## Chapter 2. Automobile and Adaptive Equipment Allowance Under 38 U.S.C. Chapter 39

#### 1. Eligibility for Automobile and Adaptive Equipment Allowance

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on the eligibility    |
| troduction | > requirements for automobile and adaptive equipment    |
|            | > allowance, including information on                   |
|            |                                                         |
|            | -   the eligibility requirements for financial          |
|            |     assistance for a conveyance                         |
|            |                                                         |
|            | -   issuing a certificate of eligibility                |
|            |                                                         |
|            | -   the eligibility requirements for adaptive equipment |
|            |                                                         |
|            | -   the definition of the term ***adaptive equipment*** |
|            |                                                         |
|            | -   veterans who do not qualify for benefits            |
|            |                                                         |
|            | -   eligibility for 38 U.S.C. Chapter 31 beneficiaries, |
|            |     and                                                 |
|            |                                                         |
|            | -   reduction of benefits due to a tort judgment or     |
|            |     settlement.                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > August 6, 2008                                        |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > To be eligible for financial assistance in purchasing |
|  a. Eligib | > a new or used automobile (or other conveyance), a     |
| ility Requ | > veteran or serviceperson must have acquired one of    |
| irements f | > the following disabilities as a result of injury or   |
| or Financi | > disease incurred or aggravated during activity        |
| al Assista | > military service, or as a result of medical treatment |
| nce for a  | > or examination, vocational rehabilitation, or         |
| Conveyance | > compensated work therapy provided by the Department   |
|            | > of Veterans Affairs (VA) ([38 U.S.C.                  |
|            | > 1151](http://straylight.law.cornell.edu/u             |
|            | scode/html/uscode38/usc_sec_38_00001151----000-.html)): |
|            |                                                         |
|            | -   loss, or permanent loss of use, of one or both feet |
|            |                                                         |
|            | -   loss, or permanent loss of use, of one or both      |
|            |     hands, or                                           |
|            |                                                         |
|            | -   permanent impairment of vision in both eyes with a  |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   central visual acuity of 20/200 or less in the      |
|            |     better eye with corrective glasses, or              |
|            |                                                         |
|            | -   central visual acuity of more than 20/200 if there  |
|            |     is a field defect in which the peripheral field has |
|            |     contracted to such an extent that the widest        |
|            |     diameter of visual field has an angular distance no |
|            |     greater than 20 degrees in the better eye.          |
|            |                                                         |
|            | > ***Reference***: For more information on the          |
|            | > eligibility requirements for the automobile allowance |
|            | > and adaptive equipment, see [38 U.S.C. Chapter        |
|            | > 39](http://straylight.law.cornell.edu                 |
|            | /uscode/html/uscode38/usc_sup_01_38_10_III_20_39.html). |
+------------+---------------------------------------------------------+

Continued on next page

1\. Eligibility for Automobile and Adaptive Equipment Allowance,
Continued

+------------+---------------------------------------------------------+
| #####      | > A certificate of eligibility for financial assistance |
|  b. Issuin | > in the purchase of a new or used automobile or other  |
| g a Certif | > conveyance (such as a van, truck, jeep, or station    |
| icate of E | > wagon) may be made to a veteran                       |
| ligibility |                                                         |
|            | -   once in his/her lifetime                            |
|            |                                                         |
|            | -   in an amount not exceeding the amount specified in  |
|            |     [38 U.S.C.                                          |
|            |     3902](http://straylight.law.cornell.edu/            |
|            | uscode/html/uscode38/usc_sec_38_00003902----000-.html), |
|            |     and                                                 |
|            |                                                         |
|            | -   if the eligibility requirements are met.            |
|            |                                                         |
|            | > ***Note***: The law prohibits Department of Veterans  |
|            | > Affairs (VA) from making payments for automobile      |
|            | > grants directly to veterans. VA is required to pay    |
|            | > the benefit to the seller of the automobile.          |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > A veteran or serviceperson who qualifies for the      |
| c. Eligibi | > automobile allowance also qualifies for adaptive      |
| lity Requi | > equipment. To be eligible to receive *only* adaptive  |
| rements fo | > equipment (as opposed to the automobile allowance),   |
| r Adaptive | > the veteran or serviceperson must be entitled to      |
|  Equipment | > disability compensation for ankylosis of one or both  |
|            | > knees or hips based on                                |
|            |                                                         |
|            | -   the establishment of service connection, or         |
|            |                                                         |
|            | -   entitlement under [38 U.S.C.                        |
|            |     1151](http://straylight.law.cornell.edu             |
|            | /uscode/html/uscode38/usc_sec_38_00001151----000-.html) |
|            |     as the result of                                    |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   VA treatment or examination                         |
|            |                                                         |
|            | -   compensated work therapy, or                        |
|            |                                                         |
|            | -   vocational training under [38 U.S.C. Chapter        |
|            |     31](http://straylight.law.cornell.ed                |
|            | u/uscode/html/uscode38/usc_sup_01_38_10_III_20_31.html) |
|            |                                                         |
|            | > The adaptive equipment benefit may be paid more than  |
|            | > once, and it may be paid to either the seller or the  |
|            | > veteran.                                              |
|            | >                                                       |
|            | > ***Reference***: For more information on ankylosis of |
|            | > one (or both) knees or hips, see [38 U.S.C.           |
|            | > 3902(b)(2)](http://straylight.law.cornell.edu/        |
|            | uscode/html/uscode38/usc_sec_38_00003902----000-.html). |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### d.   | > The term ***adaptive equipment*** includes, but is    |
| Definition | > not limited to                                        |
| : Adaptive |                                                         |
|  Equipment | -   power steering                                      |
|            |                                                         |
|            | -   power brakes                                        |
|            |                                                         |
|            | -   power window lifts                                  |
|            |                                                         |
|            | -   power seats, and                                    |
|            |                                                         |
|            | -   special equipment necessary to assist the eligible  |
|            |     person into and out of the automobile or other      |
|            |     conveyance.                                         |
+------------+---------------------------------------------------------+

