```

[Senate Report 111-24]
[From the U.S. Government Publishing Office]

                                                        Calendar No. 70
111th Congress                                                   Report
                                 SENATE
 1st Session                                                     111-24

======================================================================

 
      VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2009

                                _______
                                

                  June 4, 2009.--Ordered to be printed

                                _______
                                

          Mr. Akaka, from the Committee on Veterans' Affairs,
                        submitted the following

                              R E P O R T

                         [To accompany S. 407]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs (hereinafter, 
``Committee''), to which was referred the bill (S.407) to 
increase, effective as of December 1, 2009, the rates of 
compensation for veterans with service-connected disabilities 
and the rates of dependency and indemnity compensation for the 
survivors of certain disabled veterans, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment in the nature of a substitute, and recommends that 
the bill, as amended, do pass.

                              Introduction

    On February 10, 2009, Committee Chairman Daniel K. Akaka 
introduced S.407, a bill to increase, effective as of December 
1, 2009, the rates of compensation for veterans with service-
connected disabilities and the rates of dependency and 
indemnity compensation for the survivors of certain disabled 
veterans, and for other purposes. Committee Ranking Minority 
Member Richard Burr is an original cosponsor of S.407, as are 
Committee Members John D. Rockefeller IV, Patty Murray, Bernard 
Sanders, Sherrod Brown, Jim Webb, Jon Tester, Mark Begich, 
Roland Burris, Arlen Specter, Johnny Isakson, Roger F. Wicker, 
Mike Johanns, and Lindsey Graham. Senators Frank R. Lautenberg, 
Blanche Lincoln, and Olympia J. Snowe were later added as 
cosponsors. The bill was referred to the Committee.

                           Committee Hearing

    On April 29, 2009, the Committee held a hearing on 
legislation pending before the Committee. Among the measures on 
which the Committee received testimony was S.407. Testimony on 
S.407, among other bills, was offered by: Bradley G. Mayes, 
Director, Compensation and Pension Service, Veterans Benefits 
Administration, Department of Veterans Affairs; Raymond C. 
Kelley, National Legislative Director, AMVETS; Robert Jackson, 
Assistant Director, National Legislative Service, Veterans of 
Foreign Wars of the United States; and Ian DePlanque, Assistant 
Director, Veterans Affairs and Rehabilitation Commission, The 
American Legion.

                           Committee Meeting

    On May 21, 2009, the Committee met in open session to 
consider legislation pending before the Committee. Among the 
measures so considered was S.407. The Committee voted, without 
dissent, to report favorably S.407, as amended, to the Senate.

               Summary of the Committee Bill as Reported

    The Committee bill contains freestanding provisions that 
would require the Secretary of Veterans Affairs to increase, 
effective December 1, 2009, the rates of, and limitations on, 
certain benefits paid by the Department of Veterans Affairs 
(hereinafter, ``VA'') by the same percentage as the cost-of-
living adjustment (hereinafter, ``COLA'') provided to Social 
Security recipients and VA pension beneficiaries that become 
effective on the same date. The COLA would apply to:
          1. basic compensation rates for veterans with 
        service-connected disabilities and the rates payable 
        for certain severe disabilities;
          2. the allowance for spouses, children, and dependent 
        parents paid to service-connected disabled veterans 
        rated 30 percent or more disabled;
          3. the annual clothing allowance paid to veterans 
        whose compensable disability requires the use of a 
        prosthetic or orthopedic appliance (including a 
        wheelchair) that tends to tear or wear out clothing or 
        requires the use of a medication prescribed by a 
        physician for a service-connected skin condition if the 
        medication causes irreparable damage to the veteran's 
        outer garments; and
          4. the dependency and indemnity compensation 
        (hereinafter, ``DIC'') rates paid to:
                  (a) surviving spouses of veterans whose 
                deaths were service-connected;
                  (b) surviving spouses for dependent children 
                below the age of 18;
                  (c) surviving spouses who are so disabled 
                that they need aid and attendance or are 
                permanently housebound;
                  (d) surviving spouses covered under section 
                1318 of title 38, United States Code; and
                  (e) the children of veterans whose deaths 
                were service- connected if no surviving spouse 
                is entitled to DIC, the child is age 18 through 
                22 and attending an approved educational 
                institution, or the child is age 18 or over and 
                became permanently incapable of self-support 
                prior to reaching age 18.
    The Committee bill would also codify benefit rates that 
were increased as a result of the Veterans' Compensation Cost-
of-Living Adjustment Act of 2008, Public Law 110-324.

                       Background and Discussion

A. Disability compensation

    The service-connected disability compensation program under 
chapter 11 of title 38, United States Code, provides monthly 
cash benefits to veterans who have disabilities incurred or 
aggravated during active duty in the Armed Forces.
