##### Veterans Benefits Administration M21-1, Part VI

#### Department of Veterans Affairs Change 118

#### Washington, DC 20420 September 23, 2004

Veterans Benefits Manual M21-1, Part VI, "Rating Board Procedures," is
changed as follows:

**Page 3-i:** Remove this page and substitute page 3-i attached.

**Pages 3-II-1 through 3-II-13:** Remove these pages and substitute
pages 3-II-1 through 3-II-13 attached.

Paragraph 3.08 is amended to show the current section headings in
RBA2000.

Paragraph 3.10d.(1) is revised to insert the phase "unless permanency is
not established"

after the phrase "whenever a total evaluation, either schedular or based
on individual unemployability, is granted for service-connected
disability."

Paragraph 3.10d.(3) is revised by replacing the phrase "whenever the
issue of service connection for cause of death is resolved" with the
phrase "whenever service connection is granted for cause of death".

Paragraph 3.10k. is revised to provide examples where a medical opinion
may or may not be required when a veteran with service-connected
diabetes also has hypertension.

Paragraph 3.13a is revised to clarify that a rating decision that grants
benefits should include a discussion of the basis for the grant. The
decision should also explain how the evidence in the case relates to the
disability criteria for the evaluation assigned.

Paragraph 3.25b is revised to update the diagnostic code provided in the
example from 5002-5289 to 5002-5240.

**Pages 4-i and 4-7 through 4-10**: Remove these pages and substitute
pages 4-i and 4-7 through 4-10, attached.

Paragraph 4.11b. is revised to show that Chapter 35 eligibility should
be inferred when there is a reasonable probability of granting it, but
not raised as an issue merely to deny it.

Paragraph 4.11c. is revised to indicate that, for a disability that is
total in nature, ratings as to the issue of permanency are required
whether or not there appear to be any potential dependents.

Paragraph 4.11d. is amended to clarify that a denial of Chapter 35
benefits is generally required only when the benefit is claimed, not
inferred.

Paragraph 4.13a is revised to replace the words "Adjudication Division"
with "Veterans Service Center."

**Pages 7-II-3 and 7-II-4:** Remove these pages and substitute paged
7-II-3 and 7-II-4 attached.

Paragraph 7.09a(9) is revised to clarify that a rating decision that
grants individual unemployability benefits should explain how impairment
from service-connected disability supports the grant.

Paragraph 7.09b(5) is revised to show that Chapter 35 eligibility should
be inferred when permanency is established, but not raised as an issue
merely to deny it.

"Reasons and Bases" has been replaced by "Reasons for Decision"
throughout this change.

**M21-1, Part VI September 23, 2004**

######## Change 118

"Rating specialist" has been replaced by "Rating Veterans Service
Representative" or "RVSR" throughout

this change.

Rescissions: None.

> By Direction of the Under Secretary for Benefits

Renée L. Szybala, Director

Compensation and Pension Service

Distribution: RPC: 2068

FD: EX: ASO and AR (included in RPC 2068)

# 

**September 23, 2004 M21-1, Part VI**

######  Change 118

**CHAPTER 3. PREPARATION OF THE RATING DECISION**

**CONTENTS**

PARAGRAPH PAGE

**SUBCHAPTER I. GENERAL**

3.01 Rating Board Automation 3-I-1

3.02 Ratings Requiring Data Entry 3-I-1

3.03 Preparation and Processing of Ratings\--General 3-I-1

3.04 Correction of Errors 3-I-2

3.05 Changes in the Rating Schedule 3-I-2

3.06 Extra-Schedular Consideration in Compensation and Pension Claims
3-I-3

3.07 Ratings Under 38 CFR 3.105(a) Effecting a Retroactive Grant or
Increase 3-I-3

**SUBCHAPTER II. RATING DECISIONS**

3.08 Forms and Format 3-II-1

3.09 Issue 3-II-1

3.10 Inferred Issues and Ancillary Benefits 3-II-1

3.11 Evidence 3-II-3

3.12 Decision 3-II-3

3.13 Reasons for Decision 3-II-4

3.14 Confidential Medical Records 3-II-5

3.15 Required Entries in the Data Table 3-II-5

3.16 Active Duty Dates and Additional Service Codes 3-II-5

3.17 Combat Disabilities 3-II-6

3.18 Special Provision Codes 3-II-6

3.19 Future Physical Examination 3-II-7

3.20 Copies of Ratings 3-II-7

3.21 Special Monthly Compensation 3-II-8

3.22 Miscellaneous Information 3-II-8

3.23 Jurisdiction 3-II-9

3.24 Coded Conclusion 3-II-9

3.25 Diagnostic Codes 3-II-9

3.26 Evaluations 3-II-10

3.27 Combined Degree and Effective Date 3-II-10

3.28 Listing Disabilities\--Rating Codes 3-II-11

3.29 Special Monthly Compensation 3-II-12

3.30 Signatures 3-II-12

3.31 Partial Rating Decisions 3-II-13

**EXHIBITS**

A.  Rating Decision 3-E-1

B.  Rating Decision Codesheet 3-E-3

**3-i**

**September 23, 2004 M21-1, Part VI**

######  Change 118

**SUBCHAPTER II. RATING DECISIONS**

**3.08 FORMS AND FORMAT**

a\. **Structure of the Rating Decision.** The rating consists of two
sections: the narrative section and codesheet section. The narrative
section contains an Introduction, Decision, Evidence, Reasons for
Decision, and References. The narrative section of the rating may be
copied and sent to the claimant as notification of the decision. The
codesheet section likewise has four parts: Data table, Jurisdiction,
Coded Conclusion, and Signatures. The codesheet section is intended for
internal processing and will not be routinely promulgated to the
claimant. Each page of the rating contains a heading with information
identifying the claimant and rating. Write the rating narrative using
the active voice.

b\. **Signatures and Printing.** Except as specifically provided for
overprint ratings, the signed file copy of ratings must be printed on
blue paper. One or two RVSRs will sign the completed rating at the
bottom of the last page. Ratings may be printed on both sides of the
paper (\"duplex printing\") provided that the reverse side is printed
head to foot (\"short edge\" as opposed to \"long edge\").

c\. **Deferred Rating Decision.** There are circumstances in which the
rating activity receives a claim which is under-developed or incomplete
and requires additional development. The deferred rating is used for
that purpose. Deferred rating decisions can be made on VA Form 21-6789,
"Deferred Rating Decision." The deferred rating on VA Form 21-6789 may
be handwritten.

**3.09 ISSUE**

a\. **General.** Clearly state all issues of entitlement identified by
the claimant, or those which can be reasonably inferred from the facts
or circumstances of the claim. If there is more than one issue, list the
issues by number. In RBA, the issues appear under the identifier
"ISSUE." In RBA 2000, the issues appear under the identifier "DECISION."

b\. **Compensation Ratings.** Consider all claimed disabilities in the
rating decision. Also consider all chronic disabilities found in the
service records even if they were not claimed. This is to be done on the
original rating, or subsequently in cases where additional service
medical records are received following an initial rating decision. Do
not consider any of the following conditions unless specifically
claimed:

\(1\) Acute and transitory disorders without residual disability;

\(2\) Noncompensable residual disability from venereal disease;

\(3\) Disabilities noted only on an induction examination, or disorders
recorded by history only;

\(4\) Disabilities found by authorization not to have been incurred \"in
line of duty\" (see pt. IV, par. 11.03); and

\(5\) Clinical findings such as cholesterol or blood sugar levels that
are not generally recognized as \"disabilities\" or subject to service
connection.