Continued on next page

1\. Eligibility for Automobile and Adaptive Equipment Allowance,
Continued

+------------+---------------------------------------------------------+
| ##### e. V | > Even though compensation may be payable under [38 CFR |
| eterans Wh | > 3.800(a)](http://www.warms.vba.va.gov/bookb.html#r),  |
| o Do Not Q | > veterans do *not* qualify for the automobile and      |
| ualify for | > adaptive equipment allowance if they suffered a loss  |
|  Benefits  | > of paired SC and nonservice-connected (NSC) organs or |
|            | > extremities.                                          |
|            | >                                                       |
|            | > ***Note***: Public Law 108-454 effective December 10, |
|            | > 2004, extended eligibility for the automobile and     |
|            | > adaptive equipment allowance to veterans with         |
|            | > qualifying disability under [38 U.S.C.                |
|            | > 1151](http://straylight.law.cornell.edu/              |
|            | uscode/html/uscode38/usc_sec_38_00001151----000-.html). |
|            | >                                                       |
|            | > ***Reference***: For more information on entitlement  |
|            | > to compensation for loss of paired SC and NSC organs  |
|            | > or extremities, see                                   |
|            |                                                         |
|            | -   [38 U.S.C.                                          |
|            |     1160](http://straylight.law.cornell.edu/            |
|            | uscode/html/uscode38/usc_sec_38_00001160----000-.html), |
|            |     and                                                 |
|            |                                                         |
|            | -   [38 CFR                                             |
|            |     3.383](http://www.warms.vba.va.gov/bookb.html#j).   |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### f.   | > Automobile adaptive equipment may be furnished to a   |
| Eligibilit | > beneficiary under [38 U.S.C. Chapter                  |
| y for 38 U | > 31](http://straylight.law.cornell.ed                  |
| .S.C. Chap | u/uscode/html/uscode38/usc_sup_01_38_10_III_20_31.html) |
| ter 31 Ben | > if the Vocational Rehabilitation and Employment       |
| eficiaries | > (VR&E) determines that the equipment is necessary to  |
|            |                                                         |
|            | -   overcome an employment handicap to which a SC       |
|            |     disability materially contributes, and              |
|            |                                                         |
|            | -   achieve the goals of the program of rehabilitation. |
|            |                                                         |
|            | > ***Reference***: For more information on eligibility, |
|            | > see [38 CFR                                           |
|            | > 21.216(a)(3)](http://www                              |
|            | .warms.vba.va.gov/REGS/38CFR/BOOKG/PART21/s21_216.doc). |
+------------+---------------------------------------------------------+

Continued on next page

1\. Eligibility for Automobile and Adaptive Equipment Allowance,
Continued

+------------+---------------------------------------------------------+
| #####      | > Automobile or adaptive equipment benefits must be     |
|  g. Reduct | > reduced by an "offset amount" in cases where a        |
| ion of Ben | > judgment or settlement of a tort claim against the    |
| efits Due  | > United States is granted for disability established   |
| to Tort Ju | > under [38 U.S.C.                                      |
| dgment or  | > 1151](http://straylight.law.cornell.edu/              |
| Settlement | uscode/html/uscode38/usc_sec_38_00001151----000-.html), |
|            | > if the tort judgment or settlement                    |
|            |                                                         |
|            | -   becomes final                                       |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   on or after December 10, 2004, but                  |
|            |                                                         |
|            | -   before the date VA awards the automobile or         |
|            |     adaptive equipment allowance, and                   |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   includes an amount specifically designated for      |
|            |     automobiles or adaptive equipment.                  |
|            |                                                         |
|            | > ***Notes***:                                          |
|            |                                                         |
|            | -   Contact local Regional Counsel to determine whether |
|            |     a judgment or settlement qualifies for offset under |
|            |     [38 CFR                                             |
|            |     3.363](http://w                                     |
|            | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_363.DOC). |
|            |                                                         |
|            | -   If the offset amount exceeds the amount of the      |
|            |     automobile or equipment benefits awarded, the       |
|            |     excess amount is offset against VA compensation.    |
|            |                                                         |
|            | > ***Reference***: For more information on the offset   |
|            | > of benefits, see [M21-1MR, Part IV, Subpart iii,      |
|            | > 3.G.37](../pt04_sp03_ch03_secF.xml#IV.iii.3.G.37).    |
+------------+---------------------------------------------------------+