    The amount of compensation paid depends on the nature and 
severity of the veteran's disability or combination of 
disabilities. VA rates compensable disabilities according to 
its Schedule for Rating Disabilities on a graduated scale 
ranging from 10 to 100 percent, in 10 percent increments. VA 
pays higher monthly rates (known as ``special monthly 
compensation'') to disabled veterans with certain specific, 
very severe disabilities or combinations of disabilities.
    According to VA, as set forth in its fiscal year 2010 
budget, the department estimates that it will provide 
disability compensation to 3,154,217 veterans with service-
connected disabilities in fiscal year 2010. Among the veterans 
estimated to receive such compensation are: 1 World War I 
veteran; 243,697 World War II veterans; 157,427 Korean-conflict 
veterans; 1,058,883 Vietnam-era veterans; 1,070,162 veterans of 
the Persian Gulf War era; and 612,172 veterans who served 
during peacetime.
    A veteran with a disability rated at 30 percent or more may 
receive additional compensation on behalf of the veteran's 
spouse, children, and dependent parents. These dependents' 
allowances are prorated according to the percentage of 
disability.

B. Dependency and indemnity compensation

    Under chapter 13 of title 38, United States Code, VA pays 
DIC to the survivors of servicemembers or veterans who died on 
or after January 1, 1957, from a disease or injury incurred or 
aggravated during military service. Survivors eligible for DIC 
include surviving spouses, unmarried children under the age of 
18, children age 18 or older who are permanently incapable of 
self-support, children between the ages of 18 and 22 who are 
enrolled in school, and certain needy parents. Under section 
5312 of title 38, United States Code, parents' DIC rates are 
adjusted automatically at the same time and by the same 
percentage as Social Security and VA pension benefits. 
Surviving spouses, children, and parents who are receiving 
death compensation based on deaths before January 1, 1957, may 
elect to receive DIC instead of death compensation.
    For deaths on or after January 1, 1957, but prior to 
January 1, 1993, surviving spouses received DIC at rates 
determined by the pay grade (service rank) of the deceased 
veteran. For deaths on or after January 1, 1993, DIC is paid at 
a flat rate. Surviving spouses currently receive $1,154 per 
month and, if the deceased veteran was totally disabled for 
eight years prior to death, an additional $246 per month. 
Surviving spouses who had been receiving benefits under the 
prior DIC program are paid under whichever program will pay the 
higher benefit.
    A surviving spouse who is so disabled as to be housebound 
or in need of regular aid and attendance is eligible to receive 
an additional amount. A surviving spouse also may receive 
additional allowances on behalf of the veteran's surviving 
children.
    Children are entitled to DIC if there is no surviving 
spouse, if they are 18 years of age or older and became 
permanently incapable of self-support before reaching age 18, 
or if they are 18 to 22 years old and pursuing an approved 
course of education.
    Parents of deceased veterans whose incomes are below 
statutorily prescribed income thresholds are eligible for DIC 
under section 1315 of title 38, United States Code. As 
previously noted, parents' DIC rates are adjusted automatically 
at the same time and by the same percentage as Social Security 
and VA pension benefits.
    In its fiscal year 2010 budget, VA estimates that it will 
pay DIC benefits to 348,335 survivors, a total that includes 
surviving spouses, children, and needy surviving parents.
    Under section 1318 of title 38, United States Code, VA pays 
benefits at DIC rates to the surviving spouses and children of 
veterans whose deaths are not service-connected if the veteran, 
immediately prior to his or her death, had been receiving (or 
had been entitled to receive) compensation at the 100 percent 
rate continuously for 10 or more years or for at least five 
years from the date of discharge or release from active duty. 
VA also pays DIC benefits to the surviving spouses and children 
of veterans who were former prisoners of war who die after 
September 30, 1999, and whose deaths were not service-connected 
if the veterans had been receiving (or had been entitled to 
receive) compensation at the 100 percent rate continuously for 
not less than one year preceding death.

Committee bill

    The Committee bill would direct VA to compute and provide 
increases in the monthly rates of compensation and DIC, 
effective December 1, 2009, if appropriate. The rates would be 
increased by the same percentage as the Social Security and VA 
pension COLA that will take effect on that date. In accordance 
with section 8031 of the Balanced Budget Act of 1997 (Public 
Law 105-33), amounts of compensation so computed that are not 
even multiples of $1 will be rounded down to the next lower 
whole dollar amount. In 2003, this provision was extended until 
2013 by section 706 of Public Law 108-183.
