[Federal Register Volume 72, Number 98 (Tuesday, May 22, 2007)]
[Proposed Rules]
[Pages 28770-28793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-9542]



[[Page 28769]]

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Part II





Department of Veterans Affairs





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38 CFR Part 5



General Evidence Requirements, Effective Dates, Revision of Decisions, 
and Protection of Existing Ratings; Proposed Rule

Federal Register / Vol. 72, No. 98 / Tuesday, May 22, 2007 / Proposed 
Rules

[[Page 28770]]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 5

RIN 2900-AM01


General Evidence Requirements, Effective Dates, Revision of 
Decisions, and Protection of Existing Ratings

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to reorganize 
and rewrite in plain language general provisions applicable to its 
compensation and pension regulations, including general evidence 
requirements, general effective dates for new awards, revision of 
decisions, and protection of existing ratings. These revisions are 
proposed as part of VA's rewrite and reorganization of all of its 
compensation and pension rules in a logical, claimant-focused, and 
user-friendly format. The intended effect of the proposed revisions is 
to assist claimants and VA personnel in locating and understanding 
these general provisions.

DATES: Comments must be received by VA on or before July 23, 2007.

ADDRESSES: Written comments may be submitted through 
www.Regulations.gov; by mail or hand-delivery to the Director, 
Regulations Management (00REG), Department of Veterans Affairs, 810 
Vermont Ave., NW., Room 1068, Washington, DC 20420; or by fax to (202) 
273-9026. Comments should indicate that they are submitted in response 
to ``RIN 2900-AM01--General Evidence Requirements, Effective Dates, 
Revision of Decisions, and Protection of Existing Ratings.'' Copies of 
comments received will be available for public inspection in the Office 
of Regulation Policy and Management, Room 1063B, between the hours of 8 
a.m. and 4:30 p.m. Monday through Friday (except holidays). Please call 
(202) 273-9515 for an appointment. (This is not a toll-free number.) In 
addition, during the comment period, comments may be viewed online 
through the Federal Docket Management System (FDMS).

FOR FURTHER INFORMATION CONTACT: William F. Russo, Director, 
Regulations Management (00REG), Department of Veterans Affairs, 810 
Vermont Avenue, NW., Washington, DC 20420, (202) 273-9515. (This is not 
a toll-free number.)

SUPPLEMENTARY INFORMATION: The Secretary of Veterans Affairs has 
established an Office of Regulation Policy and Management (ORPM) to 
provide centralized management and coordination of VA's rulemaking 
process. One of the major functions of this office is to oversee a 
Regulation Rewrite Project (the Project) to improve the clarity and 
consistency of existing VA regulations. The Project responds to a 
recommendation made in the October 2001 ``VA Claims Processing Task 
Force: Report to the Secretary of Veterans Affairs.'' The Task Force 
recommended that the compensation and pension regulations be rewritten 
and reorganized in order to improve VA's claims adjudication process. 
Therefore, the Project began its efforts by reviewing, reorganizing, 
and redrafting the content of the regulations in 38 CFR part 3 
governing the compensation and pension program of the Veterans Benefits 
Administration. These regulations are among the most difficult VA 
regulations for readers to understand and apply.
    Once rewritten, the proposed regulations will be published in 
several portions for public review and comment. This is one such 
portion. It includes proposed rules regarding general evidence 
requirements, general effective dates for awards, revision of 
decisions, and protection of VA ratings. After review and consideration 
of public comments, final versions of these proposed regulations will 
ultimately be published in a new part 5 in 38 CFR.

Outline

Overview of New Part 5 Organization
Overview of This Notice of Proposed Rulemaking
Table Comparing Current Part 3 Rules with Proposed Part 5 Rules
Content of Proposed Regulations
    General Evidence Requirements
    5.130 Submission of statements, evidence, or information 
affecting entitlement to benefits.
    5.13 Applications, claims, and exchange of evidence with Social 
Security Administration (SSA)--death benefits.
    5.132 Claims, statements, evidence, or information filed abroad; 
authentication of documents from foreign countries.
    5.133 Information VA may request from financial institutions.
    5.134 Will VA accept a signature by mark or thumbprint?
    5.135 Statements certified or under oath or affirmation.
    Evidence Requirements for Former Prisoners of War (POWs)
    5.140 Determining former prisoner of war status.
    5.141 Medical evidence for former prisoners' of war compensation 
claims.
    General Effective Dates for Awards
    5.150 General effective dates for awards or increased benefits.
    5.151 Date of receipt.
    5.152 Effective dates based on change of law or VA issue.
    5.153 Effective date of awards based on receipt of evidence 
prior to end of appeal period.
    General Rules on Revision of Decisions
    5.160 Binding effect of VA decisions.
    5.161 Review of benefit claims decisions.
    5.162 Revision of decisions based on clear and unmistakable 
error (CUE).
    5.163 Revision of decisions based on difference of opinion.
    5.164 Effective dates for revision of decisions based on 
difference of opinion.
    5.165 Effective dates for reduction or discontinuance of awards 
based on error.
    5.166 New and material evidence based on service department 
records.
    General Rules on Protection or Reduction of Existing Ratings
    5.170 Calculation of 5-year, 10-year, and 20-year protection 
periods.
    5.171 Protection of 5-year stabilized ratings.
    5.172 Protection of continuous 20-year ratings.
    5.173 Protection against reduction of disability ratings when 
revisions are made to the Schedule for Rating Disabilities.
    5.174 Protection of entitlement to benefits established before 
1959.
    5.175 Protection or severance of service connection.
    5.176 Due process procedures for severing service connection or 
reducing or discontinuing compensation benefits.
    5.177 Effective dates for severing service connection or 
discontinuing or reducing benefit payments.
Endnote Regarding Amendatory Language
Paperwork Reduction Act
Regulatory Flexibility Act
Executive Order 12866
Unfunded Mandates
Catalog of Federal Domestic Assistance Numbers and Titles
List of Subjects in 38 CFR Part 5

Overview of New Part 5 Organization

    We plan to organize the part 5 regulations so that most of the 
provisions governing a specific benefit are located in the same 
subpart, with general provisions pertaining to all compensation and 
pension benefits also grouped together. We believe this organization 
will enable claimants, beneficiaries, and their representatives, as 
well as VA personnel, to find information relating to a specific 
benefit more quickly than the organization provided in current part 3.
    The first major subdivision would be ``Subpart A--General 
Provisions.'' It would include information regarding the scope of the 
regulations in new part 5, general definitions, and general policy 
provisions for this part. This subpart was published as proposed on 
March 31, 2006. See 71 FR 16464.
    ``Subpart B--Service Requirements for Veterans'' would include 
information regarding a veteran's military service, including the 
minimum service requirement, types of service, periods of

[[Page 28771]]

war, and service evidence requirements. This subpart was published as 
proposed on January 30, 2004. See 69 FR 4820.
    ``Subpart C--Adjudicative Process, General'' would inform readers 
about types of claims and filing procedures, VA's duties, rights and 
responsibilities of claimants and beneficiaries, general evidence 
requirements, and effective dates for new awards, as well as revision 
of decisions and protection of VA ratings. This subpart will be 
published as three separate Notices of Proposed Rulemaking (NPRMs) due 
to its size. The first, concerning the duties of VA and the rights and 
responsibilities of claimants and beneficiaries, was published as 
proposed on May 10, 2005. See 70 FR 24680. The portion of this subpart 
covering general evidence requirements, effective dates for awards, 
revision of decisions, and protection of VA ratings is the subject of 
this document.
    ``Subpart D--Dependents and Survivors'' would inform readers how VA 
determines whether an individual is a dependent or a survivor of a 
veteran. It would also provide the evidence requirements for these 
determinations. This subpart was published as proposed on September 20, 
2006. See 71 FR 55052.
    ``Subpart E--Claims for Service Connection and Disability 
Compensation'' would define service-connected compensation, including 
direct and secondary service connection. This subpart would inform 
readers how VA determines entitlement to service connection. The 
subpart would also contain those provisions governing presumptions 
related to service connection, rating principles, and effective dates, 
as well as several special ratings. This subpart will be published as 
three separate NPRMs due to its size. The first, concerning 
presumptions related to service connection, was published as proposed 
on July 27, 2004. See 69 FR 44614.
    ``Subpart F--Nonservice-Connected Disability Pensions and Death 
Pensions'' would include information regarding the three types of 
nonservice-connected pension: Improved pension, Old-Law pension, and 
Section 306 pension. This subpart would also include those provisions 
that state how to establish entitlement to Improved pension, and the 
effective dates governing each pension. This subpart would be published 
in two separate NPRMs due to its size. The portion concerning Old-Law 
pension, Section 306 pension, and elections of Improved pension was 
published as proposed on December 27, 2004. See 69 FR 77578.
    ``Subpart G--Dependency and Indemnity Compensation, Death 
Compensation, Accrued Benefits, and Special Rules Applicable Upon Death 
of a Beneficiary,'' would contain regulations governing claims for 
dependency and indemnity compensation (DIC); death compensation; 
accrued benefits; benefits awarded, but unpaid at death; and various 
special rules that apply to the disposition of VA benefits, or proceeds 
of VA benefits, when a beneficiary dies. This subpart would also 
include related definitions, effective-date rules, and rate-of-payment 
rules. This subpart was published as two separate NPRMs due to its 
size. The portion concerning accrued benefits, death compensation, 
special rules applicable upon the death of a beneficiary, and several 
effective-date rules, was published as proposed on October 1, 2004. See 
69 FR 59072. The portion concerning DIC benefits and general provisions 
relating to proof of death and service-connected cause of death was 
published as proposed on October 21, 2005. See 70 FR 61326.
    ``Subpart H--Special and Ancillary Benefits for Veterans, 
Dependents, and Survivors'' would pertain to special and ancillary 
benefits available, including benefits for children with various birth 
defects. This subpart was published as proposed on March 9, 2007. See 
72 FR 10860.
    ``Subpart I--Benefits for Certain Filipino Veterans and Survivors'' 
would pertain to the various benefits available to Filipino veterans 
and their survivors. This subpart was published as proposed on June 30, 
2006. See 71 FR 37790.
    ``Subpart J--Burial Benefits'' would pertain to burial allowances.
    ``Subpart K--Matters Affecting the Receipt of Benefits'' would 
contain provisions regarding bars to benefits, forfeiture of benefits, 
and renouncement of benefits. This subpart was published as proposed on 
May 31, 2006. See 71 FR 31056.
    ``Subpart L--Payments and Adjustments to Payments'' would include 
general rate-setting rules, several adjustment and resumption 
regulations, and election-of-benefit rules. Because of its size, 
subpart L will be published in two separate NPRMs.
    The final subpart, ``Subpart M--Apportionments to Dependents and 
Payments to Fiduciaries and Incarcerated Beneficiaries,'' would include 
regulations governing apportionments, benefits for incarcerated 
beneficiaries, and guardianship.
    Some of the regulations in this NPRM cross-reference other 
compensation and pension regulations. If those regulations have been 
published in this or earlier NPRMs for the Project, we cite the 
proposed part 5 section. We also include, in the relevant portion of 
the Supplementary Information, the Federal Register page where a 
proposed part 5 section published in an earlier NPRM may be found. 
However, where a regulation proposed in this NPRM would cross-reference 
a proposed part 5 regulation that has not yet been published, we cite 
to the current part 3 regulation that deals with the same subject 
matter. The current part 3 section we cite may differ from its eventual 
part 5 counterpart in some respects, but we believe this method will 
assist readers in understanding these proposed regulations where no 
part 5 counterpart has yet been published. If there is no part 3 
counterpart to a proposed part 5 regulation that has not yet been 
published, we have inserted ``[regulation that will be published in a 
future Notice of Proposed Rulemaking]'' where the part 5 regulation 
citation would be placed.
    Because of its large size, proposed part 5 will be published in a 
number of NPRMs, such as this one. VA will not adopt any portion of 
part 5 as final until all of the NPRMs have been published for public 
comment.
    In connection with this rulemaking, VA will accept comments 
relating to a prior rulemaking issued as a part of the Project, if the 
matter being commented on relates to both rulemakings.

Overview of This Notice of Proposed Rulemaking

    This NPRM pertains to those regulations governing the following for 
purposes of compensation and pension benefits: (1) General evidence 
requirements; (2) general effective dates for awards; (3) revision of 
decisions; and (4) protection of existing ratings. These regulations 
would be contained in proposed Subpart C of new 38 CFR part 5. Although 
these regulations have been substantially restructured and rewritten 
for greater clarity and ease of use, most of the basic concepts 
contained in these proposed regulations are the same as in their 
existing counterparts in 38 CFR part 3. However, a few substantive 
differences are proposed, along with some rules that do not have 
counterparts in 38 CFR part 3.

