## Chapter 5. Elections Between Pension Programs 

#### 1. General Information on Entitlement to Old Law or Section 306 Pension and Improved Pension

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains general information on            |
| troduction | > entitlement to Old Law or Section 306 Pension and     |
|            | > Improved Pension. It includes information on          |
|            |                                                         |
|            | -   the election rights of a beneficiary entitled to    |
|            |     Old Law or Section 306 Pension                      |
|            |                                                         |
|            | -   the provisions of *Public Law (PL) 95-588*          |
|            |     regarding nonservice-connected (NSC) death benefits |
|            |                                                         |
|            | -   circumstances in which the right to continued       |
|            |     entitlement to Old Law or Section 306 Pension is    |
|            |     not protected                                       |
|            |                                                         |
|            | -   changing a beneficiary's benefit type, and          |
|            |                                                         |
|            | -   where to find more information on elections.        |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > May 14, 2007                                          |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #          | > Per [38 CFR                                           |
| #### a. El | > 3.711](http://                                        |
| ection Rig | www.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_709.DOC) |
| hts of a V | > and [38 CFR                                           |
| eteran Ent | > 3.960](http://w                                       |
| itled to O | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_960.DOC), |
| ld Law or  | > those persons who were receiving or were entitled to  |
| Section 30 | > receive pension on December 31, 1978, under laws then |
| 6 Pension  | > in effect, have a right to                            |
|            |                                                         |
|            | -   continue such pension, if otherwise entitled, or    |
|            |                                                         |
|            | -   elect to receive Improved Pension under *Public Law |
|            |     (PL) 95-588.*                                       |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### b.   | > Under the provisions of *PL 95-588*, effective        |
|  Provision | > January 1, 1979, beneficiaries entitled to receive    |
| s of PL 95 | > Old Law or Section 306 nonservice-connected (NSC)     |
| -588 Regar | > death benefits may *only* elect Improved Pension.     |
| ding Nonse | >                                                       |
| rvice-Conn | > ***Note***: Spanish-American War surviving spouses    |
| ected Deat | > entitled to pension under [38 U.S.C.                  |
| h Benefits | >                                                       |
|            |  1536](http://www4.law.cornell.edu/uscode/38/1536.html) |
|            | > may elect payments at the rates provided by Improved  |
|            | > Pension under the conditions (other than service      |
|            | > requirements) prescribed by [38 U.S.C.                |
|            | >                                                       |
|            | 1541](http://www4.law.cornell.edu/uscode/38/1541.html). |
+------------+---------------------------------------------------------+

Continued on next page

1\. General Information on Entitlement to Old Law or Section 306 Pension
and Improved Pension, Continued

+------------+---------------------------------------------------------+
| ##### c. W | > Circumstances in which continued entitlement to       |
| hen the Ri | > Section 306 or Old Law Pension is *not* protected     |
| ght of Con | > include when                                          |
| tinued Ent |                                                         |
| itlement t | -   a veteran in receipt of pension on December 31,     |
| o Old Law  |     1978, is found to be not permanently and totally    |
| or Section |     disabled after that date, but is again found        |
|  306 Pensi |     entitled at a later date                            |
| on Is Not  |                                                         |
| Protected  | -   income (or net worth for Section 306 beneficiaries) |
|            |     becomes a bar after December 31, 1978, unless       |
|            |     entitlement is later reestablished from the date of |
|            |     discontinuance, and                                 |
|            |                                                         |
|            | -   it is determined that Section 306 or Old Law        |
|            |     pension was awarded based on a fraudulent claim.    |
|            |                                                         |
|            | > ***Reference***: For more information on protection   |
|            | > of Section 306 and Old Law Pension, see [38 CFR       |
|            | > 3.960](http://w                                       |
|            | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_960.DOC). |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > Change a beneficiary's entitlement from one type of   |
| d. Changin | > benefit to another by amended award action using      |
| g a Benefi | > reason code 30. Reflect the change in entitlement     |
| ciary's Be | > code as provided in [M21-1, Part V, Chapter           |
| nefit Type | > 6](htt                                                |
|            | p://www.warms.vba.va.gov/admin21/m21_1/part5/ch06.doc). |
|            | >                                                       |
|            | > The table below shows the location of instructions    |
|            | > for effecting these changes in specific types of      |
|            | > cases.                                                |
+------------+---------------------------------------------------------+

