**§3.362 Offsets under 38 U.S.C. 1151(b) of benefits awarded under 38
U.S.C. 1151(a).**

\(a\) *Claims subject to this section*. This section applies to claims
received by VA on or after October 1, 1997. This includes original
claims and claims to reopen or otherwise readjudicate a previous claim
for benefits under 38 U.S.C. 1151 or its predecessors.

\(b\) *Offset of veterans' awards of compensation*. If a veteran's
disability is the basis of a judgment under 28 U.S.C. 1346(b) awarded,
or a settlement or compromise under 28 U.S.C. 2672 or 2677 entered, on
or after December 1, 1962, the amount to be offset under 38 U.S.C.
1151(b) from any compensation awarded under 38 U.S.C. 1151(a) is the
entire amount of the veteran's share of the judgment, settlement, or
compromise, including the veteran's proportional share of attorney fees.

\(c\) *Offset of survivors' awards of dependency and indemnity
compensation*. If a veteran's death is the basis of a judgment under 28
U.S.C. 1346(b) awarded, or a settlement or compromise under 28 U.S.C.
2672 or 2677 entered, on or after December 1, 1962, the amount to be
offset under 38 U.S.C. 1151(b) from any dependency and indemnity
compensation awarded under 38 U.S.C. 1151(a) to a survivor is only the
amount of the judgment, settlement, or compromise representing damages
for the veteran's death the survivor receives in an individual capacity
or as distribution from the decedent veteran's estate of sums included
in the judgment, settlement, or compromise to compensate for harm
suffered by the survivor, plus the survivor's proportional share of
attorney fees.

\(d\) *Offset of structured settlements*. This paragraph applies if a
veteran's disability or death is the basis of a structured settlement or
structured compromise under 28 U.S.C. 2672 or 2677 entered on or after
December 1, 1962.

\(1\) *The amount to be offset*. The amount to be offset under 38 U.S.C.
1151(b) from benefits awarded under 38 U.S.C. 1151(a) is the veteran's
or survivor's proportional share of the cost to the United States of the
settlement or compromise, including the veteran's or survivor's
proportional share of attorney fees.

\(2\) *When the offset begins*. The offset of benefits awarded under 38
U.S.C. 1151(a) begins the first month after the structured settlement or
structured compromise has become final that such benefits would
otherwise be paid. (Authority: 38 U.S.C. 1151)

\(e\) *Offset of award of benefits under 38 U.S.C. chapter 39*.

\(1\) If a judgment, settlement, or compromise covered in paragraphs (b)
through (d) of this section becomes final on or after December 10, 2004,
and includes an amount that is specifically designated for a purpose for
which benefits are provided under 38 U.S.C. chapter 39 (38 CFR 3.808),
and if VA awards chapter 39 benefits after the date on which the
judgment, settlement, or compromise becomes final, the amount of the
award will be reduced by the amount received under the judgment,
settlement, or compromise for the same purpose.

\(2\) If the amount described in paragraph (e)(1) of this section is
greater than the amount of an award under 38 U.S.C. chapter 39, the
excess amount received under the judgment, settlement, or compromise
will be offset against benefits otherwise payable under 38 U.S.C.
chapter 11.

\[69 FR 46433, Aug. 3, 2004, as amended at 71 FR 44918, Aug. 8, 2006\]

**Supplement *Highlights* references**: 63(1), 72(2).

Reserved