Table Comparing Current Part 3 Rules With Proposed Part 5 Rules

    The following table shows the relationship between the current 
regulations in part 3 and those proposed regulations contained in this 
NPRM:

[[Page 28772]]



------------------------------------------------------------------------
                                            Based in whole or in part on
  Proposed part 5  section or  paragraph      38 CFR part 3 section or
                                               paragraph (or ``New'')
------------------------------------------------------------------------
5.130(a)..................................  3.217(a) and Note to
                                             3.217(a).
5.130(b)..................................  3.217(b).
5.130(c)(1)(i)............................  3.217(b)(1)(i).
5.130(c)(1)(ii)...........................  3.217(b)(1)(ii).
5.130(c)(1)(iii)..........................  3.217(b)(1)(iii).
5.130(c)(2)...............................  3.217(b)(2).
5.130(d)..................................  New.
5.131(a)..................................  3.153.
5.131(b)..................................  3.201(a).
5.131(c)..................................  3.201(b).
5.132(a)..................................  3.108.
5.132(b)..................................  3.202(a).
5.132(c)(1)...............................  3.202(b)(1).
5.132(c)(2)...............................  3.202(b)(2).
5.132(c)(3)...............................  3.202(b)(3).
5.132(c)(4)...............................  3.202(b)(6).
5.132(c)(5)...............................  3.202(b)(4).
5.132(d)(1)...............................  3.202(a) [first sentence]
                                             and 3.202(a)(2).
5.132(d)(2)...............................  3.202(a)(1).
5.132(e)..................................  3.202(c).
5.133(a)..................................  3.115(a).
5.133(b)..................................  New.
5.133(b)(1)...............................  New.
5.133(b)(2)...............................  New.
5.133(c)(1)...............................  3.115(b).
5.133(c)(2)...............................  3.115(b).
5.134.....................................  3.2130.
5.135.....................................  3.200.
5.140(a)..................................  3.1(y)(1), (y)(3).
5.140(b)..................................  3.1(y)(2)(i).
5.140(c)..................................  3.1(y)(2)(ii).
5.140(d)..................................  3.1(y)(4).
5.141(a)..................................  3.304(c).
5.141(b)..................................  New.
5.141(c)..................................  3.304(e).
5.141(d)..................................  3.304(e) [first sentence].
5.141(e)..................................  3.304(e) [last two
                                             sentences].
5.141(f)..................................  3.326(b).
5.150(a)..................................  3.400 [intro] and (a),
                                             3.400(h)(1), and
                                             3.400(q)(1)(ii).
5.150(b)..................................  New.
5.151.....................................  3.1(r).
5.152.....................................  3.114.
5.153.....................................  3.156(b) and 3.400(q)(1)(i).
5.160(a)..................................  3.104(a).
5.160(b)..................................  3.104(b).
5.161.....................................  3.2600.
5.162(a)..................................  3.105(a) first two
                                             sentences].
5.162(b)..................................  3.105 [intro--first
                                             sentence] and 3.105(a)
                                             [third and fourth
                                             sentences].
5.163.....................................  3.105(b).
5.164.....................................  3.400(h)(1).
5.165(a)..................................  3.500(b).
5.165(b)..................................  3.500(b)(1).
5.165(c)..................................  3.500(b)(2).
5.166.....................................  3.156(c).
5.170(a)..................................  3.344, 3.951, and 3.957.
5.170(b)..................................  3.951(b) and 3.957.
5.170(c)..................................  New.
5.170(d)..................................  New.
5.170(e)..................................  New.
5.171(a)..................................  3.344(a).
5.171(b)..................................  3.344(c).
5.171(c)(1)...............................  3.344(c).
5.171(c)(2)...............................  3.344(a).
5.171(d)..................................  3.344(a).
5.171(e)..................................  3.344(b).
5.172(a)..................................  3.951(b) [first sentence].
5.172(b)..................................  3.951(b) [second sentence].
5.172(c)..................................  New
5.173(a)..................................  3.951(a) and 3.952.
5.173(b)(1)...............................  3.952.
5.173(b)(2)...............................  3.952.
5.173(b)(3)...............................  3.952.
5.174(a)..................................  3.953(a).
5.174(b)..................................  3.953(c).
5.175(a)(1)...............................  3.957 [first sentence].
5.175(a)(2)...............................  3.957 [last sentence].
5.175(b)(1)...............................  3.105(d) [first two
                                             sentences].
5.175(b)(2)...............................  3.105(d) [third and fourth
                                             sentences].
5.176(a) and (b)..........................  3.105(d) [fifth and sixth
                                             sentences] and 3.105(e)
                                             [first two sentences].
5.176(c)..................................  3.105(d) [last two
                                             sentences] and 3.105(e)
                                             [last two sentences].
5.177(a)..................................  3.105 [intro--last
                                             sentence].
5.177(b)..................................  3.105 [intro--second
                                             sentence].
5.177(c)..................................  3.105 [intro--first
                                             sentence] and 3.500(b).
5.177(d)..................................  3.105(d).
5.177(e)..................................  3.105(c).
5.177(f)..................................  3.105(e).
5.177(g)..................................  3.105(f).
5.177(h)..................................  3.105(g).
5.177(i)..................................  3.105(h).
------------------------------------------------------------------------

    Readers who use this table to compare existing regulatory 
provisions with the proposed provisions, and who observe a substantive 
difference between them, should consult the text that appears later in 
this document for an explanation of significant changes in each 
regulation. Not every paragraph of every current part 3 section 
regarding the subject matter of this rulemaking is accounted for in the 
table. In some instances, other portions of the part 3 sections that 
are contained in these proposed regulations will appear in subparts of 
part 5 that are being published separately for public comment. For 
example, a reader might find a reference to paragraph (a) of a part 3 
section in the table, but no reference to paragraph (b) of that section 
because paragraph (b) will be addressed in a separate NPRM. The table 
also does not include provisions from part 3 regulations that will not 
be carried forward to part 5. Such provisions are discussed 
specifically under the appropriate part 5 heading in this preamble. 
Readers are invited to comment on the proposed part 5 provisions and 
also on our proposals to omit those part 3 provisions from part 5.

Content of Proposed Regulations

General Evidence Requirements

Section 5.130 Submission of Statements, Evidence, or Information 
Affecting Entitlement to Benefits

    Proposed Sec.  5.130 is derived from current Sec.  3.217, VA's 
regulation governing the submission of statements or information 
affecting entitlement to benefits. We propose explicitly to make this 
regulation applicable to ``evidence'' as well as statements and 
information. The current regulation does not explicitly apply to the 
submission of written evidence; however, in practice the principles 
therein do apply to the submission of written evidence, and there is no 
reason not to make the part 5 regulation explicit in this regard.
    Proposed paragraph (a) addresses the methods by which beneficiaries 
may submit statements, evidence, or information affecting their 
entitlement to benefits. Acknowledging that certain VA regulations 
require that particular types of evidence or information be submitted 
in writing--e.g., Marriage (Sec.  5.192), Divorce (Sec.  5.194), and 
Birth (Sec.  5.229)--we propose to state that it is VA's policy to 
accept electronic submissions unless another regulation, form, or 
directive expressly requires a different method of submission. Proposed 
paragraph (a) would state that this policy does not apply to the filing 
of a claim, Notice of Disagreement, Substantive Appeal, or any other 
submissions or filing requirements covered in parts 19 and 20 of this 
title.
    We propose not to include the introductory phrase, ``For purposes 
of this part, unless specifically provided otherwise,'' which is used 
in paragraph (b) of current Sec.  3.217. Because proposed Sec.  5.0 
specifically states that ``[e]xcept as otherwise provided, this part 
applies only to benefits governed by this part,'' it is no longer 
necessary to state that any rule in part 5 applies only for purposes of 
this part. 71 FR 16464, 16473. Therefore, in paragraph (b) of Sec.  
5.130, we propose to state, ``Except as otherwise provided.'' By so 
doing, we achieve our goal of greater readability without loss of 
clarity or substance.
    In Sec.  5.130(c)(1), we propose to include a reference to the 
beneficiary's authorized representative that is not

[[Page 28773]]

contained in current Sec.  3.217(b)(1). Including the representative 
merely clarifies the established legal principle that the actions of an 
authorized representative are considered to be actions by the client 
beneficiary.
    Current Sec.  3.217(b)(1)(iii) states that, when a beneficiary or 
fiduciary orally provides information or a statement that VA may use to 
adjust benefits, VA must inform him or her that ``the information or 
statement will be used for the purpose of calculating benefit 
amounts.'' In proposed Sec.  5.130(c)(1)(iii), we use the word ``may'' 
instead of ``will.'' This wording is more accurate because VA may 
determine that the information or statement needs to be verified 
through other means. It also makes this paragraph consistent with the 
first sentence in proposed paragraph (b), which states that, ``VA may 
take action* * *'' Similarly, we also propose to use the phrase ``may 
be used'' in Sec.  5.130(c)(2)(v) instead of ``would be used'' as 
stated in current Sec.  3.217(b)(2).
    Finally, in proposed paragraph (d) we articulate the exceptions to 
the rule that VA cannot act on an oral statement unless VA has complied 
with paragraphs (c)(1) and (2). These exceptions, which apply to 
statements made at a hearing or to a physician, reflect current 
practice. Persons who appear at a hearing or who provide information to 
a physician, especially in connection with a VA medical examination, 
should expect that such information will be considered as part of their 
claim. Neither current Sec.  3.217 nor the proposed part 5 version of 
that rule preclude VA from relying on medical statements or statements 
made at a hearing. Moreover, there is no doubt as to the identity of 
the person making the statement in these two discrete situations. 
Finally, Sec. Sec.  5.81, 5.82, and 20.700 adequately regulate 
statements made at a hearing. 70 FR 24680, 24686-87.

Section 5.131 Applications, Claims, and Exchange of Evidence With 
Social Security Administration (SSA)--Death Benefits

    Proposed Sec.  5.131(a) is derived from the first sentence of 
current Sec.  3.153, which states that an application for death 
benefits filed with SSA on or after January 1, 1957, on a form jointly 
prescribed by VA and SSA, will be considered a claim for VA death 
benefits, and will be considered as received by VA as of the date SSA 
received it.
    Note that although current Sec.  3.1(p) uses the terms ``claim'' 
and ``application'' interchangeably, we propose to only use the term 
``claim'' in part 5, for the sake of consistency, when referring to a 
formal or informal communication in writing requesting a determination 
of entitlement or evidencing a believe in entitlement to a benefit, as 
the term ``claim'' is defined in part 3. (A future NPRM will fully 
address the definition of ``claim'' for the purposes of part 5.) Thus, 
the term ``claim'' would have the same meaning in Part 5 as it 
currently does in Part 3; no substantive change is intended. We propose 
to use the term ``application'' when referring to a certain form that a 
claimant must file to apply for benefits. This definition will be 
contained in Sec.  5.1 General Definitions.
    Current Sec.  3.153 implements the statutory provision 38 U.S.C. 
5105 that governs joint applications for SSA and dependency and 
indemnity compensation (DIC). The statute is applicable only to claims 
for chapter 13 benefits, which means that it applies to claims for DIC. 
Current Sec.  3.153 states that a claim on a joint form is to be 
treated as a claim for ``death benefits.'' However, under 38 U.S.C. 
5101(b)(1), a claim for DIC must also be considered a claim for death 
pension and accrued benefits. Consequently, proposed Sec.  5.131(a) 
would parenthetically describe ``VA death benefits'' as ``[DIC], death 
pension and accrued benefits.'' We also propose to update the statutory 
authority citation by including a reference to 38 U.S.C. 5101(b)(1), as 
the authority for considering a joint application to be a claim for 
``death benefits'' is not derived from 38 U.S.C. 5105 alone. For the 
reasons set forth above, the inclusion of death pension and accrued 
benefits in the proposed regulation would not create a new basis of 
entitlement or result in a substantive right that does not exist within 
the current framework of the pertinent law or regulations.
    The second sentence of current Sec.  3.153 states that VA is not 
precluded by reason of having received a joint application from 
requesting necessary evidence. This language is unnecessary because 
nothing in any statute or regulation, including proposed Sec.  5.131, 
precludes VA from requesting necessary evidence after we have received 
a claim for benefits. In addition, the sentence merely reiterates the 
last sentence of 38 U.S.C. 5105(b), and there is no need to maintain a 
regulatory provision that merely recites a statutory provision.
    Proposed Sec.  5.131(b) is derived in part from the second sentence 
of current Sec.  3.201(a), which pertains to the exchange of evidence 
between VA and SSA. The cited authority for this regulation includes 38 
U.S.C. 5105, discussed above. Proposed Sec.  5.131(b) does not 
incorporate the first sentence of current Sec.  3.201(a), as it is 
unnecessary and redundant of proposed Sec.  5.81, which explicitly 
states that ``VA will include in the record of proceedings any 
information, evidence (whether documentary, testimonial, or in other 
form), and any argument that a claimant offers in support of a claim.'' 
70 FR 24680, 24686. In addition, VA's ``duty to assist'' regulation, 38 
CFR 3.159(c)(2), requires VA to obtain relevant records from a federal 
department or agency, including records in custody of SSA. Moreover, 
SSA is required, pursuant to 38 U.S.C. 5105(b), to forward to VA all 
information and supporting documents that it receives in conjunction 
with a joint application for DIC/SSA benefits. In light of the 
foregoing, it is not necessary to specify in Sec.  5.131(b) that a 
claimant may submit evidence submitted to SSA, or to permit the 
claimant to request VA to obtain such evidence. We have also clarified 
that the rule, embodied in proposed Sec.  5.131(b) and current Sec.  
3.201(a), regarding the deemed date of receipt for evidence filed at 
SSA applies only when the evidence was filed in conjunction with a 
claim for both SSA death benefits and VA death benefits. The 
clarification is to avoid a situation in which a final VA decision is 
subject to collateral attack based upon evidence filed with SSA in 
support of a claim for only SSA death benefits that predates a 
subsequent separate claim for VA death benefits.
    Proposed Sec.  5.131(c) is derived from current Sec.  3.201(b), 
which provides that when SSA requests evidence from VA that was 
submitted in support of a DIC application, VA will furnish it. However, 
current Sec.  3.201(b) does not acknowledge the existence of laws, 
including the Health Insurance Portability and Accountability Act 
(HIPAA), that protect the confidentiality of various kinds of 
information or evidence that claimants or beneficiaries file with VA. 
For example, 38 U.S.C. 7332 protects the confidentiality of all records 
containing the identity, diagnosis, prognosis, or treatment of any 
patient or subject maintained in connection with any program or 
activity carried out by or for VA and connected with drug abuse, 
alcoholism or alcohol abuse, infection with the human immunodeficiency 
virus, or sickle cell anemia. VA can only release such records when 
certain prerequisites are satisfied, and we do not interpret section 
7332 as providing for an exemption for mandatory disclosures to SSA 
under this regulation or under its authorizing statute, 38 U.S.C. 
5105(b). Also, 5 U.S.C. 552a contains general

[[Page 28774]]

procedures that all agencies must follow when determining whether to 
release records that they maintain on individuals. Therefore, we 
propose to add a sentence in proposed Sec.  5.131(c) to clarify that 
any disclosure of evidence to the SSA under this paragraph must comply 
with all requirements of any applicable privacy or confidentiality 
laws, which would include HIPAA.

