**§21.422 Reduction in subsistence allowance following the loss of a
dependent.**

\(a\) *Notice of reduction required when a veteran loses a dependent.*

\(1\) Except as provided in paragraph (a)(2) of this section, VA will
not reduce an award of subsistence allowance following the veteran's
loss of a dependent unless:

\(i\) VA has notified the veteran of the adverse action, and

\(ii\) VA has provided the veteran with a period of 60 days in which to
submit evidence for the purpose of showing that subsistence allowance
should not be reduced.

\(2\) When the reduction is based solely on written, factual,
unambiguous information as to dependency provided by the veteran or his
or her fiduciary with knowledge or notice that the information would be
used to determine the monthly rate of subsistence allowance;

\(i\) VA is not required to send a prereduction notice as stated in
paragraph (a)(1) of this section, but;

\(ii\) VA will send notice contemporaneous with the reduction in
subsistence allowance. (Authority: 38 U.S.C. 5112, 5113)

\(b\) *Pre-reduction notice.* Where a reduction in subsistence allowance
is proposed by reason of information concerning dependency received from
a source other than the veteran, VA will:

\(1\) Prepared a proposal for the reduction of subsistence allowance,
setting forth material facts and reasons;

\(2\) Notify the veteran at his or her latest address of record of the
proposed action;

\(3\) Furnish detailed reasons for the proposed reduction;

\(4\) Inform the veteran that he or she has an opportunity for a
predetermination hearing, provided that VA receives a request for such a
hearing within 30 days from the date of the notice; and

\(5\) Give the veteran 60 days for the presentation of additional
evidence to show that the subsistence allowance should be continued at
its present level. (Authority: 38 U.S.C. 5112, 5113)

\(c\) *Predetermination hearing.*

\(1\) If VA receives a timely request for a predetermination hearing as
indicated in paragraph (b)(4) of this section:

\(i\) VA will notify the veteran in writing of the date, time and place
for the hearing; and

\(ii\) Payments of subsistence allowance will continue at the previously
established level pending a final determination concerning the proposed
reduction.

\(2\) The hearing will be conducted by a VA employee who:

\(i\) Did not participate in the preparation of the proposal to reduce
the veteran's subsistence allowance, and

\(ii\) Will bear the decision-making responsibility. (Authority: 38
U.S.C. 5112, 5113)

\(d\) *Final action.* VA will take final action following the
predetermination procedures specified in paragraph (c) of this section.

\(1\) If a predetermination hearing was not requested or if the veteran
failed to report for a scheduled predetermination hearing, the final
action will be based solely upon the evidence of record at the
expiration of 60 days.

\(2\) If a predetermination hearing was conducted, VA will base final
action upon:

\(i\) Evidence presented at the hearing;

\(ii\) Evidence contained in the claims file at the time of the hearing;
and

\(iii\) Any additional evidence obtained following the hearing pursuant
to necessary development.

\(3\) Whether or not a predetermination hearing was conducted, a written
notice of the final action shall be issued to the veteran setting forth
the reasons for the decision, and the evidence upon which it is based.
The veteran will be informed of his or her appellate rights and right of
representation. (For information concerning the conduct of the hearing
see §3.103(c) and (d) of this chapter).

\(4\) When a reduction of subsistence allowance is found to be warranted
following consideration of any additional evidence submitted, the
effective date of the reduction or discontinuance shall be as specified
under the provisions of §21.324 of this part. (Authority: 38 U.S.C.
5112, 5113)

\[54 FR 40872, Oct. 4, 1989\]

*Next Section is §21.430*