**3.10 INFERRED ISSUES AND ANCILLARY BENEFITS**

An issue is sometimes derived from the consideration or outcome of a
related issue. The Issue(s), Decision(s) and Reasons for Decision
sections of the rating must explicitly address these inferred issues.
Often the primary and inferred issues share the same fact-pattern, as
when a psychosis is being evaluated and competency is confirmed. In such
instances, the inferred issue may be incorporated in the same Issue(s),
Decision(s) and Reasons for Decision numbered item as the primary issue.
An example of such an issue statement might be \"1. Evaluation of
psychotic disorder currently evaluated as 30 percent disabling;
Competency to handle disbursement of funds.\" Although each of the two

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**M21-1, Part VI September 23, 2004**

######## Change 118

issues would be separately justified within the same Reasons for
Decision item, the sentences dedicated to the facts would be shared by
both. If the primary and inferred issues are each itemized in separate
Issue(s), Decision(s), and Reasons for Decision paragraphs, discussion
of a common fact pattern may be confined to the Reasons for Decision of
the primary issue. As a general rule, one should infer an issue if there
is a reasonable probability of granting it. Do not infer an issue merely
to deny it, unless specifically indicated otherwise, as in items
[3.10f]{.underline}. and [3.10k]{.underline}. below.

a\. **Special Monthly Compensation (SMC).** Consider entitlement to SMC
as an issue in every case where there is a severe degree of disability
involving the loss or loss of use of an extremity or sensory organ or
any other functional loss providing entitlement to SMC.

b\. **Aid & Attendance or Housebound.** If a single disability of 100
percent is assigned, consider potential entitlement to A&A. If
entitlement to A&A is not shown consider potential entitlement to the
housebound benefit. However, if the evidence does not indicate
entitlement or probable entitlement, neither issue should be raised by
VA merely to deny it.

c\. **Retroactive Disability Pension.** If retroactive disability
pension is not claimed, but a qualifying disability may exist, the
claimant should be advised that retroactive benefits may be payable.

d\. **Dependents\' Educational Assistance (DEA)---38 U.S.C. Chapter 35**

\(1\) Whenever a total evaluation, either schedular or based on
individual unemployability, is granted for service-connected disability,
unless permanency is not established, the following statement must be
included in the rating conclusion: \"Basic eligibility under 38 U.S.C.
Chapter 35 is established from \[date\].\"

\(2\) When permanency is subsequently established, this fact will be
reflected by citing the statement contained in subparagraph (1) above.
The effective date will be the date of examination which established
permanency, the date of new evidence requiring cancellation of future
examination, or the date of review when a future examination is
canceled.

**NOTE:** A rating decision *must* be prepared whenever permanency is
established, whether the permanency is based on new evidence and/or on
cancellation of a future examination. This applies regardless of whether
or not there appear to be any potential dependents.

\(3\) In death ratings, whenever service connection for cause of death
is granted, the following statement must be included in the rating
conclusion: \"Basic eligibility under 38 U.S.C. Chapter 35 is
established.\"

\(4\) A surviving spouse may again establish eligibility for DIC either
upon termination of the remarriage by death, divorce, or annulment, or
upon the cessation of living with another person and holding herself or
himself out openly to the public as that person's spouse (38 U.S.C.
1311(e)). VAOPGCPREC 13-98 held that eligibility for DIC regained under
these provisions did not entitle the surviving spouse to CHAMPVA, DEA,
or loan guaranty benefits. However, Public Law 106-117, effective
November 30, 1999, explicitly restored eligibility for these ancillary
benefits. See also Part IV, 12.14g.

e\. **Psychosis---38 U.S.C. 1702.** Whenever a claim for service
connection for a psychosis based on wartime service is denied, determine
entitlement to service connection for treatment purposes under 38 U.S.C.
1702. Code the decision \"48. Active Psychosis---SC for Treatment
Purposes Only.\"

f\. **Consideration Under 38 CFR 3.324.** Consideration of entitlement
to a 10 percent rating under 38 CFR 3.324 must be shown as an issue in
all ratings, including confirmed ratings, when a veteran has no
compensable evaluation but more than one noncompensable evaluation. If
denied, the Reasons for Decision section of the rating must adequately
address this issue.

g\. **Extra-Schedular Consideration Under 38 CFR 3.321(b)(2).** Consider
an extra-schedular evaluation under 38 CFR 3.321(b)(2) whenever a
pension claim fails to meet the schedular requirements for permanent and
total disability. In the Reasons and Bases section of the rating discuss
why pension can or cannot be granted under that

**3-II-2**

**September 23, 2004 M21-1, Part VI**

######  Change 118

regulation. If favorably considered, refer the rating to the VSCM
recommending approval. A favorable decision will not require reference
to extra-schedular consideration in the issue section of the rating.

h\. **Specially Adapted Housing.** Whenever a rating initially
establishes disability evaluations meeting the requirements of 38 CFR
3.809 or 3.809a, dispose of the issue of entitlement to specially
adapted housing in the rating conclusion by using rating code 41 or 41A
and the applicable paragraph in part I, Appendix A.

i\. **Automobile and Adaptive Equipment.** Whenever a rating initially
establishes entitlement under 38 U.S.C. 3902 (38 CFR 3.808), dispose of
the issue of entitlement to automobile and adaptive equipment or
adaptive equipment only. In the rating conclusion enter the appropriate
rating code 61 or 61A as found in part I, Appendix A.

j\. **Competency.** Consider competency as an issue whenever a mental
disorder is evaluated as 100 percent disabling, or if other evidence
raises a question as to the beneficiary\'s mental capacity to contract
or to manage his or her own affairs, including disbursements of funds,
without limitation.

k\. **Diabetes Mellitus and Hypertension.** When a veteran is service
connected for diabetes mellitus and diabetic nephropathy, and has a
diagnosis of hypertension, review the medical evidence and determine
when the hypertension was diagnosed relative to the diabetic
nephropathy. Then:

\(1\) If the medical evidence shows that hypertension was diagnosed
after diabetic nephropathy was diagnosed, grant service connection for
hypertension as secondary to diabetes mellitus.

\(2\) If the medical evidence shows that hypertension was diagnosed
before diabetic nephropathy was diagnosed, and there has been no change
in the treatment of hypertension or increase in blood pressure readings
since diabetic nephropathy was diagnosed, deny service connection for
hypertension as not secondary to diabetes mellitus.

\(3\) If the medical evidence shows that hypertension was diagnosed
before diabetic nephropathy was diagnosed, but that there was a change
in the treatment of hypertension and/or an increase in blood pressure
readings since diabetic nephropathy was diagnosed, obtain a medical
opinion to determine if hypertension was aggravated by the
service-connected diabetic nephropathy.

\(4\) If it is unclear from the medical evidence when hypertension was
diagnosed, or whether there has been an increase in the hypertension
disability since diabetic nephropathy was diagnosed, obtain a medical
opinion to determine if hypertension developed or was aggravated by the
service-connected diabetic nephropathy.

l\. **Individual Unemployability.** If the veteran meets the schedular
requirement for unemployability under [38 CFR 4.16(a]{.underline}), the
issue of individual unemployability should be inferred unless there is
persuasive evidence that the veteran is gainfully employed. (See also
[Part VI, 7.07b]{.underline}.) In cases where the evidence shows that
he/she is employed, do not infer the issue merely to deny.

**3.11 EVIDENCE**

Under the identifier \"EVIDENCE,\" clearly and concisely inventory all
evidence considered in arriving at the decision with the applicable
dates of treatment reports, hospitalization, etc. Include the dates
covered by service medical records (identifying at least the month and
year) and the names of VA and private medical facilities, private
physicians and other information sources. The Evidence section should
also describe items of evidence requested but not received. Further
reference to evidence not received will not be required in the Reasons
for Decision.

**3.12 DECISION**

Under \"DECISION,\" clearly and concisely state the decision made on
each issue or inferred issue considered in the rating. If there is more
than one decision, list the decisions by numbers corresponding to the
numbered issues.

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**M21-1, Part VI September 23, 2004**

######## Change 118

The assignment of an evaluation or effective date in compensation cases
must also be included in the decision statement.

**3.13 REASONS FOR DECISION**

a\. **General.** Support conclusions with the necessary level of
analysis and explanation. For example, where service connection is being
granted, state or discuss the

> benefit being granted,
>
> basis for the grant, focusing on the in-service event and/or
> subsequent developments that link the condition to service,
>
> basis for the evaluation,
>
> requirements for the next higher evaluation, and
>
> basis for the effective date.

\(1\) Grants of service connection must include an explanation or
analysis that shows how the entitlement or disability was determined to
be service-connected. Computer-generated paragraphs standing alone or
conclusory statements without explanation do not satisfy the requirement
to state the basis for the grant. See Training Letter\
02-02 dated June 19, 2002.

