## Chapter 7: Total Disability Income Provision (TDIP) Review

#### Table of Contents

> 1\. Effect on Pension and Parents' Dependency and Indemnity\
> Compensation (DIC) 7-1
>
> 2\. Review Procedures 7-3
>
> 3\. Comparison of VA Form 29-456, Insurance Award Record Printout\
> and TDIP Reported by Veteran 7-5
>
> 4\. Multiple VA Forms 29-456 7-8

## Chapter 7. Total Disability Income Provision (TDIP) Review

#### 1. Effect on Pension and Parents' Dependency and Indemnity Compensation (DIC)

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on the effect of TDIP |
| troduction | > on pension and parents' DIC, including                |
|            |                                                         |
|            | -   TDIP benefits and payments, and                     |
|            |                                                         |
|            | -   the insurance-pension interface.                    |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > July 23, 2004                                         |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > Veterans with certain GI life insurance policies      |
| ### a. TDI | > added a Total Disability Income Provision (TDIP) as a |
| P Benefits | > rider to those policies.                              |
|            | >                                                       |
|            | > If a veteran who purchased TDIP subsequently became   |
|            | > totally disabled, the veteran was paid a monthly      |
|            | > benefit. For most policies, the monthly benefit is    |
|            | > \$15 per \$1,000 of life insurance coverage.          |
|            | >                                                       |
|            | > ***Example***: A veteran with a \$10,000 National     |
|            | > Service Life Insurance (NSLI) policy typically        |
|            | > receives a \$150 per month TDIP benefit.              |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > TDIP payments are countable income for Improved       |
| ### b. TDI | > Pension purposes.                                     |
| P Payments | >                                                       |
|            | > TDIP payments are not countable income for purposes   |
|            | > of                                                    |
|            |                                                         |
|            | -   Old Law Pension                                     |
|            |                                                         |
|            | -   Section 306 Pension, and                            |
|            |                                                         |
|            | -   Parents' Dependency and Indemnity Compensation      |
|            |     (DIC).                                              |
+------------+---------------------------------------------------------+

Continued on next page

1\. Effect on Pension and Parents' Dependency and Indemnity Compensation
(DIC), Continued

+------------+---------------------------------------------------------+
| #####      | > The Philadelphia Regional Office and Insurance Center |
| c. Insuran | > (ROIC) runs an interface periodically to identify     |
| ce-Pension | > veterans in receipt of both pension and TDIP          |
|  Interface | > payments.                                             |
|            | >                                                       |
|            | > The system generates *VA Form 29-456, Insurance Award |
|            | > Record Printout*, for each case identified based on   |
|            | > the match.                                            |
|            | >                                                       |
|            | > The Compensation and Pension (C&P) Service mails out  |
|            | > the forms and a cover letter to each regional office  |
|            | > (RO) that has cases requiring review.                 |
+------------+---------------------------------------------------------+

#### 2. Review Procedures

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on review procedures, |
| troduction | > including                                             |
|            |                                                         |
|            | -   pulling the claims folder                           |
|            |                                                         |
|            | -   end product (EP) assignment, and                    |
|            |                                                         |
|            | -   reviewing for a veteran                             |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   receiving Improved Pension                          |
|            |                                                         |
|            | -   not receiving Improved Pension, and                 |
|            |                                                         |
|            | -   who is deceased.                                    |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > July 23, 2004                                         |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | Pull the claims folder for each *VA Form 29-456* that   |
| # a. Pulli | is located at your RO.                                  |
| ng the Cla |                                                         |
| ims Folder | If the folder is in the Records Management Center       |
|            | (RMC), recall it.                                       |
|            |                                                         |
|            | If the folder has been permanently transferred to       |
|            | another RO, send\                                       |
|            | *VA Form 29-456* to the RO having the folder.           |
|            |                                                         |
|            | > ***Important:*** Do not send *VA Form 29-456* to the  |
|            | > RMC.                                                  |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > Cases that require development and/or award action    |
| ### b. EP  | > based on the TDIP review are assigned end product     |
| Assignment | > (EP) 150.                                             |
|            | >                                                       |
|            | > ***References***: For more information on EP credit,  |
|            | > see [M21-4, Appendix                                  |
|            | > C](http:/                                             |
|            | /152.124.238.193/bl/21/publicat/Manuals/M214/AppC.htm). |
+------------+---------------------------------------------------------+