    The increases in DIC would automatically result in 
identical percentage increases in benefits paid at DIC rates 
under section 1318 of title 38, United States Code, to the 
surviving spouses and children of veterans who had a service-
connected disability at the time of death for which they 
continuously were rated totally disabled for at least (1) 10 
years, (2) five years from the date of discharge from active 
duty, or (3) one year if the veteran was a former prisoner of 
war who died after September 30, 1999, and whose death was not 
service-connected if the veteran had been receiving (or had 
been entitled to receive) compensation at the 100 percent rate 
continuously for not less than one year preceding death.
    Under section 156(e)(1)(A) of Public Law 97-377, the DIC 
increases also would automatically result in the same 
percentage increases in Social Security benefits that were 
terminated by section 2205 of the Omnibus Budget Reconciliation 
Act of 1981 (hereinafter, ``OBRA 1981'') (Public Law 97-35). 
Prior to OBRA 1981, those Social Security benefits had been 
paid to certain surviving spouses of those who died on active 
duty or from a service-connected disability on behalf of their 
children under 18 and children over age 19 who were secondary-
school students; OBRA 1981 reduced the eligibility cutoff age 
from 18 to 16 years old.
    Section 314 of Public Law 100-322 amended section 156(a)(1) 
of Public Law 97-377, the Further Continuing Appropriations Act 
of 1993, to restore the benefits eliminated by OBRA 1981. The 
DIC increase also would apply to these restored benefits, 
effective December 1, 2000.
    The CBO, in its most recent baseline, estimated that there 
will be no Social Security COLA affecting fiscal year 2010 
payments; the COLA provided for by the Committee bill will 
follow accordingly. The actual Social Security COLA could 
differ from this estimate. Rather than selecting any particular 
percentage adjustment at the time the Committee ordered the 
bill reported, the Committee followed its prior practice of 
setting the COLA by reference to any Social Security increase.

               Congressional Budget Office Cost Estimate

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the Committee, based on 
information supplied by the CBO, estimates that enactment of 
the Committee bill would, relative to current law, not increase 
spending in 2010 or in subsequent years. Enactment of the 
Committee bill would not affect the budget of state, local, or 
tribal governments.
    The cost estimate provided by CBO, setting forth a detailed 
breakdown of costs, follows:

                               Congressional Budget Office,
                                      Washington, DC, June 2, 2009.

Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 407, the Veterans' 
Compensation Cost-of-Living Adjustment Act of 2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne M. 
Wright.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.

  Enclosure.

S.407--Veterans' Compensation Cost-of-Living Adjustment Act of 2009

    S.407 would increase the amounts paid to veterans for 
disability compensation and to their survivors for dependency 
and indemnity compensation by the same cost-of-living 
adjustment (COLA) payable to Social Security recipients. The 
increase would take effect on December 1, 2009, and the 
resulting adjustment would be rounded to the next lower dollar.
    The COLA that would be authorized by this bill is assumed 
in CBO's baseline, consistent with section 257 of the Balanced 
Budget and Emergency Deficit Control Act, and savings from 
rounding it down were achieved by the Balanced Budget Act of 
1997 (Public Law 105-33) and extended to 2013 by the Veterans 
Benefits Act of 2003 (Public Law 108183). Furthermore, based on 
its current economic forecast, CBO does not anticipate a cost-
of-living increase in 2010 for Social Security; thus, CBO 
estimates that enacting this bill would have no impact on 
spending for those programs.
    S.407 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    On March 25, 2009, CBO transmitted a cost estimate for H.R. 
1513, the Veterans' Compensation Cost-of-Living Adjustment Act 
of 2009, as ordered reported by the House Committee on 
Veterans' Affairs on March 25, 2009. The two versions of the 
legislation are similar and their estimated costs are 
identical.
    The CBO staff contact for this estimate is Dwayne M. 
Wright. This estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

                      Regulatory Impact Statement

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee on Veterans' 
Affairs has made an evaluation of the regulatory impact that 
would be incurred in carrying out the Committee bill. The 
Committee finds that S.407, as amended, would not entail any 
regulation of individuals or businesses or result in any impact 
on the personal privacy of any individuals and that the 
paperwork resulting from enactment would be minimal.

                 Tabulation of Votes Cast in Committee

    In compliance with paragraph 7 of rule XXVI of the Standing 
Rules of the Senate, the following is a tabulation of votes 
cast in person or by proxy by Members of the Committee on 
Veterans' Affairs at its May 21, 2009, meeting. On that date, 
the Committee considered and ordered reported S. 407, as 
amended, a bill to increase, effective as of December 1, 2009, 
the rates of compensation for veterans with service-connected 
disabilities and the rates of 
dependency and indemnity compensation for survivors of certain 
disabled veterans. The Committee bill was agreed to by a vote 
of 
14 to 0.