Section 5.132 Claims, Statements, Evidence, or Information Filed 
Abroad; Authentication of Documents From Foreign Countries

    Proposed Sec.  5.132 is derived from current Sec.  3.202, VA's 
regulation pertaining to the criteria for the acceptance of foreign 
evidence, and Sec.  3.108, which relates to occasions when the State 
Department functions as an agent of VA. We believe it is logical to 
consolidate into a single regulation the rule pertaining to filing 
claims or evidence in foreign countries with the rule pertaining to 
filing evidence from foreign sources.
    In paragraph (a) of Sec.  5.132, we propose to include the 
provisions of current Sec.  3.108, which recognize U.S. diplomatic and 
consular officers abroad as agents for the acceptance of VA 
applications or claims, or evidence in support of a claim pending with 
VA. We clarify that the rule applies to submissions of claims or of 
statements, evidence, or information in support of a claim.
    Current Sec.  3.108 provides that diplomatic and consular officers 
may act as agents of VA, ``and, therefore, a formal or informal claim 
or evidence submitted in support of a claim filed in a foreign country 
will be considered as filed in [VA] as of the date of receipt by the 
State Department representative.'' We intend no substantive changes to 
this regulation by eliminating the term ``informal claim.'' The term 
``claim'' necessarily embraces all of the types of claims listed in the 
regulations, including informal and formal claims.
    Current Sec.  3.108 uses the terms ``diplomatic and consular 
officers of the Department of State'' and ``the State Department 
representative,'' to describe the officials who are authorized to 
receive claims and evidence. For purposes of Sec.  5.132, we propose to 
simplify the description by substituting the inclusive term 
``Department of State representative.''
    Paragraph (b) of proposed Sec.  5.132 explains that the term 
``authentication'' means that ``an official listed in paragraph (d) of 
this section verifies that the foreign document, including each 
signature, stamp, and seal appearing on it, is genuine and has not been 
altered.''
    Paragraph (b) of proposed Sec.  5.132 explains that for the 
purposes of Sec.  5.132(b) the term ``foreign documents'' means 
documents that are signed under oath or affirmation in the presence of 
an official in a foreign country. This definition is derived from 
current Sec.  3.202(a). Examples of foreign documents are described in 
the proposed regulation in order to aid the reader.
    Paragraph (b) also directs the reader to a list (in paragraph (c)) 
of foreign documents that do not require authentication.
    Paragraph (c) of proposed Sec.  5.132 restates current Sec.  
3.202(b). In addition, proposed Sec.  5.132(c)(3) contains a direct 
reference to Sec.  2.3, which pertains to delegation of authority to 
employees to take affidavits, to administer oaths, etc. This reference 
is appropriate, as it bears directly on the subject matter contained in 
proposed Sec.  5.132. Current Sec.  3.202(b)(4) states that 
authentication will not be required, ``[w]hen a copy of a public or 
church record from any foreign country purports to establish birth, 
adoption, marriage, annulment, divorce, or death, provided it bears the 
signature and seal of the custodian of such record and there is no 
conflicting evidence in the file which would serve to create doubt as 
to the correctness of the record.'' Paragraph (b)(5) states that 
authentication will not be required, ``[w]hen a copy of the public or 
church record from one of the countries comprising the United Kingdom, 
namely: England, Scotland, Wales, or Northern Ireland, purports to 
establish birth, marriage, or death, provided it bears the signature or 
seal or stamp of the custodian of such record and there is no evidence 
which would serve to create doubt as to the correctness of the 
records.'' VA believes that maintaining a different rule for the United 
Kingdom is unnecessary because records maintenance in the United 
Kingdom is not necessarily superior to that of all other countries. 
Moreover, we believe that a single rule will be easier for VA personnel 
to correctly apply and for the public to understand. We therefore 
propose not to include an equivalent to Sec.  3.202(b)(5) in Sec.  
5.132.
    Paragraph (d) of proposed Sec.  5.132 is derived from current Sec.  
3.202(a). Current Sec.  3.202(a) uses, among others, the terms ``United 
States Consular Officer,'' ``the State Department,'' and ``the nearest 
American consul,'' to describe the various Department of State 
officials who may authenticate the signatures of officials of foreign 
countries in cases where affidavits or other documents are required to 
be executed under oath before foreign officials. For purposes of Sec.  
5.132, we propose to simplify the description by substituting the 
inclusive term ``officer of the Department of State authorized to 
authenticate documents.'' We note that the Department of State has 
promulgated 22 CFR 131.1, which authorizes specially designated 
``authentication officers'' to issue certificates of authentication 
under the seal of the Department of State on behalf of the Secretary of 
State. That regulation also prescribes the proper form of 
authentication. A certificate of authentication therefore constitutes 
the State Department's official acknowledgment that a document of 
foreign origin is genuine.

Section 5.133 Information VA May Request From Financial Institutions

    Proposed Sec.  5.133, derived from current Sec.  3.115, will 
provide readers with clarification of the different types of 
information VA may request from a financial institution, the conditions 
under which a request may be made, the steps for making a request, and 
VA's responsibilities with regard to the handling of this information 
once it is obtained.
    The first sentence of current Sec.  3.115(a) reads: ``The Secretary 
of Veterans Affairs may request from a financial institution the names 
and addresses of its customers.'' As in several other proposed part 5 
rules, this rule will refer to ``VA'' rather than ``[t]he Secretary of 
Veterans Affairs'' to shorten the reference without changing its 
meaning.
    Some readers may not have a clear understanding of what constitutes 
a ``financial institution,'' a term that is used in the first sentence 
of current Sec.  3.115(a). Accordingly, we propose to add examples of 
various types of financial institutions. Examples include banks, 
savings and loan associations, trust companies, and credit unions.
    The current language of Sec.  3.115 and the statutory provisions of 
12 U.S.C. 3413 explicitly authorize VA to obtain only names and 
addresses from a financial institution. However, VA also possesses 
statutory authority to subpoena financial information. According to the 
Right to Financial Privacy Act, ``A government authority may obtain 
financial records * * * pursuant to an administrative subpoena or 
summons otherwise authorized by law if there is reason to believe that 
the records sought are relevant to a legitimate law enforcement 
inquiry.'' 12 U.S.C. 3405. ``Government authority'' is defined in this 
Act as ``any agency or department of the United States, or any officer, 
employee, or agent thereof.'' 12 U.S.C. 3401(3). The Act also defines 
``law enforcement inquiry'' as ``a lawful

[[Page 28775]]

investigation or official proceeding inquiring into a violation of, or 
failure to comply with, any * * * regulation, rule, or order issued 
pursuant thereto.'' 12 U.S.C. 3401(8). These provisions give VA the 
authority, under certain circumstances, to obtain financial information 
through a subpoena, provided it is necessary in order to determine 
whether an individual has violated any of the regulations on veterans' 
benefits. Additionally, 38 U.S.C. 5711(a)(2), authorizes the Secretary 
and employees to whom the Secretary has delegated such authority to 
``require the production of books, papers, documents, and other 
evidence.''
    For example, current Sec. Sec.  3.660(a), 3.256(a), and 3.277(b) 
require individuals claiming entitlement to or receiving income-based 
benefits from VA to promptly report changes in their income. If VA 
discovers that a current or former beneficiary may have reported a 
lower amount of income to VA than the financial institution reported to 
the Internal Revenue Service as having been paid to the beneficiary, VA 
will ask the individual to verify the amount received. If the 
individual refuses or fails to respond to VA's request, VA has 
authority under 12 U.S.C. 3405 to subpoena from the financial 
institution a statement showing amounts it paid to the individual.
    Before issuing a subpoena to a financial institution, 12 U.S.C. 
3405(2) requires VA to: (1) Send a copy of the subpoena to the current 
or former beneficiary; (2) inform the current or former beneficiary of 
the reason VA is requesting financial information from the financial 
institution; and (3) explain to the current or former beneficiary the 
procedures for challenging VA's proposal to issue a subpoena.
    VA's authority to issue subpoenas to financial institutions in 
order to verify the amount of income paid by a financial institution to 
a current or former VA beneficiary, as well as the circumstances under 
which they may be issued, are not addressed in part 3 of current 38 
CFR. However, we believe this is an issue about which the public should 
be informed. For example, if VA discovers that a current or former 
beneficiary, while receiving either pension or parents' dependency and 
indemnity compensation, may have underreported or failed to report to 
VA the receipt of income from a financial institution, VA may ask the 
financial institution that paid the income to provide a statement 
showing the amount it paid to the individual. We propose to clarify in 
Sec.  5.133(b) that requests of this type must be made through a 
subpoena. To ensure readers understand the meaning of the word 
``subpoena,'' we propose to define it in paragraph (b). Our definition, 
which is ``a legal document commanding an individual or organization to 
provide specified evidence to the issuer of the subpoena,'' is derived 
from the 2001 edition of Merriam-Webster's Dictionary of Law.
    The content of paragraph (c)(1) of proposed Sec.  5.133 is derived 
from current Sec.  3.115(b), while the content of paragraph (c)(2) is 
derived from 12 U.S.C. 3412(a), which was part of the Right to 
Financial Privacy Act of 1978. Although we have changed the language 
taken from these two sources in order to make the proposed rule easier 
to understand, we intend no change in the substance they convey.

Section 5.134 Will VA accept a signature by mark or thumbprint?

    Proposed Sec.  5.134 is derived from current Sec.  3.2130. We are 
not proposing any changes to the current regulation. Rather, we will 
incorporate the language of current Sec.  3.2130 at proposed Sec.  
5.134.

Section 5.135 Statements Certified or Under Oath or Affirmation

    Proposed Sec.  5.135 is based on current Sec.  3.200, which states, 
in pertinent part, ``All written testimony submitted by the claimant or 
in his or her behalf for the purpose of establishing a claim for 
service connection will be certified or under oath or affirmation.'' 
Instead of referring to ``written testimony'' we propose to use the 
phrase, ``[a]ny documentary evidence or written assertion of fact'' 
which we believe is easier for readers to understand. We propose to 
give VA discretion to consider such a submission that is not certified 
or under oath or affirmation or to require certification, oath, or 
affirmation if considered necessary to establish the reliability of a 
material document. This would give VA discretion to consider documents 
which are considered reliable under the circumstances of a particular 
case. It would also give VA discretion to require certification, oath, 
or affirmation when a submission appears unreliable, which will help 
ensure program integrity.
    Whereas current Sec.  3.200(b) is limited to claims for service 
connection, we propose to have Sec.  5.135(b) apply to all claims 
within the scope of part 5. We believe that there is nothing unique 
about claims for service connection with respect to the reliability of 
evidence. We believe that the principles stated above should apply 
equally to all claims for compensation or pension benefits.

Evidence Requirements for Former Prisoners of War (POWs)

Section 5.140 Determining Former Prisoner of War Status

    Proposed Sec.  5.140 contains rules relating to the evidentiary and 
adjudicative considerations in determining prisoner of war (POW) 
status. Proposed Sec.  5.140 is derived from current Sec.  3.1(y), 
which sets forth general principles applicable to establishing status 
as a POW, including definitions and certain evidentiary and 
adjudicative considerations. We have addressed the various definitions 
contained in current 3.1(y) in a separate NPRM that restated such 
definitions in Sec.  5.1 of proposed part 5. See 71 FR 16464, 16473. 
Additional principles establishing former POW status are found in Sec.  
3.41, which sets forth special rules applicable to former prisoners of 
war with Philippine service. These principles are also covered in a 
separate NPRM. See 71 FR 37790, 37794.
    Paragraph (a) of proposed Sec.  5.140 restates the current rule 
that service department determinations of POW status are generally 
binding on VA, and states the criteria VA will use to decide POW status 
in all other cases. It also restates the requirement in current Sec.  
3.1(y)(3) that the Director of the Compensation and Pension Service 
must approve all 152 office decisions based on criteria for determining 
former POW status other than service department findings. In order to 
recognize the modern dangers presented by non-government forces, we 
propose to expand the instances in which service department findings 
will be accepted. Whereas current Sec.  3.1(y)(1) only accepts service 
department findings that a person was a POW during a period of war when 
detention or internment was by an enemy government or its agents, under 
paragraph (a) of proposed Sec.  5.140, VA will also accept a finding by 
the service department that a person was a POW during a period of war 
when detention or internment was by a hostile force.
    Paragraphs (b), (c), and (d) of proposed Sec.  5.140 restate the 
content of current Sec.  3.1(y)(2)(i), (y)(2)(ii), and (y)(4), 
respectively. In paragraph (d), we propose to cross-reference Sec.  
5.660, pertaining to ``line of duty'' and derived from current 
Sec. Sec.  3.1(m) and 3.301(a), and Sec.  5.661, pertaining to 
``willful misconduct'' and derived from current Sec. Sec.  3.1(n), 
3.301(a) through (d), and 3.302. See 71 FR 31056, 31062-63.
    At the end of the proposed rule, we propose to cross-reference 
proposed Sec.  5.611, which restates current Sec.  3.41,

[[Page 28776]]

relating to POW status and Philippine service. See 71 FR 37790, 37795.

Section 5.141 Medical Evidence for Former Prisoners' of War 
Compensation Claims

    Proposed Sec.  5.141 is based in part on those portions of current 
Sec.  3.304, ``Direct service connection; wartime and peacetime,'' that 
pertain to former POWs. Except as provided below, no substantive 
changes are intended to these provisions. Portions of current Sec.  
3.304 have already been addressed in a prior NPRM, published as 
proposed on May 10, 2005. See 70 FR 24680. Other provisions of current 
Sec.  3.304 will be addressed in a separate NPRM.
    Proposed paragraph (a) provides information regarding injuries and 
conditions claimed by a former POW that are obviously due to service. 
The paragraph states that VA will rate such injuries and conditions 
without awaiting receipt of service records. This paragraph is derived 
from the last sentence of current Sec.  3.304(c) and is included to 
clarify how the general rule in proposed Sec.  5.91, the part 5 version 
of current Sec.  3.304(c), applies to conditions resulting from POW 
confinement.
    Proposed paragraph (b) provides that where disability compensation 
is claimed by a former POW, the claimant's statements as to the 
incurrence or aggravation of an injury or disease during or immediately 
prior to detention or internment will be viewed as truthful unless 
there is clear and convincing evidence to the contrary. This is a 
substantive change based upon expanding current Sec.  3.304(d). VA's 
practice has been to treat statements by former POWs in the same manner 
as combat veterans for purposes of 38 U.S.C. 1154(b) in order to 
recognize the deficiencies or complete absence of many former POWs' 
service medical records showing evidence of diseases or injuries 
suffered during or immediately before detention or internment. This 
substantive change is consistent with current Sec.  3.304(f)(2), 
pertaining to post-traumatic stress disorder claimed by a former 
prisoner of war. At the end of paragraph (b), we propose to add a 
reference to Sec.  3.304(f)(2) to let the reader know the location of a 
similar provision regarding POWs. We cite to the current part 3 
regulation because the proposed part 5 regulation that deals with the 
same subject matter has not yet been published. Current Sec.  
3.304(f)(2) may differ from its eventual part 5 counterpart in some 
respects.
    Proposed paragraph (c) notes that supporting evidence from fellow 
service members that an injury or disease was incurred during 
confinement will be considered. This is not a substantive change from 
part 3 and does not provide a new benefit to former POWs. VA accepts 
``buddy statements'' in all cases. We explicitly provide for such 
evidence here, and discuss how to evaluate that evidence, because such 
evidence is more frequently encountered in cases relating to POWs.
    Proposed paragraph (c) would require VA to consider statements from 
fellow service members submitted in connection with a former POW's 
claim for benefits, regarding the former POW's physical condition 
before capture, the circumstances surrounding the former POW's 
internment, changes in the former POW's physical condition following 
release from internment, or the existence of signs or symptoms of 
disability following the former POW's release from internment.
    Paragraph (d) of proposed Sec.  5.141 provides that the lack of 
medical findings from clinical records made upon a former POW's return 
to U.S. control will not be determinative of whether service connection 
is awarded for a particular disability. It is derived from the first 
sentence of current Sec.  3.304(e).
    Proposed paragraph (e) restates the second and third sentences of 
current Sec.  3.304(e).
    Finally, proposed paragraph (f) includes information from the 
second sentence of current Sec.  3.326(b), which provides that VA will 
not deny monetary benefits unless the claimant has been offered a 
complete physical examination at a VA facility. Unlike current Sec.  
3.326(b), which states that the examination will be ``conducted at a 
[VA] hospital or outpatient clinic,'' proposed paragraph (f) does not 
specify the location of the examination to be provided because an 
examination may be provided by VA at one of a variety of VA medical 
facilities, or, in some instances, VA may provide an examination with a 
private contractor at a non-VA facility. ``[M]edical examination'' used 
in proposed paragraph (f), as opposed to ``physical examination'' used 
in current Sec.  3.326(b), clarifies that the examination is not 
limited to examination for physical disorders but includes examination 
for mental disorders as well.