Continued on next page

2\. Review Procedures, Continued

+------------+---------------------------------------------------------+
| ###        | For veterans receiving Improved Pension                 |
| ## c. Vete |                                                         |
| ran Receiv | -   look in the "Award Record" section of *VA Form      |
| ing Improv |     29-456*                                             |
| ed Pension |                                                         |
|            | -   locate the TDIP MONTHLY AWARD AMOUNT and DATE 1ST   |
|            |     PAY'T fields, and                                   |
|            |                                                         |
|            | -   compare the information in these fields with EVR    |
|            |     forms and other information in the file to          |
|            |     determine whether the veteran's TDIP income has     |
|            |     been correctly reported and counted.                |
|            |                                                         |
|            | > If the TDIP income has not been correctly reported    |
|            | > and counted                                           |
|            |                                                         |
|            | -   determine the correct rates                         |
|            |                                                         |
|            | -   send the pre-termination/reduction notice, and      |
|            |                                                         |
|            | -   adjust accordingly after the due process period has |
|            |     expired.                                            |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### d. V | For veterans not in receipt of Improved Pension because |
| eteran Doe | the award is terminated or the veteran is receiving     |
| s Not Rece | another benefit                                         |
| ive Improv |                                                         |
| ed Pension | -   annotate the margin of *VA Form 29-456* as follows: |
|            |     *NAN M21-1, Pt. IV, par. 31.31*, and                |
|            |                                                         |
|            | -   reverse-file *VA Form 29-456* on the left flap and  |
|            |     highlight the *TDIP MONTHLY AWARD AMOUNT*.          |
|            |                                                         |
|            | > ***Note***: TDIP rates increased by 50% for most      |
|            | > beneficiaries effective with checks received on or    |
|            | > after July 6, 1991.                                   |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > If the veteran is deceased, file *VA Form 29-456* on  |
|  e. Vetera | > the left flap.                                        |
| n Deceased |                                                         |
+------------+---------------------------------------------------------+

#### 3. Comparison of VA Form 29-456, Insurance Award Record Printout and TDIP Reported by Veteran

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on the comparison of  |
| troduction | > *VA Form 29-456* and TDIP reported by the veteran,    |
|            | > including                                             |
|            |                                                         |
|            | -   when TDIP is                                        |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   correctly reported and counted                      |
|            |                                                         |
|            | -   reported but not counted, and                       |
|            |                                                         |
|            | -   not reported or underreported                       |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   an example of comparing *VA Form 29-456* and TDIP   |
|            |     amount                                              |
|            |                                                         |
|            | -   adding TDIP income that has no effect on rate of    |
|            |     pension                                             |
|            |                                                         |
|            | -   agreement or no response, and                       |
|            |                                                         |
|            | -   when the veteran disputes TDIP information.         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > July 23, 2004                                         |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > If the review indicates that the veteran correctly    |
| # a. TDIP  | > reported TDIP income and that it was correctly        |
| Correctly  | > counted on the pension award at all times the veteran |
| Reported a | > was in receipt of both benefits                       |
| nd Counted |                                                         |
|            | -   annotate "*NAN*" in the margin of *VA Form 29-456*, |
|            |     and                                                 |
|            |                                                         |
|            | -   file it on the left flap.                           |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### b.   | > If the veteran correctly reported TDIP income but VA  |
|  TDIP Repo | > did not count it as income on an Improved Pension     |
| rted but N | > award, consider administrative error.                 |
| ot Counted | >                                                       |
|            | > ***Reference***: For more information on effective    |
|            | > dates of administrative errors, see [38 CFR           |
|            | > 3.500(b)(2)](http://w                                 |
|            | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_500.DOC). |
+------------+---------------------------------------------------------+

Continued on next page

3\. Comparison of VA Form 29-456, Insurance Award Record Printout and
TDIP Reported by Veteran, Continued

