Editorial Note on Part 3
Editorial Note: Nomenclature changes to part 3 appear at 61 FR 7216, Feb. 27, 1996; 62 FR 35970, July 3, 1997; 62 FR 47532, Sept. 9, 1997; and 67 FR 46868, July 17, 2002.

§ 3.12 Benefit eligibility based on character of discharge. ( a ) *General rule.* If the former service member did not die in service, then pension, compensation, or dependency and indemnity compensation is payable for claims based on a period of service that was terminated by discharge or release under conditions other than dishonorable. (38 U.S.C. 101(2)) A discharge under honorable conditions is binding on the Department of Veterans Affairs as to character of discharge.
( b ) *Insanity exception.* No bar to benefits under this section shall be applied if VA determines that the former service member was insane at the time he or she committed the offense(s) leading to the discharge or release under dishonorable conditions. (38 U.S.C. 5303(b)) Insanity is defined in § 3.354.
( c ) *Statutory bars to benefits.* Benefits are not payable where the former service member was discharged or released under one of the following conditions: ( 1 ) As a conscientious objector who refused to perform military duty, wear the uniform, or comply with lawful orders of competent military authorities.
( 2 ) By reason of the sentence of a general court-martial.
( 3 ) Resignation by an officer for the good of the service.
( 4 ) As a deserter.
( 5 ) As an alien during a period of hostilities, where it is affirmatively shown that the former service member requested his or her release. See § 3.7(b).
( 6 ) By reason of a discharge under other than honorable conditions issued as a result of an absence without official leave (AWOL) for a continuous period of at least 180 days (38 U.S.C. 5303(a)). ( i ) *Compelling circumstances exception.* This paragraph (c)(6) does not apply if compelling circumstances mitigate the prolonged unauthorized absence, as discussed in paragraph (e) of this section.
( ii ) *Applicability prior to October 8, 1977.* This paragraph (c)(6) applies to any person awarded an honorable or general discharge prior to October 8, 1977, under one of the programs listed in paragraph (i) of this section, and to any person who prior to October 8, 1977, had not otherwise established basic eligibility to receive Department of Veterans Affairs benefits. *Basic eligibility* for purposes of this paragraph (c)(6)(ii) means either a Department of Veterans Affairs determination that an other than honorable discharge was issued under conditions other than dishonorable, or an upgraded honorable or general discharge issued prior to October 8, 1977, under criteria other than those prescribed by one of the programs listed in paragraph (i) of this section. However, if a person was discharged or released by reason of the sentence of a general court-martial, only a finding of insanity (paragraph (b) of this section) or a decision of a board of correction of records established under 10 U.S.C. 1552 can establish basic eligibility to receive Department of Veterans Affairs benefits.
( d ) *Regulatory bars to benefits.* Benefits are not payable where the former service member was discharged or released under one of the conditions listed in paragraph (d)(1) or (2) of this section. ( 1 ) Compelling circumstances exception is not applicable for: ( i ) *Discharge in lieu of trial.* Acceptance of a discharge under other than honorable conditions or its equivalent in lieu of trial by general court-martial.
( ii ) *Mutiny or espionage.* Mutiny or spying.
( 2 ) Compelling circumstances exception is applicable for: ( i ) *An offense involving moral turpitude.* This paragraph (d)(2)(i) includes, generally, conviction of a felony.
( ii ) *Willful and persistent misconduct.* For purposes of this section, instances of minor misconduct occurring within two years of each other are persistent; an instance of minor misconduct occurring within two years of more serious misconduct is persistent; and instances of more serious misconduct occurring within five years of each other are persistent. For purposes of this section, minor misconduct is misconduct for which the maximum sentence imposable pursuant to the Manual for Courts-Martial United States would not include a dishonorable discharge or confinement for longer than one year if tried by general court-martial.
( e ) *Compelling circumstances exception.* The bar to benefits for prolonged AWOL under paragraph (c)(6) of this section and the two types of misconduct described in paragraph (d)(2) of this section will not be applied if compelling circumstances mitigate the AWOL or misconduct at issue. The following factors will be considered in a determination on this matter: ( 1 ) *Length and character of service exclusive of the period of prolonged AWOL or misconduct.* Service exclusive of the period of prolonged AWOL or misconduct should generally be of such quality and length that it can be characterized as honest, faithful, and meritorious and of benefit to the Nation.
( 2 ) *Reasons for prolonged AWOL or misconduct.* Factors considered are as follows: ( i ) Mental or cognitive impairment at the time of the prolonged AWOL or misconduct, to include but not limited to a clinical diagnosis of (or evidence that could later be medically determined to demonstrate existence of) posttraumatic stress disorder (PTSD), depression, bipolar disorder, schizophrenia, substance use disorder, attention deficit hyperactivity disorder (ADHD), impulsive behavior, or cognitive disabilities.
( ii ) Physical health, to include physical trauma and any side effects of medication.
( iii ) Combat-related or overseas-related hardship.
( iv ) Sexual abuse/assault.
( v ) Duress, coercion, or desperation.
( vi ) Family obligations or comparable obligations to third parties.