General Effective Dates for Awards

Section 5.150 General Effective Dates for Awards or Increased Benefits

    Proposed Sec.  5.150 would restate without substantive change the 
introductory text and paragraph (a) of current Sec.  3.400, which 
state:

    Except as otherwise provided, the effective date of an 
evaluation and award of pension, compensation or dependency and 
indemnity compensation based on an original claim, a claim reopened 
after final disallowance, or a claim for increase will be the date 
of receipt of the claim or the date entitlement arose, whichever is 
later.

    (a) Unless specifically provided. On basis of facts found.
    The exceptions to the general effective-date rule, which are 
currently contained in other provisions of Sec. Sec.  3.400 through 
3.405, would be contained in regulations located proximate to their 
respective benefit regulations.
    In paragraph (a) of Sec.  5.150, we propose not to include the 
phrase ``facts found'' in current Sec.  3.400(a). Instead, we will only 
use the phrase ``date entitlement arose,'' which appears in the 
introductory text of Sec.  3.400. Section 5110(a) of title 38, United 
States Code, on which the general effective date rule stated in Sec.  
3.400 is based, uses ``facts found'' and does not use the phrase ``date 
entitlement arose.'' Nevertheless, the legislative history of 38 U.S.C. 
5110(a) and the regulatory history of 38 CFR 3.400 both suggest that 
``facts found'' and ``date entitlement arose'' mean the same thing. 
Both phrases are derived from Veterans Regulation No. 2(a), promulgated 
by Exec. Order 6230 (1933), which states that the effective date of an 
award of pension ``shall be fixed in accordance with the facts found'' 
except that no awards would be effective before the date of separation 
from service, date of death, date of the happening of the contingency 
upon which disability or death pension is allowed, or the date of 
receipt of the claim therefor, whichever is the later date. The various 
dates listed in the immediately preceding sentence, except for the date 
of receipt of the claim, are exceptions to the rule to assign the 
effective date in accordance with the facts found, and are themselves 
dates upon which entitlement to various kinds of benefits is 
predicated. For all practical purposes, these are the relevant 
``facts'' upon which entitlement would be based.
    VA has consistently so construed Veterans Regulation No. 2(a), a 
fact made clear by an examination of the effective-date regulations VA 
issued after Veterans' Regulation No. 2(a). These are as follows: VA 
Regulation (VAR) 1148 (concerning the assignment of effective dates for 
ratings made under VA's 1945 Schedule for Rating Disabilities); VAR 
1212 (effective date for awards of disability compensation); VAR 2574 
(effective date of awards of death compensation or pension), and

[[Page 28777]]

VAR 2945 (effective date of payment of dependency and indemnity 
compensation). VA used the term ``facts found'' in only two of these 
regulations. VAR 2574 (Jan. 25, 1936) (which cites Veterans Regulation 
No. 2(a)), VAR 2945 (Jan. 1, 1958) (which was changed from different 
language to mirror the language of what is now 38 U.S.C. 5110(a)). 
Instead of using ``facts found,'' VA used phrases such as ``date the 
evidence shows a compensable or pensionable degree of disability to 
have existed'' and ``date the evidence shows entitlement.'' VAR 1148 
(Jan. 25, 1936). In 1950, VAR 2574 was amended to state that the 
effective date for an award of death compensation or pension would be 
the date ``of the veteran's death, date of the happening of the 
contingency upon which death compensation or pension is allowed, or the 
date of receipt of [the] application therefor,'' whichever is later. 
This general effective-date provision is very similar to that of 
Veterans Regulation No. 2(a) except that it is devoid of the phrase 
``fixed in accordance with the facts found.'' Nevertheless, it conveys 
the same information.
    When Congress first consolidated the laws and regulations related 
to compensation and pension, the present version of what is now 38 
U.S.C. 5110(a) first appeared in the statute. Public Law 85-56, section 
910(a), 71 Stat. 83, 119 (1957). The purpose of this law was to 
incorporate existing law into a single act. According to the committee 
reports, Congress did not intend to make any substantive changes to the 
effective date provisions. See H.R. Rep. No. 85-279, at 2, reprinted in 
1957 U.S.C.C.A.N. 1214, 1215 (1957); S. Rep. No. 85-332, at 2, 
reprinted in 1957 U.S.C.C.A.N. 1214, 1241 (1957). This statute also 
repealed Veterans Regulation No. 2(a). Pub. L. No. 85-56, Sec.  
2202(129), 71 Stat. at 167. The committee reports stated that the law 
``would repeal those provisions of law * * * which are obsolete, 
executed, or restated in substance.'' H.R. Rep. No. 85-279, at 2, S. 
Rep. No. 85-322, at 2. Therefore, Public Law 85-56 was intended to 
restate the substance of the rule in Veterans Regulation No. 2(a), 
despite changing the language.
    Current Sec.  3.400 uses ``date entitlement arose'' in the 
introductory text and uses ``facts found'' in paragraph (a). These two 
phrases have been used interchangeably in the past, though neither has 
been defined. This also suggests that ``facts found'' and ``date 
entitlement arose'' mean the same thing. We believe that we should only 
use one phrase consistently throughout the part 5 to eliminate any 
confusion over whether ``facts found'' means the same thing as ``date 
entitlement arose'' and to make the regulations more user-friendly. 
Therefore, we will use ``date entitlement arose'' in Sec.  5.150. The 
proposed rule clarifies that the term ``date entitlement arose'' has 
the same meaning when used in other effective-date regulations 
throughout part 5.
    We also propose to define the phrase ``date entitlement arose'' in 
paragraph (a)(2) of Sec.  5.150 to make the rule easier to understand. 
As noted above, the phrase has never been defined in the statute or in 
the regulations. Proposed paragraph (a)(2) defines ``date entitlement 
arose'' as the date shown by the evidence to be the date that the 
claimant first met the requirements for the benefit awarded. This 
definition accurately expresses the intent of the relevant statutes 
cited above.
    We also propose to add a sentence to emphasize that VA will assume 
the ``date entitlement arose'' was before the date VA received the 
claim for benefits unless the evidence indicates otherwise. We believe 
it is important to provide this guidance because in the majority of 
cases, claimants meet the requirements for a benefit before they apply 
for it. In such cases, the general rule mandates that the effective 
date be the date of receipt of the claim for that benefit, and not some 
later date.
    Proposed Sec.  5.150(b) sets forth a chart that provides readers 
with the location of other effective-date provisions in part 5, which 
are exceptions to the general effective date rule of proposed paragraph 
(a). The chart is intended solely for informational purposes. As 
proposed, the chart shows both already published and as yet unpublished 
Part 5 sections. The unpublished sections are included as placeholders; 
many may change before publication. The Subpart B provisions were 
published as proposed on January 30, 2004. See 69 FR 4820.
    Section 5.101(d) of Subpart C was published as proposed on May 10, 
2005. See 70 FR 24680. Proposed Sec. Sec.  5.152, 5.153, 5.162(b), 
5.164, 5.165, 5.166(c), (d), and 5.177 of Subpart C are contained in 
this document.
    The Subpart D provisions were published as proposed on September 
20, 2006. See 71 FR 55052.
    Sections 5.463 and 5.477 of Subpart F were published as proposed on 
December 27, 2004. See 69 FR 77578.
    Sections 5.567 to 5.572 of Subpart G were published as proposed on 
October 1, 2004. See 69 FR 59072. A correction to proposed Sec.  5.570 
was published on October 21, 2004. See 69 FR 61914. Sections 5.524(c), 
5.573, and 5.574 of Subpart G were published as proposed on October 21, 
2005. See 70 FR 61326.
    The Subpart H provisions were published as proposed on March 9, 
2007. See 72 FR 10860.
    The Subpart I provisions were published as proposed on June 30, 
2006. See 71 FR 37790.
    The Subpart K provisions were published as proposed on May 31, 
2006. See 71 FR 31056.

Section 5.151 Date of Receipt

    Current Sec.  3.1(r) sets forth a definition of the phrase ``date 
of receipt.'' We propose to address that topic in a provision 
designated as Sec.  5.151. Proposed paragraph (a) would broaden the 
concept in current Sec.  3.1(r) to include ``documents'' in addition to 
claims, information, and evidence. Although the language in the 
proposed Part 5 counterparts of current Sec. Sec.  3.108, 3.153, and 
3.201 does not contain the phrase ``date of receipt,'' proposed 
paragraph (a) would nevertheless retain the exceptions for these 
provisions that are contained in current Sec.  3.1(r) because proposed 
paragraph (a) will refer to a concept rather than merely define the 
specific term ``date of receipt.''
    Proposed paragraph (b) would incorporate provisions from current 
Sec.  3.1(r) authorizing VA to establish exceptions to the general rule 
when a natural or man-made disaster or similar event has caused 
disruption in the process through which VA ordinarily receives 
correspondence. The intended effect is to ensure that claimants and 
beneficiaries are not deprived of potential entitlement to benefits 
because of unexpected delays or impediments through no fault of their 
own. Section 512(a) of 38 U.S.C., listed as statutory authority for 
proposed Sec.  5.151, pertains to the Secretary's ability to delegate 
authority to officials and employees to administer the laws and make 
decisions. The citation to 38 U.S.C. Sec.  512(a) is used to justify 
empowering employees and officials to establish procedures in emergency 
circumstances. Although current Sec.  3.1(r) makes a delegation to the 
Under Secretary for Benefits, the cited statute does not limit 
delegation to the Under Secretary for Benefits. Accordingly, proposed 
paragraph (b) does not contain that limitation.

Section 5.152 Effective Dates Based on Change of Law or VA Issue

    We propose to re-state current Sec.  3.114 in Sec.  5.152. The 
heading for paragraph (b) of proposed Sec.  5.152, ``Reduction or 
discontinuance of benefits'' differs from the heading of current Sec.  
3.114(b), ``Discontinuance of benefits,'' in order to describe more 
accurately the content of the paragraph, which addresses both 
reductions of benefits and

[[Page 28778]]

discontinuances of benefits. Current Sec.  3.114(b) states that a 
claimant has 60 days from the date of the notice of a proposed 
reduction or discontinuance of benefits in which to submit evidence 
showing the proposed action should not be taken. The last sentence of 
current Sec.  3.114(b) states that

    [i]f additional evidence is not received within that period, the 
award will be reduced or discontinued effective the last day of the 
month in which the 60-day period expired.

    We propose to clarify in Sec.  5.152(b) that if no evidence is 
received within 60 days, or if evidence is received that does not 
demonstrate that the proposed action should not be taken, the award 
will be reduced or discontinued effective the last day of the month in 
which the 60-day period expired.
    Another change has to do with the use of the term ``facts found'' 
used in current Sec.  3.114 and in 38 U.S.C. 5110(g). As noted in the 
discussion of proposed Sec.  5.150, VA interprets ``facts found'' and 
another phrase used in effective date rules, ``date entitlement 
arose,'' to have the same basic meaning. We are proposing to use only 
one of these terms in Sec.  5.152, ``date entitlement arose,'' to be 
consistent.

Section 5.153 Effective Date of Awards Based on Receipt of Evidence 
Prior to End of Appeal Period

    We propose to revise current Sec. Sec.  3.156(b) and 3.400(q)(1)(i) 
in order to establish clearer rules regarding the effective dates for 
awards based on the types of evidence described in current Sec.  
3.156(b).
    Section 3.156(b) reads as follows:

    New and material evidence received prior to the expiration of 
the appeal period, or prior to the appellate decision if a timely 
appeal has been filed (including evidence received prior to an 
appellate decision and referred to the agency of original 
jurisdiction by the Board of Veterans Appeals without consideration 
in that decision in accordance with the provisions of Sec.  
20.1304(b)(1) of this chapter), will be considered as having been 
filed in connection with the claim which was pending at the 
beginning of the appeal period.

    Although the words ``effective date'' do not appear in current 
Sec.  3.156(b), the substantive effect of the paragraph is to establish 
an appropriate effective date, in tandem with Sec.  3.400(q)(1)(i).
    Section 3.400(q)(1)(i) provides that the effective date for a claim 
reopened based on new and material evidence ``[o]ther than service 
department records'' that are ``[r]eceived within [the] appeal period 
or prior to appellate decision * * * will be as though the former 
decision had not been rendered.'' Under 38 U.S.C. 5110(a), the 
effective date for an award based on an original claim or a claim 
reopened after final adjudication (except as otherwise provided) 
``shall be fixed in accordance with the facts found, but shall not be 
earlier than the date of receipt of application therefore.'' Therefore, 
if the claim is not ``finally'' decided when VA receives additional 
evidence, that is, if the evidence is submitted within the appeal 
period or before an appellate decision is rendered, then the effective 
date of the award can be as early as the date VA received the ``open'' 
claim. However, if VA were to treat all evidence submitted after the 
appeal period has begun as ``new and material evidence,'' then the 
effective date could not be earlier than the date VA received that 
evidence (which would be construed as a claim to reopen). Hence, 38 CFR 
3.156(b) and 3.400(q)(1)(i) provide a claimant-friendly effective-date 
rule for awards based on evidence received while a claim is on appeal 
or before the appeal period expires. This interpretation is consistent 
with 38 U.S.C. 7105(c), which provides that a regional office denial is 
``final'' when the time limit for initiating an appeal to the Board of 
Veterans' Appeals has expired and no appeal has been filed. The 
proposed text is also consistent with the Federal Circuit's decision in 
Jackson v. Nicholson, 449 F.3d 1204 (Fed. Cir. 2006), which held that 
current Sec.  3.156(b) does not refer to evidence received by VA after 
a Board decision has been issued.
    Proposed Sec.  5.153 retains this favorable interpretation, but 
does rephrase the rule. The current regulation can be read to suggest 
that new and material evidence is needed while the claim is still 
``open.'' However, in such cases there is no claim to ``reopen'' 
because the claim has not been ``closed'' (that is, the claimant could 
still prevail on that claim).