----------------------------------------------------------------------------------------------------------------
                Yeas                                 Senator                                 Nays
----------------------------------------------------------------------------------------------------------------
                      X (by proxy)   Mr. Rockefeller
                                 X   Mrs. Murray
                      X (by proxy)   Mr. Sanders
                                 X   Mr. Brown
                                 X   Mr. Webb
                                 X   Mr. Tester
                                 X   Mr. Begich
                                 X   Mr. Burris
                      X (by proxy)   Mr. Specter
                                 X   Mr. Burr
                                 X   Mr. Isakson
                      X (by proxy)   Mr. Wicker
                                 X   Mr. Johanns
                                     Mr. Graham
                                 X   Mr. Akaka, Chairman
----------------------------------------------------------------------------------------------------------------
                                14   TALLY                                                                    0
----------------------------------------------------------------------------------------------------------------

                             Agency Report

    On April 29, 2009, Bradley G. Mayes, Director, Compensation 
and Pension Service, Veterans Benefits Administration, 
Department of Veterans Affairs, appeared before the Committee 
on Veterans' Affairs and submitted testimony on, among other 
things, S.407. Excerpts from this statement are reprinted 
below:

       STATEMENT OF BRADLEY G. MAYES, DIRECTOR, COMPENSATION AND 
     PENSION SERVICE, VETERANS BENEFITS ADMINISTRATION, DEPARTMENT 
                          OF VETERANS AFFAIRS

          Mr. Chairman and members of the Committee, I am 
        pleased to be here today to provide the Department of 
        Veterans Affairs' (VA) views on pending benefits 
        legislation.

           *       *       *       *       *       *       *

          S.407, the ``Veterans' Compensation Cost-of-Living 
        Adjustment Act of 2009,'' would direct the Secretary of 
        Veterans Affairs to increase administratively the rates 
        of disability compensation for veterans with service-
        connected disabilities, including the additional 
        amounts authorized for dependents and the clothing 
        allowance, and of dependency and indemnity compensation 
        for the survivors of veterans whose deaths are service 
        related, effective December 1, 2009. The rates of 
        increase would be the same as the cost-of-living 
        adjustment that will be provided under current law to 
        Social Security recipients. The bill would also 
        authorize VA to adjust the rates of disability 
        compensation payable under prior laws to persons who 
        have not received compensation under chapter 11 of 
        title 38, United States Code.
          VA supports a cost-of-living adjustment of this 
        nature. We believe this legislation is necessary to 
        ensure the affected benefits against any eroding 
        effects of inflation. The worthy beneficiaries of these 
        benefits deserve no less.

           *       *       *       *       *       *       *

                        Changes in Existing Law

    In compliance with paragraph 12 of Rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the Committee bill, as reported, are shown as follows (existing 
law proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

TITLE 38--VETERANS' BENEFITS

           *       *       *       *       *       *       *

PART II--GENERAL BENEFITS

           *       *       *       *       *       *       *

CHAPTER 11--COMPENSATION FOR SERVICE-CONNECTED DISABILITY OR DEATH

           *       *       *       *       *       *       *

Subchapter II--Wartime Disability Compensation

           *       *       *       *       *       *       *

SEC. 1114. RATES OF WARTIME DISABILITY COMPENSATION

    For the purposes of section 1110 of this title--
          (a) if and while the disability is rated 10 percent 
        the monthly compensation shall be [$117] $123;
          (b) if and while the disability is rated 20 percent 
        the monthly compensation shall be [$230] $243;
          (c) if and while the disability is rated 30 percent 
        the monthly compensation shall be [$356] $376;
          (d) if and while the disability is rated 40 percent 
        the monthly compensation shall be [$512] $541;
          (e) if and while the disability is rated 50 percent 
        the monthly compensation shall be [$728] $770;
          (f) if and while the disability is rated 60 percent 
        the monthly compensation shall be [$921] $974;
          (g) if and while the disability is rated 70 percent 
        the monthly compensation shall be [$1,161] $1,228;
          (h)if and while the disability is rated 80 percent 
        the monthly compensation shall be [$1,349] $1,427;
          (i) if and while the disability is rated 90 percent 
        the monthly compensation shall be [$1,517] $1,604;
          (j) if and while the disability is rated as total the 
        monthly compensation shall be [$2,527] $2,673;
          (k) if the veteran, as the result of service-
        connected disability, has suffered the anatomical loss 
        or loss of use of one or more creative organs, or one 
        foot, or one hand, or both buttocks, or blindness of 
        one eye, having only light perception, has suffered 
        complete organic aphonia with constant inability to 
        communicate by speech, or deafness of both ears, having 
        absence of air and bone conduction, or, in the case of 
        a woman veteran, has suffered the anatomical loss of 25 
        percent or more of tissue from a single breast or both 
        breasts in combination (including loss by mastectomy or 
        partial mastectomy) or has received radiation treatment 
        of breast tissue, the rate of compensation therefor 
        shall be [$91] $96 per month for each such loss or loss 
        of use independent of any other compensation provided 
        in subsections (a) through (j) or subsection (s) of 
        this section but in no event to exceed [$3,145] $3,327 
        per month; and in the event the veteran has suffered 
        one or more of the disabilities heretofore specified in 
        this subsection, in addition to the requirement for any 