#### 2. Application for Automobile and Adaptive Equipment Allowance

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on applications for   |
| troduction | > automobile and adaptive equipment allowance,          |
|            | > including information on                              |
|            |                                                         |
|            | -   applying for automobile allowance                   |
|            |                                                         |
|            | -   applying for adaptive equipment, and                |
|            |                                                         |
|            | -   handling incomplete applications.                   |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > August 6, 2008                                        |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > A formal claim on *VA Form 21-4502, Application for   |
| ### a. App | > Automobile or Other Conveyance and Adaptive           |
| lying for  | > Equipment,* is required if the veteran or             |
| Automobile | > serviceperson is applying for the automobile          |
|  Allowance | > allowance.                                            |
|            | >                                                       |
|            | > The application for an automobile or other conveyance |
|            | > is considered an application for the adaptive         |
|            | > equipment specified for the claimant's disability by  |
|            | > directive of the Chief Medical Director. The          |
|            | > instructions on the *VA Form 21-4502* contain a list  |
|            | > of adaptive equipment that has been preapproved for   |
|            | > particular disabilities.                              |
|            | >                                                       |
|            | > ***Notes***:                                          |
|            |                                                         |
|            | -   There is no time limit for filing a claim.          |
|            |                                                         |
|            | -   Upon receipt of the application, before referring   |
|            |     the claim to the rating activity                    |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   establish end product (EP) 290, and                 |
|            |                                                         |
|            | -   send the claimant a duty-to-notify/assist ("VCAA")  |
|            |     letter.                                             |
+------------+---------------------------------------------------------+

Continued on next page

2\. Application for Automobile and Adaptive Equipment Allowance,
Continued

+------------+---------------------------------------------------------+
| #####      | > A formal claim on a *VA Form 10-1394, Application for |
|  b. Applyi | > Adaptive Equipment -- Motor Vehicle* is required if   |
| ng for Ada | > the veteran is entitled to adaptive equipment only.   |
| ptive Equi | > Typically this form is provided by the outpatient     |
| pment Only | > clinic to the veteran for forwarding to finance       |
|            | > activity, or submitted by the prosthetics department  |
|            | > on his/her behalf to the local finance activity.      |
|            | >                                                       |
|            | > A *VA Form 10-1394* is also required for approval of  |
|            | > equipment not specified on the *VA Form 21-4502* for  |
|            | > the veteran's particular disability.                  |
|            | >                                                       |
|            | > ***Notes***:                                          |
|            |                                                         |
|            | -   There is no time limit for filing a claim for       |
|            |     adaptive equipment based on ankylosis.              |
|            |                                                         |
|            | -   Upon receipt of the application, before referring   |
|            |     the claim to the rating activity                    |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   establish end product (EP) 290, and                 |
|            |                                                         |
|            | -   send the claimant a duty-to-notify/assist ("VCAA")  |
|            |     letter.                                             |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > If an application from a person on active duty is     |
| ### c. Han | > incomplete in any essential part or the medical       |
| dling Inco | > evidence or service status is insufficiently          |
| mplete App | > documented                                            |
| lications  |                                                         |
|            | -   return the application to the VA prosthetics        |
|            |     department, if it is responsible for the            |
|            |     deficiency; otherwise                               |
|            |                                                         |
|            | -   advise the serviceperson of the deficiency, and     |
|            |                                                         |
|            | -   ask him/her to obtain the necessary evidence.       |
+------------+---------------------------------------------------------+

