**March 2, 1988 M28‑1, Part III**

**CONTENTS**

**CHAPTER 4. MONETARY ASSISTANCE SERVICES**

**PARAGRAPH PAGE**

4.01 Range of Services 4-1

4.02 Subsistence Allowance 4-1

a\. Control of Subsistence Allowance Payments 4-1

b\. Assignment to Case Status Allowing Payment of Subsistence Allowance
4-1

c\. Establishing a Control for Entrance or Reentrance 4-1

d\. Maintaining Contact Prior to Entrance or Reentrance 4-1

e\. Maturation of the Control 4-1

f\. Entrance or Reentrance Verified 4-2

g\. Entrance or Reentrance Not Verified 4-2

h\. Changes Following Entrance or Reentrance Into a Rehabilitation
Program 4-2

i\. Interruption, Discontinuance, and Employment Adjustment Allowance
4-2

j\. Types of Subsistence Allowance Changes/Actions 4-3

k\. Action Required When Change in Training Hours Does Not Change Rate
of Pursuit 4-3

l\. Source Documentation for a Subsistence Allowance 4-3

m\. Proof of Dependency 4-3

4.03 Coordination with VSD (Veterans Services Division) in Responding to
VAIS (Veterans

Assistance Inquiries 4-4

a\. Types of VAI's 4-4

b\. When VSD Takes a VAI 4-4

c\. When VR&C Takes a VAI Which Requires Action by Another Division 4-4

4.04 Reimbursement of Costs for Training and Rehabilitation Services,
Supplies and Facilities 4-4

4.05 Election of Payment of an Allowance at the Rate Paid Under Chapter
30 or 34 (38 CFR 21.264

and 21.334) 4-4

a\. Veterans Will Be Informed of Rights and Obligations 4-4

b\. Veteran Elects Payment of Allowance at the Rate Paid Under Chapter
30 or 34 4-5

c\. Chapter 30 or 34 Program Requirements Must Be Met 4-5

d\. Chapter 31 Financial Assistance Forfeited While the Chapter 30 or 34
Rate Is Being Paid 4-6

e\. Chapter 31 Services Available to a Veteran Who Elects Payment at the
Chapter 30 or 34 Rate 4-6

f\. Chapter 31 Services Available Upon Completion of Training 4-6

g\. Election Effective Dates 4-6

h\. Voucher Payments of Tuition and Fees Restrict Elections 4-7

i\. Reelection of Subsistence Allowance 4-7

j\. VR&C Procedures to Process Elections 4-8

k Reelection or Discontinuance Notification 4-9

4.06 Employment Adjustment Allowance 4-10

4.07 Veteran-Student Services (Work-study Program) (38 CFR 21.272) 4-10

**4-i**

**M28‑1, Part III March 2, 1988**

**CONTENTS-Continued**

**CHAPTER 4. MONETARY ASSISTANCE SERVICES-Con.**

**PARAGRAPH PAGE**

4.08 Advances from the Revolving Fund 4-10

a\. Criteria for an Advance 4-10

b\. Financial Management 4-10

c\. Veteran's Application 4-10

d\. Documentation and Record Review 4-10

e\. Processing the Advance 4-11

f\. Future Considerations 4-11

g\. Appellate Procedures 4-11

4.09 Special Transportation Assistance 4-11

a\. Institution Provides Transportation 4-11

b\. Contract Agency Provides Transportation 4-11

c\. Veteran Secures Transportation 4-11

**TABLE**

4.01 Subsistence Allowance Actions and 38 CFR References 4-5

**4-ii**

**March 2, 1988 M28‑1, Part III**

**CHAPTER 4. MONETARY ASSISTANCE SERVICES**

**4.01 RANGE OF SERVICES**

Monetary assistance under chapter 31 is provided to help the veteran
pursue his or her rehabilitation program. While the range of monetary
assistance may not be sufficient in certain cases to cover all of a
veteran's expenses, these monetary services do provide a financial base,
freeing him or her from having to commit large amounts of time to earn
money for living expenses while in a rehabilitation program. The case
manager must be aware of each veteran's financial situation and must be
able to utilize appropriate VA and non-VA financial resources to aid
veterans who need additional assistance. VA monetary assistance services
include

**a.** Subsistence allowance payments to the veteran;

**b** Reimbursement to service providers for costs of training and
rehabilitation services;

**c.** Payment for books, supplies and other training equipment;

**d.** Election of payments at the rate payable under chapter 30 or 34
in lieu of both subsistence allowance and reimbursement of the costs of
training and rehabilitation services;

**e.** Employment adjustment allowance;

**f.** Veteran-student services (Work-Study Program);

**g.** Advances from the Revolving Loan Fund; and

**h.** Special transportation allowances.

**4.02 SUBSISTENCE ALLOWANCE**

**a. Control of Subsistence Allowance Payments.** The case manager must
assure that subsistence allowance payments are made on a timely basis,
that the veteran is eligible for payment during the period certified,
and that the veteran receives the rate to which he or she is entitled
based upon rate of pursuit.