\(2\) When assigning a disability evaluation, it is not enough to simply
list the criteria for the evaluation followed by a statement that a
particular evaluation is assigned because the disability meets the
criteria. Instead, relate what the evidence shows to the criteria
assigned. For example, when explaining the reasons for assigning a
thirty percent evaluation to a knee disability state, "You meet the
criteria for a thirty percent evaluation because at your examination,
severe instability was found in your left knee," rather than, "Thirty
percent is assigned because your disability meets the above criteria."

b\. **Review of Evidence.** Concisely cite and evaluate all evidence
that is relevant and necessary to the determination. Rating decisions
must evaluate all the evidence, including oral testimony given under
oath and certified statements submitted by claimants, and must clearly
explain why that evidence is found to be persuasive or unpersuasive.
Decisions must address all pertinent evidence and all of the claimant\'s
contentions. Do not quote at length from letters, affidavits, hospital
reports, etc.

c\. **Next Higher Evaluations**. When assigning a disability evaluation,
if a higher evaluation is possible under a particular diagnostic code,
discuss the criteria for the next higher evaluation. If the reason the
veteran does not meet the requirements for the next higher evaluation is
not readily apparent, be sure to explain why. Confine the explanation of
the criteria for the assigned and next higher evaluations to the
diagnostic code under which the disability is evaluated. In the case of
hearing loss or visual impairment, a general statement such as "higher
evaluations are assigned for greater loss of hearing (or vision)" will
be sufficient.

\(1\) If service connection is granted, do not relate all the details of
treatment in service. A simple statement that the enlistment exam was
negative and that beginning on a particular date prior to separation the
veteran was treated for whatever condition was diagnosed is usually
sufficient. The next entry in the paragraph should be the findings from
the current exam or a citation of whatever evidence is necessary to
establish chronicity and continuity. If the cause of several claimed
disabilities is the same, such as one accident, information concerning
the origin need only be discussed in detail once in the reasons and
bases paragraph for the first disability of common origin.

\(2\) When granting service connection, extensive discussion of post
service treatment is only necessary if essential to the evaluation.

\(3\) Cite evidence, both favorable and unfavorable, without partiality,
especially when a decreased benefit is under consideration. Compare
relevant findings at the time of previous rating with present findings.

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**September 23, 2004 M21-1, Part VI**

######  Change 118

d\. **Medical Conclusions.** Cite medical information and reasoning
linking or separating two disabilities or establishing or refuting prior
inception or aggravation. Medical conclusions must be supported by
evidence in the claims file. Rating Veteran Service Representatives
(RVSRs) cannot refute medical evidence submitted by the claimant with
their own medical opinions. Rating decisions can cite recognized medical
treatises or an independent medical opinion to support a conclusion.
Such authority, when relied upon, must be identified in the decision.

**3.14 CONFIDENTIAL MEDICAL RECORDS**

Identify evidence under the authority of 38 U.S.C. 7332 (confidentiality
of certain medical records relating to substance abuse, HIV infection,
or sickle cell anemia) by specifying only the name of the medical
facility furnishing the report and the date of the report. See part II,
paragraph 3.05. The Reasons for Decision should only summarize
information from a 38 U.S.C. 7332 record which is directly pertinent to
the issue. If, for example, a veteran is claiming to have been treated
for a service-connected disorder but records instead show treatment for
substance abuse, state simply that there is no evidence of treatment for
the claimed condition without mentioning the actual object of treatment.
If treatment records affirm a claim, summarize the information essential
to the decision. Do not incorporate quotations from a 38 U.S.C. 7332
record.

**3.15 REQUIRED ENTRIES IN THE DATA TABLE**

The future exam field is a required entry in all live cases. Enter dates
of service (and additional service code if applicable) for the initial
rating of a veteran. Service dates are not required on a subsequent
rating unless they have changed. A combat code is required for the
initial rating which addresses service connection. There is no need for
a later entry unless the combat status has changed. Entries for the
special provision code and SMC codes are required only if applicable to
current or future benefit entitlement.

**3.16 ACTIVE DUTY DATES AND ADDITIONAL SERVICE CODES**

Enter the veteran\'s dates of entry and release from active duty on all
original ratings and on any supplemental ratings which base entitlement
on a different period of service.

a\. **Two or More Periods of Service**

\(1\) If the veteran had more than two periods of service, enter the
inclusive dates for the period of service on which entitlement is
established in the first of the active blocks, as follows:

\(a\) In compensation ratings, the latest entitling period.

\(b\) In pension ratings, the earliest entitling period.

\(2\) Enter multiple periods of honorable service, without any break in
service, as a single entitling period of service.

\(3\) Show additional periods of service (prior and subsequent) in the
space above the Jurisdiction.

b\. **Additional Service Code.** Enter the appropriate additional
service code in the space provided, as follows:

\(1\) **Code 1---WT** Additional service, some of which occurred during
a wartime period.

\(2\) **Code 2---PTE** Additional service, all occurring during a
peacetime period.

\(3\) **Code 3---SCD** Used only in pension ratings based on less than
90 days service, i.e., if the veteran had less than 90 days wartime
service, but entitlement is established based on a service-connected
disability at time of separation for which discharge or release was or
would have been granted as provided in 38 CFR 3.3(a)(1)(ii) and
(a)(3)(ii).

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c\. **WW I---Service in Russia.** In cases where the veteran had no
active service during the inclusive dates for World War I (April 6,
1917---November 11, 1918) but did serve thereafter, on or before April
1, 1920, the rating narrative must show whether or not there was service
in Russia, qualifying as WW I service.

**3.17 COMBAT DISABILITIES**

a\. The term \"combat disability\" applies to any injury received in
action against an enemy of the United States or as a result of an act of
such an enemy. This includes wounds by missiles, injuries, or
psychological trauma (PTSD) experienced in accidents, explosions,
airplane crashes, etc., during a period when the veteran was in combat.
Diseases directly attributable to exposure to the elements as an
incident of action against the enemy or the result of acts of the enemy
(including exposure following airplane crash, shipwreck, etc.) are to be
held as of combat origin. Avoid conjecture in the matter. No combat
determination is to be made unless evidence of record clearly relates
the disability to combat origin or acts of the enemy.

b\. Make an entry in Combat Status for the initial rating which
addresses service connection. There is no need for a later entry unless
the combat status has changed. In RBA 2000, combat status is entered as
appropriate for each disability.

\(1\) **Code 1---(None).** No combat disabilities.

> \(2\) **Code 2---(Comp.).** One or more combat disabilities, all of
> which are compensable.

\(3\) **Code 3---(Noncomp.).** One or more combat disabilities, none of
which are compensable.

\(4\) **Code 4---(Both).** One or more combat disabilities, not all of
which are compensable.

**3.18 SPECIAL PROVISION CODES**

a\. **General.** Computer audits of the rating data in a master record
verify that the percentage of disability assigned to each diagnostic
code is one of the evaluations permitted by the rating schedule and that
the combined degree is justified. There are some ratings that, because
of a special provision of the rating schedule or other VA regulations,
contain an evaluation or combined degree which would not ordinarily be
acceptable. Special provision codes are used to identify these cases and
to permit successful computer audits. Special provision codes 1, 2, 4,
5, and 7 are generated automatically when applicable. Special provision
codes 3 and 6 must be entered in the appropriate block by the RVSR.

b\. **Code 3.** This code is used to indicate entitlement based on an
extra-schedular evaluation when individual unemployability is conceded
under 38 CFR 3.321(b). In RBA, identify an extra-schedular evaluation by
entry of \"ES\" following the specific diagnostic code(s) involved. In
RBA 2000, enter "ES" following the diagnosis text.

c\. **Code 4.** When assigning an otherwise unacceptable under-schedular
evaluation for a diagnostic code under 38 CFR 3.322(a) by reason of
deduction of the preservice level of disability service connected by
aggravation, enter \"US\" following the diagnostic code in RBA. In RBA
2000, enter "US" following the diagnosis text.

d\. **Code 6---Other or Combination**

\(1\) This code is used for computer audit acceptance of any combination
of the special provision codes and when a total evaluation is continued
under the protection of 38 CFR 3.951 or assigned to a single disability
in accordance with paragraph 16 of the rating schedule under a valid
diagnostic code (identified by alpha equivalent) for which such
percentage evaluation would be otherwise unacceptable.

