### Section E. DIC to Children Pending Determination of a Surviving Spouse's Entitlement

#### Overview

+------------+---------------------------------------------------------+
| #          | > This section contains the following topics:           |
| #### In th |                                                         |
| is Section |                                                         |
+------------+---------------------------------------------------------+

  ------------ ---------------------------------------------- ------------
  Topic        Topic Name                                     See Page

  21           Paying DIC While the Surviving Spouse's Award  3-E-2
               Is Pending                                     

  22           Determining DIC Depending on the Surviving     3-E-6
               Spouse's Entitlement                           
  ------------ ---------------------------------------------- ------------

#### 21. Paying DIC While the Surviving Spouse's Award Is Pending

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains general information on paying DIC |
| troduction | > while the surviving spouse's award is pending. It     |
|            | > includes information on                               |
|            |                                                         |
|            | -   the basis for entitlement                           |
|            |                                                         |
|            | -   benefits when all children are in the custody of    |
|            |     the surviving spouse                                |
|            |                                                         |
|            | -   benefits for a child or children not in the custody |
|            |     of the surviving spouse, and                        |
|            |                                                         |
|            | -   examples of                                         |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   apportioning an award due to children not in the    |
|            |     surviving spouse's custody                          |
|            |                                                         |
|            | -   the payee 11 (child out of custody) award, 403      |
|            |     screen, and                                         |
|            |                                                         |
|            | -   the payee 12 (child in custody) award, 403 screen.  |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > November 16, 2006                                     |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a. B | > If determination of a surviving spouse's entitlement  |
| asis for E | > will be unduly delayed in a claim involving children, |
| ntitlement | > award benefits for the child or children if and when  |
|            | > their entitlement can be established.                 |
|            | >                                                       |
|            | > Award the apportioned rates found in [M21-1, Part I,  |
|            | > Appendix                                              |
|            | > B](http://ww                                          |
|            | w.warms.vba.va.gov/admin21/m21_1/part1/appb/sectV.doc). |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### b.   | > If all children are in the custody of the surviving   |
|  Benefits  | > spouse                                                |
| When All C |                                                         |
| hildren Ar | -   award the benefits to the surviving spouse claimant |
| e in the C |     under either payee 11 or 31 as custodian under [38  |
| ustody of  |     CFR 3.850                                           |
| the Surviv |     (c)](http://w                                       |
| ing Spouse | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_850.DOC), |
|            |     and                                                 |
|            |                                                         |
|            | -   make the payment at the children-only rates.        |
|            |                                                         |
|            | > ***Reference***: For more information on the          |
|            | > recognition of a custodian under [38 CFR              |
|            | > 3.850(c)](http://w                                    |
|            | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_850.DOC), |
|            | > see M21-1MR, Part III, Subpart v, 9.C.13 (TBD) or     |
|            | > [M21-1, Part IV,                                      |
|            | > 17.14](htt                                            |
|            | p://www.warms.vba.va.gov/admin21/m21_1/part4/ch17.doc). |
+------------+---------------------------------------------------------+

Continued on next page

21\. Paying DIC While the Surviving Spouse's Award Is Pending, Continued

+------------+---------------------------------------------------------+
| ##### c. B | > Apportionment is required if one or more of the       |
| enefits fo | > children leaves the custody of the surviving spouse   |
| r a Child  | > before a final determination is made as to the        |
| or Childre | > surviving spouse's entitlement.                       |
| n Not in C | >                                                       |
| ustody of  | > If it is necessary to prepare *VA Form 21-592,        |
| the Surviv | > Request for Appointment of a Fiduciary,* *Custodian   |
| ing Spouse | > or Guardian*                                          |
|            |                                                         |
|            | -   note on the form that                               |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   any awards to children will be made pending a       |
|            |     determination of the surviving spouse's             |
|            |     entitlement, and                                    |
|            |                                                         |
|            | -   benefits awarded may be subject to adjustment, and  |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   determine the rate payable from the apportionment   |
|            |     schedule for children as if the surviving spouse    |
|            |     were entitled.                                      |
+------------+---------------------------------------------------------+

+----------+-----------------------------------------------------------+
| ##### d  | > ***Situation***:                                        |
| . Exampl |                                                           |
| e 1: App | -   The veteran died on 04/15/1998.                       |
| ortionin |                                                           |
| g an Awa | -   The surviving spouse's entitlement is pending.        |
| rd Due t |                                                           |
| o Childr | -   There are two children not in the custody of the      |
| en Not i |     surviving spouse.                                     |
| n the Su |                                                           |
| rviving  | > The payee 31 award is displayed on the 403 screen       |
| Spouse's | > below.                                                  |
|  Custody | >                                                         |
|          | > ![](media/image1.wmf)                                   |
+----------+-----------------------------------------------------------+