General Rules on Revision of Decisions

Section 5.160 Binding Effect of VA Decisions

    Proposed Sec.  5.160 is derived from current Sec.  3.104, and is 
intended to clarify when a decision rendered by a decision maker in a 
VA agency of original jurisdiction is binding on other VA agencies of 
original jurisdiction. The current version provides that decisions of a 
VA agency of original jurisdiction,

shall be final and binding on all field offices of [VA] as to 
conclusions based on the evidence on file at the time VA issues 
written notification in accordance with 38 U.S.C. 5104. A final and 
binding agency decision shall not be subject to revision on the same 
factual basis except by duly constituted appellate authorities or 
except as provided in Sec.  3.105 and Sec.  3.2600 of this part.

38 CFR 3.104(a) (emphasis added).
    We propose to repeat the language of Sec.  3.104(a) in proposed 
Sec.  5.160(a) without any substantive change. However, we will not 
repeat the word ``final'' in Sec.  3.104(a) in proposed Sec.  5.160(a). 
We believe that use of the word ``final'' in this context may cause 
confusion because the word ``final'' is used elsewhere in VA's 
regulations to refer only to agency of original jurisdiction decisions 
that have not been appealed within the time limits prescribed by 
statute and regulation for their appeal. See, e.g., 38 CFR 20.302(a) 
(if Notice of Disagreement not filed within 1 year of notice of agency 
of original jurisdiction decision, that decision shall become 
``final''). Further, in 38 CFR 3.160(d), VA defines a ``finally 
adjudicated claim'' as one that ``has been allowed or disallowed by the 
agency of original jurisdiction, the action having become final by the 
expiration of 1 year after the date of notice of an award or 
disallowance, or by denial on appellate review, whichever is the 
earlier.'' This suggests that an agency of original jurisdiction 
decision might be simultaneously ``final,'' in the sense implied by 
Sec.  3.104(a), on the date notice of the decision is given, and ``non-
final,'' in the sense implied by Sec.  3.160(d), because the time 
within which to appeal the decision has not yet expired.
    In Majeed v. Principi, 16 Vet. App. 421, 427-28 (2002), the United 
States Court of Appeals for Veterans Claims (CAVC) rejected the 
argument that the phrase ``final and binding'' in Sec.  3.104(a) means 
that a decision is final and binding as of the date issued because it 
could be seen to be at odds with the availability of an administrative 
appeal. VA does not intend that the term ``'final and binding'' 
preclude an administrative appeal. In fact, other VA regulations 
specifically provide for review of an agency of original jurisdiction 
decision that has not become final for purposes of appeal. For example, 
pursuant to 38 CFR 3.2600, a claimant may seek review of an agency of 
original jurisdiction decision by a Veterans Service Center Manager or 
Decision Review Officer after filing a Notice of Disagreement. Also, 
pursuant to 38 CFR 3.105(b), if revision of an agency of original 
jurisdiction decision is warranted as a result of a difference of 
opinion, an agency of original jurisdiction may recommend to VA Central 
Office that the decision be reversed or revised.
    VA therefore intends to clarify in this rulemaking that an agency 
of original

[[Page 28779]]

jurisdiction decision is ``binding'' on the same or another agency of 
original jurisdiction on the same factual basis, barring a change in 
law, except under the circumstances enumerated in current Sec.  
3.104(a). Further, we have changed the cross-references in current 
Sec.  3.104(a) to Sec. Sec.  3.105 and 3.2600 to match their part 5 
counterparts.
    Paragraph (b) of Sec.  3.104 currently provides that decisions made 
by an agency of original jurisdiction and VA Insurance Service 
adjudicators, which are ``made in accordance with existing 
instructions,'' concerning character of service, character of 
discharge, relationship issues, and other matters, are reciprocally 
binding when they are based on the same criteria. VA proposes not to 
include the phrase ``made in accordance with existing instructions'' 
from this paragraph because the instructions to which it refers are 
contained in VA procedural manuals rather than regulations in title 38, 
Code of Federal Regulations. The deletion of this phrase does not imply 
that VA is not required to follow the laws and regulations pertaining 
to the making of determinations of the type described in paragraph (b). 
It merely reflects a judgment that references to internal procedural 
manuals and other VA-generated documents that lack the force and effect 
of law are not appropriate for inclusion in the regulations.
    Finally, we propose to replace the terms ``adjudication activity'' 
and ``insurance activity'' contained in Sec.  3.104(b) with ``Veterans 
Service Center'' and ``VA Insurance Center,'' respectively; again, 
because these are the more precise modern designations of the relevant 
entities. These proposed changes would simply modify the terminology to 
make it easier for the public to understand.

Section 5.161 Review of Benefit Claims Decisions

    We propose to repeat the language of Sec.  3.2600 in proposed Sec.  
5.161 without any substantive change. We have only changed the cross-
references in current Sec.  3.2600 to Sec. Sec.  3.103 and 3.105 to 
match their part 5 counterparts.

Section 5.162 Revision of Decisions Based on Clear and Unmistakable 
Error (CUE)

    In Sec.  5.162, we propose to state clearly that VA adjudicative 
agency decisions that are final will be presumed correct unless there 
is a showing of clear and unmistakable error (CUE). In addition, this 
section will state the effective date for awards resulting from the 
revision or reversal, based on a finding of clear and unmistakable 
error, of prior final decisions.
    Proposed Sec.  5.162 will not deviate in scope from the body of law 
that precedes it. Consequently, Sec.  5.162 provides that, absent CUE, 
prior final decisions are accepted as correct. The requirement of a 
showing of CUE applies only to a ``final decision,'' as defined by 
proposed Sec.  5.2 to mean ``a decision on a claim for VA benefits with 
respect to which VA provided the claimant with written notice'' and the 
claimant either did not file a timely Notice of Disagreement or 
Substantive Appeal or the Board has issued a final decision on the 
claim. See 71 FR 16464, 16473-74 (March 31, 2006). We also proposed to 
incorporate 38 U.S.C. 5109A(c) and (d), which state that a CUE claim 
may be instituted by VA or upon request of the claimant and that a CUE 
claim may be made at any time after a final decision is made.
    We propose not to include the examples of determinations contained 
in the first sentence of current Sec.  3.105(a) (``decisions of service 
connection, degree of disability, age, marriage, relationship, service, 
dependency, line of duty, and other issues''). Because the examples 
conclude with ``* * * and other issues,'' they would include any 
determination. Likewise, the proposed rule applies to any 
determination. By eliminating the examples, we intend to emphasize that 
the rule applies to any determination and avoid a misperception that 
the examples are a limitation on the rule.

Section 5.163 Revision of Decisions Based on Difference of Opinion

    Current Sec.  3.105(b) provides that where an agency of original 
jurisdiction believes that revising or amending a previous decision is 
warranted, based on a difference of opinion, a recommendation will be 
made to VA Central Office to authorize a change in the decision. We 
have used the term ``Director of the Compensation and Pension Service'' 
instead of ``[VA] Central Office'' and used the term ``Veterans Service 
Center Manager (VSCM)'' instead of ``adjudicative agency'' to 
accurately reflect long-standing VA practices. Additionally, we propose 
to state that this section authorizes revisions only when they would 
lead to a more favorable decision on the claim that was the subject of 
a prior decision, and that this section does not apply to a prior 
decision that is final or has been the subject of a Substantive Appeal.

Section 5.164 Effective Dates for Revision of Decisions Based on 
Difference of Opinion

    We propose in Sec.  5.164 to state VA's effective-date provision 
applicable to revisions of decisions based on difference of opinion. 
Proposed Sec.  5.164 provides that the effective date of the revision 
would be the date benefits would have been paid if the previous 
decision had been favorable.

Section 5.165 Effective Dates for Reduction or Discontinuance of Awards 
Based on Error

    Paragraphs (a), (b), and (c)(1) of proposed Sec.  5.165 are derived 
from current Sec.  3.500(b)(1) and (2), which govern the effective 
dates of reductions or discontinuances of awards of compensation, DIC, 
or pension based on error. In paragraph (a), we propose to exclude from 
Sec.  5.165 payment amounts that are not authorized by a VA rating 
decision, such as a payment of an incorrect amount or a duplicative 
payment. Proposed Sec.  5.165 applies only to reductions or 
discontinuances of erroneous awards. If a payment has not been 
authorized by a rating decision, then VA has not made an award of such 
an erroneous payment and therefore recovery of that payment is not a 
reduction or discontinuance of an ``erroneous award'' under 38 U.S.C. 
5112(b)(9) or (10). We would add in paragraph (a) that ``[s]uch amounts 
are overpayments, subject to recoupment.''
    We propose to rewrite the current language of Sec.  3.500(b) to 
enhance its readability. We also propose not to include the word 
``payee'' and insert in its place the term ``beneficiary.'' The term 
``beneficiary'' is consistent with the phrasing of the authorizing 
statute, 38 U.S.C. 5112(b)(9).
    In paragraph (c)(2), we propose to add a new definitional section 
that will clearly define ``administrative error'' and ``error in 
judgment.'' This definition will clearly show when these terms are 
applicable and will be consistent with precedential opinions prepared 
by VA's General Counsel. VAOPGCPRECs 2-90 (March 20, 1990) and 6-97 
(January 18, 1997) held that an administrative error includes an error 
of fact (for example, VA mistakes or overlooks the facts or commits a 
purely clerical error) and that an error in judgment includes those 
instances when VA fails to properly interpret, understand, or follow 
Department instructions, regulations, or statutes. The proposed 
definitional section will assist the users of the regulation in 
determining under what circumstances VA may have committed

[[Page 28780]]

administrative error or an error in judgment.

Section 5.166 New and Material Evidence Based on Service Department 
Records

    Current Sec.  3.156(c) addresses those situations when a prior 
final decision is being reconsidered based on the official service 
department records. We repeat that language in proposed Sec.  5.166.

General Rules on Protection or Reduction of Existing Ratings

    Currently, the rules that protect existing VA disability ratings 
from either reduction or severance are located in several different 
subparts within part 3 of title 38, CFR. For example, most of the 
substantive rules on the subject (38 CFR 3.951 et seq.) are located 
under the undesignated part 3 subheading, ``Protections;'' however, 
substantive rules relevant to severance of service connection, as well 
as unique procedural provisions, are also located in current 38 CFR 
3.105. Meanwhile, lesser protections afforded to stable ratings are 
located in Sec.  3.344.
    We therefore propose to reorganize these rules under the 
undesignated subheading, ``General Rules on Protection or Reduction of 
Existing Ratings,'' in part 5 of title 38, CFR. This reorganization 
will contain the general rules that relate to the protection of 
existing ratings, which are found in current 38 CFR 3.105. It will also 
include those rules pertaining to the protection of the following 
ratings: Those that have stabilized, those in existence for a 20-year 
period, those based on the 1925 Schedule of Rating Disabilities, those 
in effect on December 31, 1958, and those in effect for a 10-year 
period. These are derived from current Sec. Sec.  3.344, 3.951 through 
3.953, and 3.957, respectively.
    This reorganized portion does not include current Sec.  3.950, the 
rule relating to the awards of pension or compensation to a helpless 
child, because this rule does not protect an existing rating. It also 
does not include current Sec.  3.954, the rule relating to awards of 
burial benefits, which will be addressed in another NPRM. The part 5 
rule relating to federal employees' compensation cases, current Sec.  
3.958, will be located with the proposed regulations regarding 
concurrent receipt; the rule relating to tuberculosis (current Sec.  
3.959) will be located with the regulations regarding tuberculosis; and 
the rule relating to Section 306 and Old-Law pension protection 
(current Sec.  3.960) is located with the regulations regarding 
pension.

Section 5.170 Calculation of 5-Year, 10-Year, and 20-Year Protection 
Periods

    Current Sec.  3.344 provides that ``ratings which have continued 
for long periods at the same level (5 years or more)'' cannot be 
reduced absent a reexamination ``disclosing improvement, physical or 
mental, in these disabilities.'' We propose in Sec.  5.170 to set forth 
general provisions governing how VA determines whether a rating has 
been continuously in place for the 5-year period currently found in 
Sec.  3.344. This rule also sets forth those provisions that apply to 
determining whether a 20-year period has been continuous, such that a 
rating is protected under the part 5 equivalent of 38 CFR 3.951(b). 
Additionally, proposed Sec.  5.170 determines how to calculate whether 
service connection has been in effect for 10 years and is, therefore, 
protected under the part 5 equivalent of 38 CFR 3.957. It is preferable 
to state the general rules applicable to calculating these periods in 
one regulation rather than repeat the concepts in multiple regulations.
    Proposed paragraph (b) states the general rule that the described 
periods begin on the effective date of the protected award or rating 
and end on the date that service connection would be severed or the 
rating reduced. This provision takes into account any applicable due 
process provisions contained in current Sec.  3.105 and proposed Sec.  
5.176. The method of measuring the duration of a rating is explicit in 
current Sec. Sec.  3.951 and 3.957; but it is not explicit in Sec.  
3.344. However, the implicit measurement method in Sec.  3.344 is 
consistent with VA's current practice and policy, and with the 
interpretation of current Sec.  3.344(c) set forth in Brown v. Brown, 5 
Vet. App. 413 (1993). In that case, the Court held: ``[T]he duration of 
a rating for purposes of Sec.  3.344(c) must be measured from the 
effective date assigned that rating until the effective date of the 
actual reduction. * * * [T]hose results flow from the plain and 
unambiguous language of the regulation.'' Brown, 5 Vet. App. at 418-
419. We believe that making the effective-date-measurement rule 
explicitly applicable to the 5-year protection against reduction set 
forth in Sec.  3.344, as it is in current Sec. Sec.  3.951 and 3.957, 
will help clarify VA's practice on this issue.
    The requirement that the 20-year protection period be continuous is 
set forth in 38 U.S.C. 110, which protects certain ratings that have 
been ``continuously in force for twenty or more years.'' Therefore, 
proposed paragraph (c) states that ``a rating is not continuous if 
benefits based on that rating are discontinued or interrupted because 
the veteran reentered active service.'' See VAOGCPREC 5-95 (holding 
that a rating discontinued based on reentry into service was not 
continuous for 20 years for purposes of section 110).
    We believe that the holding of VAOGCPREC 5-95 logically should 
apply to the continuity requirement for the 5-year protection set forth 
in current Sec.  3.344(c). Explicitly stating this rule in proposed 
Sec.  5.170(c) will promote consistency in decision making by VA staff.
    The rule of 5.170(c) regarding re-entry into active service does 
not apply to break the 10-year period of proposed Sec.  5.175 for 
protection of service connection. Under current Sec.  3.654(b), the 
prior determination ``of service connection is not disturbed'' because 
of the re-entry into active service. Because service connection remains 
in effect, the period of continuity is not broken.
    Proposed paragraph (d) states that a rating period may be protected 
without regard to whether the beneficiary actually received VA 
compensation based on that rating. This is based on current VA policy. 
We note that this rule is intended to apply to all adjustments, except 
for reentry of active service, including a beneficiary whose payments 
were adjusted by deduction, recoupment, apportionment, reduction in 
compensation due to incarceration, and a beneficiary who elected to 
receive retirement pay. These common examples are listed in proposed 
paragraph (d).
    Proposed paragraph (e) extends the protections found in current 
Sec. Sec.  3.344, 3.951, and 3.957 to retroactive increases in rating 
or grants of service connection, including those awarded based on clear 
and unmistakable error (CUE) under current Sec.  3.105(a)/proposed 
Sec.  5.162. In addition, the rule clearly states that it applies to 
any protection period even if it includes a period based on a 
retroactive award. The extension to retroactive awards is not a new VA 
practice. First, as to retroactive awards not based on a finding of 
CUE, the practice is well-established, even as to current Sec.  3.344. 
See, e.g., Brown v. Brown, 5 Vet. App. 413, 417 (1993). The application 
of the retroactive protection to the 20-year period in cases based on 
findings of CUE is required by 38 U.S.C. 110. See VAOGCPREC 68-91 
(citing H.R. Rep. No. 533, 83rd Cong., 1st Sess. 2 (1953); Pub. L. No. 
88-445, 78 Stat. 464 (1964); and VAOGCPREC 16-89). The legislative 
intent behind applying a retroactive award to form the 20-year