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**September 23, 2004 M21-1, Part VI**

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\(2\) Code 6 will also be used for acceptance of a combined degree that
is not justified by the individual evaluations. Examples include:

\(a\) When graduated evaluations are assigned for two or more diagnoses
of inactive tuberculosis which may not be combined;

\(b\) When an independent respiratory condition is assigned in addition
to a graduated evaluation for pulmonary tuberculosis which may not be
combined;

\(c\) Two or more independent disabilities affecting one extremity, when
the combined evaluation exceeds the maximum allowable under the
amputation rule. Use of this code provides for computer audit acceptance
of valid diagnostic codes at any evaluation, and a combined degree of
less than the normal value of the individual evaluation;

\(d\) Two or more separate noncompensable disabilities (including 38
U.S.C. 1151) for which a 10 percent combined evaluation may be assigned
under 38 CFR 3.324; or

\(e\) Two or more conditions that are assigned separate evaluations
considered as one for the purpose of meeting the 40 percent or 60
percent single disability requirement in paragraph 16 of the rating
schedule. The reasons and bases section of the rating should show the
basis for such consideration

**3.19 FUTURE PHYSICAL EXAMINATION**

a\. Enter a future control date or \"None\" on every disability rating
decision in the space for \"Future Exam\" even though such entry may
constitute a repetition of an entry made on a prior rating decision.

b\. If a future examination is required, explain why in the reasons and
bases section of the rating decision.

c\. To establish an examination date, enter the month and year in the
spaces provided. The master record maintains only one future exam
control at a time. The master record also cannot be used to generate a
VA Form 21-2507a if the requested examination date is less than 3 months
in the future. In such a case, indicate an immediate examination is to
be requested by entering \"AT ONCE\" or \"Immd\" (in RBA AND RBA 2000)
in the space provided for the future examination date and complete an
examination request.

d\. To change the date of a Future Exam Control, enter the new month and
year in the space for \"Future Exam\" control. To cancel an exam, enter
\"None.\"

**3.20 COPIES OF RATINGS**

Make the appropriate entry(ies) in the \"Copy To\" field whenever an
additional copy(ies) is required. Copies of all pages of the rating are
to be provided. Copies of ratings do not have to be printed on blue
paper.

a\. **For Chapter 31 Purposes**

\(1\) If the claims folder contains VA Form 28-6564, "Vocational
Rehabilitation Participant---Claims Folder Flash," provide a copy of the
rating decision to VR&E whenever the evaluation of a service-connected
disability is increased, service connection is granted for an additional
compensable disability, or a service-connected disability is reduced in
evaluation or severed. See paragraph 4.05.

\(2\) If VA Form 28-6564 is annotated with the date of discontinuance or
rehabilitation, only provide copies of ratings that increase the
evaluation of service-connected disabilities or grant service connection
for an additional compensable disability.

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**M21-1, Part VI September 23, 2004**

######## Change 118

b\. **For Insurance Purposes**

\(1\) Prepare an insurance copy of a rating only if it is specifically
requested by the VA insurance center in Philadelphia.

\(2\) When a Rating Veterans Service Representative (RVSR) believes a
veteran in receipt of compensation is suffering from a terminal illness,
hand deliver a copy of the rating to the VSCM or designee, except if the
file contains a duplicate copy of VA Form 29-4364, "Application for
Service Disabled Veterans Life Insurance (RH)." Annotate the rating
sheet to show \"Insurance copy delivered to \[name of
employee\]---Potential Terminal Case.\"

\(3\) Refer copies of ratings establishing pension entitlement for
veterans under the age of 65 to the VSCM or designee to develop
applications for possible waiver of premiums and benefits under the
Total Disability Income Provisions.

c\. **For the Medical Activity.** If a medical center requests a
determination of service connection or entitlement to compensation under
38 U.S.C. 1151, prepare an extra copy of the rating for the center.

d\. **For the Veterans Service Center Manager.** When payments are being
made to a guardian of an incompetent veteran, provide a copy of any
rating establishing the veteran as competent to the VSCM or designee.
See paragraph 9.08d.

e\. **Special Law Code 10 Cases.** When an award is authorized under
special law code 10 for a rate which cannot be verified by computer
audit/edit, provide a copy of the rating for the Compensation and
Pension Service (212B), VA Central Office. See part V, paragraph 6.09.

f\. **For Specially Adapted Housing Purposes.** On all original or
reopened compensation claims in which the requirements of 38 CFR 3.809
or 38 CFR 3.809a are initially met, furnish a copy of the rating
containing the veteran\'s full name and address above the Jurisdiction
on the codesheet to Loan Guaranty. See chapter 4 and part IV, paragraph
23.07.

**3.21 SPECIAL MONTHLY COMPENSATION**

Enter the appropriate codes in the blocks provided for the special
monthly compensation paragraph code and for loss of use, anatomical
loss, and other losses with the appropriate effective dates. If
applicable, enter future SMC paragraph codes in the blocks provided. Do
not enter SMC codes for retroactive SMC entitlement for a period
entirely in the past. See part I, appendices A and B.

**3.22 MISCELLANEOUS INFORMATION**

a\. **General.** It may occasionally be necessary to provide processing
instructions to authorization for certain rating actions. If a veteran
was awarded severance pay by the service department for any disabilities
which are being service connected, insert a note above the Jurisdiction
in RBA to identify those disabilities, such as \"Disability Severance
Pay awarded for Diagnostic Codes 5257 and 5295.\" RBA 2000 places
withholding information with each appropriate disability, not above the
Jurisdiction. Also include instructions for processing issues relating
to 38 CFR 3.105(a) and accrued benefits. Other information and
\"legends\" may be included at local option immediately above the
Jurisdiction in RBA. RBA 2000 places these instructions and legends
above the signature blocks instead of above the Jurisdiction.

b\. **Other Controls.** Using the identifier \"OTHER CONTROLS,\" provide
instructions to authorization to establish, cancel, or change master
record controls other than for future physical exams. Include the month,
year, and reason code previously entered.

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c\. **Limitations On Disability Rating Controls.** Only future date
rating controls under the following reason codes may be introduced,
changed, or canceled by a rating. Because only an examination control
can be entered on the BDN rating screen, additional rating controls will
require entry on an award screen or by the DIAR command. A control for a
future date beyond the \"limit\" permitted will result in a reject as
\"OUT OF RANGE.\"

> Code Reason Limit
>
> 01 Future Physical Exam 5 years
>
> 03 Helpless Child Review Open
>
> 04 NSC TB 38 CFR 3.324 Review 6 months

**3.23 JURISDICTION**

Use the identifier \"JURISDICTION\" to show why the case is before the
rating activity. This statement should refer to the initial claim and
will appear below the heading section. Cite the pertinent jurisdictional
date(s).

**3.24 CODED CONCLUSION**

A coded conclusion will be prepared in accordance with part I, appendix
A, and the provisions of this chapter. On subsequent ratings bring
forward the coding for all disabilities previously rated whenever coding
directly affecting compensation or pension entitlement is added or
changed. When the issue of entitlement to individual unemployability is
being denied for the first time, a formal coded rating is required and
code 18B (IU not found) must be used in the conclusion. Denial of
special monthly compensation or a finding of not new and material
evidence as the sole issue requires no coded conclusion since there are
no codes applicable to the disposition of these issues.

a\. **Incompetency.** A final rating of incompetency will not require a
summary of past coding pertaining to compensation or pension entitlement
unless such coding has changed. Ordinarily, a code 33 followed by the
appropriate effective date will suffice. Include code 33 in any future
ratings which bring forward compensation or pension coding.

b\. **Pension.** If a claim for disability pension was denied and the
veteran reopens the claim with evidence of additional disabilities or if
there is a change in the evaluation of any previously evaluated
disabilities, a formal coded rating is required. The extra-schedular
provisions of 38 CFR 3.321(b)(2) must also be considered if schedular
requirements are not met.

c\. **Denial of Special Monthly Pension (SMP).** Use of code 19C (not
entitled to SMP) will not require a summary of past coding pertaining to
compensation or pension entitlement unless such coding has changed.
Include code 19C in any future ratings which bring forward compensation
or pension coding.

