**§3.660 Dependency, income and estate.**

\(a\) *Reduction or discontinuance*:

\(1\) *General.* A veteran, surviving spouse or child who is receiving
pension, or a parent who is receiving compensation or dependency and
indemnity compensation must notify the Department of Veterans Affairs of
any material change or expected change in his or her income or other
circumstances which would affect his or her entitlement to receive, or
the rate of, the benefit being paid. Such notice must be furnished when
the recipient acquires knowledge that he or she will begin to receive
additional income or when his or her marital or dependency status
changes. In pension claims subject to §3.252(b) or §3.274 and in
compensation claims subject to §3.250(a)(2), notice must be furnished of
any material increase in corpus of the estate or net worth.

\(2\) *Effective dates.* Where reduction or discontinuance of a running
award of section 306 pension or old-law pension is required because
dependency of another person ceased due to marriage, annulment, divorce
or death, or because of an increase in income, which increase could not
reasonably have been anticipated based on the amount actually received
from that source the year before, the reduction or discontinuance shall
be made effective the end of the year in which the increase occurred.
Where reduction or discontinuance of a running award of improved pension
or dependency and indemnity compensation is required because of an
increase in income, the reduction or discontinuance shall be made
effective the end of the month in which the increase occurred. Where
reduction or discontinuance of a running award of any benefit is
required because of an increase in net worth or corpus of estate,
because dependency of a parent ceased, or because dependency of another
person ceased prior to October 1, 1982, due to marriage, annulment,
divorce, or death, the award shall be reduced or discontinued effective
the last day of the calendar year in which the increase occurred or
dependency ceased. Except as noted in this subparagraph for section 306
or old-law pension, where the dependency of another person ceased on or
after October 1, 1982, due to marriage annulment, divorce or death, the
reduction or discontinuance shall be effective the last day of the month
in which dependency ceased. (Authority: 38 U.S.C. 5112(b))

\(3\) *Overpayments.* Overpayments created by retroactive discontinuance
of benefits will be subject to recovery if not waived. Where dependency
and indemnity compensation was being paid to two parents living
together, an overpayment will be established on the award to each
parent.

\(b\) *Award or increase; income.* Where pension or dependency and
indemnity compensation was not paid for a particular 12-month
annualization period because the claim was disallowed, an award was
deferred under §§3.260(b) or 3.271(f), payments were discontinued or
made at a lower rate based on anticipated or actual income, benefits
otherwise payable may be authorized commencing the first of a 12-month
annualization period as provided in this paragraph. In all other cases,
benefits may not be authorized for any period prior to the date of
receipt of a new claim.

\(1\) *Anticipated income.* Where payments were not made or were made at
a lower rate because of anticipated income, pension or dependency and
indemnity compensation may be awarded or increased in accordance with
the facts found but not earlier than the beginning of the appropriate
12-month annualization period if satisfactory evidence is received
within the same or the next calendar year. (Authority: 38 U.S.C.
5110(h))

\(2\) *Actual income.* Where the claimant's actual income did not permit
payment, or payment was made at a lower rate, for a given 12-month
annualization period, pension or dependency and indemnity compensation
may be awarded or increased, effective the beginning of the next
12-month annualization period, if satisfactory evidence is received
within that period.

\(c\) *Increases; change in status.* Where there is change in the
payee's marital status or status of dependents which would permit
payment at a higher rate and the change in status is by reason of the
claimant's marriage or birth or adoption of a child, the effective date
of the increase will be the date of the event if the required evidence
is received within 1 year of the event. Where there is a change in
dependency status for any reason other than marriage, or the birth or
adoption of a child, which would permit payment at a higher rate, the
increased rate will be effective the date of receipt of notice
constituting an informal claim if the required evidence is received
within 1 year of Department of Veterans Affairs request. The rate
payable for each period will be determined, as provided in §§3.260(f) or
3.273(c). (See §3.651 as to increase due to termination of payments to
another payee. Also see §3.667 as to increase based on school
attendance.)

\(d\) *Corpus of estate; net worth*. Where a claim has been finally
disallowed or terminated because of the corpus of estate and net worth
provisions of §§3.263 or 3.274 and entitlement is established on the
basis of a reduction in estate or net worth, or a change in
circumstances such as health, acquisition of a dependent, or increased
rate of depletion of the estate, benefits or increased benefits will not
be paid for any period prior to the date of receipt of a new claim.

\[30 FR 3354, Mar. 12, 1965, as amended at 44 FR 45942, Aug. 6, 1979; 48
FR 34473, July 29, 1983; 57 FR 59300, Dec. 15, 1992\]

**Supplement *Highlights* reference**: 6(2).