**b. Assignment to Case Status Allowing Payment of Subsistence
Allowance.** Following completion of the rehabilitation plan, the
veteran's case may be assigned to one of the case statuses under which
payment of subsistence allowance may be authorized. These case statuses
are Rehabilitation to the Point of Employability, Extended Evaluation,
and Independent Living.

**c. Establishing a Control for Entrance or Reentrance.** The case
manager will establish a future date control for all entrances or
reentrances. The control will be scheduled to mature on the expected
date of entrance or reentrance.

**d. Maintaining Contact Prior to Entrance or Reentrance.** The case
manager will maintain contact with the veteran during the period the
control is in effect. During this period, the case manager will provide
any assistance necessary for the veteran to begin or reenter his or her
rehabilitation program. Upon maturation of the control, the case manager
will act to prevent erroneous payment if the veteran fails to enter or
withdraws from participation in the rehabilitation program which has
been developed.

**e. Maturation of the Control.** VA Form 28‑1905, Authorization and
Certification of Entrance or Reentrance into Rehabilitation and
Certification of Status, should be signed and returned by the training
or rehabilitation facility within 5 days of maturation of the control.
If this form is not received by this deadline, the case manager will
contact the facility by telephone to verify that the veteran has begun
to receive training or other rehabilitation services.

**4-1**

**M28‑1, Part III March 2, 1988**

**f. Entrance or Reentrance Verified.** When entrance or reentrance is
verified on VA Form 28‑1905 and the rate of pursuit is established, the
case manager will complete the reverse of the VA Form 28‑1905. Payment
will begin the month following entrance or reentrance. Since this
payment reflects the first month's training, most veterans will receive
less than a full month's subsistence allowance. If entrance or
reentrance is verified, but the VA Form 28‑1905 will not be received
from the facility in time to process for payment by the beginning of the
month following entrance or reentrance, the VRS will prepare another VA
Form 28‑1905 for the Adjudication Division to assure that the veteran
will receive his or her subsistence allowance in as timely a manner as
possible. The case manager will notify the veteran whenever payment may
be delayed beyond the beginning of the month following entrance or
reentrance.

**g. Entrance or Reentrance Not Verified.** If the veteran has not
entered the rehabilitation program, processing of the VA Form 28‑1905
will cease. If necessary, the case manager will initiate action to
suspend payment of subsistence allowance to prevent overpayment. Check
intercept procedures will be implemented if necessary. Then the case
manager will create an employee future control on the 320 screen for 45
days. During this interval, the case manager will determine if the
veteran will pursue the established program. When this information is
known, but no later than the maturation of the diary, the case manager
will take the following actions:

**(1)** If failure to begin timely was due to a temporary delay which
should not hinder the veteran's pursuit of the program of training or
other rehabilitation services, the case manager will prepare copies 1
and 2 of VA Form 28‑1905 to record the change in the veteran's beginning
date (see subpar. h(l) below for instructions on preparing VA Form
28‑1905).

**(2)** If there appears to be a significant problem which will prevent
the veteran from beginning the rehabilitation program or which will
adversely affect the veteran's program pursuit, assign the veteran's
case to Interrupted status to allow further time for resolution of the
problems preventing entrance or reentrance. In these cases, the case
manager will obtain the R&E folder to assure that the suspension of
subsistence allowance and the reassignment of the case to Interrupted
status are properly completed and noted in the CER folder and in the
Target System.

**h. Changes Following Entrance or Reentrance into a Rehabilitation
Program**

**(1) Preparation of VA Form 28‑1905.** The case manager will prepare
copies 1 and 2 of VA Form 28‑1905 to record changes in the veteran's
program which affect the subsistence allowance award or which are
required for record purposes. Copies 3 and 4 are not needed and will be
destroyed in accordance with RCS VB-1, part I, item No. 13-052.100.
Examples of these adjustments are reassignment to another status and
changes in rate of pursuit or course duration. Part I11, chapter 2,
paragraph 2.03c describes the steps to complete the VA Form 28‑1905 for
entrances. To authorize a change following initial entrance, the same
instructions generally apply. The basis for each determination will be
set forth on VA Form 28‑1905 in item 24, Reason and Authority for
Action. The effective dates of changes are generally determined under
the provisions of 38 CFR 21.322 and 21.324. See subparagraph j below for
a list of other regulations which govern effective dates.

**(2) Award Verification.** Following completion of VA Form 28‑1905
authorizing a subsistence award or a change in an award, the case
manager will review the award action taken on the VA Form 22‑1907a,
Authorization of Subsistence Allowance. If the award has not been
properly completed, the case manager will contact the responsible
adjudicator and request immediate correction of the award action.