+----------------------------------+-----------------------------------+
| If the change in entitlement is  | Then see ...                      |
| due to ...                       |                                   |
+----------------------------------+-----------------------------------+
| an election from Death           | M21-1MR, Part IV, Subpart iii,    |
| Compensation to DIC              | 3.H                               |
+----------------------------------+-----------------------------------+
| the payment of DIC or death      | M21-1MR, Part III, Subpart ii, 7  |
| compensation after a prior award | or M21-1MR, Part IV, Subpart iii, |
| of death pension benefits        | 1.2                               |
+----------------------------------+-----------------------------------+
| a possible change in the         | -   M21-1MR, Part V, Subpart iii, |
| entitlement of a child in        |     5.4, and                      |
| receipt of an apportioned share  |                                   |
| of Section 306 or Old Law        | -   M21-1MR, Part V, Subpart iii, |
| Pension to Improved Pension upon |     5.5.                          |
| the discontinuance of the        |                                   |
| surviving spouse's entitlement   | ***Note***: A child can continue  |
|                                  | to receive an apportioned share   |
|                                  | of Section 306 or Old Law Pension |
|                                  | even if the surviving spouse      |
|                                  | elects Improved Pension.          |
+----------------------------------+-----------------------------------+

Continued on next page

1\. General Information on Entitlement to Old Law or Section 306 Pension
and Improved Pension, Continued

  -----------------------------------------------------------------------
  d\. Changing a Beneficiary's Benefit Type (continued)

  -----------------------------------------------------------------------

+----------------------------------+-----------------------------------+
| If the change in entitlement is  | Then see ...                      |
| due to ...                       |                                   |
+----------------------------------+-----------------------------------+
| an election by the surviving     | -   M21-1MR, Part V, Subpart iii, |
| spouse or child, if there is no  |     5.4, and                      |
| surviving spouse entitled, from  |                                   |
| Section 306 or Old Law Pension   | -   M21-1MR, Part V, Subpart iii, |
| to Improved Pension              |     5.5.                          |
+----------------------------------+-----------------------------------+

+------------+---------------------------------------------------------+
| ##### e.   | > For additional information on elections between       |
|  Where to  | > pension programs, see M21-1MR, Part III, Subpart v,   |
| Find Addit | > 4.                                                    |
| ional Info |                                                         |
| rmation on |                                                         |
|  Elections |                                                         |
+------------+---------------------------------------------------------+

#### 2. Exercising the Right of Pension Election

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on exercising the     |
| troduction | > right of pension election. It includes information on |
|            |                                                         |
|            | -   the applicability of a veteran's exercise of the    |
|            |     right of election                                   |
|            |                                                         |
|            | -   the provisions of *PL 96-272* regarding states in   |
|            |     which Medicaid eligibility is contingent upon the   |
|            |     receipt of public assistance                        |
|            |                                                         |
|            | -   the states in which *PL 96-272* applies             |
|            |                                                         |
|            | -   the action to take when a election is               |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   received by a person in a state in which *PL        |
|            |     96-272* applies, or                                 |
|            |                                                         |
|            | -   not in a claimant's best interest, and              |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   an example of deferring an election until a future  |
|            |     beneficial effective date.                          |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > May 14, 2007                                          |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a    | > An election by the veteran or on the veteran's behalf |
| . Applicab | > under M21-1MR, Part III, Subpart v, 4.A.3, is binding |
| ility of a | > on his/her dependents, including an estranged spouse  |
|  Veteran's | > or children not in his/her custody.                   |
|  Exercise  | >                                                       |
| of Right o | > If an election is received, defer award action if     |
| f Election |                                                         |
|            | -   the monthly rate of pension under the Improved      |
|            |     Pension law would be less than the current monthly  |
|            |     rate under the prior law, or                        |
|            |                                                         |
|            | -   the election is not otherwise in the veteran's      |
|            |     financial interest.                                 |
|            |                                                         |
|            | > ***Reference***: For more information on the action   |
|            | > to take when an election is not in a claimant's best  |
|            | > interest, see M21-1MR, Part V, Subpart iii, 5.2.e.    |
+------------+---------------------------------------------------------+

Continued on next page

2\. Exercising the Right of Pension Election, Continued

+------------+---------------------------------------------------------+
| ##### b    | > Under *PL 96-272*, accept no election or reelection   |
| . Provisio | > of Improved Pension from persons residing in states   |
| ns of PL 9 | > in which Medicaid eligibility is contingent upon      |
| 6-272 Rega | > receipt of public assistance (Supplemental Security   |
| rding Stat | > Income (SSI) or Temporary Assistance for Needy        |
| es in Whic | > Families (TANF)), unless the claimant has first been  |
| h Medicaid | > informed that                                         |
|  Eligibili |                                                         |
| ty Is Cont | -   the election may result in the loss of medical      |
| ingent Upo |     assistance (Medicaid), and                          |
| n Receipt  |                                                         |
| of Public  | -   he/she is *not* required to make the election in    |
| Assistance |     order to receive public assistance.                 |
|            |     (***Reference***: For more information, see [38 CFR |
|            |     3.714](http://ww                                    |
|            | w.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_714.DOC).) |
|            |                                                         |
|            | > ***Important***: *PL 104-193*, *The* *Personal        |
|            | > Responsibility and Work Opportunity Reconciliation    |
|            | > Act of 1996*, abolished the requirement for           |
|            | > eligibility for Medicaid to be contingent upon        |
|            | > receipt of public assistance in any State. VA will be |
|            | > deleting [38 CFR                                      |
|            | > 3.714](http://                                        |
|            | www.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_714.DOC) |
|            | > soon because this section is now obsolete. After [38  |
|            | > CFR                                                   |
|            | > 3.714](http://                                        |
|            | www.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_714.DOC) |
|            | > is deleted, the instructions in M21-1MR, Part V,      |
|            | > Subpart iii, 5.2.b through d, will no longer apply,   |
|            | > regardless of a claimant's State of residence.        |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > *PL 96-272* applies in the following states:          |
| ### c. Sta |                                                         |
| tes in Whi |                                                         |
| ch PL 96-2 |                                                         |
| 72 Applies |                                                         |
+------------+---------------------------------------------------------+