        of the rates specified in subsections (l) through (n) 
        of this section, the rate of compensation shall be 
        increased by [$91] $96 per month for each such loss or 
        loss of use, but in no event to exceed [$4,412] $4,667 
        per month;
          (l) if the veteran, as the result of service-
        connected disability, has suffered the anatomical loss 
        or loss of use of both feet, or of one hand and one 
        foot, or is blind in both eyes, with 5/200 visual 
        acuity or less, or is permanently bedridden or with 
        such significant disabilities as to be in need of 
        regular aid and attendance, the monthly compensation 
        shall be [$3,145] $3,327;
          (m) if the veteran, as the result of service-
        connected disability, has suffered the anatomical loss 
        or loss of use of both hands, or of both legs at a 
        level, or with complications, preventing natural knee 
        action with prostheses in place, or of one arm and one 
        leg at levels, or with complications, preventing 
        natural elbow and knee action with prostheses in place, 
        or has suffered blindness in both eyes having only 
        light perception, or has suffered blindness in both 
        eyes, rendering such veteran so significantly disabled 
        as to be in need of regular aid and attendance, the 
        monthly compensation shall be [$3,470] $3,671;
          (n) if the veteran, as the result of service-
        connected disability, has suffered the anatomical loss 
        or loss of use of both arms at levels, or with 
        complications, preventing natural elbow action with 
        prostheses in place, has suffered the anatomical loss 
        of both legs so near the hip as to prevent the use of 
        prosthetic appliances, or has suffered the anatomical 
        loss of one arm and one leg so near the shoulder and 
        hip as to prevent the use of prosthetic appliances, or 
        has suffered the anatomical loss of both eyes, or has 
        suffered blindness without light perception in both 
        eyes, the monthly compensation shall be [$3,948] 
        $4,176;
          (o) if the veteran, as the result of service-
        connected disability, has suffered disability under 
        conditions which would entitle such veteran to two or 
        more of the rates provided in one or more subsections 
        (l) through (n) of this section, no condition being 
        considered twice in the determination, or if the 
        veteran has suffered bilateral deafness (and the 
        hearing impairment in either one or both ears is 
        service connected) rated at 60 percent or more 
        disabling and the veteran has also suffered service-
        connected total blindness with 20/200 visual acuity or 
        less, or if the veteran has suffered service-connected 
        total deafness in one ear or bilateral deafness (and 
        the hearing impairment in either one or both ears is 
        service connected) rated at 40 percent or more 
        disabling and the veteran has also suffered service-
        connected blindness having only light perception or 
        less, or if the veteran has suffered the anatomical 
        loss of both arms so near the shoulder as to prevent 
        the use of prosthetic appliances, the monthly 
        compensation shall be [$4,412] $4,667;
          (p) in the event the veteran's service-connected 
        disabilities exceed the requirements for any of the 
        rates prescribed in this section, the Secretary may 
        allow the next higher rate or an intermediate rate, but 
        in no event in excess of [$4,412] $4,667. In the event 
        the veteran has suffered service-connected blindness 
        with 5/200 visual acuity or less and (1) has also 
        suffered bilateral deafness (and the hearing impairment 
        in either one or both ears is service connected) rated 
        at no less than 30 percent disabling, the Secretary 
        shall allow the next higher rate, or (2) has also 
        suffered service-connected total deafness in one ear or 
        service-connected anatomical loss or loss of use of one 
        hand or one foot, the Secretary shall allow the next 
        intermediate rate, but in no event in excess of 
        [$4,412] $4,667. In the event the veteran has suffered 
        service-connected blindness, having only light 
        perception or less, and has also suffered bilateral 
        deafness (and the hearing impairment in either one or 
        both ears is service connected) rated at 10 or 20 
        percent disabling, the Secretary shall allow the next 
        intermediate rate, but in no event in excess of 
        [$4,412] $4,667. In the event the veteran has suffered 
        the anatomical loss or loss of use, or a combination of 
        anatomical loss and loss of use, of three extremities, 
        the Secretary shall allow the next higher rate or 
        intermediate rate, but in no event in excess of 
        [$4,412] $4,667. Any intermediate rate under this 
        subsection shall be established at the arithmetic mean, 
        rounded down to the nearest dollar, between the two 
        rates concerned;
          (r) Subject to section 5503(c) of this title, if any 
        veteran, otherwise entitled to compensation authorized 
        under subsection (o) of this section, at the maximum 
        rate authorized under subsection (p) of this section, 
        or at the intermediate rate authorized between the 
        rates authorized under subsections (n) and (o) of this 
        section and at the rate authorized under subsection (k) 
        of this section, is in need of regular aid and 
        attendance, then, in addition to such compensation--
                  (1) the veteran shall be paid a monthly aid 
                and attendance allowance at the rate of 
                [$1,893] $2,002; or
                  (2) if the veteran, in addition to such need 
                for regular aid and attendance, is in need of a 
                higher level of care, such veteran shall be 
                paid a monthly aid and attendance allowance at 
                the rate of [$2,820] $2,983, in lieu of the 
                allowance authorized in clause (1) of this 
                subsection, if the Secretary finds that the 
                veteran, in the absence of the provision of 
                such care, would require hospitalization, 
                nursing home care, or other residential 
                institutional care.