**3.25 DIAGNOSTIC CODES**

a\. **Analogous Codes**. When evaluating by analogy any disability not
listed in the Rating Schedule, use a built-up diagnostic code consisting
of two diagnostic codes separated by a hyphen. The first two digits of
the first diagnostic code should be applicable to the body system
involved and the second two digits would end with \"99.\" The second
diagnostic code is to be taken from the Rating Schedule and identifies
the diagnostic criteria used to evaluate the claimed disability. For
example, use 6599-6516 for postoperative tonsillectomy if the condition
was evaluated under the criteria for chronic laryngitis.

b\. **Residual Conditions.** Hyphenated codes do not necessarily denote
analogous ratings. Two diagnostic codes may be used to identify the
source of a disability or a residual from disease. For example,
ankylosis of the spine from rheumatoid arthritis would be rated as
5002-5240.

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c\. **Rating of a Disability Entity.** Consistent with the prohibition
against pyramiding (38 CFR 4.14), it is fundamental to the proper
evaluation of a disability that individual findings not be separated
when these findings in their entirety constitute one disability. For
example, a disability of a tibia with malunion, limitation of
dorsiflexion, eversion, inversion and traumatic arthritis of an ankle
would be evaluated under one diagnostic code, DC 5262, in accordance
with the effect upon ankle function with no separate evaluation for the
limitation of motion or traumatic arthritis.

d\. **Rating of Multiple Involvement of a Single Disease Entity.** When
rating multiple disabilities resulting from the same disease entity
(e.g., arthritis, multiple sclerosis, cerebrovascular accident, etc.)
code each disability separately. Show the diagnostic code for the
disease entity only once, as the lead diagnostic code of the hyphenated
codes. Follow this lead code with a code for the body system of the most
severely affected disorder. Thereafter, code involvement of the other
body systems under the diagnostic code assignable for the disability on
which the evaluation is determined. Identify the basic disease entity in
the diagnoses of the disabilities involved.

**3.26 EVALUATIONS**

a\. **General.** List individual percentage evaluations for each
disability in accordance with part I, appendix A, and this paragraph.
Furnish individual effective dates for all service-connected
disabilities.

b\. **Service-Connected Disabilities.** Current and, if applicable,
future percentage evaluations, and effective dates are required for all
disabilities.

\(1\) Furnish historical evaluations only to the extent necessary. Show
historical evaluations under the 1925 schedule, protected under 38 CFR
3.951 and 3.952, when the rating grants pension as the greater
entitlement, so that they will not be overlooked in the event pension is
subsequently terminated.

\(2\) Record the evaluation in effect for each service-connected
disability, as well as the new evaluation assigned, with the future
evaluation(s), if indicated.

\(a\) In ratings applying the provisions of 38 CFR 3.105(e), show the
current evaluation in effect followed by the future reduced
evaluation(s).

\(b\) Whenever there is a retroactive increase or reduction, show only
one line of entitlement after the service-connected condition. For
example, if the veteran has been entitled to 30 percent from 1-1-93 and
50 percent from 1-1-94, a retroactive increase of 70 percent from 1-1-94
need only show that one line of entitlement.

c\. **Nonservice-Connected Disabilities**

\(1\) When rating a claim for compensation only, evaluations of
nonservice-connected disabilities are not required.

\(2\) Evaluations are required for all disabilities when rating a claim
for both compensation and pension or pension only. Effective dates are
not required for nonservice-connected disabilities. An effective date of
pension entitlement is required only next to rating code 2.

**3.27 COMBINED DEGREE AND EFFECTIVE DATE**

a\. Determine the combined degree for two or more disabilities from the
combined table in the rating schedule or by use of the programming for
combining in RBA or RBA 2000, even when the claim is granted on the
basis of unemployability. If disabilities also carry historical and/or
future evaluations, show the combined degrees for these evaluations with
appropriate effective dates. An effective date is not required when
denying a claim for pension only. A combined degree and effective date
are not required when there is only a single evaluation.

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######  Change 118

b\. Where both compensation and pension entitlement are at issue,
separately show the service-connected combined degree (\"COMB SC %\")
immediately under the rating code 2 or 9 citation, followed by the
nonservice-connected degree (\"COMB NSC %\").

c\. **Bilateral Factor**

\(1\) Whenever there are compensable disabilities affecting the use of
paired extremities, regardless of location or specified type of
impairment, apply the bilateral factor (38 CFR 4.26) to bilateral
disabilities before other combinations are carried out.

\(2\) The bilateral factor is for application when a specific diagnostic
code provides an evaluation for a bilateral condition (for example, 30
percent for bilateral flat feet under DC 5276) and there is an
independently ratable condition in one of the involved extremities (such
as 20 percent for left leg muscle damage under DC 5311).

d\. **Rounding.** In the event a combined evaluation equals or exceeds
.5 percent, round to the nearest degree divisible by 10. This is the
last step in determining the combined degree of disability (38 CFR 4.25)
and is to be done only once per rating. For example, a combined
evaluation of 54.5 percent should be raised to 55 percent and then
adjusted upward to 60 percent. See also paragraph 7.06.

**3.28 LISTING DISABILITIES---RATING CODES**

a\. **Compensation Ratings.** First group all disabilities subject to
compensation under code 1. SC and show them in descending order by
current percentage evaluation.

\(1\) Show the diagnostic code followed by the diagnosis on the same
line. Use the diagnostic terminology of the medical examiner. Do not
make an attempt to translate the examiner\'s terms into schedular
terminology unless citation is required by way of explanation (e.g., for
an analogy) or if too lengthy. A lengthy diagnosis need not be cited in
full if the essential elements are retained. Do not cite residuals of
diseases or therapeutic procedures without reference to the basic
disease.

\(2\) When first establishing compensation entitlement for a particular
disability, show the percentage evaluation, effective date, period of
service, and the appropriate abbreviation for incurrence (INC),
aggravation (AGG) or presumption (PRES) (e.g., \"30% from 7-1-77 (WWII
PRES)\") under each diagnosis. However, when the parenthetical entry for
the period of service and appropriate abbreviation (e.g., \"(WWII
PRES)\") would be the same for all disabilities under the rating code,
show it with the rating code (e.g., \"1. SC (WWII PRES)\"). If
compensation is awarded for a disability under 38 U.S.C. 1151 or 38 CFR
3.383, include the disability under rating code 1 with the parenthetical
statement \"38 U.S.C. 1151\" or \"38 CFR 3.383\" after the effective
date of entitlement.

\(3\) When entitlement to compensation has previously been established
for all service-connected disabilities under code 1, it is sufficient to
simply show above those disabilities \"1. SC\" followed by the period of
service corresponding to the entitlement code for compensation. For
example, if compensation is authorized under code 71, which denotes
Vietnam service, show \"1. SC VE\" above all code 1 disabilities. There
is no need to distinguish among disabilities in the same case which
arose during other periods of service, or among different mechanisms of
service connection. However, if compensation is authorized for a
disability under 38 U.S.C. 1151 or 38 CFR 3.383, continue to include the
parenthetical \"38 U.S.C. 1151\" or \"38 CFR 3.383\" after the effective
date of entitlement.

b\. **Secondary Service Connection.** In RBA, following code 1
disabilities, group all disabilities initially granted service
connection secondary to a service-connected disorder under rating code
37. On later ratings show disabilities listed initially under rating
code 37 under code 1. In RBA 2000, disabilities granted service
connection secondary to a service-connected disorder will appear under
rating code 1, with a notation that the condition is secondary.