+------------+---------------------------------------------------------+
| ###        | > Send the veteran notice of a proposed adverse action  |
| ## c. TDIP | > based on the information shown on *VA Form 29-456* if |
|  Not Repor | > the veteran                                           |
| ted or Und |                                                         |
| erreported | -   never reported TDIP                                 |
|            |                                                         |
|            | -   reported TDIP in an amount less than that shown on  |
|            |     *VA Forms 29-456,* or                               |
|            |                                                         |
|            | -   reported TDIP from a date later than the 1ST PAY'T  |
|            |     date shown on *VA Form 29-456* *and* the inclusion  |
|            |     of TDIP will affect the rate of pension.            |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### d.   | > ***Situation***:                                      |
|  Example:  |                                                         |
| Comparing  | -   *VA Form 29-456* shows a TDIP MONTHLY AWARD AMOUNT  |
| VA Form 29 |     of \$150 and a 1ST PAY'T of 8/99.                   |
| -456 and T |                                                         |
| DIP Amount | -   The veteran is being paid based on \$0 countable    |
|            |     income.                                             |
|            |                                                         |
|            | > ***Action***: Send a notice of proposed adverse       |
|            | > action based on countable income of \$1800 effective  |
|            | > September 1, 1999.                                    |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### e. A | > If adding the TDIP income will have no effect on the  |
| dding TDIP | > veteran's rate of pension, for example, the veteran   |
|  Income Ha | > has continuing medical expenses that zero out         |
| s No Effec | > countable income                                      |
| t on Rate  |                                                         |
| of Pension | -   do not send the notice of proposed adverse action   |
|            |                                                         |
|            | -   amend the award to add the TDIP income, and         |
|            |                                                         |
|            | -   furnish contemporaneous notice.                     |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ###        | > If the veteran does not respond to the notice of      |
| ## f. Agre | > proposed adverse action or agrees with the proposed   |
| ement or N | > action, adjust the award to count the TDIP income as  |
| o Response | > *other* income, effective the later of                |
|            |                                                         |
|            | -   the first of the month after the DATE 1ST PAY'T     |
|            |     shown on *VA Form 29-456*, or                       |
|            |                                                         |
|            | -   the payment date of the pension award.              |
+------------+---------------------------------------------------------+

Continued on next page

3\. Comparison of VA Form 29-456, Insurance Award Record Printout and
TDIP Reported by Veteran, Continued

+------------+---------------------------------------------------------+
| ##         | > If the veteran denies having received TDIP income or  |
| ### g. Vet | > disputes the amount or payment dates shown on *VA     |
| eran Dispu | > Form 29-456*, contact the C&P Service Procedures      |
| tes TDIP I | > Staff (212A).                                         |
| nformation |                                                         |
+------------+---------------------------------------------------------+

#### 4. Multiple VA Forms 29-456

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on multiple *VA Forms |
| troduction | > 29-456*, including                                    |
|            |                                                         |
|            | -   when veterans have more than one insurance policy   |
|            |     with TDIP rider                                     |
|            |                                                         |
|            | -   an example of more than one insurance policy with   |
|            |     TDIP rider, and                                     |
|            |                                                         |
|            | -   who to contact on the review.                       |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > July 23, 2004                                         |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > Some veterans have more than one insurance policy     |
|  a. More t | > with a TDIP rider.                                    |
| han One In | >                                                       |
| surance Po | > You will receive *VA Form 29-456* for each such       |
| licy with  | > policy.                                               |
| TDIP Rider |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > ***Situation***: You receive two *VA Forms 29-456*,   |
| # b. Examp | > each of which shows that the veteran receives TDIP of |
| le: More t | > \$75 per month with a DATE 1ST PAY'T of October 28,   |
| han One In | > 1999.                                                 |
| surance Po | >                                                       |
| licy with  | > ***Action***: Count TDIP income of \$150 per month    |
| TDIP Rider | > from November 1, 1999.                                |
|            | >                                                       |
|            | > ***Note***: In some instances the TDIP amounts and    |
|            | > DATE 1ST PAY'T dates may not be the same on all       |
|            | > policies.                                             |
|            | >                                                       |
|            | > ***Reference***: For more information on review       |
|            | > procedures, see [M21-1MR, Part X,                     |
|            | > 7.2](http://152.12                                    |
|            | 5.216.223/bl/21/m21-1mr/pt10/ch07/pt10_ch07.xml#X.7.2). |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #          | > Contact the C&P Service if there are questions about  |
| #### c. Qu | > this review.                                          |
| estions ab |                                                         |
| out Review |                                                         |
+------------+---------------------------------------------------------+