          For the purposes of clause (2) of this subsection, 
        need for a higher level of care shall be considered to 
        be need for personal health-care services provided on a 
        daily basis in the veteran's home by a person who is 
        licensed to provide such services or who provides such 
        services under the regular supervision of a licensed 
        health-care professional. The existence of the need for 
        such care shall be determined by a physician employed 
        by the Department or, in areas where no such physician 
        is available, by a physician carrying out such function 
        under contract or fee arrangement based on an 
        examination by such physician. For the purposes of 
        section 1134 of this title, such allowance shall be 
        considered as additional compensation payable for 
        disability.
          (s) If the veteran has a service-connected disability 
        rated as total, and (1) has additional service-
        connected disability or disabilities independently 
        ratable at 60 percent or more, or, (2) by reason of 
        such veteran's service-connected disability or 
        disabilities, is permanently housebound, then the 
        monthly compensation shall be [$2,829] $2,993. For the 
        purpose of this subsection, the requirement of 
        ``permanently housebound'' will be considered to have 
        been met when the veteran is substantially confined to 
        such veteran's house (ward or clinical areas, if 
        institutionalized) or immediate premises due to a 
        service-connected disability or disabilities which it 
        is reasonably certain will remain throughout such 
        veteran's lifetime.

SEC. 1115. ADDITIONAL COMPENSATION FOR DEPENDENTS

           *       *       *       *       *       *       *

          (1) If and while rated totally disabled and--
                  (A) has a spouse but no child, [$142] $150;
                  (B) has a spouse and one or more children, 
                [$245] $259 plus [$71] $75 for each child in 
                excess of one;
                  (C) has no spouse but one or more children, 
                [$96] $101 plus [$71] $75 for each child in 
                excess of one;
                  (D) has a parent dependent upon such veteran 
                for support, then, in addition to the above 
                amounts, [$114] $120 for each parent so 
                dependent;
                  (E) notwithstanding the other provisions of 
                this paragraph, the monthly payable amount on 
                account of a spouse who is (i) a patient in a 
                nursing home or (ii) blind, or so nearly blind 
                or significantly disabled as to need or require 
                the regular aid and attendance of another 
                person, shall be [$271] $286 for a totally 
                disabled veteran and proportionate amounts for 
                partially disabled veterans in accordance with 
                paragraph (2) of this section; and
                  (F) notwithstanding the other provisions of 
                this paragraph, the monthly amount payable on 
                account of each child who has attained the age 
                of eighteen years and who is pursuing a course 
                of instruction at an approved educational 
                institution shall be [$227] $240 for a totally 
                disabled veteran and proportionate amounts for 
                partially disabled veterans in accordance with 
                paragraph (2) of this section.

           *       *       *       *       *       *       *

Subchapter VI--General Compensation Provisions

           *       *       *       *       *       *       *

SEC. 1162. CLOTHING ALLOWANCE

    The Secretary under regulations which the Secretary shall 
prescribe, shall pay a clothing allowance of [$677] $716 per 
year to each veteran who--

           *       *       *       *       *       *       *

CHAPTER 13--DEPENDENCY AND INDEMNITY COMPENSATION FOR SERVICE-CONNECTED 
DEATHS

           *       *       *       *       *       *       *

Subchapter II--Dependency and Indemnity Compensation

           *       *       *       *       *       *       *

SEC. 1311. DEPENDENCY AND INDEMNITY COMPENSATION TO A SURVIVING SPOUSE

    (a)(1) Dependency and indemnity compensation shall be paid 
to a surviving spouse at the monthly rate of [$1,091] $1,154.