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c\. **Code 8 Disabilities.** List disabilities held not service
connected under code 8. Next to code 8, parenthetically show the periods
of service considered. Show the following reasons for denial in
parentheses after the diagnosis on the rating codesheet for ratings
initially disposing of the claim as well as for all subsequent ratings:
constitutional or developmental abnormality, willful misconduct or
vicious habits, not line of duty. If compensation is denied under 38
U.S.C. 1151 or 38 CFR 3.383 (paired organs or extremities), use rating
code 8 and include the parenthetical statement \"38 U.S.C. 1151\" or
\"38 CFR 3.383\" after the diagnosis.

d\. **Pension Ratings.** Following code 8, use rating code 2 showing
veteran \"PT from \[date\]\" or code 9 showing veteran \"Not PT.\"
Identify the disabilities by diagnostic code in order of percentage
evaluation. Code all claimed or noted disabilities and show the
evaluation for each unless the disabilities have been held to be due to
the claimant\'s own willful misconduct by rating (such as when
intoxication from alcohol or drugs results proximately and immediately
in disability or death) or Administrative Decision. Disabilities which
result from the use of alcohol or drugs may not be service connected
because they cannot be deemed to have been incurred in line of duty.
However, they are not considered of willful misconduct origin (38 CFR
3.301(c)) and should be provided an evaluation under code 8 if pension
is claimed. See part IV, paragraph 11.04.

e\. **Miscellaneous Codes.** If applicable, then show combined
degree(s), effective date(s), bilateral factor and all other coded
entitlements indicated in part I, Appendix A.

**3.29 SPECIAL MONTHLY COMPENSATION**

Show entitlement to special monthly compensation and statutory awards in
the conclusion section of the rating, immediately following the combined
degree, using the appropriate rating code and phrases as set forth in
part I, Appendix A.

a\. Explain the denial of special monthly compensation whether
specifically claimed by the veteran or inferred by the rating activity
in the reasons and bases section of the rating.

b\. Separately cite the additional specific disability on the rating if
entitlement under 38 U.S.C. 1114(k) is shown for more than one
anatomical loss or loss of use.

c\. List any anatomical loss as the first entitlement in order of
preference over all losses of use.

d\. **Aid and Attendance/Housebound**

\(1\) **Compensation.** Show entitlement to special monthly compensation
for need of aid and attendance or housebound benefits by the use of the
appropriate narrative rating code immediately after the combined degree
and by the entry of the necessary SMC codes in the data table. See also
part IV, chapter 18, subchapter III, regarding SMC coding during
hospitalization.

\(2\) **Pension.** Show entitlement to special monthly pension for need
of aid and attendance or housebound benefits only by the use of the
appropriate rating code following the combined degree.

**3.30 SIGNATURES**

All rating decisions require the signatures of two RVSRs unless approved
as single-signature ratings by the VSCM. Ratings must be signed on the
last page of the rating decision. See paragraph 2.04.

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######  Change 118

**3.31 PARTIAL RATING DECISIONS**

a\. **General.** Make a partial rating decision if the record contains
sufficient evidence to grant any benefit at issue. Provide a compensable
evaluation for disabilities, if possible, even though the issue of
service connection or compensation for other disabilities or the issue
of a higher evaluation must be deferred. Make an increased evaluation
immediately, even though a rating under paragraph 28, 29, or 30 may
require deferral for proper certification. Identify the deferred issues
both in the conclusion under code 38 and in the narrative.

b\. **Improper Use of Partial Rating**

\(1\) Do not make a rating decision which only denies a claim when
consideration of another issue is pending examination or receipt of
other evidence. If only compensation is at issue, do not make a rating
simply to assign a noncompensable evaluation.

\(2\) Do not make a rating decision denying service connection for a
cause of death if development is being undertaken for another condition
which is possibly involved. However it is proper to defer the issue of
service connection in a death case while granting DIC benefits under
some other provision of the law. If death pension entitlement is
otherwise shown, it would also be proper to make a rating decision
granting service connection for the cause of discharge in a case where
there was less than 90 days service.

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######  Change 118

**CHAPTER 4. RATINGS FOR ANCILLARY BENEFITS AND SPECIAL PURPOSES**

**CONTENTS**

PARAGRAPH PAGE

4.01 General 4-1

4.02 Vocational Rehabilitation 4-2

4.03 Aid and Attendance Allowance for Spouses, Surviving Spouses and
Parents;

Housebound Benefits for Surviving Spouses Entitled to DIC or Improved
Pension 4-4

4.04 Veteran\'s Civil Service Preference 4-4

4.05 Insurance Purposes 4-5

4.06 Service Connection for Psychosis Under 38 U.S.C. 1702 4-6

4.07 Insanity 4-6

4.08 Entitlement to Automobile and Adaptive Equipment 4-6

4.09 Entitlement to Specially Adapted Housing or Special Home Adaptation
Grant 4-7

4.10 Discharge of Liability for Educational Loan 4-8

4.11 Dependents\' Educational Assistance (DEA)\--38 U.S.C. Chapter 35
4-8

4.12 Loan Guaranty Basic Eligibility 4-10

4.13 Determinations Under 38 U.S.C. 109(c)\--Polish and Czechoslovakian
Armed Forces 4-10

4.14 Extension of Delimiting Dates for Disability\--38 U.S.C. Chapters
30, 31, 32, 35, and 1606 4-10

4.15 Medical Care Eligibility 4-11

16. Dental Treatment Eligibility 4-11

4.17 Benefits under 38 U.S.C. 1805 for a Child Suffering from Spina
Bifida 4-12

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**September 23, 2004 M21-1, Part VI**

######  Change 118

field subtends an angular distance no greater than 20 degrees in the
better eye; for adaptive equipment eligibility only, ankylosis of one or
both knees or one or both hips.

b\. **Jurisdiction.** Prepare a rating decision whenever a claim for
automobile or adaptive equipment is received from a veteran or a
serviceperson (see part IV, chapter 23). Also infer the issue whenever a
disability rating fulfills the applicable disability criteria.

c\. **Rating Conclusion.** Show the appropriate rating code 61, 61A, or
62 and the applicable paragraph found in appendix A.

## 4.09 ENTITLEMENT TO SPECIALLY ADAPTED HOUSING OR SPECIAL HOME ADAPTATION GRANT

a\. **General.** A certificate of eligibility for assistance in
acquiring specially adapted housing may be extended when the veteran is
permanently disabled from one of the following conditions which is the
result of injury or disease

-   incurred in or aggravated during active military service, or

-   acquired subsequent to discharge from service under 38 U.S.C. 1151
    (see *Kilpatrick v. Principi*, 327F.3d 1375 (Fed. Cir. 2003) as a
    result of treatment in a VA medical facility or as the result of
    training under 38 U.S.C. chapter 31:

1.  the loss, or loss of use, of both lower extremities, such as to
    preclude locomotion without the aid of braces, crutches, canes, or a
    wheelchair;

2.  blindness in both eyes, having only light perception, plus the
    anatomical loss or loss of use of one lower extremity;

3.  the loss or loss of use of one lower extremity together with
    residuals of organic disease or injury which so affect the functions
    of balance or propulsion as to preclude locomotion without the aid
    of braces, crutches, canes, or a wheelchair; or

4.  the loss or loss of use of one lower extremity together with the
    loss of use of one upper extremity which so affect the functions of
    balance or propulsion as to preclude locomotion without the aid of
    braces, crutches, canes, or a wheelchair (38 CFR 3.809).

A certificate of eligibility for assistance in acquiring necessary
special home adaptations may be issued when the veteran has a
service-connected condition which is either due to blindness in both
eyes with 5/200 visual acuity or less, or includes the anatomical loss
or loss of use of both hands (38 CFR 3.809a).

b\. **Jurisdiction.** A claim for specially adapted housing or special
home adaptation grant on VA Form 26-4555, \"Veteran\'s Application in
Acquiring Specially Adapted Housing or Special Home Adaptation Grant (38
U.S.C. 2101(a) or 2101(b)),\" will be referred to the rating activity.
Also infer the issue of specially adapted housing or special home
adaptation grant whenever a disability rating initially fulfills one of
the above requirements. Prepare a rating decision when the report of
examination or hospitalization and VA Form 10-4555b containing
certification of medical feasibility for specially adapted housing are
received, or if there is no reasonable probability of entitlement under
38 U.S.C. 2101(a) and 2101(b). See chapter 3 and part IV, chapter 23.

c\. **Medical Evidence of Medical Feasibility.** If Loan Guaranty cannot
make a favorable decision as to medical feasibility request a
certificate of medical feasibility (VA Form 10-4555b) from the
appropriate VA Medical Center. If the veteran is hospitalized, request a
current interim hospital summary along with completion of VA Form
10-4555b, to include complete medical findings. Completion of VA Form
10-2617, \"Self-Care Activities---Functional Evaluation,\" and VA Form
21-2680, \"Examination for Housebound Status or Permanent Need for
Regular Aid and Attendance,\" may also be requested to ascertain the
extent of disability when warranted.

d\. **Rating Conclusion.** Use rating codes 41, 41A, 42, and/or 42A as
appropriate and their applicable paragraphs found in appendix A. If
entitlement to specially adapted housing is denied but entitlement to a
special home adaptation grant is approved, use both rating codes 41A and
42.