  ----------------- ----------------- ----------------- -----------------
  Alabama           Florida           South Carolina    Nevada

  Alaska            Georgia           New Jersey        South Dakota

  Colorado          Idaho             New Mexico        Texas

  Delaware          Iowa              Oregon            Wyoming
  ----------------- ----------------- ----------------- -----------------

+-----------------------------------------------------------------------+
| > ***Note***: For TANF purposes, *PL 96-272* also applies to          |
|                                                                       |
| -   Indiana                                                           |
|                                                                       |
| -   Mississippi                                                       |
|                                                                       |
| -   Missouri, and                                                     |
|                                                                       |
| -   Ohio.                                                             |
+-----------------------------------------------------------------------+

Continued on next page

2\. Exercising the Right of Pension Election, Continued

+------------+---------------------------------------------------------+
| #####      | > On receipt of an election by a person in any of the   |
|  d. Action | > states listed in the block above in which *PL 96-272* |
|  to Take W | > applies, and a determination that greater benefits    |
| hen an Ele | > would be payable                                      |
| ction Is R |                                                         |
| eceived Fr | -   advise the claimant of this in a letter as provided |
| om a Perso |     in M21-1MR, Part V, Subpart iii, 5.7                |
| n in a Sta |                                                         |
| te in Whic | -   take no award action, unless the claimant responds  |
| h PL 96-27 |     in writing to that letter, and                      |
| 2 Applies  |                                                         |
|            | -   do not maintain a control.                          |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > If electing Improved Pension may not be in the        |
|  e. Action | > claimant's best financial interest                    |
|  to Take W |                                                         |
| hen an Ele | -   inform the claimant                                 |
| ction Is N |                                                         |
| ot in the  | ```{=html}                                              |
| Claimant's | <!-- -->                                                |
|  Interest  | ```                                                     |
|            | -   by locally-generated letter of the exact monthly    |
|            |     rates payable under each law for the periods        |
|            |     indicated                                           |
|            |                                                         |
|            | -   that because of the possible adverse result, VA     |
|            |     will not take further action on the election until  |
|            |     the claimant furnishes a signed statement           |
|            |     expressing a desire to receive the possible lesser  |
|            |     benefit, and                                        |
|            |                                                         |
|            | -   if appropriate, that the election may be deferred   |
|            |     and of the effective date of a later beneficial     |
|            |     election, and                                       |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   do *not* maintain a control.                        |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #          | > ***Example***                                         |
| #### f. Ex | >                                                       |
| ample: Def | > ***Situation***:                                      |
| erring an  |                                                         |
| Election U | -   A veteran in receipt of Section 306 Pension reports |
| ntil a Fut |     in August 2006 that his wife died on July 15, 2006. |
| ure Benefi |     At that time, he also elects Improved Pension.      |
| cial Effec |                                                         |
| tive Date  | -   The veteran's Section 306 Pension rate as a married |
|            |     veteran is greater than his Improved Pension rate   |
|            |     as a married veteran would be.                      |
|            |                                                         |
|            | -   However, his Improved Pension rate as a single      |
|            |     veteran rate will be greater than his Section 306   |
|            |     Pension rate as a single veteran will be.           |
|            |                                                         |
|            | > ***Result***:                                         |
|            |                                                         |
|            | -   Continue the veteran's Section 306 Pension rate as  |
|            |     a married veteran through December 31, 2006, and    |
|            |                                                         |
|            | -   award the Improved Pension rate for a single        |
|            |     veteran from January 1, 2007.                       |
+------------+---------------------------------------------------------+