    (2) The rate under paragraph (1) shall be increased by 
[$233] $246 in the case of the death of a veteran who at the 
time of death was in receipt of or was entitled to receive (or 
but for the receipt of retired pay or retirement pay was 
entitled to receive) compensation for a service-connected 
disability that was rated totally disabling for a continuous 
period of at least eight years immediately preceding death. In 
determining the period of a veteran's disability for purposes 
of the preceding sentence, only periods in which the veteran 
was married to the surviving spouse shall be considered.
    (3) * * *

----------------------------------------------------------------------------------------------------------------
                  [Pay grade                     Monthly rate               Pay grade              Monthly rate
----------------------------------------------------------------------------------------------------------------
[E-1..........................................          $1,091  W-4.............................          $1,305
E-2...........................................          $1,091  O-1.............................          $1,153
E-3...........................................          $1,091  O-2.............................          $1,191
E-4...........................................          $1,091  O-3.............................          $1,274
E-5...........................................          $1,091  O-4.............................          $1,349
E-6...........................................          $1,091  O-5.............................          $1,485
E-7...........................................          $1,129  O-6.............................          $1,674
E-8...........................................          $1,191  O-7.............................          $1,808
E-9...........................................       \1\$1,242  O-8.............................          $1,985
W-1...........................................          $1,153  O-9.............................          $2,123
W-2...........................................          $1,198  O-10............................       \2\$2,328
W-3...........................................          $1,234  ................................  ..............
----------------------------------------------------------------------------------------------------------------
[\1\If the veteran served as sergeant major of the Army, senior enlisted advisor of the Navy, chief master
  sergeant of the Air Force, sergeant major of the Marine Corps, or master chief petty officer of the Coast
  Guard, at the applicable time designated by section 1302 of this title, the surviving spouse's rate shall be
  $1,342.
[\2\If the veteran served as Chairman or Vice-Chairman of the Joint Chiefs of Staff, Chief of Staff of the Army,
  Chief of Naval Operations, Chief of Staff of the Air Force, Commandant of the Marine Corps, or Commandant of
  the Coast Guard, at the applicable time designated by section 1302 of this title, the surviving spouse's rate
  shall be $2,499.]

----------------------------------------------------------------------------------------------------------------
                   Pay grade                     Monthly rate               Pay grade              Monthly rate
----------------------------------------------------------------------------------------------------------------
E-1...........................................          $1,154  W-4.............................          $1,380
E-2...........................................          $1,154  O-1.............................          $1,219
E-3...........................................          $1,154  O-2.............................          $1,260
E-4...........................................          $1,154  O-3.............................          $1,347
E-5...........................................          $1,154  O-4.............................          $1,427
E-6...........................................          $1,154  O-5.............................          $1,571
E-7...........................................          $1,194  O-6.............................          $1,771
E-8...........................................          $1,260  O-7.............................          $1,912
E-9...........................................       \1\$1,314  O-8.............................          $2,100
W-1...........................................          $1,219  O-9.............................          $2,246
W-2...........................................          $1,267  O-10............................       \2\$2,463
W-3...........................................          $1,305  ................................  ..............
----------------------------------------------------------------------------------------------------------------
\1\If the veteran served as sergeant major of the Army, senior enlisted advisor of the Navy, chief master
  sergeant of the Air Force, sergeant major of the Marine Corps, or master chief petty officer of the Coast
  Guard, at the applicable time designated by section 1302 of this title, the surviving spouse's rate shall be
  $1,419.
\2\If the veteran served as Chairman or Vice-Chairman of the Joint Chiefs of Staff, Chief of Staff of the Army,
  Chief of Naval Operations, Chief of Staff of the Air Force, Commandant of the Marine Corps, or Commandant of
  the Coast Guard, at the applicable time designated by section 1302 of this title, the surviving spouse's rate
  shall be $2,643.

    (b) If there is a surviving spouse with one or more 
children below the age of eighteen of a deceased veteran, the 
dependency and indemnity compensation paid monthly to the 
surviving spouse shall be increased by [$271] $286 for each 
such child.
    (c) The monthly rate of dependency and indemnity 
compensation payable to a surviving spouse shall be increased 
by [$271] $286 if the spouse is (1) a patient in a nursing home 
or (2) blind, or so nearly blind or significantly disabled as 
to need or require the regular aid and attendance of another 
person.
    (d) The monthly rate of dependency and indemnity 
compensation payable to a surviving spouse shall be increased 
by [$128] $135 if the surviving spouse is, by reason of 
disability, permanently housebound but does not qualify for the 
aid and attendance allowance under subsection (c) of this 
section. For the purposes of this subsection, the requirement 
of ``permanently housebound'' will be considered to have been 
met when the surviving spouse is substantially confined to such 
surviving spouse's home (ward or clinical areas, if 
institutionalized) or immediate premises by reason of a 
disability or disabilities which it is reasonably certain will 
remain throughout such surviving spouse's lifetime.