[[Page 28781]]

protection should apply as well to the regulatory 5-year protection 
because the purpose of Sec.  3.344 is similar to the purpose of Sec.  
110 in that both protections support the economic and humane 
considerations noted above. Finally, the proposed regulation provides 
explicit protection to veterans, and is in keeping with our consistent 
treatment of the three time periods set forth in current Sec. Sec.  
3.344, 3.951, and 3.957 in other respects, as described in the other 
paragraphs in this proposed rule.

Section 5.171 Protection of 5-Year Stabilized Ratings

    Proposed Sec.  5.171 is derived from current Sec.  3.344. Proposed 
paragraph (a) restates in plain language the first sentence of current 
Sec.  3.344(a). Proposed paragraph (b) is primarily derived from the 
first sentence of current Sec.  3.344(c), which states: ``The 
provisions of paragraphs (a) and (b) of this section apply to ratings 
which have continued for long periods at the same level (5 years or 
more).'' Proposed paragraph (b) rephrases the current rule, as follows: 
``For the purposes of this section, if a disability has been rated at 
or above a specific level for 5 years or more, VA will consider it to 
be stabilized at that specific level.'' No substantive change is 
intended.
    Proposed paragraph (c) states two criteria that must be present 
before we will reduce a stabilized rating. The first criterion is 
stated in proposed paragraph (c)(1), and requires that there be ``[a]n 
examination [that] shows sustainable material improvement, * * * in the 
disability.'' The requirement of ``material improvement'' is based on 
the third sentence of current Sec.  3.344(c), which states, 
``[r]eexaminations disclosing improvement, physical or mental, in these 
disabilities will warrant reduction in rating.'' We propose to change 
``improvement'' to ``material improvement.'' ``Material improvement'' 
is what is intended in current Sec.  3.344(c), as evidenced by the use 
of the term ``material improvement'' in paragraph (a) of the current 
regulation. Finally, ``material improvement'' is the standard used to 
measure a protected or stabilized rating in other similar regulations. 
See 38 CFR 3.327(b)(2)(ii) (disability will not be subject to scheduled 
reexamination ``[w]hen the findings and symptoms are shown by 
examinations * * * and hospital reports to have persisted without 
material improvement for a period of 5 years or more''); 38 CFR 
3.343(a) (``[t]otal disability ratings * * * will not be reduced * * *. 
without examination showing material improvement in physical or mental 
condition'').
    Proposed paragraph (c)(2) states the second criterion that must be 
present before VA will reduce a stabilized rating, which is that 
``[t]he evidence shows that it is reasonably certain that the material 
improvement will be maintained under the ordinary conditions of life.'' 
This requirement is drawn directly from the seventh sentence of current 
Sec.  3.344(a).
    We propose not to retain the second-to-last sentence of current 
Sec.  3.344(c), which states: ``[The provisions of this rule] do not 
apply to disabilities which have not become stabilized and are likely 
to improve.'' Proposed paragraph (c) clearly states that this rule 
applies to the reduction of stabilized ratings. The term ``stabilized 
ratings'' is clearly defined in proposed paragraph (b), and does ``not 
apply to disabilities which have not become stabilized.'' Therefore, 
the second-to-last sentence of current Sec.  3.344(c) is unnecessary.
    Proposed paragraph (d) is derived from current Sec.  3.344(a). In 
the current regulation, paragraph (a) contains ten sentences, nine of 
which articulate specific and distinct adjudicative rules. Three of 
these sentences also contain lists of various disabilities that are 
affected by the specific rule articulated in the sentence. Current 
paragraph (a) does not organize those ten sentences either by 
associating similar concepts or by setting the rules out in numbered 
paragraphs. We apply both of these organizational tools in the proposed 
rule, in order to improve readability and help users locate the parts 
of the paragraph that apply to their particular cases.
    In essence, Sec.  3.344(a) lists and describes the evidence 
required by VA to justify the reduction of a stabilized rating. Hence, 
we propose to title the paragraph that restates most of the rules 
contained in current Sec.  3.344(a), ``How VA determines whether there 
has been material improvement.''
    The proposed rule required significant reorganization of the 
current rule. In order to show clearly what we have done, we have 
reproduced below the current regulation, with numbers before each of 
the 10 sentences. Then, we have indicated how our proposed rule would 
dispose of each sentence of the existing rule.

    (a) Examination reports indicating improvement. [1] Rating 
agencies will handle cases affected by change of medical findings or 
diagnosis, so as to produce the greatest degree of stability of 
disability evaluations consistent with the laws and Department of 
Veterans Affairs regulations governing disability compensation and 
pension. [2] It is essential that the entire record of examinations 
and the medical-industrial history be reviewed to ascertain whether 
the recent examination is full and complete, including all special 
examinations indicated as a result of general examination and the 
entire case history. [3] This applies to treatment of intercurrent 
diseases and exacerbations, including hospital reports, bedside 
examinations, examinations by designated physicians, and 
examinations in the absence of, or without taking full advantage of, 
laboratory facilities and the cooperation of specialists in related 
lines. [4] Examinations less full and complete than those on which 
payments were authorized or continued will not be used as a basis of 
reduction. [5] Ratings on account of diseases subject to temporary 
or episodic improvement, e.g., manic depressive or other psychotic 
reaction, epilepsy, psychoneurotic reaction, arteriosclerotic heart 
disease, bronchial asthma, gastric or duodenal ulcer, many skin 
diseases, etc., will not be reduced on any one examination, except 
in those instances where all the evidence of record clearly warrants 
the conclusion that sustained improvement has been demonstrated. [6] 
Ratings on account of diseases which become comparatively symptom 
free (findings absent) after prolonged rest, e.g. residuals of 
phlebitis, arteriosclerotic heart disease, etc., will not be reduced 
on examinations reflecting the results of bed rest. [7] Moreover, 
though material improvement in the physical or mental condition is 
clearly reflected the rating agency will consider whether the 
evidence makes it reasonably certain that the improvement will be 
maintained under the ordinary conditions of life. [8] When syphilis 
of the central nervous system or alcoholic deterioration is 
diagnosed following a long prior history of psychosis, 
psychoneurosis, epilepsy, or the like, it is rarely possible to 
exclude persistence, in masked form, of the preceding innocently 
acquired manifestations. [9] Rating boards encountering a change of 
diagnosis will exercise caution in the determination as to whether a 
change in diagnosis represents no more than a progression of an 
earlier diagnosis, an error in prior diagnosis or possibly a disease 
entity independent of the service-connected disability. [10] When 
the new diagnosis reflects mental deficiency or personality disorder 
only, the possibility of only temporary remission of a super-imposed 
psychiatric disease will be borne in mind.




    At the outset, we note that, as discussed above, sentence 1 of 
Sec.  3.344(a) is reflected in the proposed paragraph (a) and sentence 
7 of Sec.  3.344(a) is reflected in proposed paragraph (c)(2).
    Proposed paragraph (d)(1) is derived from current Sec.  3.344(a) 
sentences 2, 3, and 4, which together emphasize the requirement that 
only a complete examination, including a review of the full medical 
record, can serve as a basis for a reduction under this section. The 
items needed for a complete medical record are in the proposed rule. 
The list

[[Page 28782]]

includes all of the items in the current rule.
    Proposed paragraph (d)(2) restates in plain language current Sec.  
3.344(a) sentence 5, which states, ``lists those diseases that will not 
be reduced on any one examination, absent evidence showing sustained 
improvement.'' The list of diseases contained in the existing rule is 
set off as indented ``bullet points,'' to improve readability. In 
addition, we note that the term ``manic depressive'' is no longer an 
accepted term in the psychiatric community. It has been replaced by the 
term ``Bipolar Disorders.'' See American Psychiatric Association, 
Diagnostic and Statistical Manual of Mental Disorders, 382-401 (4th ed. 
2000). We therefore propose to use the term ``Bipolar Disorders'' 
instead of using ``manic depressive.'' In addition, we note that the 
term ``psychoneurotic reaction'' is no longer an accepted term in the 
psychiatric community. It has been replaced by the term ``Anxiety 
Disorders.'' See American Psychiatric Association, Diagnostic and 
Statistical Manual of Mental Disorders, 429-484 (4th ed. 2000). We 
therefore propose to use the term ``Anxiety Disorders'' instead of 
using ``psychoneurotic reaction.''
    The intent behind sentence 5 of Sec.  3.344(a) is not that every 
single piece of evidence of record clearly warrants the conclusion that 
sustained improvement has been demonstrated. Such a literal 
interpretation would lead to an absurd result because in a case where a 
rating has been in effect for 8 years, the evidence from 6-8 years 
would not show sustained improvement; only more recent evidence would 
show sustained improvement. Sentence 5 uses ``all'' to refer to the 
evidentiary record as a whole. We propose to not include the word 
``all'' in paragraph (d) to clarify that VA does not intend that every 
single piece of evidence of record must clearly warrant the conclusion 
that sustained improvement has been demonstrated, but rather that the 
evidentiary record as a whole must clearly warrant such a conclusion.
    Proposed paragraph (d)(3) restates in plain language current Sec.  
3.344(a) sentence 6.
    Proposed (d)(4) provides a statement of VA's policy as to when it 
will find ``material improvement'' to exist, as follows: ``(4) Material 
improvement will be held to exist only where, after full compliance 
with the procedure outlined in this paragraph (d), the medical record 
clearly demonstrates that the disability does not meet the requirements 
for the currently assigned disability rating.''
    Proposed paragraph (d)(5) reflects the first, ninth, and tenth 
sentences of current Sec.  3.344(a), and references a similar rule, 38 
CFR 4.13. Section 4.13 states that in reevaluating a case based on a 
change in diagnosis, ``The repercussion upon a current rating of 
service connection when change is made of a previously assigned 
diagnosis or etiology must be kept in mind. The aim should be the 
reconciliation and continuance of the diagnosis or etiology upon which 
service connection for the disability had been granted.'' Section 4.13 
is similar to Sec.  3.344(a) sentence 1, but the language of Sec.  4.13 
more clearly places emphasis on the protection of the existing rating. 
Therefore, we explicitly require consideration of the part 4 rule when 
VA is confronted with evidence of a change in diagnosis.
    Proposed paragraph (d)(6) restates without alteration current Sec.  
3.344(a) sentence 8.
    Proposed paragraph (e) restates, in plain language, current Sec.  
3.344(b). We note that the current rule requires VA to cite ``the 
former diagnosis with the new diagnosis in parentheses,'' whereas the 
proposed rule would require VA to cite ``the former diagnosis with the 
new diagnosis, if any, in parentheses'' (emphasis added). This change 
clarifies that proposed paragraph (e) applies to any basis for 
reduction, not just to reductions based on a changed diagnosis.

Section 5.172 Protection of Continuous 20-Year Ratings

    Proposed Sec.  5.172 is based on current Sec.  3.951(b), which 
protects disability ratings and ratings of permanent and total 
disability for pension purposes that have been in effect for at least 
20 years.
    Proposed paragraph (a) restates in plain language the protection in 
current Sec.  3.951(b) afforded to disabilities rated for periods in 
which the beneficiary was receiving compensation. It would not include 
the phrase ``under laws administered by the Department of Veterans 
Affairs'' because there is no ambiguity concerning whether this 
regulation applies to ratings under VA regulations.
    Proposed paragraph (b) restates in plain language the current 
protection afforded in current Sec.  3.951(b) to a rating of permanent 
total disability for pension purposes.
    Proposed paragraph (c) states that the 20-year protection against 
reduction applies ``whether or not the veteran elects to receive 
disability compensation or pension during all or any part of the 20-
year period.'' This additional language reflects the holding of Salgado 
v. Brown, 4 Vet. App. 316, 320 (1993) (``The Court holds that the 
protection afforded by section 110 of title 38 of the United States 
Code applies to ratings for compensation purposes, whether or not a 
veteran elects to receive a monetary award.''). Because 38 U.S.C. 110 
applies to both pension and compensation, we propose to include pension 
in proposed paragraph (c).

