**Veterans Benefits Administration M21-1, Part IV**

**Department of Veterans Affairs Change 218**

**Washington, DC 20420 April 19, 2005**

Veterans Benefits Manual M21-1, Part IV, "Authorization Procedures," is
changed as follows:

**Pages 20-IV-7 through 20-IV-9:** Remove these pages and substitute
pages 20-IV-7 through 20-IV-9 attached.

The numbering of the paragraph under paragraph 20.25c(3)(c) is corrected
to 20.25c(4).

Paragraph 20.25d is corrected to reflect situations in which National
Guard service under Title 32 is considered active duty for VA purposes
and, accordingly, qualifying service for benefit eligibility.

By Direction of the Under Secretary for Benefits

Renée Szybala, Director

> Compensation and Pension Service

Distribution: RPC: 2068

FD: EX: ASO and AR (included in RPC 2068)

LOCAL REPRODUCTION AUTHORIZED

**April 19, 2005 M21-1, Part IV**

**Change 218**

**b. Action on Application for Reimbursement.** After proper
certification has been received, take award action to process
reimbursement for the days for which the veteran did not receive drill
pay. Show the same starting date on the award of the no-rate period as
in the award of reduction previously made. Change the commencing date of
payments following the no-rate period so that the new award will reflect
accurately the exact number of days for which payment was received in
accordance with the provisions of paragraphs 20.20 and 20.21.

**EXAMPLE 1.** Waiver was filed for 55 days. The award provided a
\"No-rate\" period of 55 days; withholding began March 1 and benefits
were reinstated April 26. Subsequently, a claim was filed for
reimbursement for excess waiver of 20 days on the basis of 15 days of
active duty for training and 20 periods of drill duty performed on 10
calendar days. In this case, payment of training duty pay was made for
only 35 days, not the 55 days previously certified. On the amended
award, again show a withholding effective March 1; change the commencing
date of payments following the no-rate period to April 6, so that the
new award will reflect only 35 days of drill pay.

**EXAMPLE 2.** Waiver was filed for 55 days. The award provided
\"No-rate\" period of 55 days. Subsequently, a claim was filed for
reimbursement for excess waiver of 20 days on the basis of 15 days
active duty for training and 40 periods of drill duty performed on 20
calendar days. Since payment of training duty pay was made for 55 days,
no adjustment of the award is in order. Disapprove the application.

**20.24 INCAPACITATION PAY**

As discussed in VA General Counsel Precedent Opinion 10-90 dated April
30, 1990, military disability pay has been substantially altered over
the last few years. Concurrent payment of compensation or pension and
\"incapacitation pay\" is now permitted.

**20.25 EXTENDED ACTIVE DUTY**

**a. Termination of Benefits**

**(1) General.** Veterans receiving VA disability pension, compensation
or retirement pay must relinquish such benefits at the time of
reentrance into active service.

**(2) Notification From Veteran.** Accept written notification from the
veteran or other authentic evidence to establish the date of entry into
active service.

**(3) Notification From Other Than the Veteran.** If information is
received from other than the veteran, establish the date of reentry into
active service via PIES. Due process provisions found in chapter 9 must
be followed.

**(4) Date of Reentry Established.** Once the date of reentrance is
established, take appropriate action to stop benefits (using reason code
19), effective the date of reentry into service, unless an amended award
action is otherwise required. For VA employee-veterans, see part III,
paragraph 2.07f.

**b. Disposition of Claims Pending at Time of Reentry.** If a veteran
has a claim for disability compensation pending at the time of
reentrance, do not disallow the claim solely for the reason that the
veteran reentered active service. Instead, if available evidence is
adequate, adjudicate the claim and award any benefits payable for a
period prior to the date the veteran reentered active service.

**c. Resumption of Payments on Release From Active Duty**

(1) **DD Form 214 Received.** When DD Form 214, "Certificate of Release
    or Discharge From Active Duty," or other authentic evidence is
    received showing the veteran has been released, review the case to
    ensure that payments were properly discontinued effective the date
    of veteran\'s reentrance into active service.