#### 3. Finality and Irrevocability of Pension Elections

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on the finality and   |
| troduction | > irrevocability of pension elections. It includes      |
|            | > information on                                        |
|            |                                                         |
|            | -   persons authorized to make elections                |
|            |                                                         |
|            | -   discounting the requirements of SSI or other non-VA |
|            |     benefits when considering the validity of an        |
|            |     election                                            |
|            |                                                         |
|            | -   the finality of an election, and                    |
|            |                                                         |
|            | -   circumstances in which an election may be voided.   |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > May 14, 2007                                          |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > An election of Improved Pension must be a positive    |
| a. Persons | > act of                                                |
|  Authorize |                                                         |
| d to Make  | -   the claimant                                        |
| Elections  |                                                         |
|            | -   the fiduciary designated by a Veterans Service      |
|            |     Center Manager (VSCM), including                    |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   a spouse-payee under [38 CFR                        |
|            |     3.850(a)](http://                                   |
|            | www.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_850.DOC) |
|            |     and [38 CFR                                         |
|            |     13.57](http://w                                     |
|            | ww.warms.vba.va.gov/regs/38cfr/bookf/part13/s13_57.doc) |
|            |                                                         |
|            | -   a parent-custodian recognized under [38 CFR         |
|            |     3.850(c)](http://w                                  |
|            | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_850.DOC), |
|            |     or                                                  |
|            |                                                         |
|            | -   the Director of a Department of Veterans Affairs    |
|            |     (VA) medical center (VAMC).                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > Do not consider, as a basis for revocation of an      |
| # b. Disco | > otherwise valid election, the fact that an election   |
| unting the | > may have been prompted by the requirements of         |
|  Requireme | > Supplemental Security Income (SSI) or other agencies, |
| nts of SSI | > which require that a person applying for or receiving |
|  or Other  | > SSI or other non-VA benefits also apply for Improved  |
| Non-VA Ben | > Pension as a greater benefit.                         |
| efits When | >                                                       |
|  Consideri | > This applies to any institutionalized persons         |
| ng the Val | > receiving Medicaid assistance (although not in        |
| idity of a | > receipt of SSI or TANF) without regard to the State   |
| n Election | > of residence.                                         |
+------------+---------------------------------------------------------+

Continued on next page

3\. Finality and Irrevocability of Pension Elections, Continued

+------------+---------------------------------------------------------+
| ##         | > Unless one of the circumstances shown in M21-1MR,     |
| ### c. Fin | > Part V, Subpart iii, 5.3.d, applies, an election is   |
| ality of a | > final and irrevocable after the claimant              |
| n Election |                                                         |
|            | -   negotiates the first pension check, or              |
|            |                                                         |
|            | -   receives the second Improved Pension payment via    |
|            |     Direct Deposit -- Electronic Funds Transfer         |
|            |     (DD-EFT).                                           |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### d.   | > Any claimant may void an election of Improved Pension |
|  Circumsta | > when                                                  |
| nces in Wh |                                                         |
| ich an Ele | -   the claimant makes the election and is subsequently |
| ction May  |     found to have been mentally incompetent at the time |
| Be Voided  |     the election was made                               |
|            |                                                         |
|            | -   the VA mistakenly awarded a higher rate than was    |
|            |     justified by the evidence then of record in the     |
|            |     claims folder, and VA subsequently finds that, on   |
|            |     the basis of the same evidence, the claimant was    |
|            |     entitled only to a lower rate                       |
|            |                                                         |
|            | -   the provisions of M21-1MR, Part V, Subpart iii,     |
|            |     5.2.b regarding deferral of action and fully        |
|            |     informing the claimant of the effects of the        |
|            |     election were not followed, or                      |
|            |                                                         |
|            | -   the claimant made the election based on erroneous   |
|            |     information that VA furnished.                      |
+------------+---------------------------------------------------------+

#### 4. Effect of a Surviving Spouse's Improved Pension Election 

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on the effect of a    |
| troduction | > surviving spouse's Improved Pension election. It      |
|            | > includes information on                               |
|            |                                                         |
|            | -   the effect of a surviving spouse's election on the  |
|            |     rights of children                                  |
|            |                                                         |
|            | -   how 38 CFR 3.701(a) applies to children not in      |
|            |     custody                                             |
|            |                                                         |
|            | -   action to take when a surviving spouse elects       |
|            |     Improved Pension and an out-of-custody child is     |
|            |     receiving a protected apportionment, and            |
|            |                                                         |
|            | -   an example of a situation in which a surviving      |
|            |     spouse elects Improved Pension and an               |
|            |     out-of-custody child is receiving a protected       |
|            |     apportionment.                                      |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > May 14, 2007                                          |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > A surviving spouse's election also controls the       |
| # a. Effec | > rights of all children involved in the case, *except* |
| t of a Sur | > for those children outside the surviving spouse's     |
| viving Spo | > custody who are receiving an apportioned share of the |
| use's Elec | > surviving spouse's Section 306 or Old Law Pension     |
| tion on th | > award.                                                |
| e Rights o |                                                         |
| f Children |                                                         |
+------------+---------------------------------------------------------+