Continued on next page

21\. Paying DIC While the Surviving Spouse's Award Is Pending, Continued

+------------+---------------------------------------------------------+
| ##         | > ***Situation***:                                      |
| ### e. Exa |                                                         |
| mple 2: Ap | -   The veteran died on 04/15/1998.                     |
| portioning |                                                         |
|  an Award  | -   The surviving spouse's entitlement is pending.      |
| Due to Chi |                                                         |
| ldren, All | -   One child is in the custody of the surviving        |
|  of Whom A |     spouse.                                             |
| re Not in  |                                                         |
| the Surviv | -   One child is out of the custody of the surviving    |
| ing Spouse |     spouse.                                             |
| 's Custody |                                                         |
|            | > ***Reference***: For the                              |
|            |                                                         |
|            | -   Payee 11 (child out of custody) award, 403 screen,  |
|            |     see M21-1MR, Part IV, Subpart iii, 3.E.21.f.        |
|            |                                                         |
|            | -   Payee 12 (child in custody) award, 403 screen, see  |
|            |     M21-1MR, Part IV, Subpart iii, 3.E.21.g.            |
+------------+---------------------------------------------------------+

+-------+--------------------------------------------------------------+
| ####  | > This is a payee 11 (child out of custody) award, 403       |
| # f.  | > screen, based on the situation in M21-1MR, Part IV,        |
| Examp | > Subpart iii, 3.E.21.e.                                     |
| le 2: | >                                                            |
|  Paye | > ![](media/image2.wmf)                                      |
| e 11  |                                                              |
| (Chil |                                                              |
| d out |                                                              |
|  of C |                                                              |
| ustod |                                                              |
| y) Aw |                                                              |
| ard,  |                                                              |
| 403 S |                                                              |
| creen |                                                              |
+-------+--------------------------------------------------------------+

Continued on next page

21\. Paying DIC While the Surviving Spouse's Award Is Pending, Continued

+--------+-------------------------------------------------------------+
| #####  | > This is a payee 12 (child in custody) award, 403 screen,  |
|  g. Ex | > based on the situation in M21-1MR, Part IV, Subpart iii,  |
| ample  | > 3.E.21.e.                                                 |
| 2: Pay | >                                                           |
| ee 12  | > ![](media/image3.wmf)                                     |
| (Child |                                                             |
|  in Cu |                                                             |
| stody) |                                                             |
|  Award |                                                             |
| , 403  |                                                             |
| Screen |                                                             |
+--------+-------------------------------------------------------------+

#### 22. Determining DIC Depending on the Surviving Spouse's Entitlement

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on determining        |
| troduction | > Dependency and Indemnity Compensation (DIC) depending |
|            | > on the surviving spouse's entitlement. It includes    |
|            | > information on                                        |
|            |                                                         |
|            | -   the action to take                                  |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   if the surviving spouse fails to provide evidence   |
|            |     to establish entitlement to DIC                     |
|            |                                                         |
|            | -   if the spouse's claim is denied                     |
|            |                                                         |
|            | -   on the children's awards when a surviving spouse's  |
|            |     claim is denied, and                                |
|            |                                                         |
|            | -   if the surviving spouse *does* establish            |
|            |     entitlement to DIC, and                             |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   processing an award after a surviving spouse        |
|            |     establishes entitlement.                            |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > December 13, 2005                                     |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > If the surviving spouse fails to provide evidence to  |
| # a. Actio | > establish entitlement to Dependency and Indemnity     |
| n to Take  | > Compensation (DIC), take action to                    |
| if the Sur |                                                         |
| viving Spo | -   pay children-only rates                             |
| use Fails  |                                                         |
| to Provide | -   correct the dependency codes                        |
|  Evidence  |                                                         |
| Required t | -   establish a future date control under reason code   |
| o Establis |     30 for receipt of the evidence required to          |
| h Entitlem |     establish entitlement within one year of the date   |
| ent to DIC |     requested ([M21-1, Part V, Chapter                  |
|            |     5.08b(15)](http                                     |
|            | ://www.warms.vba.va.gov/admin21/m21_1/part5/ch05.doc)). |
|            |                                                         |
|            | -   annotate the award that a control has been          |
|            |     established and the reason, and                     |
|            |                                                         |
|            | -   use a locally-generated letter to notify the        |
|            |     surviving spouse of the decision.                   |
|            |                                                         |
|            | > ***Note***: Reliance on the Benefits Delivery Network |
|            | > (BDN) to issue message code 880, *Not all w/h or      |
|            | > dependents being paid*, is *not* sufficient for       |
|            | > control purposes.                                     |
+------------+---------------------------------------------------------+