           *       *       *       *       *       *       *

SEC. 1313. DEPENDENCY AND INDEMNITY COMPENSATION TO CHILDREN

    (a) Whenever there is no surviving spouse of a deceased 
veteran entitled to dependency and indemnity compensation, 
dependency and indemnity compensation shall be paid in equal 
shares to the children of the deceased veteran at the following 
monthly rates:
          (1) one child, [$462] $488;
          (2) two children, [$663] $701;
          (3) three children, [$865] $915; and
          (4) more than three children, [$865] $915, plus 
        [$165] $174 for each child in excess of three.

           *       *       *       *       *       *       *

SEC. 1314. SUPPLEMENTAL DEPENDENCY AND INDEMNITY COMPENSATION TO 
                    CHILDREN

    (a) In the case of a child entitled to dependency and 
indemnity compensation who has attained the age of eighteen and 
who, while under such age, became permanently incapable of 
self-support, the dependency and indemnity compensation paid 
monthly to such child shall be increased by [$271] $286.
    (b) If dependency and indemnity compensation is payable 
monthly to a person as a surviving spouse and there is a child 
(of such person's deceased spouse) who has attained the age of 
eighteen and who, while under such age, became permanently 
incapable of self-support, dependency and indemnity 
compensation shall be paid monthly to each such child, 
concurrently with the payment of dependency and indemnity 
compensation to the surviving spouse, in the amount of [$462] 
$488.
    (c) If dependency and indemnity compensation is payable 
monthly to a person as a surviving spouse and there is a child 
(of such person's deceased spouse), who has attained the age of 
eighteen and who, while under the age of twenty-three, is 
pursuing a course of instruction at an educational institution 
approved under section 104 of this title, dependency and 
indemnity compensation shall be paid monthly to each such 
child, concurrently with the payment of dependency and 
indemnity compensation to the surviving spouse, in the amount 
of [$230] $243.

SEC. 1315. DEPENDENCY AND INDEMNITY COMPENSATION TO PARENTS

    (a) * * *
    (b)(1) Except as provided in paragraph (4) of this 
subsection, if there is only one parent, the monthly rate of 
dependency and indemnity compensation paid to such parent shall 
be [$163] $569, as increased from time to time under section 
5312(b)(1) of this title and reduced by an amount, based upon 
the amount of such parent's annual income, determined in 
accordance with regulations which the Secretary shall prescribe 
under section 5312(b)(2) of this title.
    (2) * * *
    (3) In no case may dependency and indemnity compensation be 
paid under paragraph (1) of this subsection to any parent if 
the annual income of such parent exceeds [$4,038] $13,456, as 
increased from time to time under section 5312 of this title.
    (4) * * *
    (c)(1) Except as provided in subsection (d) of this 
section, if there are two parents, but they are not living 
together, the monthly rate of dependency and indemnity 
compensation paid to each such parent shall be [$115] $412, as 
increased from time to time under section 5312(b)(1) of this 
title and reduced by an amount, based upon the amount of such 
parent's annual income, determined in accordance with 
regulations which the Secretary shall prescribe under section 
5312(b)(2) of this title.
    (2) * * *
    (3) In no case may dependency and indemnity compensation be 
paid under paragraph (1) of this subsection to any parent if 
the annual income of such parent exceeds [$4,038] $13,456, as 
increased from time to time under section 5312 of this title.
    (d)(1) If there are two parents who are living together, or 
if a parent has remarried and is living with such parent's 
spouse, the monthly rate of dependency and indemnity 
compensation paid to such parent shall be [$109] $387, as 
increased from time to time under section 5312(b)(1) of this 
title and reduced by an amount, based upon the amount of the 
combined annual income of the parents or the parent and the 
parent's spouse, determined in accordance with regulations 
which the Secretary shall prescribe under section 5312(b)(2) of 
this title.
    (2) * * *
    (3) In no case may dependency and indemnity compensation be 
paid under this subsection to a parent if the total combined 
annual income of the parent and such parent's spouse exceeds 
[$5,430] $18,087, as increased from time to time under section 
5312 of this title.

           *       *       *       *       *       *       *

    (g) The monthly rate of dependency and indemnity 
compensation payable to a parent shall be increased by [$85] 
$308, as increased from time to time under section 5312 of this 
title, if such parent is (1) a patient in a nursing home or (2) 
blind, or so nearly blind or significantly disabled as to need 
or require the regular aid and attendance of another person.
  

                                  

```