**i. Interruption, Discontinuance, and Employment Adjustment
Allowance.** The same general procedures described for entrances, and
reentrances, and changes will be followed for interruptions or
discontinuances of a rehabilitation program for which a subsistence
allowance is being paid or for payment of an employment adjustment
allowance. This procedure includes

**(1)** Assuring that appropriate award action has been completed on the
VA Form 22‑1907a;

**(2)** If there is an error or delay in processing the award, bringing
the matter to the attention of the responsible adjudicator to assure
that necessary action is taken to complete the change.

**4-2**

**March 2, 1988 M28‑1, Part III**

**j. Types of Subsistence Allowance Changes/Actions.** Table 4.01
indicates potential subsistence allowance actions which may be
authorized by the case manager during a veteran's rehabilitation
program. The table cites 38 CFR references which provide guidance
concerning reasons and effective dates for actions. For example, if an
award for subsistence has been processed at the full-time rate and the
veteran subsequently reduces to the half-time rate, the case manager
will use the VA Form 28‑1905 to authorize and request from the
Authorization activity a reduction in rate of subsistence allowance. In
38 CFR 21.324i (see table 4.01), it indicates that the effective date is
found to be the last date of the month in which the reduction occurred
(assuming mitigating circumstances exist). This date would be entered in
item 23B, line 1. The entry in item 23C, line I would be "2" to indicate
the new half-time rate of pursuit. Item 23D, line 3, would show the
ending date of the award. This procedure will be used to reflect any
changes in rate or effective dates of active subsistence allowance
awards.

**k. Action Required When Change in Training Hours Does Not Change Rate
of Pursuit**. Case managers do not need to prepare a subsistence
allowance award for a change in training hours which does not cause a
change in rate of pursuit. For example, a veteran reduces training from
18 to 15 semester hours. Both 18 and 15 semester hours are full time
training. The case manager's approval of the original voucher for
payment of tuition, fees, books, and supplies should continue to be
valid for the Finance activity unless one of the following occurs:

**(1)** The case manager requests that the Finance activity collect from
the veteran previous payments or portions of payments. Stations may
locally standardize this notification, using office automation equipment
or overprinted memoranda. In completing the standardized document, the
case manager would only need to enter the veteran's name and claim
number and an itemization of the funds to be collected.

**(2)** The case manager forwards a new voucher for additional payments
based on the change in course load.

**l. Source Documentation for a Subsistence Allowance Award**. A case
manager may prepare a subsistence allowance award as soon as the
training facility provides the VR&C Division with documentation that
meets the basic criteria to support an award. If the award results in
reduction in rate of pursuit, however, the case manager must also follow
the due process procedures in part II, chapter 10. Although facilities
should certify program participation on VA Form 28-1905, Authorization
and Certification of Entrance or Reentrance Into Rehabilitation and
Certification of Status, or another VA-approved form, facilities may
report this information using their own formats. Use of VA-designed
forms helps to prevent insufficient reporting, however, which could
result in delays paying benefits to veterans or in incorrect payments.
Therefore, VR&C Divisions should not encourage the regular submission of
non-VA documentation to justify payments or adjustments of subsistence
allowance.

**m. Proof of Dependency**. Veterans claiming additional subsistence
allowance for dependents must submit sufficient evidence to meet the
standards in M21-1, part IV, chapters 12 through 14.

**(1) Veteran Has Not Previously Proved Dependents' Status**. The
veteran must identify each claimed dependent by full name, date of a
child's birth or the marriage to the current spouse, and Social Security
Number, usually on VA Form 21-686c, Declaration of Status of Dependents.
Certified copies of public records proving the dependency must accompany
this statement. VA cannot pay additional benefits for a dependent until
VA receives this documentation.

**(2) Servicemember With Dependents Enters a Chapter 31 Program**. If a
servicemember enters a chapter 31 program, the case manager should
assist the servicemember to complete the VA Form 21-686c and to obtain
and submit the certified proofs of dependency. The VR&C Division will
file down the documentation in the claims folder until the regional
office receives the veteran's DD214. Once the regional office receives
the DD214, the case manager will obtain from the Adjudication activity a
completed VA Form 28-0505, Claims Folder Search and Dependency
Verification, and will add the authorized dependents shown on the VA
Form 28-0505.

**4-3**

**M28‑1, Part III March 2, 1988**

**(3) Veteran Claims Dependents Already Established in Compensation
Award**. If the veteran is claiming the same dependents that the current
compensation award shows, the veteran may confirm this dependency by
declaring the dependents by name, dates of birth or marriage, and Social
Security Number. If the case manager is aware of the need for this
statement when the veteran is in the case manager's office, the case
manager should ask the veteran to make this statement on VA Form
21-4138, Statement in Support of Claim. The veteran may also mail this
declaration to the VR&C Division or make an oral statement. The case
manager will document oral statements on VA Form 119, Report of Contact.
In the oral statement, the veteran must be able to provide and the case
manager must detail on the VA Form 119 the same information about each
claimed dependent as the written statement requires."