Continued on next page

4\. Effect of a Surviving Spouse's Improved Pension Election, Continued

+------------+---------------------------------------------------------+
| ###        | > Under [38 CFR                                         |
| ## b. How  | > 3.701(a)](hhttp://w                                   |
| 38 CFR 3.7 | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_701.DOC), |
| 01(a) Appl | > a surviving spouse's election of Improved Pension     |
| ies to Chi | > does *not* affect the rights of an out-of-custody     |
| ldren Not  | > child to continue receiving any apportioned amount of |
| in Custody | > Old Law or Section 306 Pension in effect on December  |
|            | > 31, 1978.                                             |
|            | >                                                       |
|            | > Such a child *may* elect Improved Pension if it is to |
|            | > the child's advantage.                                |
|            | >                                                       |
|            | > ***Notes***:                                          |
|            |                                                         |
|            | -   Under [38 CFR                                       |
|            |     3.24](http://                                       |
|            | www.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_24.DOC), |
|            |     a child has independent Improved Pension            |
|            |     eligibility if the child is not in the custody of a |
|            |     surviving spouse who is eligible for Improved       |
|            |     Pension.                                            |
|            |                                                         |
|            | -   "Custody" for Improved Pension purposes is defined  |
|            |     in [38 CFR                                          |
|            |     3.57(d)](http://                                    |
|            | www.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_57.DOC). |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### c.   | > When a surviving spouse elects Improved Pension and   |
|  Action to | > an out-of-custody child is receiving a protected      |
|  Take When | > apportionment of Old Law or Section 306 Pension       |
|  a Survivi |                                                         |
| ng Spouse  | -   continue the protected apportionment rate to the    |
| Elects Imp |     child                                               |
| roved Pens |                                                         |
| ion and an | -   award benefits to the surviving spouse *without*    |
|  Out-of-Cu |     regard to the protected apportionment rate awarded  |
| stody Chil |     to the child                                        |
| d Is Recei |                                                         |
| ving a Pro | -   do *not* reflect the child's dependency in the      |
| tected App |     surviving spouse's award, and                       |
| ortionment |                                                         |
|            | -   do *not*                                            |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   increase the surviving spouse's maximum pension     |
|            |     rate on account of the child, or                    |
|            |                                                         |
|            | -   reduce the surviving spouse's rate because of the   |
|            |     apportionment rate awarded an out-of-custody child, |
|            |     per [*VAOPGCPREC                                    |
|            |     1-95*](http://www.va.gov/ogc/docs/Prc01-95.doc).    |
|            |                                                         |
|            | > ***Note***: The protected Old Law or Section 306      |
|            | > Pension rate paid to the child is separate, rather    |
|            | > than an apportionment of the surviving spouse's       |
|            | > Improved Pension.                                     |
+------------+---------------------------------------------------------+

Continued on next page

4\. Effect of a Surviving Spouse's Improved Pension Election, Continued

+------------+---------------------------------------------------------+
| ##### d    | ***Situation***:                                        |
| . Example: |                                                         |
|  Surviving | -   A surviving spouse of a World War II (WWII) veteran |
|  Spouse El |     is receiving Section 306 Pension at the rate of     |
| ects Impro |     \$129 per month (\$159 - \$30).                     |
| ved Pensio |                                                         |
| n and Out- | -   Monthly pension has been apportioned to the         |
| of-Custody |     veteran's helpless child from a previous marriage   |
|  Child Rec |     at the rate of \$30 per month since prior to        |
| eives Prot |     December 31, 1978.                                  |
| ected Appo |                                                         |
| rtionment  | -   In January 2006                                     |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   the surviving spouse elects Improved Pension, and   |
|            |                                                         |
|            | -   the helpless child does not make such an election.  |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   The surviving spouse has no income for VA purposes  |
|            |     (IVAP).                                             |
|            |                                                         |
|            | > ***Result***: The awards for payee number (PN) 10 and |
|            | > PN 11 are as follows:                                 |
+------------+---------------------------------------------------------+

  --------------- ---------- ----- ----------- ---- ------- ---- ------ ----- ----------
  **PN 10                                                                     
  SURVIVING                                                                   
  SPOUSE'S                                                                    
  AWARD**                                                                     

                  DATE       RSN   RATE        EC   DEPEN   S H  INC    SLC   WITHHOLD

                  02-01-06   30    0591.00\*   2D   10/10   0 0  0000         
  --------------- ---------- ----- ----------- ---- ------- ---- ------ ----- ----------

  --------------- ---------- ----- --------- ---- ------- ---- ------ ----- ----------
  **PN 11                                                                   
  HELPLESS                                                                  
  CHILD'S                                                                   
  PROTECTED RATE                                                            
  AWARD**                                                                   

                  DATE       RSN   RATE      EC   DEPEN   S H  INC    SLC   WITHHOLD

                  02-01-06   29    0030.00   28   81/81   1    0000         
  --------------- ---------- ----- --------- ---- ------- ---- ------ ----- ----------

+-----------------------------------------------------------------------+
| > \*Rate payable to a surviving spouse alone under [38 U.S.C.         |
| >                                                                     |
| 1541(b)](http://www4.law.cornell.edu/uscode/38/1541.html)\--\$7094/12 |
+-----------------------------------------------------------------------+