( vii ) Age, education, cultural background, and judgmental maturity.
( 3 ) Whether a valid legal defense would have precluded a conviction for AWOL or misconduct under the Uniform Code of Military Justice. For purposes of this paragraph (e)(3), the defense must go directly to the substantive issue of absence or misconduct rather than to procedures, technicalities, or formalities.
( f ) *Board of corrections upgrade.* An honorable discharge or discharge under honorable conditions issued through a board for correction of records established under authority of 10 U.S.C. 1552 is final and conclusive on the Department of Veterans Affairs. The action of the board sets aside any prior bar to benefits imposed under paragraph (c) or (d) of this section.
( g ) *Discharge review board upgrades prior to October 8, 1977.* An honorable or general discharge issued prior to October 8, 1977, under authority other than that listed in paragraphs (i)(1) through (3) of this section by a discharge review board established under 10 U.S.C. 1553, sets aside any bar to benefits imposed under paragraph (c) or (d) of this section except the bar contained in paragraph (c)(2) of this section.
( h ) *Discharge review board upgrades on or after October 8, 1977.* An honorable or general discharge issued on or after October 8, 1977, by a discharge review board established under 10 U.S.C. 1553, sets aside a bar to benefits imposed under paragraph (d) of this section, but not under paragraph (c) of this section, provided that: ( 1 ) The discharge is upgraded as a result of an individual case review;
( 2 ) The discharge is upgraded under uniform published standards and procedures that generally apply to all persons administratively discharged or released from active military, naval, air, or space service under conditions other than honorable; and
( 3 ) Such standards are consistent with historical standards for determining honorable service and do not contain any provision for automatically granting or denying an upgraded discharge.
( i ) *Special review board upgrades.* Under 38 U.S.C. 5303(e), unless a discharge review board established under 10 U.S.C. 1553 determines on an individual case basis that the discharge would be upgraded under uniform standards meeting the requirements set forth in paragraph (h) of this section, an honorable or general discharge awarded under one of the following programs does not remove any bar to benefits imposed under this section: ( 1 ) The President's directive of January 19, 1977, implementing Presidential Proclamation 4313 of September 16, 1974; or
( 2 ) The Department of Defense's special discharge review program effective April 5, 1977; or
( 3 ) Any discharge review program implemented after April 5, 1977, that does not apply to all persons administratively discharged or released from active military service under other than honorable conditions.
( j ) *Overpayments after October 8, 1977, due to discharge review board upgrades.* No overpayments shall be created as a result of payments made after October 8, 1977, based on an upgraded honorable or general discharge issued under one of the programs listed in paragraph (i) of this section which would not be awarded under the standards set forth in paragraph (h) of this section. Accounts in payment status on or after October 8, 1977, shall be terminated the end of the month in which it is determined that the original other than honorable discharge was not issued under conditions other than dishonorable following notice from the appropriate discharge review board that the discharge would not have been upgraded under the standards set forth in paragraph (h) of this section, or April 7, 1978, whichever is the earliest. Accounts in suspense (either before or after October 8, 1977) shall be terminated on the date of last payment or April 7, 1978, whichever is the earliest.
( k ) *Overpayments after October 8, 1977, based on application of AWOL statutory bar.* No overpayment shall be created as a result of payments made after October 8, 1977, in cases in which the bar contained in paragraph (c)(6) of this section is for application. Accounts in payment status on or after October 8, 1977, shall be terminated at the end of the month in which it is determined that compelling circumstances do not exist, or April 7, 1978, whichever is the earliest. Accounts in suspense (either before or after October 8, 1977) shall be terminated on the date of last payment, or April 7, 1978, whichever is the earliest.
( l ) *Uncharacterized separations.* Where enlisted personnel are administratively separated from service on the basis of proceedings initiated on or after October 1, 1982, the separation may be classified as one of the three categories of administrative separation that do not require characterization of service by the military department concerned. In such cases conditions of discharge will be determined by the VA as follows: ( 1 ) *Entry level separation.* Uncharacterized administrative separations of this type shall be considered under conditions other than dishonorable.
( 2 ) *Void enlistment or induction.* Uncharacterized administrative separations of this type shall be reviewed based on facts and circumstances surrounding separation, with reference to the provisions of § 3.14 of this part, to determine whether separation was under conditions other than dishonorable.
( 3 ) *Dropped from the rolls.* Uncharacterized administrative separations of this type shall be reviewed based on facts and circumstances surrounding separation to determine whether separation was under conditions other than dishonorable. (Authority: 38 U.S.C. 101, 501, and 5303)


Cross References:
Validity of enlistments. See § 3.14. Revision of decisions. See § 3.105. Effective dates. See § 3.400(g). Minimum active-duty service requirement. See § 3.12a. [28 FR 123, Jan. 4, 1963, as amended at 41 FR 12656, Mar. 26, 1976; 43 FR 15153, Apr. 11, 1978; 45 FR 2318, Jan. 11, 1980; 49 FR 44099, Nov. 2, 1984; 62 FR 14823, Mar. 28, 1997; 87 FR 26125, May 3, 2022; 89 FR 32372, Apr. 26, 2024]