**4.03 COORDINATION WITH VSD (VETERANS SERVICES DIVISION) IN RESPONDING
TO VAI'S (VETERANS ASSISTANCE INQUIRIES)**

**a. Types of VAI'S.** The VR&C Division will cooperate fully with VSD
in the resolution of VAI's taken in the telephone or personal interview
units.

**b. When VSD Takes a VAI.** If VSD takes the inquiry directly from the
veteran and further action is required by another division, VSD will:

**(1)** Complete items I through 18 on VA Form 27-8386, Veterans
Assistance Inquiry;

**(2)** Establish controls;

**(3)** Conduct research and development;

**(4)** Forward the inquiry to other operating elements for assistance;
and

**(5)** Provide prompt, complete, and courteous responses to VAI'S.

**c. When VR&C Takes a VAI Which Requires Action by Another Division.**
If the VR&C Division takes the inquiry directly from the veteran and
further action is required by another division, the VR&C Division will:

**(1)** Complete items I through 18 on VA Form 27-8386;

**(2)** Annotate the form in item 13 with as much information as is
available in the VR&C activity to assist in the resolution of the
inquiry; and

**(3)** Forward the inquiry to VSD for control, resolution, and response
to the veteran.

**4.04 REIMBURSEMENT OF COSTS FOR TRAINING AND REHABILITATION
SERVICES,**

**SUPPLIES AND FACILITIES**

Costs of services provided veterans through a rehabilitation program
will be paid by the VA under 38 CFR 21.262(b) and the provisions of
applicable VA Acquisition Regulations referred to in that paragraph.
Specific procedures for reimbursement of costs are discussed later in
this part in chapters 6 (supplies), 7 (review of vouchers) and 8
(contracts).

**4.05 ELECTION OF PAYMENT OF AN ALLOWANCE AT THE RATE UNDER CHAPTER 30
OR 34**

**(38 CFR 21.264 AND 21.334)**

**a. Veteran Will Be Informed of Rights and Obligations.** Each veteran
entering a program of rehabilitation who is eligible for chapter 30 or
34 benefits will be advised by the case manager of the right to elect
payment at the rates payable for these benefits if the veteran meets the
conditions described in 38 CFR 21.264. The case manager will assist the
veteran in

**4-3**

**March 2, 1988 M28‑1, Part III**

**ISSUE 38 CFR**

Advance Payments 21.332c

Chapter 30 or 34 Election/Reelection 21.334

Death of Dependent 21.324c

Death of Veteran 21.324b

Dependency Increase 21.322c

Discontinuance 21.324g

Divorce 21.324d

Entrance into a Program 21.322b

Error 21.3241

Fraud 21.324k

Hospitalization of Veterans at VA Expense 21.324p

IILP, IEEP Completed 21.324f

Incarceration 21.324n

Interruption of Program 21.324f

Leave Payments 21.270a

Payments for Weekends, Holidays, Other Periods 21.270c

Payment Between Periods of Instructions 21.270b

Reduced Work Tolerance 21.312d

Reduction in Rate of Pursuit 21.324i

Reentrance Into a Program 21.322b

Rehabilitation to Point of Employability Completed 21.324f

Retroactive Inductions 21.282c

Severance of Service-connected Disability 21.324j

Special Rehabilitation Facility (Room and board paid) 21.324o

Treasonable/Subversive Acts Convictions 21.324m

Unauthorized, Unexcused Absences 21.350b

Wage Rate Increases for OJT 21.324h

**Table 4.01 Subsistence Allowance Actions and 38 CFR References**

**March 2, 1988 M28‑1, Part III**

determining eligibility for payment at the chapter 30 or 34 rate. If
eligible, the veteran will be informed of the ramifications of election
and of his or her right to reelect subsistence allowance at any time
during the program.

**b. Veteran Elects Payment of Allowance at the Rate Paid Under Chapter
30 or 34.** A veteran electing payment under chapter 30 or 34 will
receive an educational assistance allowance for this training as if the
training were pursued under chapter 30 or 34. The veteran will also
receive other benefits and services provided under chapter 30 or 34, For
example, if tutoring is required, the veteran may receive this
assistance under the provisions of 38 CFR 21.4236 in the same manner and
up to the normal dollar limitations as eligible chapter 34 veterans.

**c. Chapter 30 or 34 Program Requirements Must Be Met.** For a veteran
to elect or continue to receive payment of an allowance and other
benefits while in a rehabilitation program, all the program requirements
for a regular chapter 30 or 34 course of training must be met:

**(1)** The program and courses the veteran is pursuing must meet all VA
and SAA approval criteria for training under chapter 30 or 34;

**(2)** The veteran must be within the period of chapter 30 or 34
eligibility and have remaining chapter 30 or 34 entitlement; and

**(3)** While training, the veteran must meet all standards of progress
and conduct which are imposed upon chapter 30 or 34 participants.