#### 3. Rating Claims for Automobile and Adaptive Equipment Allowance

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on rating claims for  |
| troduction | > automobile or adaptive equipment allowance, including |
|            | > information on                                        |
|            |                                                         |
|            | -   referring claims to the rating activity             |
|            |                                                         |
|            | -   when to prepare a rating decision, and              |
|            |                                                         |
|            | -   the rating conclusion.                              |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > April 19, 2005                                        |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a.   | > If prior rating decisions do *not* establish the      |
|  Referring | > existence of qualifying SC disability, refer the      |
|  Claims to | > claim to the rating activity after any necessary      |
|  the Ratin | > development.                                          |
| g Activity | >                                                       |
|            | > ***Result***: If a claim for other VA benefits has    |
|            | > not been filed, the rating activity prepares a        |
|            | > memorandum rating.                                    |
|            | >                                                       |
|            | > ***Reference***: For more information on preparing a  |
|            | > rating determination of eligibility, see [M21-1MR,    |
|            | > Part IX, Subpart ii,                                  |
|            | > 2.1](../pt09_sp02_ch02.xml#XI.ii.2.1).                |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > Prepare a rating decision whenever                    |
| ### b. Whe |                                                         |
| n to Prepa | -   a claim for automobile or adaptive equipment is     |
| re a Ratin |     received from a veteran or a serviceperson and the  |
| g Decision |     issue has not been previously considered, or        |
|            |                                                         |
|            | -   the issue of eligibility for automobile or adaptive |
|            |     equipment is inferred from a disability rating that |
|            |     fulfills the applicable disability criteria.        |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### c. T | > RBA2000 will generate the codesheet with the          |
| he Rating  | > decision(s) regarding entitlement to automobile and   |
| Conclusion | > adaptive equipment or adaptive equipment only, on all |
|            | > original or reopened claims where the requirements of |
|            | > [38 U.S.C.                                            |
|            | > 3901](http://straylight.law.cornell.edu               |
|            | /uscode/html/uscode38/usc_sec_38_00003901----000-.html) |
|            | > ([38 CFR                                              |
|            | > 3.808(b)](http://w                                    |
|            | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_808.DOC)) |
|            | > or [38 U.S.C.                                         |
|            | > 3902(b)(2)](http://straylight.law.cornell.edu         |
|            | /uscode/html/uscode38/usc_sec_38_00003902----000-.html) |
|            | > are initially met.                                    |
+------------+---------------------------------------------------------+

#### 4. Notifying Claimants

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on notifying          |
| troduction | > claimants of awards and denials, including            |
|            | > information on                                        |
|            |                                                         |
|            | -   potential eligibility, and                          |
|            |                                                         |
|            | -   the reason for the denial.                          |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > November 16, 2004                                     |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ###        | > Use the table below to inform the claimant of         |
| ## a. Noti | > potential eligibility after receiving the rating      |
| fying Clai | > decision.                                             |
| mants of P |                                                         |
| otential E |                                                         |
| ligibility |                                                         |
+------------+---------------------------------------------------------+

+----------------------------------+-----------------------------------+
| If the veteran or serviceperson  | Then ...                          |
| is eligible for ...              |                                   |
+----------------------------------+-----------------------------------+
| the automobile allowance         | -   furnish *VA Form 21-4502* in  |
|                                  |     duplicate, if one is not of   |
|                                  |     record, and                   |
|                                  |                                   |
|                                  | -   instruct the claimant to      |
|                                  |     complete and return both      |
|                                  |     copies of the form.           |
+----------------------------------+-----------------------------------+
| adaptive equipment only          | -   furnish *VA Form 10-1394*, if |
|                                  |     available, and                |
|                                  |                                   |
|                                  | -   instruct the claimant to      |
|                                  |                                   |
|                                  | ```{=html}                        |
|                                  | <!-- -->                          |
|                                  | ```                               |
|                                  | -   complete all items in Section |
|                                  |     I, except items 5 and 6       |
|                                  |                                   |
|                                  | -   specify the disability upon   |
|                                  |     which the claim is based in   |
|                                  |     item 7E, and                  |
|                                  |                                   |
|                                  | -   return the completed form to  |
|                                  |     the nearest VA medical        |
|                                  |     facility.                     |
|                                  |                                   |
|                                  | ***Note***: If *VA Form 10-1394*  |
|                                  | is not available, refer the       |
|                                  | claimant to the nearest VA        |
|                                  | prosthetics department.           |
+----------------------------------+-----------------------------------+

Continued on next page

4\. Notifying Claimants, Continued

+------------+---------------------------------------------------------+
| ###        | > If an application is *not* approved, fully inform the |
| ## b. Noti | > claimant of the                                       |
| fying Clai |                                                         |
| mants of t | -   evidence considered, and                            |
| he Reason  |                                                         |
| for Denial | -   reason for denial.                                  |
|            |                                                         |
|            | > ***Reference***: For more information on notice of    |
|            | > disagreements (NODs), see [M21-1MR, Part IX, Subpart  |
|            | > i, 2.7](../pt09_sp01_ch02.xml#IX.i.2.7).              |
+------------+---------------------------------------------------------+

#### 5. Processing Claims for Automobile and Adaptive Equipment Allowance

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on processing claims  |
| troduction | > for automobile and adaptive equipment allowance,      |
|            | > including information on                              |
|            |                                                         |
|            | -   reviewing *VA Form 21-4502* and determining prior   |
|            |     payment status                                      |
|            |                                                         |
|            | -   applying for "other" types of conveyance            |
|            |                                                         |
|            | -   processing applications for "other" types of        |
|            |     conveyance                                          |
|            |                                                         |
|            | -   releasing *VA Form 21-4502* and *VA Form 10-1394*   |
|            |     to the applicant for a conveyance                   |
|            |                                                         |
|            | -   entitlement based on vehicle lease, and             |
|            |                                                         |
|            | -   determining whether the vehicle is purchased or     |
|            |     leased.                                             |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > August 6, 2008                                        |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