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**4.10 DISCHARGE OF LIABILITY FOR EDUCATIONAL LOAN**

a\. **General.** Remaining liability for an educational loan under 38
U.S.C. 3698 will be discharged when the recipient of the loan dies or
becomes permanently and totally disabled. Base the decision on the
criteria set forth in 38 CFR 3.340 and 3.341. The claimant\'s
disability(ies) must either combine to 100 percent, or if less than 100
percent, be sufficient to produce unemployability in accordance with the
requirements of 38 CFR 4.16.

b\. **Jurisdiction.** The Finance activity will request a rating
determination for discharge of liability for permanent and total
disability. This request should be accompanied by any medical evidence
submitted by the claimant. If the evidence of record is insufficient for
rating purposes, authorization will request evidence from the claimant
or next of kin. Schedule an examination only after all attempts to
secure adequate evidence have failed.

c\. **Rating Decision.** Do not make this decision part of any other
rating decision. Provide a copy of the rating decision to the Finance
activity, which will notify the claimant of the decision. Under the
identifier \"ISSUE,\" show \"Discharge of Liability for an Educational
Loan.\" Use the statement \"Permanent and Total disability for discharge
of liability \[is\]\[is not\] established\" in the coded conclusion.

## 4.11 DEPENDENTS\' EDUCATIONAL ASSISTANCE (DEA)---38 U.S.C. CHAPTER 35

a\. **General**

\(1\) The rating activity is responsible for a determination of basic
eligibility for a child, spouse, or surviving spouse(s) under 38 U.S.C.
chapter 35. The eligible person must derive entitlement from an
honorably discharged veteran who served on active duty after April 21,
1898, or an active service member who:

\(a\) Has a total service-connected disability permanent in nature
(including a total disability evaluation for the loss of paired organs
or extremities under 38 U.S.C. 1160---see *Kimberlin v. Brown*, 5 Vet.
App. 174 (1993)); or

\(b\) Died as the result of a service-connected disability; or

\(c\) Had a permanent and total service-connected disability at the time
of death.

\(2\) Eligibility is also derived from a service member who, as a member
of the Armed Forces on active duty, has been listed for more than 90
days as:

\(a\) Missing in action; or

\(b\) Captured in line of duty by a hostile force; or

\(c\) Forcibly detained or interned in line of duty by a foreign
government or power.

\(3\) Disability or death under 38 U.S.C. 1151 does not establish
eligibility.

\(4\) Under the provisions of 38 U.S.C. 1311(e), a surviving spouse
ineligible for DIC because of remarriage, or living with someone and
holding himself or herself out openly as a spouse, may regain
eligibility for DIC upon the termination of such relationships.
VAOPGCPREC 13-98 held that eligibility for DIC regained under these
provisions entitled the surviving spouse to CHAMPVA, DEA, or loan
guaranty benefits. However, Public Law 106-117, effective November 30,
1999, explicitly restored eligibility for all of these benefits. See
also [Part IV, 12.14]{.underline} and [Part III, 6.15]{.underline}.

b\. **Jurisdiction.** The issue of entitlement to Chapter 35 is inferred
from service connection for cause of death or assignment of a total
disability evaluation. As a general rule, it should be inferred when
there is a reasonable probability that it can be granted; the issue
should not be inferred merely to deny. For further information on

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**September 23, 2004 M21-1, Part VI**

######  Change 118

inferring Chapter 35 as an issue, see [Part VI, 3.10d]{.underline}. If
the issue has not been previously addressed, authorization will refer
claims to the rating activity unless:

\(1\) The rating of record denies service connection for the cause of
death and for permanent and total service-connected disability at time
of death; or

\(2\) The rating of record shows death was service-connected (direct or
presumptive); or

\(3\) The rating of record shows service-connected total disability
either schedular or due to individual unemployability, with no future
examination scheduled, or if a 100 percent evaluation has been granted
under the provisions of 38 CFR 4.28, 4.29 or 4.30; or

\(4\) The rating of record denies service connection for all
disabilities; or

\(5\) Death is service-connected without a determination by the rating
activity in accordance with part III, chapter 3.

c\. **Permanency.** Ratings are required if the issue of permanency has
not been disposed of in a prior decision. This applies whether or not
there appear to be any potential dependents (see [3.10d.(2)
***Note***]{.underline}). A decision is also required following a rating
establishing a total disability permanent in nature where no payment was
made or, if begun, was properly discontinued (other than because of
total recoupment as in severance pay cases) before the expiration of the
20-year period (e.g., because of election to receive retired pay) and
the propriety of continuing that rating can be determined only by
reexamination or other adequate medical evidence.

\(1\) **Disability Cases.** The term \"total disability permanent in
nature\" includes cases where the disabilities are evaluated 100 percent
under a schedular or extra-schedular evaluation other than for 38 CFR
4.28, 4.29 or 4.30, or on the basis of individual unemployability based
on impairment reasonably certain to continue throughout the lifetime of
the veteran as determined in accordance with 38 CFR 3.340 and 3.341.

\(a\) The above criteria are met in any case in which the rating
activity has determined a disability is static and no future examination
is required under the provisions of 38 CFR 3.327(b)(2). Individual
Unemployability review is not considered a future examination.

\(b\) The above criteria are met if there is a 100 percent rating under
the 1925 rating schedule (38 CFR 3.952), or if a total rating for
compensation purposes has been in force for 20 years (38 CFR 3.951).

\(c\) Veterans who are considered permanently and totally disabled prior
to the assignment of a 100 percent evaluation under a diagnostic code
with a limited duration and future examination will be considered
permanently disabled during the total evaluation. For example, a veteran
who is considered permanently and totally disabled because of a heart
disorder undergoes coronary artery bypass surgery. The veteran would
continue to be considered permanently and totally disabled for the
duration of the one-year convalescent period under diagnostic code 7017
despite a scheduled future examination. The status of permanency would
be reconsidered following completion of the examination.

\(2\) **Death Cases.** When a veteran who is totally disabled from
service-connected causes dies of a nonservice-connected disability(ies),
concede permanency of the total service-connected disability(ies),
unless the total rating was assigned under 38 CFR 4.28, 4.29 or 4.30.
See also chapter 5.

d\. **Rating Conclusion.** Use either the conclusion \"Basic eligibility
under 38 U.S.C. chapter 35 is established from \[date\]" or \"Basic
eligibility under 38 U.S.C. chapter 35 is not established," keeping in
mind that denials are generally necessary only when the issue is
claimed, not inferred. (See [Part VI, 3.10d]{.underline}. and
[4.11b]{.underline}. above) When permanency is subsequently established,
the effective date will be the date of examination which established
permanency, the date of new evidence requiring cancellation of future
examination, or the date of review when a future examination is
canceled.

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######## Change 118

## 

## 4.12 LOAN GUARANTY BASIC ELIGIBILITY

a\. **Jurisdiction.** A rating is required when Loan Guaranty requests
an eligibility determination as to whether the veteran\'s death was
service-connected, discharge or release from active duty was because of
a service-connected disability, or whether a serviceperson hospitalized
pending final discharge has a service-connected disability for which he
or she could be discharged or released (38 U.S.C. 3725).

b\. **Rating Decision.** Do not make this decision part of any other
rating decision. Prepare a copy of the rating decision for Loan Guaranty
which will notify the claimant of the decision. Under \"ISSUE,\" show
\"Eligibility to Loan Guaranty Benefits.\" Use the statement
\"Eligibility for loan guaranty benefits \[is\]\[is not\] established.\"
in the coded conclusion.