***NOTE:** The requirement that a program must meet chapter 30 or 34
criteria for approval of a program of education thereby excludes an
election for any period of extended evaluation, evaluation and
improvement of rehabilitation potential, independent living, individual
programs for the homebound, or individual instructor training. While the
veteran is involved in such activities, he or she will be entitled to
chapter 31 subsistence allowance to the extent he or she is otherwise
eligible.*

**d. Chapter 31 Financial Assistance Forfeited While the Chapter 30 or
34 Rate Is Being Paid.** Certain benefits normally available to chapter
31 participants are expressly prohibited to trainees while receiving
paying at the chapter 30 or 34 rate:

**(1)** Subsistence allowance;

**(2)** Revolving fund advances;

**(3)** VA payment of direct education expenses, which include tuition,
fees, books, supplies, licensing fees, equipment

and other training materials;

**(4)** Individualized tutorial assistance under chapter 31; and

**(5)** Employment adjustment allowance at chapter 34 rates. This
benefit may be paid at subsistence allowance rates, however, as provided
in subparagraph f(2) below.

**e. Chapter 31 Services Available to a Veteran Who Elects Payment at
the Chapter 30 or 34 Rate.** A veteran electing payment at the chapter
30 or 34 rate may receive any service available to vocational
rehabilitation program participants except for the financial assistance
benefits barred in subparagraph d above. These veterans are chapter 31
participants except for method of payment of subsistence and the costs
of training. Services are as essential to the accomplishment of the
vocational rehabilitation goals of these trainees just as they are for
participants receiving regular chapter 31 award benefits. Among these
services, several warrant emphasis:

**(1)** An IWRP (Individualized Written Rehabilitation Plan) will be
created for each participant electing to receive payment at the chapter
30 or 34 benefit rate as part of a vocational rehabilitation program;

\(2\) A case manager will work closely with the veteran to develop and
carry through with the rehabilitation program; and 4-5

**March 2, 1988 M28‑1, Part III**

**(3)** Services not specifically excluded in subparagraph d above may
be paid by voucher.

**f. Chapter 31 Services Available Upon Completion of Training**

**(1)** Trainees who complete their vocational rehabilitation programs
while receiving payment at the chapter 30 or 34 rate will receive the
same employment assistance provided other chapter 31 participants.

**(2)** An employment adjustment allowance will be paid at the full-time
subsistence allowance rate appropriate to the type of training, but only
if the veteran reelected chapter 31 payment of subsistence allowance
prior to completing the period of rehabilitation to the point of
employability (38 CFR 21.268).

**g. Election Effective Dates**

**(1)** When the veteran elects payment of an allowance at the chapter
34 rate, the effective dates for commencement, reduction and termination
are specified in 38 CFR 21.4130 through 21.4135. When a veteran elects
payment of an allowance at the chapter 30 rate, applicable instructions
will be used.

**(2)** The effective date of each election made prior to receipt by the
veteran of a subsistence allowance will be the beginning date of the
period of training for which a subsistence allowance would normally
otherwise have been authorized. If a veteran in receipt of a subsistence
allowance elects payment at the chapter 30 or 34 rate during an interval
between training sessions, however, see subparagraph i(1) below.

**(3)** An election made during a period of training for which a veteran
has already begun to receive a subsistence allowance will be effective
DLP (date of last pay) for the subsistence award or the date of the
election, whichever is to the veteran's financial advantage. See
subparagraph h below for restrictions on this election right.

**h. Voucher Payments of Tuition and Fees Restrict Elections.** A
veteran may not elect payment at the chapter 30 or 34 rate for any
period for which the VA has already paid the veteran's tuition and fees.

**(1)** Tuition and Fees on a Term Basis. For a facility organized on a
term, quarter or semester basis, this will preclude elections during any
term, quarter or semester for which the VA has already paid the tuition
and fees.

**(2) Tuition and Fees Paid on a Prorata Basis.** For other institutions
whose tuition and fees are paid on a recurring prorata basise.g.,
monthlyelections may be made effective the first day of any month for
which the VA has not already paid the tuition and fees.

**i. Reelection of Subsistence Allowance**

**(1) Voluntary Reelections.** In general, a veteran receiving payment
at the chapter 30 or 34 rate may reelect to receive a subsistence
allowance at any time during the program. For training in a school
organized on the basis of regular terms such as semesters, however,
veterans should receive educational assistance for at least one term
before reelection. The effective dates of election or reelection are
contained in 38 CFR 21.334. If a training facility does not structure
its training around regular terms, the veteran may make the reelection
any time, but he or she should have received payment at the chapter 34
rate for 6 months by the time of the reelection. The case manager may
waive these training duration guidelines. The close contact the case
manager maintains with trainees should minimize arbitrary reelections.
On the other hand, a case manager must approve a reelection of
subsistence allowance whenever he or she finds that failure to approve a
reelection of subsistence allowance would work to the veteran's
financial detriment. When the veteran reelects subsistence allowance
during an interval between periods of instruction, interval payment will
be made at whichever rate affords the veteran the greater advantage
unless the veteran declines in writing the higher rate of payment.
Documentation of the veteran's refusal of the higher rate will be filed
on the left flap of the CER folder.