Continued on next page

5\. Processing Claims for Automobile and Adaptive Equipment Allowance,
Continued

+------------+---------------------------------------------------------+
| #          | > Follow the steps in the table below to review *VA     |
| #### a. Re | > Form 21-4502*, with Section I, *Application*,         |
| viewing VA | > completed by the veteran or serviceperson, and to     |
|  Form 21-4 | > determine whether prior payment has been made.        |
| 502 and De |                                                         |
| termining  |                                                         |
| Prior Paym |                                                         |
| ent Status |                                                         |
+------------+---------------------------------------------------------+

+-------+--------------------------------------------------------------+
| Step  | Action                                                       |
+-------+--------------------------------------------------------------+
| 1     | Upon receipt of *VA Form 21-4502*, review the claims folder  |
|       | to determine whether it contains a copy of a prior *VA Form  |
|       | 21-4502* annotated by the finance activity indicating prior  |
|       | payment of the automobile allowance.                         |
|       |                                                              |
|       | -   If *yes*, go to Step 5.                                  |
|       |                                                              |
|       | -   If *no*, go to Step 2.                                   |
|       |                                                              |
|       | ***Important***: Although a previously processed *VA Form    |
|       | 21-4502* is generally filed in the left flap of a claims     |
|       | folder, it is important to review the entire claims folder.  |
+-------+--------------------------------------------------------------+
| 2     | Does the Benefits Delivery Network (BDN)/Share M15 screen    |
|       | (or the equivalent in the Veterans Service Network           |
|       | ([VETSNET](http://10.220.1.10/vetsnet/Home.htm))) display    |
|       |                                                              |
|       | -   a "*Y*" in the Auto Allowance Paid field, or             |
|       |                                                              |
|       | -   the terminal digit of the year in which the last payment |
|       |     was made in the Auto Adaptive Equipment field?           |
|       |                                                              |
|       | -   If *yes*, go to Step 5.                                  |
|       |                                                              |
|       | -   If *no*, go to Step 3.                                   |
+-------+--------------------------------------------------------------+
| 3     | Review the *VA Form 21-4502* with the claims folder to       |
|       | determine whether a prior rating decision established        |
|       | entitlement to the automobile or adaptive equipment          |
|       | allowance.                                                   |
|       |                                                              |
|       | -   If *yes*, go to Step 6.                                  |
|       |                                                              |
|       | -   If *no*                                                  |
|       |                                                              |
|       | ```{=html}                                                   |
|       | <!-- -->                                                     |
|       | ```                                                          |
|       | -   send a duty-to-notify/assist ("VCAA") letter to the      |
|       |     claimant                                                 |
|       |                                                              |
|       | -   refer the claim to the rating activity for consideration |
|       |     after the duty-to-notify/assist response period has      |
|       |     expired, and                                             |
|       |                                                              |
|       | -   go to Step 4.                                            |
+-------+--------------------------------------------------------------+

Continued on next page

5\. Processing Claims for Automobile and Adaptive Equipment Allowance,
Continued

  -----------------------------------------------------------------------
  a\. Reviewing VA Form 21-4502 and Determining Prior Payment Status
  (continued)

  -----------------------------------------------------------------------

+-------+--------------------------------------------------------------+
| Step  | Action                                                       |
+-------+--------------------------------------------------------------+
| 4     | Did the rating activity establish entitlement to either the  |
|       | automobile or adaptive equipment allowance?                  |
|       |                                                              |
|       | -   If *yes*, go to Step 6.                                  |
|       |                                                              |
|       | -   If *no*                                                  |
|       |                                                              |
|       | ```{=html}                                                   |
|       | <!-- -->                                                     |
|       | ```                                                          |
|       | -   disallow the claim, and                                  |
|       |                                                              |
|       | -   notify the claimant accordingly.                         |
+-------+--------------------------------------------------------------+
| 5     | If the claim is for                                          |
|       |                                                              |
|       | -   an automobile or conveyance                              |
|       |                                                              |
|       | ```{=html}                                                   |
|       | <!-- -->                                                     |
|       | ```                                                          |
|       | -   prior payment disqualifies the application, and          |
|       |                                                              |
|       | -   inform the claimant accordingly, or                      |
|       |                                                              |
|       | ```{=html}                                                   |
|       | <!-- -->                                                     |
|       | ```                                                          |
|       | -   adaptive equipment                                       |
|       |                                                              |
|       | ```{=html}                                                   |
|       | <!-- -->                                                     |
|       | ```                                                          |
|       | -   prior payment does *not* necessarily disqualify the      |
|       |     application, and                                         |
|       |                                                              |
|       | -   go to Step 6.                                            |
+-------+--------------------------------------------------------------+
| 6     | Does *any one* of the following situations exist?            |
|       |                                                              |
|       | -   The claimant was rated with the qualifying disability    |
|       |     more than five years prior to receipt of *VA Form        |
|       |     21-4502.*                                                |
|       |                                                              |
|       | -   The claims folder was recently transferred from another  |
|       |     RO.                                                      |
|       |                                                              |
|       | -   There is indication that adaptive equipment payments     |
|       |     have been made.                                          |
|       |                                                              |
|       | -   If *yes*                                                 |
|       |                                                              |
|       | ```{=html}                                                   |
|       | <!-- -->                                                     |
|       | ```                                                          |
|       | -   refer the claim to finance activity to review for prior  |
|       |     payment, and                                             |
|       |                                                              |
|       | -   after finance activity completes the review and returns  |
|       |     the claim to authorization, go to Step 7.                |
|       |                                                              |
|       | ```{=html}                                                   |
|       | <!-- -->                                                     |
|       | ```                                                          |
|       | -   If *no*, go to Step 8.                                   |
+-------+--------------------------------------------------------------+
| 7     | Does finance activity's review show that a prior payment for |
|       | an automobile or conveyance was made?                        |
|       |                                                              |
|       | -   If *yes*, disallow the claim.                            |
|       |                                                              |
|       | -   If *no*, go to Step 8.                                   |
+-------+--------------------------------------------------------------+
| 8     | Complete *VA Form 21-4502*, Section II, *Certificate of      |
|       | Eligibility,* by entering all the qualifying disabilities.   |
+-------+--------------------------------------------------------------+