Section 5.173 Protection Against Reduction of Disability Ratings When 
Revisions Are Made to the Schedule for Rating Disabilities

    Proposed Sec.  5.173 is derived from current Sec. Sec.  3.951 and 
3.952. Section 3.951(a) states that VA will not reduce any disability 
rating in effect on the effective date of a revision of the applicable 
Schedule for Rating Disabilities, based on such revisions, unless 
medical evidence establishes that the rated disability has actually 
improved. Current Sec.  3.952 applies that protection, with some 
modification, to ratings assigned under the Schedule of Disability 
Ratings, 1925, which were the basis of compensation on April 1, 1946, 
when the current Schedule of Disability Ratings took effect. Proposed 
Sec.  5.173 combines the general rule in current Sec.  3.951(a) with 
the specific rule in current Sec.  3.952, into a single regulation 
titled, ``Protection against reduction of disability ratings when 
revisions are made to the Schedule for Rating Disabilities.'' At the 
end of the proposed regulation, we cross-reference proposed Sec.  
5.176, the regulation that describes the process required before 
reducing a rating.
    Proposed paragraph (a) restates in plain language the general rule 
in current Sec.  3.951(a), as follows: ``VA will not reduce a 
disability rating in effect on the effective date of a revision of the 
applicable Schedule for Rating Disabilities unless medical evidence 
establishes that the rated disability has actually improved, except 
when the rating was assigned under the 1925 Schedule of Disability 
Ratings (as provided in paragraph (b) of this section).''
    Proposed paragraph (b) of Sec.  5.173 restates in plain language 
the protections afforded under current Sec.  3.952. These changes are 
meant to make the rules easier to follow; no substantive changes are 
intended.

Section 5.174 Protection of Entitlement to Benefits Established Before 
1959

    Proposed Sec.  5.174 is based on current Sec.  3.953. We propose 
not to include current Sec.  3.953(b), which refers to emergency 
officers' retirement pay payable to veterans of World War I. We

[[Page 28783]]

believe it is very unlikely that VA will receive any more claims for 
this benefit. However, if such a claim were to be received, Section 11, 
Public Law 85-857 would be used to adjudicate the claim.

Section 5.175 Protection or Severance of Service Connection

    Proposed Sec.  5.175 is derived from current Sec. Sec.  3.957 and 
3.105(d). Proposed Sec.  5.175(a) incorporates current Sec.  3.957, 
which states that service connection for disability or death may be 
protected if it has been in effect for 10 years or more. Such a rating 
may not be severed unless any of the following are shown: (1) The 
original grant was obtained through fraud; or, (2) military records 
clearly show that the person identified as a veteran did not have the 
requisite qualifying service; or, (3) military records clearly show 
that the veteran's discharge from service was a bar to service 
connection. See 38 CFR 3.12. We would include the current rule in the 
provision governing severance of service connection because the rule 
advises claimants of circumstances when a protected rating may be 
severed.
    Proposed Sec.  5.175(b) provides that severance of service 
connection may also occur when evidence establishes that it is clearly 
and unmistakably erroneous (the burden of proof being upon VA), subject 
to Sec. Sec.  5.152 and 5.176. This paragraph further provides that a 
change in medical diagnosis may be a basis for severing service 
connection if the examining physician or physicians or other proper 
medical authority certifies that, in light of all accumulated evidence, 
the diagnosis that was the basis of the award is clearly erroneous. 
That certification must be accompanied by a summary of the facts, 
findings, and reasons supporting the conclusion that the diagnosis is 
erroneous.

Section 5.176 Due Process Procedures for Severing Service Connection or 
Reducing or Discontinuing Compensation Benefits

    Proposed Sec.  5.176 re-states current Sec.  3.105(d), (e). Current 
Sec.  3.105(d) and (e) state that a claimant has 60 days from the date 
of the notice of a proposed severance of service connection or 
reduction or discontinuance of benefits in which to submit evidence 
showing the proposed action should not be taken. The last sentence of 
both current Sec.  3.105(d) and current Sec.  3.105(e) states that

    [i]f additional evidence is not received within that period, 
final rating action will be taken and the award will be reduced or 
discontinued * * * effective the last day of the month in which a 
60-day period from the date of notice to the beneficiary of the 
final rating action expires.

    We propose to clarify in Sec.  5.176(c) that if no evidence is 
received within 60 days, or if evidence is received that does not 
demonstrate that the proposed action should not be taken, VA will 
notify the beneficiary that VA is severing service connection or 
reducing or discontinuing the benefit.

Section 5.177 Effective Dates for Severing Service Connection or 
Discontinuing or Reducing Benefit Payments

    Proposed Sec.  5.177 contains the effective date provisions related 
to severance of service connection and reduction or discontinuance of 
benefits. It is derived from various provisions of current Sec.  3.105. 
We propose in paragraph (a) to restate the provisions found in the 
introductory paragraph of Sec.  3.105 regarding effective dates for 
reductions or discontinuances of suspended awards. We propose in 
paragraph (c) to list the three exceptions to Sec.  5.177, which are 
derived from the introductory paragraph of Sec.  3.105 and current 
Sec.  3.500(b). We propose not to include the exception for cases where 
the award of service connection was ``clearly illegal'' because such 
cases would properly fall within Sec.  3.105 and proposed Sec.  
5.177(d).
    We propose in paragraphs (d) through (i), to state the specific 
type of benefit that is the subject of the particular effective date 
rule and to explain when the benefit will be reduced, stopped, or 
severed. These effective date provisions are from paragraphs (c) 
through (h) of the current version of Sec.  3.105.
Endnote Regarding Amendatory Language
    We intend to ultimately remove part 3 entirely, but we are not 
including amendatory language to accomplish that at this time. VA will 
provide public notice before removing part 3.
Paperwork Reduction Act
    This document contains no provisions constituting a new collection 
of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).
Regulatory Flexibility Act
    The Secretary hereby certifies that this regulatory amendment will 
not have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act (RFA), 5 
U.S.C. 601-612. This amendment would not significantly impact any small 
entities. Therefore, pursuant to 5 U.S.C. 605(b), this amendment is 
exempt from the initial and final regulatory flexibility analysis 
requirements of sections 603 and 604.
Executive Order 12866
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity). The Executive 
Order classifies a ``significant regulatory action,'' requiring review 
by the Office of Management and Budget (OMB) unless OMB waives such 
review, as any regulatory action that is likely to result in a rule 
that may: (1) Have an annual effect on the economy of $100 million or 
more or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities; (2) create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) materially alter 
the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in the Executive 
Order.
    The economic, interagency, budgetary, legal, and policy 
implications of this proposed rule have been examined, and it has been 
determined to be a significant regulatory action under the Executive 
Order because it is likely to result in a rule that may raise novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order.
Unfunded Mandates
    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in an expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector of $100 million or more (adjusted annually for 
inflation) in any given year. This proposed rule would have no such 
effect on State, local, and tribal governments, or the private sector.
Catalog of Federal Domestic Assistance Numbers and Titles
    The Catalog of Federal Domestic Assistance program numbers and 
titles for this proposal are 64.100,

[[Page 28784]]

Automobiles and Adaptive Equipment for Certain Disabled Veterans and 
Members of the Armed Forces; 64.101, Burial Expenses Allowance for 
Veterans; 64.102, Compensation for Service-Connected Deaths for 
Veterans' Dependents; 64.104, Pension for Non-Service Connected 
Disability for Veterans; 64.105, Pension to Veterans Surviving Spouses, 
and Children; 64.106, Specially Adapted Housing for Disabled Veterans; 
64.109, Veterans Compensation for Service-Connected Disability; 64.110, 
Veterans Dependency and Indemnity Compensation for Service-Connected 
Death; 64.115, Veterans Information and Assistance; and 64.127, Monthly 
Allowance for Children of Vietnam Veterans Born with Spina Bifida.

List of Subjects in 38 CFR Part 5

    Administrative practice and procedure, Claims, Disability benefits, 
Pensions, Veterans.

    Approved: February 8, 2007.
Gordon H. Mansfield,
Deputy Secretary of Veterans Affairs.
    For the reasons set out in the preamble, VA proposes to further 
amend 38 CFR part 5, as proposed to be added at 69 FR 4832, January 30, 
2004, by adding subpart C to read as follows:

PART 5--COMPENSATION, PENSION, BURIAL, AND RELATED BENEFITS

Subpart C--Adjudicative Process, General

General Evidence Requirements

Sec.
5.130 Submission of statements, evidence, or information affecting 
entitlement to benefits.
5.131 Applications, claims, and exchange of evidence with Social 
Security Administration (SSA)--death benefits.
5.132 Claims, statements, evidence, or information filed abroad; 
authentication of documents from foreign countries.
5.133 Information VA may request from financial institutions.
5.134 Will VA accept a signature by mark or thumbprint?
5.135 Statements certified or under oath or affirmation.
5.136-5.139 [Reserved]

Evidence Requirements for Former Prisoners of War (POWS)

5.140 Determining former prisoner of war status.
5.141 Medical evidence for former prisoners' of war compensation 
claims.
5.142-5.149 [Reserved]

General Effective Dates for Awards

5.150 General effective dates for awards or increased benefits.
5.151 Date of receipt.
5.152 Effective dates based on change of law or VA issue.
5.153 Effective date of awards based on receipt of evidence prior to 
end of appeal period.
5.154-5.159 [Reserved]

General Rules on Revision of Decisions

5.160 Binding effect of VA decisions.
5.161 Review of benefit claims decisions.
5.162 Revision of decisions based on clear and unmistakable error 
(CUE).
5.163 Revision of decisions based on difference of opinion.
5.164 Effective dates for revision of decisions based on difference 
of opinion.
5.165 Effective dates for reduction or discontinuance of awards 
based on error.
5.166 New and material evidence based on service department records.
5.167-5.169 [Reserved]

General Rules on Protection or Reduction of Existing Ratings

5.170 Calculation of 5-year, 10-year, and 20-year protection 
periods.
5.171 Protection of 5-year stabilized ratings.
5.172 Protection of continuous 20-year ratings.
5.173 Protection against reduction of disability ratings when 
revisions are made to the Schedule for Rating Disabilities.
5.174 Protection of entitlement to benefits established before 1959.
5.175 Protection or severance of service connection.
5.176 Due process procedures for severing service connection or 
reducing or discontinuing compensation benefits.
5.177 Effective dates for severing service connection or 
discontinuing or reducing benefit payments.
5.178-5.179 [Reserved]

    Authority: 38 U.S.C. 501(a) and as noted in specific sections.

Subpart C--Adjudicative Process, General

General Evidence Requirements


Sec.  5.130  Submission of statements, evidence, or information 
affecting entitlement to benefits.

    (a) Statement of VA policy concerning submission of written 
statements, evidence, or information. (1) It is VA's general policy to 
allow submission of statements, evidence, or information by e-mail, 
facsimile (fax) machine, or other electronic means, unless a VA 
regulation, form, or directive expressly requires a different method of 
submission (for example, where a VA form directs claimants to submit 
certain documents by regular mail or hand delivery). This policy does 
not apply to the submission of a claim, Notice of Disagreement, 
Substantive Appeal, or any other submissions or filing requirements 
covered in parts 19 and 20 of this chapter.
    (2) Paragraph (a)(1) of this section merely concerns the method by 
which written statements, evidence, or information is submitted to VA. 
Requirements regarding the content of the submission must still be met.
    (b) VA action following submission of statements, evidence, or 
information. Except as otherwise provided, after a beneficiary or his 
or her fiduciary or authorized representative provides VA with a 
statement, evidence, or information that affects entitlement to 
benefits, either orally or in writing, VA may take action affecting the 
beneficiary's entitlement to benefits based upon the statement, 
evidence, or information.
    (c) Notice and documentation or oral statements. Except as provided 
in paragraph (d) of this section, VA will not take action based on oral 
statements unless the VA employee receiving the information meets the 
following conditions:
    (1) During the conversation in which the beneficiary, 
representative, or fiduciary provides the statement, the VA employee:
    (i) Identifies himself or herself as a VA employee who is 
authorized to receive the statement (this means that the VA employee 
must be authorized to take actions under Sec. Sec.  2.3 or 3.100 of 
this chapter);
    (ii) Verifies the identity of the provider as the beneficiary or 
his or her fiduciary or authorized representative by obtaining specific 
information about the beneficiary that is contained in the 
beneficiary's VA records, such as Social Security number, date of 
birth, branch of military service, dates of military service, or other 
information; and
    (iii) Informs the provider that the statement may be used to 
calculate benefit amounts; and
    (2) During or following the conversation in which the beneficiary, 
representative, or fiduciary provides the statement, the VA employee 
documents in the beneficiary's VA record all of the following:
    (i) The specific statement provided.
    (ii) The date such statement was provided.
    (iii) The identity of the provider.
    (iv) The steps taken to verify the identity of the provider as 
being the beneficiary or his or her fiduciary or authorized 
representative.
    (v) The statement of the employee that the provider was informed 
that the statement may be used for the purpose of calculating benefits 
amounts.
    (d) Exceptions to paragraph (c) notice and documentation 
requirements. Paragraph (c) of this section does not apply to the 
following:

[[Page 28785]]

    (1) Oral statements made at a VA hearing; and
    (2) Oral statements recorded by VA personnel in reports of medical 
treatment or examination.

(Authority: 38 U.S.C. 501(a))

Sec.  5.131  Applications, claims, and exchange of evidence with Social 
Security Administration (SSA)--death benefits.

    (a) Dual-purpose SSA and VA application forms. A claim for death 
benefits received by SSA on a form jointly prescribed by VA and SSA 
claiming such benefits is considered to be a claim for VA death 
benefits (including dependency and indemnity compensation (DIC), death 
pension, and accrued benefits). The claim will be deemed to have been 
received by VA on the date that it was received by SSA.
    (b) Evidence filed with SSA. Evidence received by SSA in 
conjunction with a claim under paragraph (a) of this section is 
considered received by VA on the date that SSA received the evidence.
    (c) SSA request of copies or certifications of evidence filed with 
VA. At SSA's request, VA will furnish copies or certifications of 
evidence that a claimant has filed with VA in support of a claim for VA 
death benefits, provided that the release of this evidence fully 
complies with all requirements in any applicable laws and regulations 
that protect the confidentiality of VA records.

(Authority: 38 U.S.C. 501(a), 5101(b)(1), 5105)

Sec.  5.132  Claims, statements, evidence, or information filed abroad; 
authentication of documents from foreign countries.