**(2) Automatic Discontinuance of Chapter 34 Election.** The election of
chapter 30 or 34 training will automatically be terminated the day
following the last day of approved training in one of six instances:

**(a)** The veteran makes an unauthorized reduction in training time
without VRS approval;

4-6

**March 2, 1988 M28‑1, Part III**

**(b)** The veteran ceases his or her chapter 30 or 34 training without
VRS approval;

**(c)** The veteran changes his or her program objective on the IWRP
without VA approval;

**(d)** The veteran exhausts entitlement to chapter 30 or 34 allowance
payments;

**(e)** The veteran reaches his or her chapter 30 or 34 delimiting date;
or

**(f)** The veteran completes his or her training program while
receiving an allowance at the chapter 30 or 34 rate and is declared
rehabilitated to the point of employability.

**j. VR&C Division Procedures to Process Elections**

**(1) Election Rights Presented to Veterans.** VR&C staff members should
inform eligible applicants of their election rights and the benefit
tradeoffs available before the veterans begin training in a vocational
rehabilitation program.

**(2) Review of Requirements for Receipt of Payment at the Chapter 30 or
34 Rate.** The VRS will insure that the program for which payment at the
chapter 30 or 34 rate is requested meets all chapter 30 or 34
requirements. If a program does not meet these requirements, a veteran
may not receive payment at the chapter 30 or 34 rate for that program.

**(3) Entitlement Usage Requirements.** The VRS will not extend a
program beyond 48 months of combined entitlement used if the veteran has
trained under more than one program subject to the restrictions of
38 CFR 21.4020. A veteran will be charged chapter 31 entitlement for any
period during which he or she is in a rehabilitation program, regardless
of election of payment at the chapter 30 or 34 rate. If the veteran has
received payment only at chapter 30 or 34 rates, the veteran's
entitlement may not exceed the 45-month limitation applicable to chapter
34 trainees or the 36-month limitation for chapter 30 trainees unless he
or she qualifies for an extension to complete a training session. Beyond
these limits, a vocational rehabilitation participant may only receive
subsistence allowance and other standard chapter 31 financial
assistance, and then only if the additional benefits are necessary to
accomplish the rehabilitation goal.

**(4) Payment Status Change Documentation and Entitlement
Calculations.** For trainees electing payment at the chapter 30 or 34
rate, the VRS will clearly designate on VA Form 28‑1905 the dates of
changes in payment status. The VRS and the Adjudication Division should
cooperate in entitlement calculations to insure no involuntary
alteration in status which operates to the veteran's disadvantage occurs
as a result of entitlement usage. Several examples of entitlement
considerations will clarify the issues involved.

**(a)** A veteran has used 45 months of chapter 34 entitlement or 36
months of chapter 30 entitlement before induction into a chapter 31
program. Since only 45 months of chapter 34 benefits or 36 months of
chapter 30 benefits plus an extension to finish a term already begun can
be paid when only chapter 30 or 34 benefits have been received, this
veteran may not elect payment of the chapter 30 or 34 rate.

**(b)** A veteran uses 24 months of chapter 34 entitlement, enters a
vocational rehabilitation program, and immediately elects payment of the
chapter 34 rate. The veteran continues to receive this payment for
another 20‑3/4 months, at which time the veteran would have used 44-3/4
months of chapter 34 entitlement. If the veteran then begins a new
semester, he or she can continue to receive the chapter 34 rate until
completion of the semester or for 12 weeks of training, whichever occurs
first. Training time is not an issue for this last available use of
entitlement. The same extension allowance to complete a term is
available to chapter 30 trainees except that this extension is granted
for a term during which the veteran exceeds 36 months of entitlement
used. At that point the election is discontinued automatically and the
veteran may receive only subsistence allowance.

**(c)** The same veteran in subparagraph (b) above uses exactly 45
months of entitlement at the end of a semester. He or she may only
receive subsistence allowance for further training. This includes the
following interval between terms.

**(d)** A veteran receives 24 months of chapter 31 subsistence allowance
and discontinues training under the vocational rehabilitation program.
If this veteran reenters the chapter 31 program, he or she may
immediately elect payment at the chapter 30 or 34 rate up to a maximum
of 24 months; that is, until 48 months of combined entitlement have been
used.

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**March 2, 1988 M28‑1, Part III**

**(e)** A veteran receives a subsistence allowance for 48 months. He or
she may not elect payment at the chapter 30 or 34 rate.