**20-IV-7**

**M21-1, Part IV April 19, 2005**

**Change 218**

**NOTE:** If payments should have been discontinued at an earlier date
or were never discontinued, send predetermination notice to the veteran.
Follow due process provisions outlined in M21-1, IV, 9. Inform the
veteran that benefits must be discontinued the exact day he/she
reentered active service. Benefits should be discontinued effective the
date of reentrance into active service regardless of the length of time
that has elapsed since the veteran's reentrance. (38 CFR 3.654)

(2) **Notify Veteran.** Notify the veteran that payments may be resumed
    upon receipt of a reopened claim.

(3) **Application for Resumption of Benefits Received -- Disability
    Static at the Time of Entry on Active Duty.** When an application is
    received, resume payments immediately for any disability considered
    static (no future exam pending). Benefits will be resumed effective
    the day following release from active duty if the application for
    resumption of benefits is received within one year from the date of
    such release; otherwise payments will be resumed effective one year
    prior to the date of receipt of the application. Per 38 CFR 3.31(b)
    and 38 CFR 3.654(b)(2), the end-of-month rule does **not** apply to
    the resumption of benefits following release from active duty. A
    claim for increase or new claim received with an application to
    resume benefits should be processed concurrently, observing all VCAA
    notice and development requirements.

***Note***: 38 CFR 3.31 does **not** apply to increases granted in the
evaluation of a previously service-connected condition (FL 04-25). 38
CFR 3.31 would apply when service connection for a new condition is
granted.

(a) **Requesting Service Medical Records**. If complete records covering
    the last period of service are

    available, refer those records for a current rating decision after
    resuming benefits. If complete records are not available, obtain
    complete records covering the last period of service and, upon
    receipt, refer those records for a current rating decision.

(b) **Examination Requests**. After review of the veteran's service
    medical records, a VA examination

should be requested only if it is necessary to fairly decide the claim.
Do not routinely request an examination if a decision can be made based
on the evidence of record. Provisions of 38 CFR 3.105(e) must be applied
if the Rating Activity proposes a reduction in the combined evaluation.

\(c\) **End Product Credit**. Take action to resume compensation
payments based on static disability(ies) under EP 290. Establish a
separate EP 020 for review of service medical records and required
rating action to include processing of a claim for increase and/or a new
claim received in conjunction with a request for resumption of benefits.

(4) **Application for Resumption of Benefits Received -- Disability Not
    Static at the Time of Entry**

**on Active** **Duty**. When an application is received for a disability
that was not considered static at the time of entry on active duty, do
not resume payments until complete service medical records covering the
last period of service have been obtained. Upon receipt of those
records, refer for a current rating decision. Benefits, if otherwise in
order, will be resumed effective the day following release from active
duty if the application for resumption of payments is received within
one year from the date of such release; otherwise payments will be
resumed effective one year prior to the date of receipt of a new
application. Per 38 CFR 3.31(b) and 38 CFR 3.654(b)(2), the end-of-month
rule does **not** apply to the resumption of benefits following release
from active duty. A claim for increase or new claim received with an
application to restore benefits should be processed concurrently,
observing all VCAA notice and development requirements. Partial grants,
when warranted, should be processed without delay. However, the end
product must be continued until all issues are resolved.

***Note***: 38 CFR 3.31 does **not** apply to increases granted in the
evaluation of a previously service-connected condition (FL 04-25). 38
CFR 3.31 would apply when service connection for a new condition is
granted.

**20-IV-8**

# April 19, 2005 M21-1, Part IV

**Change 218**

(a) **Examination Requests**. After review of the veteran's service
    medical records, a VA examination should be requested only if
    necessary to determine current level of disability and to fairly
    decide the claim. If the current evaluation of a non-static
    disability is not longer warranted, do **not** apply the provisions
    of 38 CFR 3.105(e) since the veteran is not in receipt of payment
    for that disability at the present time**.**

(b) **End Product Credit**. Only EP 020 may be taken for evaluation of
    non-static disability(ies) that require rating activity before award
    action.

**d. National Guard Service.** Members of the National Guard who are
activated under Title 10, U.S.C., qualify for VA benefits. If they are
activated while receiving VA compensation, benefits must be terminated
for the period activated. National Guard Service under Title 32, U.S.C.,
is not qualifying service for VA benefits, unless the veteran is
disabled or killed while serving on active duty for training or inactive
duty for training. See M21-1, Part IV, 10.03c.

> **20-IV-9**