#### 5. Pension Election Rights of Children of Veterans

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on the pension        |
| troduction | > election rights of the children of veterans. It       |
|            | > includes information on                               |
|            |                                                         |
|            | -   the elective rights of children when there is or is |
|            |     not a surviving spouse entitled to pension on       |
|            |     December 31, 1978                                   |
|            |                                                         |
|            | -   an example of the effect of the discontinuance of a |
|            |     surviving spouse's award on a child's protected     |
|            |     rate                                                |
|            |                                                         |
|            | -   an example of a case in which a surviving spouse    |
|            |     reestablishes entitlement after 1978                |
|            |                                                         |
|            | -   the effect of one child's election on another child |
|            |     when there is no surviving spouse                   |
|            |                                                         |
|            | -   an example of the effect of one child's election on |
|            |     another child, and                                  |
|            |                                                         |
|            | -   adjusting protected rates when an additional child  |
|            |     is established with eligibility to Improved Pension |
|            |     *only*.                                             |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > May 14, 2007                                          |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a. E | > Use the table below for information on the rights of  |
| lective Ri | > election of children when there is or is not a        |
| ghts of Ch | > surviving spouse entitled to pension on December 31,  |
| ildren Whe | > 1978.                                                 |
| n There Is |                                                         |
|  or Is Not |                                                         |
|  a Survivi |                                                         |
| ng Spouse  |                                                         |
| Entitled t |                                                         |
| o Pension  |                                                         |
| on Decembe |                                                         |
| r 31, 1978 |                                                         |
+------------+---------------------------------------------------------+

+----------------------------+-----------------------------------------+
| If there is \...           | Then \...                               |
+----------------------------+-----------------------------------------+
| -   a surviving spouse     | -   the children in custody have no     |
|     receiving pension on   |     separate right of election, and     |
|     December 31, 1978, and |                                         |
|                            | -   on discontinuance of the surviving  |
| -   the children are in    |     spouse's entitlement for any        |
|     the spouse's custody   |     reason, the children's only         |
|                            |     entitlement is to Improved Pension. |
+----------------------------+-----------------------------------------+

Continued on next page

5\. Pension Election Rights of Children of Veterans, Continued

  -----------------------------------------------------------------------
  a\. Elective Rights of Children When There Is or Is Not a Surviving
  Spouse Entitled to Pension on December 31, 1978 (continued)

  -----------------------------------------------------------------------

+----------------------------+-----------------------------------------+
| If there is \...           | Then \...                               |
+----------------------------+-----------------------------------------+
| -   a surviving spouse     | out-of-custody children who were        |
|     receiving pension on   | receiving pension on December 31, 1978  |
|     December 31, 1978, and |                                         |
|                            | -   have a separate right of election   |
| -   the children are *not* |     if the surviving spouse's Old-Law   |
|     in the spouse's        |     or Section 306 Pension is           |
|     custody                |     discontinued for any reason, and    |
|                            |                                         |
|                            | -   have separate eligibility as        |
|                            |     surviving children if the surviving |
|                            |     spouse elects Improved Pension.     |
|                            |                                         |
|                            | ***Notes***:                            |
|                            |                                         |
|                            | -   For Improved Pension purposes, a    |
|                            |     child who is not in the custody of  |
|                            |     a surviving spouse may not be       |
|                            |     considered a dependent of the       |
|                            |     surviving spouse.                   |
|                            |                                         |
|                            | -   "Custody" for Improved Pension      |
|                            |     purposes is defined in [38 CFR      |
|                            |     3.57(d)](http://www.warms.vba.va    |
|                            | .gov/regs/38CFR/BOOKB/PART3/S3_57.DOC). |
+----------------------------+-----------------------------------------+
| *no* surviving spouse      | children have the same elective rights  |
| entitled to pension on     | as veterans and surviving spouses.      |
| December 31, 1978,         |                                         |
+----------------------------+-----------------------------------------+
| -   *no* surviving spouse  | -   the entitlement of the surviving    |
|     entitled to pension on |     spouse is under the Improved        |
|     December 31, 1978, but |     Pension program                     |
|                            |                                         |
| -   the surviving spouse   | -   the children in the surviving       |
|     reestablishes          |     spouse's custody have entitlement   |
|     entitlement *after*    |     to Improved Pension *only*          |
|     1978                   |                                         |
|                            | -   the children *not* in custody of    |
|                            |     the surviving spouse have their Old |
|                            |     Law or Section 306 Pension rates    |
|                            |     protected, and                      |
|                            |                                         |
|                            | -   children not in the custody of the  |
|                            |     surviving spouse have independent   |
|                            |     eligibility to Improved Pension.    |
|                            |                                         |
|                            | ***Reference***: For an example of      |
|                            | eligibility in this type of situation,  |
|                            | see M21-1MR, Part V, Subpart iii,       |
|                            | 5.5.c.                                  |
+----------------------------+-----------------------------------------+