**(5) Preparation of Certification.** The VRS will use VA Form 28‑1905
to certify awards for veterans electing payment at the chapter 30 or 34
rate. The certification will be prepared in the same manner as for a
regular subsistence allowance with four exceptions:

**(a)** No award authorization will extend beyond I year;

**(b)** Item 24 will be clearly annotated to show that the award to be
prepared will be at the chapter 30 or 34 rate;

**(c)** An Optional Form 41, Routing and Transmittal Slip, will be
annotated "Chapter 31/30 (or 34) payment trainee" and backfiled on the
right flap on the CER folder so as to remain the uppermost document; and

**(d)** The veteran is within 3 months of completing the training phase
of his or her vocational rehabilitation program employment assistance
counseling has not been previously initiated.

**(6) VRS Progress Review.** The VRS will review continuation of payment
at the chapter 30 or 34 rate as necessary, but at least once yearly.
This will be done in the course of review of the veteran's progress in
achieving the goals of the IWRP. As a result of this review, the VRS
will certify either another year at the chapter 30 or 34 rate or
reelection of subsistence allowance depending on the veteran's desires.
Moreover, the VRS will counsel the veteran and take the appropriate
action whenever any one of several events occurs:

**(a)** The veteran requests consideration of redevelopment of the IWRP;

**(b)** The veteran indicates a desire to reelect subsistence allowance;

**(c)** The veteran makes an unauthorized change in his or her training
program, including changes in training time, program objective or
discontinuance of training. ***NOTE:** Any such change requires VRS
preparation of a VA Form 28‑1905 prior to Adjudication Division award
adjustment; or*

**(d)** The veteran is within 3 months of completing the training phase
of his or her vocational rehabilitation program and employment
assistance counseling has not been previously initiated.

**(7)** **VRS Action When Veteran Makes an Unauthorized Training Program
Change**

**(a)** When the VRS is informed of an unauthorized training program
change, the VRS will interrupt the case and contact the veteran to
determine whether the veteran can be continued in the program. The VRS
will promptly notify the Adjudication Division of the ultimate outcome
of the review so the award can be adjusted.

**(b)** If the veteran has dropped or added courses which change pay
status; but not the character of the course, the VRS may retroactively
approve the change if the change can be approved under the provisions of
38 CFR 21.94 and reenter the veteran into the training program.

**(c)** If the change is to a different program or radically alters the
nature of the course, the VRS may approve continuation and reenter the
veteran into training if the veteran subsequently agrees to return to
the previously established program and objective. If the veteran does
not agree to reenter the same program, the VRS will arrange for complete
reevaluation of the program by a CP under 38 CFR 21.94.

**(d)** If the unauthorized change represents continuation of a pattern
indicating abuse of the program, the VRS will take the same action as
for other chapter 31 trainees under the procedures described in chapter
10, to include discontinuing all chapter 31 benefits if appropriate. The
veteran may then reenter the chapter 31 program only if the reasons for
discontinuance are removed and the rehabilitation program which the
veteran proposes to pursue (whether the same or revised) is suitable to
the veteran's abilities, aptitudes and interests (38 CFR 21.364).

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**March 2, 1988 M28‑1, Part III**

**k. Reelection or Discontinuance Notification.** The VRS will notify
the Adjudication Division of any reelection of subsistence allowance or
discontinuance in the chapter 31 program altogether so that benefit
payments can be promptly adjusted. Item 24 of the VA Form 28‑1905 will
be annotated to the effect: "Terminate award for payment of allowance at
the chapter 30 or 34 rate effective (date)." If applicable, a regular
subsistence allowance award may be authorized on the same document. The
effective and ending dates of subsistence allowance payments will be
clearly identified in item 24. At this time, the Optional Form 41 folder
flash will be destroyed in accordance with RCS VB-1, part I, item No.
07-620.042.

**4.06 EMPLOYMENT ADJUSTMENT ALLOWANCE**

An employment adjustment allowance, consisting of 2 months payment at
the full-time rate of subsistence allowance for the veteran's type of
training, will be paid to each veteran who achieves the goals of his
Individualized Written Rehabilitation Plan. This award will include
payment for the veteran's dependents in the same manner as for a normal
training period. If a legislative increase or decrease in the rate
payable occurs during the 2 months, it will also be reflected in the
employment adjustment award. The VRS will use VA Form 28‑1905 to
authorize payment of the employment adjustment allowance. The VRS will
check employment adjustment allowance in item 18 and block 7 in item 22.
Additionally, item 24 will state that payment of a 2-month employment
adjustment allowance is authorized and will cite 38 CFR 21.268.

**4.07 VETERAN-STUDENT SERVICES (WORK-STUDY PROGRAM) (38 CFR 21.272)**

The Veteran-Student Services, or Work-Study, Program offers part-time
assistance to veterans pursuing a rehabilitation program at the
full-time rate. The Veterans Service Division at the regional office
normally administers this program. Case managers should develop a close
working relationship with the Work-Study coordinator to facilitate the
processing of applications from veterans participating in a
rehabilitation program. Work-Study assignments will be the preferred
method for these veterans to earn additional income.