Continued on next page

5\. Processing Claims for Automobile and Adaptive Equipment Allowance,
Continued

  -----------------------------------------------------------------------
  a\. Reviewing VA Form 21-4502 and Determining Prior Payment Status
  (continued)

  -----------------------------------------------------------------------

+-------+--------------------------------------------------------------+
| Step  | Action                                                       |
+-------+--------------------------------------------------------------+
| 9     | Have *VA Form 21-4502* signed by the Veterans Service Center |
|       | Manager (VSCM) or by a designee no lower than coach.         |
+-------+--------------------------------------------------------------+
| 10    | -   Release the original *VA Form 21-4502* to the applicant  |
|       |     and send him/her a notification letter, unless referral  |
|       |     to an outpatient clinic is required, and                 |
|       |                                                              |
|       | -   clear the pending EP 290.                                |
|       |                                                              |
|       | ***Reference***: For more information on the requirement of  |
|       | referring claims to an outpatient clinic, see [M21-1MR, Part |
|       | IX, Subpart i, 2.6.f](../pt09_sp01_ch02.xml#IX.i.2.6.f).     |
+-------+--------------------------------------------------------------+
| 11    | Place a copy of the form in the claims folder.               |
+-------+--------------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### b.   | > Prior to taking any action on the application, if the |
| Applying f | > Type of Conveyance Applied For field on *VA Form      |
| or "Other" | > 21-4502* is checked "Other," make a determination of  |
|  Types of  | > approval or disapproval of the type of conveyance in  |
| Conveyance | > the form of an administrative decision in the format  |
|            | > prescribed in [M21-1MR, Part III, Subpart v,          |
|            | > 1.A.2](../pt03_sp05_ch01_secA.xml#III.v.1.A.2) for    |
|            | > the approval of the VSCM or a designee no lower than  |
|            | > a coach.                                              |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > Follow the steps in the table below when the          |
|  c. Proces | > applicant is found eligible for a conveyance other    |
| sing Appli | > than an automobile or similar vehicle and has         |
| cations fo | > submitted a *VA Form 21-4502* with Section I,         |
| r "Other"  | > *Application*, completed.                             |
| Types of C |                                                         |
| onveyances |                                                         |
+------------+---------------------------------------------------------+

  -------- --------------------------------------------------------------
  Step     Action

  1        Complete and approve Section II, *Certificate of Eligibility*,
           of *VA Form 21-4502*.

  2        Refer the form to the outpatient clinic with a copy of the
           rating decision.

  3        Annotate the copy of *VA Form 21-4502* to show the date and
           place of referral.

  4        File a copy of *VA Form 21-4502* in the claims folder.
  -------- --------------------------------------------------------------

Continued on next page

5\. Processing Claims for Automobile and Adaptive Equipment Allowance,
Continued

+------------+---------------------------------------------------------+
| #          | > After determination of any adaptive equipment for a   |
| #### d. Re | > conveyance other than an automobile or similar        |
| leasing VA | > vehicle, the outpatient clinic must release *VA Form  |
|  Forms 21- | > 21-4502* and supplemental authorization on *VA Form   |
| 4502 and 1 | > 10-1394* to the applicant. The applicant must send    |
| 0-1394 to  | > the forms to finance activity for payment.            |
| the Applic |                                                         |
| ant for a  |                                                         |
| Conveyance |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ###        | > The transfer of possession of a vehicle under a       |
| ## e. Enti | > contract amounting to a lease does *not* qualify for  |
| tlement Ba | > the automobile allowance under [38 U.S.C.             |
| sed on Veh | > 3902(a)](http://straylight.law.cornell.edu/           |
| icle Lease | uscode/html/uscode38/usc_sec_38_00003902----000-.html). |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ###        | > Use the table below to determine whether the vehicle  |
| ## f. Dete | > is purchased or leased.                               |
| rmining Wh |                                                         |
| ether the  |                                                         |
| Vehicle Is |                                                         |
|  Purchased |                                                         |
|  or Leased |                                                         |
+------------+---------------------------------------------------------+