Continued on next page

5\. Pension Election Rights of Children of Veterans, Continued

+------------+---------------------------------------------------------+
| ####       | > ***Situation***:                                      |
| # b. Examp |                                                         |
| le: Effect | -   A surviving spouse is receiving pension on December |
|  of the Di |     31, 1978.                                           |
| scontinuan |                                                         |
| ce of a Su | -   A child is receiving an apportioned Section 306     |
| rviving Sp |     Pension rate of \$28.                               |
| ouse's Awa |                                                         |
| rd on a Ch | -   The surviving spouse's award is discontinued.       |
| ild's Prot |                                                         |
| ected Rate | > ***Result***:                                         |
|            |                                                         |
|            | -   Continue to pay the child the rate of \$28.         |
|            |                                                         |
|            | -   On the child's award, use                           |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   special law (SL) code 10 to continue the protected  |
|            |     rate, and                                           |
|            |                                                         |
|            | -   Section 306 entitlement code.                       |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #          | > ***Situation***:                                      |
| #### c. Ex |                                                         |
| ample: Sur | -   A helpless child alone not in the surviving         |
| viving Spo |     spouse's custody is receiving \$61 under Section    |
| use Reesta |     306 Pension.                                        |
| blishes En |                                                         |
| titlement  | -   The surviving spouse's eligibility is restored      |
| After 1978 |     after 1978 under Improved Pension.                  |
|            |                                                         |
|            | > ***Result***:                                         |
|            |                                                         |
|            | -   For Improved Pension purposes, the child is not a   |
|            |     dependent of the surviving spouse. Do not reflect   |
|            |     the child on the surviving spouse's award.          |
|            |                                                         |
|            | -   Determine the Improved Pension amount payable to    |
|            |     the surviving spouse.                               |
|            |                                                         |
|            | -   Continue to pay the child the \$61 Section 306      |
|            |     Pension rate.                                       |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### d. E | > If there is no surviving spouse, and a child who is   |
| ffect of O | > entitled to Section 306 or Old Law Pension elects to  |
| ne Child's | > receive Improved Pension, the election may not        |
|  Election  | > increase the rate payable to a child remaining under  |
| on Another | > Section 306 or Old Law Pension, per [38 CFR           |
|  Child Whe | > 3.704(a)](hhttp://w                                   |
| n There Is | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_704.DOC). |
|  No Surviv | >                                                       |
| ing Spouse | > The rate payable for each child remaining under       |
|            | > Section 306 or Old Law Pension may not exceed the     |
|            | > amount that would be paid if all children were        |
|            | > receiving under that law.                             |
+------------+---------------------------------------------------------+

Continued on next page

5\. Pension Election Rights of Children of Veterans, Continued

+------------+---------------------------------------------------------+
| #####      | > ***Situation***:                                      |
|  e. Exampl |                                                         |
| e: Effect  | -   Three children are receiving \$37 each under        |
| of One Chi |     Section 306 Pension.                                |
| ld's Elect |                                                         |
| ion on Ano | -   Two children elect Improved Pension.                |
| ther Child |                                                         |
|            | > ***Result***: Continue to pay the child remaining     |
|            | > under Section 306 Pension as one of three children.   |
|            | >                                                       |
|            | > ***Rationale***: Under Improved Pension, each child   |
|            | > stands alone, and the existence of the other two      |
|            | > children is not a factor (unless VA is paying the     |
|            | > custodian of multiple children on a combined award).  |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #          | > If an additional child is established with            |
| #### f. Ad | > eligibility to *only* Improved Pension, adjust the    |
| justment o | > corresponding Section 306 or Old Law Pension award.   |
| f a Protec |                                                         |
| ted Rate W |                                                         |
| hen an Add |                                                         |
| itional Ch |                                                         |
| ild Is Est |                                                         |
| ablished W |                                                         |
| ith Eligib |                                                         |
| ility to I |                                                         |
| mproved Pe |                                                         |
| nsion Only |                                                         |
+------------+---------------------------------------------------------+