Continued on next page

22\. Determining DIC Depending on the Surviving Spouse's Entitlement,
Continued

+------------+---------------------------------------------------------+
| #####      | > If the surviving spouse's claim is denied             |
|  b. Action |                                                         |
|  to Take i | -   prepare a denial and include notice of              |
| f the Surv |                                                         |
| iving Spou | ```{=html}                                              |
| se's Claim | <!-- -->                                                |
|  Is Denied | ```                                                     |
|            | -   the reasons his/her claim could not be granted      |
|            |                                                         |
|            | -   the action taken on the children's claim for        |
|            |     entitlement, and                                    |
|            |                                                         |
|            | -   the awards to, or for, the children, and            |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   take appropriate action on the children's awards.   |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### c. A | > Use the table below to determine the action to take   |
| ction to T | > on the children's awards when a surviving spouse's    |
| ake on the | > claim is denied.                                      |
|  Children' |                                                         |
| s Awards W |                                                         |
| hen a Surv |                                                         |
| iving Spou |                                                         |
| se's Claim |                                                         |
|  Is Denied |                                                         |
+------------+---------------------------------------------------------+

+----------------------------------+-----------------------------------+
| If all children are ...          | Then ...                          |
+----------------------------------+-----------------------------------+
| in the custody of the surviving  | take no action to adjust the      |
| spouse                           | children's award.                 |
+----------------------------------+-----------------------------------+
| -   out of the custody of the    | -   take action as of the date of |
|     surviving spouse, or         |     entitlement to authorize      |
|                                  |     payment at the children-only  |
| -   both in and out of the       |     rates with appropriate        |
|     custody of the surviving     |     withholding through the date  |
|     spouse                       |     last paid (DLP), when the     |
|                                  |     award will be adjusted to     |
|                                  |     zero out the withholding, and |
|                                  |                                   |
|                                  | -   change the dependency codes   |
|                                  |     to show the codes for a       |
|                                  |     children-only award.          |
+----------------------------------+-----------------------------------+

Continued on next page

22\. Determining DIC Depending on the Surviving Spouse's Entitlement,
Continued

+------------+---------------------------------------------------------+
| ####       | > Use the table below to determine the action to take   |
| # d. Actio | > if                                                    |
| n to Take  |                                                         |
| if the Sur | -   an award has been made for a child or children, and |
| viving Spo |                                                         |
| use Does E | -   the surviving spouse's entitlement is subsequently  |
| stablish E |     established.                                        |
| ntitlement |                                                         |
+------------+---------------------------------------------------------+

+----------------------------+-----------------------------------------+
| If ...                     | Then ...                                |
+----------------------------+-----------------------------------------+
| all children are in the    | -   terminate the payee 11 or 31 award  |
| surviving spouse's custody |     as of the DLP                       |
|                            |                                         |
|                            | -   pay the available balance under a   |
|                            |     payee 10 award, and                 |
|                            |                                         |
|                            | -   adjust the payee 10 award DLP to    |
|                            |     remove the withholding.             |
+----------------------------+-----------------------------------------+
| none of the children are   | -   take no action on the children's    |
| in the custody of the      |     award, and                          |
| surviving spouse           |                                         |
|                            | -   prepare a payee 10 award with       |
|                            |     proper withholding for the children |
|                            |     out of custody.                     |
+----------------------------+-----------------------------------------+
| there are children both in | -   take no action on the award for the |
| and out of custody of the  |     children out of custody             |
| surviving spouse           |                                         |
|                            | -   terminate the award for the         |
|                            |     children in custody as of the DLP,  |
|                            |     and                                 |
|                            |                                         |
|                            | -   prepare a payee 10 award from the   |
|                            |     date of entitlement, with           |
|                            |     appropriate withholding for prior   |
|                            |     payments adjusted as of DLP.        |
+----------------------------+-----------------------------------------+

Continued on next page

22\. Determining DIC Depending on the Surviving Spouse's Entitlement,
Continued

+---------+------------------------------------------------------------+
| ##      | > ***Situation***:                                         |
| ### e.  |                                                            |
| Example | -   The veteran died on 04/15/1998.                        |
| : Proce |                                                            |
| ssing a | -   The surviving spouse has established entitlement.      |
| n Award |                                                            |
|  After  | -   There are two children with                            |
| a Survi |                                                            |
| ving Sp | ```{=html}                                                 |
| ouse Es | <!-- -->                                                   |
| tablish | ```                                                        |
| es Enti | -   one child in the custody of the surviving spouse, and  |
| tlement |                                                            |
|         | -   one child out of the custody of the surviving spouse.  |
|         |                                                            |
|         | ```{=html}                                                 |
|         | <!-- -->                                                   |
|         | ```                                                        |
|         | -   The DLP is 07/01/1998.                                 |
|         |                                                            |
|         | > ***Result***:                                            |
|         |                                                            |
|         | -   No action is necessary on payee 11 award               |
|         |                                                            |
|         | -   terminate the payee 12 award DLP, and                  |
|         |                                                            |
|         | -   prepare a payee 10 award.                              |
|         |                                                            |
|         | > ***Note***: The payee 10 award is displayed on the 403   |
|         | > screen below.                                            |
|         | >                                                          |
|         | > ![](media/image4.wmf)                                    |
+---------+------------------------------------------------------------+