+----------------------------------+-----------------------------------+
| When the ...                     | Then the agreement is a ...       |
+----------------------------------+-----------------------------------+
| applicant and vendor are         | purchase.                         |
| absolutely bound at the outset   |                                   |
| to a purchase and sale           |                                   |
+----------------------------------+-----------------------------------+
| -   applicant                    | lease.                            |
|                                  |                                   |
| ```{=html}                       |                                   |
| <!-- -->                         |                                   |
| ```                              |                                   |
| -   retains the option of        |                                   |
|     considering the payments as  |                                   |
|     rent, and                    |                                   |
|                                  |                                   |
| -   is not obligated to purchase |                                   |
|     the vehicle at the end of    |                                   |
|     the lease period, or         |                                   |
|                                  |                                   |
| ```{=html}                       |                                   |
| <!-- -->                         |                                   |
| ```                              |                                   |
| -   dealer retains the right to  |                                   |
|     take the car back even after |                                   |
|     the applicant meets all the  |                                   |
|     payments due                 |                                   |
+----------------------------------+-----------------------------------+

#### 6. Processing and Paying Eligibility Requests and Certificates of Eligibility

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on processing and     |
| troduction | > paying eligibility requests and certificates of       |
|            | > eligibility, including information on                 |
|            |                                                         |
|            | -   making payment if the vehicle was purchased before  |
|            |     adjudicative action established eligibility         |
|            |                                                         |
|            | -   receiving eligibility requests for vehicles         |
|            |     acquired prior to receipt of allowance              |
|            |                                                         |
|            | -   processing eligibility requests for vehicles        |
|            |     acquired prior to receipt of allowance              |
|            |                                                         |
|            | -   finance activity's recording and reporting on       |
|            |     claims                                              |
|            |                                                         |
|            | -   preventing duplicate payment, and                   |
|            |                                                         |
|            | -   referring adaptive equipment claims to the finance  |
|            |     activity.                                           |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > November 16, 2004                                     |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > Ordinarily, an application on *VA Form 21-4502* is    |
| a. Payment | > completed and approved by authorization activity to   |
|  if the Ve | > certify eligibility before the claimant takes         |
| hicle was  | > possession of, or title to, the vehicle.              |
| Purchased  | >                                                       |
| Before Adj | > However, payment of the automobile allowance is *not* |
| udicative  | > precluded if the vehicle was purchased before the     |
| Action Est | > adjudicative action establishing eligibility,         |
| ablished E | > provided the claimant was actually eligible on the    |
| ligibility | > date on which the claimant signed the sales contract. |
|            | > The claimant's eligibility is controlled by the       |
|            | > effective date of the qualifying disability.          |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #          | > The Veterans Service Center (VSC) receives requests   |
| #### b. Re | > in duplicate for eligibility data for reimbursement   |
| ceiving El | > of adaptive equipment for a vehicle acquired prior to |
| igibility  | > receipt of the automobile allowance from the medical  |
| Requests f | > center or outpatient clinic.                          |
| or Vehicle | >                                                       |
| s Acquired | > The request identifies the claimant and the reason    |
|  Prior to  | > for the request.                                      |
| Receipt of | >                                                       |
|  Allowance | > ***Example***: *"Was claimant eligible under 38       |
|            | > U.S.C. 3902 on* **\[Date expense was incurred for     |
|            | > purchase, installation, repair, or reinstallation of  |
|            | > adaptive equipment\]***?*"                            |
+------------+---------------------------------------------------------+

Continued on next page

6\. Processing and Paying Eligibility Requests and Certificates of
Eligibility, Continued

+------------+---------------------------------------------------------+
| ##         | > After receiving eligibility requests for vehicles     |
| ### c. Pro | > acquired prior to receipt of the automobile           |
| cessing El | > allowance, use the table below to determine           |
| igibility  | > eligibility.                                          |
| Requests f |                                                         |
| or Vehicle |                                                         |
| s Acquired |                                                         |
|  Prior to  |                                                         |
| Receipt of |                                                         |
|  Allowance |                                                         |
+------------+---------------------------------------------------------+