**4.08 ADVANCES FROM THE REVOLVING FUND**

**a. Criteria for an Advance.** A noninterest advance based on future
subsistence allowance payments may be made from the Revolving Fund as a
part of available services under the chapter 31 program. This advance is
available to a veteran for whom a rehabilitation plan has been
established but who is not financially able to begin or continue a
rehabilitation program without such assistance. To receive an advance,
the criteria below must be met:

**(1)** Establishment of Revolving Fund-38 CFR 21.274a

**(2)** Eligibility-38 CFR 21.274c

**(3)** Advance conditions-38 CFR 21.274d

**(4)** Determination of the amount of the advance-38 CFR 21.247e

**(5)** Repayment-38 CFR 21.274f

**b. Financial Management.** One of the areas that may need to be
explored early in the development of the rehabilitation plan is money
management and potential resources of assistance for financial aid. The
veteran's financial situation should first be ascertained during the
time the IWRP is being developed and again during the induction
orientation. There may be times, however, when an advance is a logical
resource, as the veteran would be unable to begin or continue a
rehabilitation program without the advance from the Revolving Fund.

**c. Veteran's Application.** The veteran applies for an advance from
the revolving fund loan by completing the top portion of VA Form
28‑1910, Application and Public Voucher for Advancement From the
Vocational Rehabilitation Revolving Fund.

**d. Documentation and Record Review.** When it is determined that the
advance from the Revolving Fund is appropriate, the case manager will
document the reason for the advance request. This documentation will be

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**March 2, 1988 M28‑1, Part III**

filed down on the left flap of the CER folder. The MINQ MOI master
record screen will be reviewed for possible current outstanding advance,
which would prohibit granting a new advance. If the documentation and
interaction with the veteran provide a sound and reasonable basis for
the advance, the advance will be approved.

**e. Processing the Advance.** The approved advance from the Revolving
Fund will be processed as expeditiously as possible including
handcarrying if possible to the Finance activity. It is essential that
this service be provided immediately as the critical nature of the need
has already been documented.

**(1) Amount of Advance.** The case manager may approve up to \$200 for
the advance (in multiples of \$ 1 0). An advance in excess of \$200
requires the concurrence of the VR&C Officer. The VR&C Officer may
approve up to twice the amount of the subsistence allowance for a single
veteran at the institutional rate (see 38 CFR 21.260).

**(2) Repayment Schedule.** The monthly rate of repayment may not be
less than 10 percent of the amount advanced unless the monthly benefit
against which the advance is offset is less than that amount.
(38 CFR 21.274f).

**f. Future Considerations.** The VR&C Division will maintain
information on grants and other financial assistance. The veteran may
also be referred to financial aid officers at the facility he attends to
investigate available grants and loans. The veteran will also be
informed about the Work-Study Program and other temporary employment
opportunities if appropriate. Furthermore, the case manager will be
aware of and explore with the veteran the possible need for money
management counseling.

**g. Appellate Procedures.** If the veteran is denied an advance, he or
she will be provided a written reason for the denial and informed of his
or her appeal rights under 38 CFR 21.420 (see also pt. 1, ch. 10).

**4.09 SPECIAL TRANSPORTATION ASSISTANCE**

Special transportation assistance is a special rehabilitation service
provided seriously disabled veterans who incur transportation costs
resulting from their disability which would not be incurred by those not
so disabled. The scope and the periods during which special
transportation assistance may be authorized are provided in
38 CFR 21.154. When it is established that these services are needed by
the veteran, they will be included under Services Provided on the IWRP
and may be authorized by one of the following methods:

**a. Institution Provides Transportation.** When these services are
included in a statement of fees for an institution or rehabilitation
facility, they may be authorized as vouchered services using a record
purpose VA Form 28‑1905 separate from the one used to justify the award
of subsistence allowance. This VA Form 28‑1905 will be clearly annotated
at the top "SPECIAL TRANSPORTATION ASSISTANCE ONLY" and the original
will be routed directly to the Finance activity. Copy 2 will be filed on
the left flap of the CER folder. Copies 3 and 4 are not needed and will
be destroyed in accordance with RCS VB-1 part I item No. 13-052.100.
Once the voucher payment has been made, the Finance activity will send
the VA Form 28‑1905 to the files activity with instructions to drop file
the form in the R&E folder.

**b. Contract Agency Provides Transportation.** When these services are
not available through an approved facility or institution, they may be
arranged for by contract using VA Form 28‑1903, Contract for Education
and Training, and authorized as in subparagraph a above.

**c. Veteran Secures Transportation.** When methods in paragraph a or b
are not possible, these services may be secured by the veteran and may
be reimbursed monthly in arrears. In this case, the anticipated costs
will be established in advance and authorized as a voucher service on VA
Form 28‑1905. For each month claimed, the veteran will present a claim
for this special transportation allowance on Standard Form 1164, Claim
for Reimbursement for Expenditures on Official Business.

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