#### 6. Aid and Attendance (A&A) and Housebound Claims in Protected Pension Programs

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on A&A and Housebound |
| troduction | > claims in protected pension programs. It includes     |
|            | > information on                                        |
|            |                                                         |
|            | -   referring claims to the rating activity             |
|            |                                                         |
|            | -   claims that should not be referred to the rating    |
|            |     activity                                            |
|            |                                                         |
|            | -   denying claims that are not in the claimant's       |
|            |     financial interest                                  |
|            |                                                         |
|            | -   requesting medical evidence, and                    |
|            |                                                         |
|            | -   actions to take when the rating activity determines |
|            |     that the claimant is or is not in need of A&A or    |
|            |     Housebound.                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > May 14, 2007                                          |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a.   | > Refer A&A and Housebound claims filed by Section 306  |
|  Referring | > and Old Law pensioners to the rating activity unless  |
|  Claims to | > prohibited by M21-1MR, Part V, Subpart iii, 5.6.b,    |
|  the Ratin | > below.                                                |
| g Activity |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > Do *not* refer A&A and Housebound and claims to the   |
| b. Claims  | > rating activity if                                    |
| That Shoul |                                                         |
| d Not Be R | -   they are for A&A based on nursing home status       |
| eferred to |                                                         |
|  the Ratin | -   election of Improved Pension is not in the          |
| g Activity |     claimant's financial interest, even with A&A, or    |
|            |                                                         |
|            | -   the claimant did not submit current medical         |
|            |     evidence.                                           |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > If election of Improved Pension plus A&A is not in    |
|  c. Denyin | > the claimant's financial interest, deny the claim.    |
| g a Claim  | >                                                       |
| Not in the | > In the notification letter, provide information       |
|  Claimant' | > concerning the time limits in [38 CFR                 |
| s Financia | > 3.660(b)](http://                                     |
| l Interest | www.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_660.DOC) |
|            | > so that claimants can claim deductible expenses if it |
|            | > appears that Improved Pension would be a better       |
|            | > benefit if deductible expenses were a factor.         |
+------------+---------------------------------------------------------+

Continued on next page

6\. Aid and Attendance (A&A) and Housebound Claims in Protected Pension
Programs, Continued

+------------+---------------------------------------------------------+
| ##### d    | > If the claimant has not submitted current medical     |
| . Requesti | > evidence, and it appears that Improved Pension would  |
| ng Medical | > be the greater benefit                                |
|  Evidence  |                                                         |
|            | -   advise the claimant of the need for current medical |
|            |     evidence showing probable entitlement to A&A or     |
|            |     Housebound                                          |
|            |                                                         |
|            | -   explain the need to elect Improved Pension in order |
|            |     to receive additional benefits                      |
|            |                                                         |
|            | -   invite the claimant to elect Improved Pension       |
|            |                                                         |
|            | -   develop for any other evidence necessary to         |
|            |     adjudicate the claim, and                           |
|            |                                                         |
|            | -   continue any control previously established as      |
|            |     outlined in M21-1MR, Part III, Subpart iii, 1.B.3.  |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### e.   | > Use the table below to determine the actions to take  |
|  Actions t | > when the rating activity determines that the claimant |
| o Take Whe | > is or is not in need of A&A or is not Housebound.     |
| n the Rati |                                                         |
| ng Activit |                                                         |
| y Determin |                                                         |
| es That th |                                                         |
| e Claimant |                                                         |
|  Is or Is  |                                                         |
| Not in Nee |                                                         |
| d of A&A o |                                                         |
| r Is Not H |                                                         |
| ousebound  |                                                         |
+------------+---------------------------------------------------------+

+----------------------------------+-----------------------------------+
| If the rating activity           | Then \...                         |
| determines that the claimant     |                                   |
| \...                             |                                   |
+----------------------------------+-----------------------------------+
| -   *is* in need of A&A or is    | -   inform the claimant of the    |
|     Housebound, and              |     decision, and                 |
|                                  |                                   |
| -   Improved Pension plus A&A or | -   provide notification and take |
|     Housebound *is* in the       |     actions as outlined in        |
|     claimant's financial         |     M21-1MR, Part V, Subpart iii, |
|     interest                     |     5.6.d.                        |
+----------------------------------+-----------------------------------+
| -   *is* in need of A&A or is    | -   deny the claim, and           |
|     Housebound, and              |                                   |
|                                  | -   provide the Improved Pension  |
| -   Improved Pension plus A&A or |     time limits as stated in      |
|     Housebound benefits *is*     |     M21-1MR, Part V, Subpart iii, |
|     *not* in the claimant's      |     5.6.c.                        |
|     financial interest           |                                   |
+----------------------------------+-----------------------------------+
| *is not* in need of A&A or is    | -   deny the claim                |
| not Housebound                   |                                   |
|                                  | -   notify the claimant of the    |
|                                  |     decision, and                 |
|                                  |                                   |
|                                  | -   provide procedural and        |
|                                  |     appellate rights.             |
+----------------------------------+-----------------------------------+

#### 7. Exhibit 1: Sample Letter - Notification of Election of Improved Pension

+------------+---------------------------------------------------------+
| ##### In   | > This exhibit contains a sample of the *Public Law     |
| troduction | > 96-272* Notification of Election of Improved Pension  |
|            | > letter.                                               |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a. N | > ![](media/image1.jpeg){width="5.222916666666666in"    |
| otificatio | > height="5.547916666666667in"}                         |
| n of Elect |                                                         |
| ion of Imp |                                                         |
| roved Pens |                                                         |
| ion Letter |                                                         |
+------------+---------------------------------------------------------+