.   |
+------------+---------------------------------------------------------+

Continued on next page

20\. Prohibition Against Duplication of Benefits, Continued

+------------+---------------------------------------------------------+
| #####      | > Do not make the offset required in the event of a     |
| b. Determi | > judgment, compromise, or administrative award         |
| ning the O | > effective prior to the first day of the month         |
| ffset Effe | > following the month that such a judgment, compromise, |
| ctive Date | > or administrative award is granted.                   |
|            | >                                                       |
|            | > The offset effective date should be the first day of  |
|            | > the month *after* the month in which the judgment was |
|            | > made.                                                 |
|            | >                                                       |
|            | > ***Example***: If the judgment was issued March 17,   |
|            | > 2003, then the effective date of the offset would be  |
|            | > April 1, 2003.                                        |
|            | >                                                       |
|            | > ***Note***: Explain the offset requirements of the    |
|            | > law in the award letter.                              |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### c.   | > Upon initiation of recoupment, inform the claimant    |
|  Requestin | > that, although no payment of DIC may be made until    |
| g Updated  | > the amount received is recouped, the claimant *must*  |
| Claimant I | > keep VA informed of his/her current address, marital  |
| nformation | > status, and dependency changes so that there will be  |
|            | > no delay in resuming benefits.                        |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### d.   | > Prepare awards that include an offset in the regular  |
|  Preparing | > format as shown in [M21-1, Part V, Chapter            |
|  Awards Th | > 6](ht                                                 |
| at Include | tp://www.warms.vba.va.gov/admin21/m21_1/part5/ch06.doc) |
|  an Offset | > and                                                   |
|            |                                                         |
|            | -   show no withholding code or amounts on the award,   |
|            |     since this allows the payment to be made            |
|            |     automatically when the full amount to be offset has |
|            |     been recouped                                       |
|            |                                                         |
|            | -   show the amount of offset on the award form with    |
|            |     the statement *"Subject to offset of \$*            |
|            |     **\[amount\]** *under 38 U.S.C. 1318*," and         |
|            |                                                         |
|            | -   route the claims folder, with *Optional* *Form 41*  |
|            |     attached, to the finance activity, requesting       |
|            |     establishment of a 30B accounts receivable for the  |
|            |     amount to be recouped, with a deduction for the     |
|            |     full amount of the award.                           |
+------------+---------------------------------------------------------+