+----------------------------------+-----------------------------------+
| If ...                           | Then ...                          |
+----------------------------------+-----------------------------------+
| the claimant has *not*           | determine basic eligibility as    |
| previously filed a claim for the | described in [M21-1MR, Part IX,   |
| automobile allowance and         | Subpart i,                        |
| adaptive equipment               | 2.1]                              |
|                                  | (../pt09_sp01_ch02.xml#IX.i.2.1). |
+----------------------------------+-----------------------------------+
| -   there is evidence of         | -   determine the eligibility of  |
|     entitlement or               |     the claimant for an           |
|     nonentitlement on record, or |     automobile allowance on the   |
|                                  |     date furnished by the medical |
| -   a determination of basic     |     facility                      |
|     eligibility has already been |                                   |
|     made                         | -   annotate the request form to  |
|                                  |     show *"Claimant (was) (was    |
|                                  |     not) eligible on* **\[date    |
|                                  |     furnished by the medical      |
|                                  |     facility\]***"*               |
|                                  |                                   |
|                                  | -   file the copy of the          |
|                                  |     eligibility request in the    |
|                                  |     claims folder, and            |
|                                  |                                   |
|                                  | -   return the original to the    |
|                                  |     requester.                    |
+----------------------------------+-----------------------------------+
| > a request for eligibility for  | > review the claims folder to     |
| > adaptive equipment only is     | > determine if the veteran is     |
| > received (based on SC          | > entitled.                       |
| > ankylosis)                     |                                   |
|                                  | -   If the veteran is entitled,   |
|                                  |     annotate the request to show  |
|                                  |                                   |
|                                  | ```{=html}                        |
|                                  | <!-- -->                          |
|                                  | ```                               |
|                                  | -   eligibility because of SC     |
|                                  |     ankylosis (loss of use) of    |
|                                  |     one or both knees or hips, or |
|                                  |                                   |
|                                  | -   that the veteran is not       |
|                                  |     eligible, and                 |
|                                  |                                   |
|                                  | ```{=html}                        |
|                                  | <!-- -->                          |
|                                  | ```                               |
|                                  | -   if eligibility is *not*       |
|                                  |     established, furnish a copy   |
|                                  |     of the rating decision.       |
+----------------------------------+-----------------------------------+

Continued on next page

6\. Processing and Paying Eligibility Requests and Certificates of
Eligibility, Continued

+------------+---------------------------------------------------------+
| ###        | > When the original *VA Form 21-4502* with Section III  |
| ## d. Fina | > completed by the claimant is returned and scheduled   |
| nce Activi | > for payment, the finance activity                     |
| ty Respons |                                                         |
| ibility to | -   prominently annotates the copy of the application   |
|  Record an |     in the claims folder to show the                    |
| d Report t |                                                         |
| he Payment | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   date                                                |
|            |                                                         |
|            | -   amount authorized for payment, and                  |
|            |                                                         |
|            | -   initials of the voucher auditor                     |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   records the payment in the master record, and       |
|            |                                                         |
|            | -   forwards a copy of the completed *VA Form 21-4502*  |
|            |     to the outpatient clinic of jurisdiction.           |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### e    | > The VSC permanently retains the annotated copy of *VA |
| . Preventi | > Form 21-4502* in the award section of the claims      |
| ng Duplica | > folder to prevent duplicate payment in the event a    |
| te Payment | > subsequent claim is received.                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### f.   | > Refer all claims for adaptive equipment to the        |
|  Referring | > finance activity. It will determine if the adaptive   |
|  Adaptive  | > equipment is preapproved for reimbursement based upon |
| Equipment  | > the effective date of entitlement, the veteran's SC   |
| Claims to  | > disability, or if it is specifically authorized by    |
| the Financ | > the local VA outpatient clinic. If it is not, then    |
| e Activity | > the finance activity will forward the claim to the    |
|            | > outpatient clinic serving the applicant\'s residence. |
|            | > The designee of the Chief Medical Director will       |
|            | > consider the claim. The prosthetic department will    |
|            | > signify its approval by completing *VA Form 10-1394*. |
|            | > This form is then returned to finance for payment.    |
|            | >                                                       |
|            | > These claims may be independent of any initial        |
|            | > application for an automobile, and may involve        |
|            | > repair, replacement, or reinstallation of adaptive    |
|            | > equipment.                                            |
+------------+---------------------------------------------------------+

#### 7. Processing Notice of Disagreements (NODs) or Substantive Appeal

+------------+---------------------------------------------------------+
| ##### C    | > November 16, 2004                                     |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a.   | > Use the table below to determine the next steps when  |
|  Processin | > the claimant files an NOD or substantive appeal       |
| g an NOD o | > relating to the denial of a claim for automobile and  |
| r Substant | > adaptive equipment allowance.                         |
| ive Appeal |                                                         |
+------------+---------------------------------------------------------+

+----------------------------------+-----------------------------------+
| If ...                           | Then ...                          |
+----------------------------------+-----------------------------------+
| the disallowance resulted from   | authorization furnishes the       |
| the denial of basic eligibility  | statement of the case (SOC) and   |
|                                  | certifies the appeal when the     |
|                                  | substantive appeal is received.   |
+----------------------------------+-----------------------------------+
| -   the claimant has established | -   authorization transfers the   |
|     basic eligibility to the     |     claims folder to the medical  |
|     automobile allowance and     |     facility for preparation of   |
|     adaptive equipment, and      |     an SOC, and                   |
|                                  |                                   |
| -   the issue is the result of   | -   the medical facility returns  |
|     disallowance by the medical  |     the SOC and claims folder to  |
|     activity for certain         |     authorization for release of  |
|     adaptive equipment           |     the SOC.                      |
+----------------------------------+-----------------------------------+
| a substantive appeal is filed    | authorization forwards the claims |
| because of disallowance by the   | folder to the medical activity    |
| medical activity                 | for processing and certification  |
|                                  | of the appeal.                    |
+----------------------------------+-----------------------------------+