## 4.13 DETERMINATIONS UNDER 38 U.S.C. 109(c)---POLISH AND CZECHOSLOVAKIAN ARMED FORCES

a\. **Jurisdiction.** The Veterans Service Center of the Wilmington VA
Medical and Regional Office Center (VAM&ROC) has sole jurisdiction for
all rating determinations required in these cases (38 CFR 3.359).
Requests received by any other regional office should be routed to the
Wilmington office with information as to the referral provided to the
submitting health care facility.

b\. **Evidence.** Base rating determinations on the evidence submitted
with the request. The medical facility is responsible for fully
developing the claim before sending the request directly to MAS (136) in
Wilmington VAM&ROC. (See part II, paragraph 4.01.)

c\. **Rating Decision.** Under \"ISSUE,\" show \"Eligibility for
Hospital or Outpatient Treatment Under 38 U.S.C. 109(c).\" Apply
existing criteria for the determination of service connection and degree
of disability. In the coded conclusion, evaluate conditions established
as service connected with a statement of either \"50 percent or more\"
or \"less than 50 percent.\" The completed rating and all other
materials will be returned to the Medical Administration Service,
Wilmington, for their maintenance of eligibility records.

## 4.14 EXTENSION OF DELIMITING DATES FOR DISABILITY---38 U.S.C. CHAPTERS 30, 31, 32, 35, AND 10 U.S.C. CHAPTER 1606

a\. **General.** The delimiting date for educational assistance for
veterans (chapters 30, 31, and 32), reservists eligible for chapter
1606, and for spouses or surviving spouses eligible for chapter 35
benefits may be extended if the rating activity determines that mental
or physical disability not the result of misconduct, prevented their
initiation or completion of a chosen program of education within the
applicable 10 or 12-year period of eligibility. A determination as to
whether the disability was the result of willful misconduct will be made
by the rating or authorization activity according to the provisions of
part IV, chapter 11. Medical infeasibility to pursue training ordinarily
may not be found for any period during which the claimant was employed
full time unless:

\(1\) The medical evidence indicates that the employment was part of a
medically prescribed rehabilitation program; or

\(2\) The employment was of a marginal nature and the disability can
reasonably be deemed to have restricted the claimant from concurrent
pursuit of the chosen program of training; or

\(3\) The nature of the disability actually precluded the claimant from
pursuing the desired program of training.

b\. **Jurisdiction.** There is no time limitation for requesting a
chapter 31 delimiting date extension. Application for an extension of a
chapter 30, 32, 35, and chapter 1606 delimiting date must be received in

**4-10**

**September 23, 2004 M21-1, Part VI**

######  Change 118

\(3\) Usually the evidence must establish that the service-connected
conditions have precluded employment continuously since date of
incurrence or the date the service-connected condition reached a static
level of disability.

\(4\) Establish individual employability on a factual basis. Do not
presume individual unemployability.

\(5\) Apply the concept of average impairment in earning capacity to
determinations of the percentage of disability, not to determinations as
to entitlement to total compensation because of individual
unemployability.

\(6\) The terms \"unemployability\" and \"unemployable\" are not
synonymous for compensation purposes. A veteran may be unemployed or
unemployable for a variety of reasons. A determination as to entitlement
to total benefits because of individual unemployability is appropriate
only when a veteran\'s unemployability is a result of service-connected
disabilities.

\(7\) When considering the issue of entitlement to total compensation
benefits because of individual unemployability, substantially gainful
employment is defined as that which is ordinarily followed by the
nondisabled to earn their livelihood with earnings common to the
particular occupation in the community where the veteran resides.

\(8\) In an individual unemployability determination, marginal
employment shall not be considered substantially gainful employment.
Marginal employment exists when a veteran\'s earned annual income does
not exceed the amount established by the U.S. Department of Commerce,
Bureau of the Census, as the poverty threshold for one person. Marginal
employment may also be held to exist, on a facts found basis (which
includes but is not limited to employment in a protected environment
such as a family business or sheltered workshop), when earned annual
income exceeds the poverty threshold. Consider the nature of the
employment and the reason for termination in all claims. (38 CFR 4.16)

\(a\) Poverty thresholds are contained in Addendum A to this chapter.
The Bureau of the Census revises the poverty thresholds annually. When
the revised amounts are published, VBA will publish notices in the
Federal Register and revise Addendum A.

\(b\) If a veteran\'s income exceeds the poverty threshold, a finding of
marginal employment is not precluded if the veteran did not actually
earn the income. (For example, a veteran suffers an increase in severity
of a service-connected disability. He applies for individual
unemployability benefits even though he is still employed at his former
salary. His employer reports that the veteran has been given light
\"make work\" jobs but is not actually earning his salary.) Employment
in a sheltered workshop is generally marginal employment.

\(9\) Determine whether the severity of the service-connected conditions
preclude the veteran from obtaining or retaining substantially gainful
employment. Identify and isolate the effects of extraneous factors such
as age, nonservice-connected conditions, intercurrent injuries,
availability of work, or voluntary withdrawal from the labor market when
determining whether a veteran is unemployable solely by reason of
service-connected disability. Include sufficient data in the Reasons for
Decision of the conclusion. A grant of individual unemployability must
contain an explanation or analysis that shows how impairment from
service-connected disability supports the grant. A conclusory statement
alone that the criteria for individual unemployability are met does not
satisfy the requirement to state the basis for the grant.

**7-II-3**

**M21-1, Part VI September 23, 2004**

######## Change 118

b\. **Preparation of Ratings**

\(1\) If schedular requirements are met but individual unemployability
is denied, the rating must provide an explanation of all pertinent
subsidiary determinations. (See 38 CFR 4.16 and 4.18.)

\(2\) When a veteran is considered unemployable due to
nonservice-connected factors, an explanation of the reasons for this
decision must be included. In addition, the RVSR must also set forth its
reasoning for finding that service-connected disabilities do not cause
unemployability without regard to nonservice-connected conditions.

\(3\) If the veteran is considered employable, the RVSR need only
explain the facts which are pertinent to that conclusion.

\(4\) If schedular requirements are not met, the absence of a basis for
extra-schedular submission must be noted. (38 CFR 3.321(b)(1), 4.16(b))

\(5\) Whenever individual unemployability is granted, unless permanency
is not established, the following statement must be included in the
rating conclusion: \"Basic eligibility under 38 U.S.C. Chapter 35 is
established from \[date\].\" See paragraph 3.10d.

## 7.10 MULTIPLE INJURIES INCURRED IN ACTION OR AS PRISONER OF WAR (POW)

## 

In determinations of entitlement to a total disability rating under 38
CFR 4.16, consider multiple injuries incurred in action as one
disability. POW status is a continuation of action against the enemy.
Therefore, consider multiple disabilities incurred while a POW, and
disabilities incurred in action prior to or subsequent to POW status, as
one disability.

## 7.11 CLAIMS REQUIRING CENTRAL OFFICE APPROVAL

## 

a\. **Extra-Schedular.** Do not hesitate to submit any case to Central
Office (211B) for extra-schedular considerations if the evidence of
record supports a finding that the veteran is unemployable by reason of
service-connected disability but does not meet the schedular
requirements of 38 CFR 4.16.

b\. **Preparation of Memorandum.** The memorandum prepared to transmit
claims folders to Central Office for review must provide the following:

\(1\) Clear and succinct statements of fact, including medical and lay
evidence of symptoms.

\(2\) Discussions of facts with relevant laws and regulations.

\(3\) The issues to be resolved as well as the recommended evaluations.

## 7.12 CONTROL OF EVALUATIONS BASED ON INDIVIDUAL UNEMPLOYABILITY

## 

###  a. Failure to Cooperate with Required Field Exam

\(1\) Prior to reduction to a schedular evaluation based upon failure to
cooperate with a required field exam, predetermination notice must also
be provided as in subparagraphs d through g above. Prepare a proposed
reduction rating using the format in Exhibit A.1.

**7-II-4**