    (a) Claims and evidence filed abroad. A claim, or statements, 
information, or evidence in support of a claim, may be submitted to a 
Department of State representative in a foreign country. Any claim, 
statement, information, or evidence filed in a foreign country will be 
considered received by VA on the date that it was received by the 
Department of State representative in that foreign country.
    (b) Authentication of foreign documents--generally. Foreign 
documents listed in paragraph (c) of this section do not require 
authentication. All other foreign documents must be authenticated as 
specified in paragraph (d) of this section. ``Foreign documents'' means 
documents that are signed under oath or affirmation in the presence of 
an official in a foreign country. Examples of foreign documents include 
affidavits, marriage certificates, and birth certificates that have 
been created, executed, or validated by a foreign government. 
``Authentication'' means that an official listed in paragraph (d) of 
this section verifies that the foreign document, including each 
signature, stamp, and seal appearing on it, is genuine and has not been 
altered.
    (c) Authentication of certain foreign documents not required. VA 
does not require authentication of the following types of foreign 
documents:
    (1) Documents approved by the Deputy Minister of Veterans Affairs 
for the Department of Veterans Affairs, Ottawa, Canada.
    (2) Documents bearing the signature and seal of an officer 
authorized to administer oaths for general purposes.
    (3) Documents signed before a VA employee authorized to administer 
oaths under Sec.  2.3 of this chapter.
    (4) Affidavits prepared in the Republic of the Philippines that are 
certified by a VA representative who is located there and who has the 
authority to administer oaths.
    (5) Copies of public or church records from any foreign country 
used to establish birth, adoption, marriage, annulment, divorce, or 
death, provided that the documents have the signature and seal of the 
custodian of these records and there is no contrary evidence of record 
that tends to cast doubt on the correctness of the documents.
    (d) Authentication of foreign documents required. Foreign documents 
not listed in paragraph (c) of this section must be authenticated by:
    (1) An officer of the Department of State authorized to 
authenticate documents; or
    (2) The Consul of a friendly government whose signature and seal is 
verified by the Department of State.
    (e) Photocopies of foreign documents. VA will accept photocopies of 
any of the foreign documents described in paragraphs (c) and (d) of 
this section if VA determines that the photocopies satisfy the 
requirements of Sec.  5.180.

(Authority: 38 U.S.C. 501(a))

Sec.  5.133  Information VA may request from financial institutions.

    (a) Names and addresses. If VA needs to verify a person's correct 
name or address, VA may request this information from a financial 
institution, such as a bank, savings and loan association, trust 
company, or credit union. In its request, VA must certify that the name 
or address is necessary in order to administer properly its benefit 
programs and cannot be located by a reasonable search of VA records.
    (b) Financial information. VA may ask a financial institution to 
provide financial records of a current or former claimant or a current 
or former beneficiary if such evidence is necessary to determine 
whether such person has failed to comply with a statute, regulation, 
rule, or order. This request, however, must be made through a subpoena. 
(A subpoena is a legal document commanding an individual or 
organization to provide specified evidence to the issuer of the 
subpoena. See Sec.  2.2 of this chapter for information on VA's 
authority to issue subpoenas.) Before the date VA serves a subpoena on 
a financial institution, VA must:
    (1) Serve or mail a copy of the subpoena to the beneficiary; 
together with
    (2) A written explanation of the purpose of VA's request for 
financial information and the procedure for challenging the subpoena. 
See 12 U.S.C. 3405.
    (c) Limitations on use of information. Unless permitted under the 
Right to Financial Privacy Act (codified at 12 U.S.C. 3401, et seq.), 
VA may not:
    (1) Use information obtained from a financial institution for any 
purpose other than the administration of VA benefits programs; or
    (2) Share this information with any other individual, group, or 
government entity.

(Authority: 12 U.S.C. 3401, 3405, 3412, 3413; 38 U.S.C. 501, 5711, 
5319)

Sec.  5.134  Will VA accept a signature by mark or thumbprint?

    VA will accept signatures by mark or thumbprint if:
    (a) They are witnessed by two people who sign their names and give 
their addresses, or
    (b) They are witnessed by an accredited agent, attorney, or service 
organization representative, or
    (c) They are certified by a notary public or any other person 
having the authority to administer oaths for general purposes, or
    (d) They are certified by a VA employee who has been delegated 
authority by the Secretary under 38 CFR 2.3.

(Authority: 38 U.S.C. 5101)

Sec.  5.135  Statements certified or under oath or affirmation.

    (a) All oral testimony presented by claimants and witnesses on 
their behalf will be under oath or affirmation (see Sec.  5.82(d)(2)).
    (b) Any documentary evidence or written assertion of fact submitted 
by the claimant or on his or her behalf for the purpose of establishing 
a claim for service connection should be certified or under oath or 
affirmation. VA may consider such a submission that is not certified or 
under oath or affirmation or

[[Page 28786]]

may require certification, oath, or affirmation if considered necessary 
to establish the reliability of a material document. Documentary 
evidence includes records, examination reports, and transcripts 
material to the issue received by VA from State, county, or municipal 
governments, recognized private institutions, or contract hospitals.

(Authority: 38 U.S.C. 501)

Sec. Sec.  5.136 through 5.139  [Reserved]

Evidence Requirements for Former Prisoners of War (POWs)


Sec.  5.140  Determining former prisoner of war status.

    (a) Basis for determination. The definition of ``hostile force'' 
set forth in paragraph (3) of the definition of ``Former prisoner of 
war (or former POW)'' in Sec.  5.1 applies to this section. VA will 
accept a finding by the appropriate service department that a person 
was a POW during a period of war when detention or internment was by an 
enemy government or its agents, or a hostile force, except when a 
reasonable basis exists for questioning that finding. The Director of 
the Compensation and Pension Service must approve all regional office 
determinations not based on service department findings. VA will apply 
paragraphs (b), (c), and (d) of this section and make its own 
determination of POW status if:
    (1) The detention or internment occurred during a period other than 
a period of war; or
    (2) If a service department has not made a finding; or
    (3) A reasonable basis exists for questioning a service-department 
finding.
    (b) Circumstances of detention or internment. To be considered a 
former POW, a serviceperson must have been forcibly detained or 
interned under circumstances comparable to those under which persons 
generally have been forcibly detained or interned by enemy governments 
during periods of war. Such circumstances include, but are not limited 
to, physical hardships or abuse, psychological hardships or abuse, 
malnutrition, and unsanitary conditions. In the absence of evidence to 
the contrary, VA will consider that each individual member of a 
particular group of detainees or internees experienced the same 
circumstances as those experienced by the group.
    (c) Reason for detention or internment. For the purposes of 
determining POW status, VA will not consider the reason a service 
member was detained or interned, except where allegations exist that 
the service member violated the laws of a foreign government. A period 
of detention or internment by a foreign government for an alleged 
violation of its laws cannot be used to establish POW status, unless 
the charges were a sham intended to make it appear that the detention 
or internment was proper.
    (d) Line of duty. VA will consider that a serviceperson was 
forcibly detained or interned in line of duty unless the evidence of 
record discloses that forcible detention or internment was the 
proximate result of the service member's own willful misconduct. See 
Sec.  5.660 (defining line of duty) and Sec.  5.661 (defining willful 
misconduct).
    Cross-reference: See Sec.  5.611 (concerning POW status and 
Philippine service).

(Authority: 38 U.S.C. 101(32))

Sec.  5.141  Medical evidence for former prisoners' of war compensation 
claims.

    (a) Injuries and other conditions of a former prisoner of war 
(POW). As soon as sufficient evidence for a rating is available, VA 
will rate injuries or other conditions of a former POW that obviously 
were incurred in service, without awaiting receipt of the claimant's 
medical and other service records.
    (b) Statements by a former POW. VA will presume true a statement by 
a former POW that an injury or disease was incurred or aggravated 
during (or immediately before) detention or internment if the statement 
is consistent with the circumstances, conditions, or hardships of 
detention or internment (or is consistent with the former POW's 
situation immediately before detention or internment). The presumption 
of truth as to such a statement is rebutted by clear and convincing 
evidence to the contrary. See also Sec.  3.304(f)(2) (pertaining to 
post-traumatic stress disorder claimed by a former POW).
    (c) Evidence from fellow service members. Evidence from fellow 
service members may be used to support an allegation of incurrence or 
aggravation of an injury or disease during detention or internment. In 
evaluating evidence from fellow service members that relates to a claim 
for disability compensation by a former POW, VA will take into account 
the fellow service member's statements, including statements regarding 
any of the following:
    (1) The former POW's physical condition before capture;
    (2) The circumstances during the former POW's detention or 
internment;
    (3) The changes in the former POW's physical condition following 
release from detention or internment; or
    (4) The existence of signs and symptoms consistent with a claimed 
disability following the former POW's release from detention or 
internment.
    (d) The absence of clinical records. If disability compensation is 
claimed by a former POW, VA will not consider as determinative the lack 
of history or findings in clinical records made upon the claimant's 
return to United States control.
    (e) Disabilities first reported after discharge. If any disability 
is first reported after discharge, especially if the claimed disability 
is poorly defined and not obviously of intercurrent origin, VA will 
determine whether the claimed disability is etiologically related to 
the POW experience. VA will consider the circumstances of the 
claimant's detention or internment, the duration of detention or 
internment, and the pertinent medical principles.
    (f) Examination requirement. If service connection for disabilities 
claimed by a former POW cannot be established otherwise, VA will 
provide the claimant a complete medical examination.
    Cross-references: Definition of prisoner of war. See Sec.  5.1. 
Presumptive service connection for diseases specific to prisoners of 
war. See Sec.  5.264(c).

(Authority: 38 U.S.C. 1154)

Sec. Sec.  5.142-5.149  [Reserved]

General Effective Dates for Awards


Sec.  5.150  General effective dates for awards or increased benefits.

    (a) General rule. Except as otherwise provided, the effective date 
of an award of pension, compensation, dependency and indemnity 
compensation, or monetary allowance under 38 U.S.C. chapter 18 for an 
individual who is a child of a Vietnam veteran, based on an original 
claim, a claim reopened after final disallowance, or a claim for 
increase, will be the later of:
    (1) The date of receipt of the claim for the benefit awarded; or
    (2) The date entitlement arose. For the purposes of this part, 
``date entitlement arose'' means the date shown by the evidence to be 
the date that the claimant first met the requirements for the benefit 
awarded. VA will assume that entitlement arose before the date of 
receipt of the claim unless the evidence shows that entitlement arose 
after that date.
    (b) Location of other effective-date provisions in part 5. The 
following chart is intended to provide assistance in locating various 
other effective-date provisions in this part. It is provided for 
informational use only.

[[Page 28787]]



------------------------------------------------------------------------
         Effective date provision                 Part 5 location
------------------------------------------------------------------------
            (1) SUBPART B--SERVICE REQUIREMENTS FOR VETERANS
------------------------------------------------------------------------
(i) Individuals and groups designated by   Sec.   5.27(c).
 the Secretary of Defense as having
 performed active military service.
(ii) Effect of discharge upgrades by       Sec.   5.34(d).
 Armed Forces boards for the correction
 of military records (10 U.S.C. 1552) on
 eligibility for VA benefits.
(iii) Effect of discharge upgrades by      Sec.   5.35(e).
 Armed Forces discharge review boards (10
 U.S.C. 1553) on eligibility for VA
 benefits.
------------------------------------------------------------------------
              (2) SUBPART C--ADJUDICATIVE PROCESS, GENERAL
------------------------------------------------------------------------
(i) Filing a claim for death benefits....  Sec.   5.53(c)(5).
(ii) New and material evidence...........  Sec.   5.56(b).
(iii) Requirement to provide Social        Sec.   5.101(c), (d).
 Security numbers.
(iv) Effective dates based on change of    Sec.   5.152.
 law or VA issue.
(v) Effective date of awards based on      Sec.   5.153.
 receipt of evidence prior to end of
 appeal period.
(vi) Revision of decisions based on clear  Sec.   5.162(b).
 and unmistakable error (CUE).
(vii) Effective dates for revision of      Sec.   5.164.
 decisions based on difference of opinion
 under Sec.   5.163.
(viii) Effective dates for reduction or    Sec.   5.165.
 discontinuance of awards based on error.
(ix) New and material evidence based on    Sec.   5.166(c), (d).
 service department records.
(x) Effective dates for severing service   Sec.   5.177.
 connection or discontinuing or reducing
 benefit payments.
------------------------------------------------------------------------
                 (3) SUBPART D--DEPENDENTS AND SURVIVORS
------------------------------------------------------------------------
(i) Evidence of dependency-reduction or    Sec.   5.181(c).
 discontinuance of VA benefits.
(ii) Effective date for additional         Sec.   5.183.
 benefits based on the existence of a
 dependent.
(iii) Effective date of reduction or       Sec.   5.184.
 discontinuance of VA benefits due to the
 death of a beneficiary's dependent.
(iv) Effective date of reduction or        Sec.   5.197.
 discontinuance of improved pension,
 compensation, or dependency and
 indemnity compensation due to marriage
 or remarriage.
(v) Effective date of reduction or         Sec.   5.198.
 discontinuance of improved pension,
 compensation, or dependency and
 indemnity compensation due to divorce or
 annulment.
(vi) Effective date of discontinuance of   Sec.   5.204.
 VA benefits to a surviving spouse who
 holds himself, or herself, out as the
 spouse of another person.
(vii) Effective date of resumption of      Sec.   5.205.
 benefits to a surviving spouse due to
 termination of a remarriage.
(viii) Effective date of resumption of     Sec.   5.206.
 benefits to a surviving spouse who stops
 holding himself, or herself, out as the
 spouse of another.
(ix) Effective date of award of pension    Sec.   5.230.
 or dependency and indemnity compensation
 to, or based on the existence of, a
 child born after the veteran's death.
(x) Effective date of reduction or         Sec.   5.231.
 discontinuance--child reaches age 18 or
 23.
(xi) Effective date of reduction or        Sec.   5.232.
 discontinuance--terminated adoptions.
(xii) Effective date of reduction or       Sec.   5.233.
 discontinuance--stepchild no longer a
 member of the veteran's household.
(xiii) Effective date of an award,         Sec.   5.234.
 reduction, or discontinuance of benefits
 based on child status due to permanent
 incapacity for self support.
(xiv) Effective date of an award of        Sec.   5.235.
 benefits due to termination of a child's
 marriage.
------------------------------------------------------------------------
(4) SUBPART E--CLAIMS FOR SERVICE CONNECTION AND DISABILITY COMPENSATION
------------------------------------------------------------------------
(i) Effective dates--award of disability   Sec.   5.310.
 compensation based on direct service
 connection.
(ii) Effective dates--award of disability  Sec.   5.311.
 compensation based on presumptive
 service connection.
(iii) Effective dates--increased           Sec.   5.312.
 compensation due to increased disability.
(iv) Effective dates--reduction or         Sec.   5.313.
 severance of service-connected
 disability compensation.
(v) Effective dates--discontinuance of     Sec.   5.314.
 total disability rating based on
 individual unemployability.
(vi) Effective dates--reduction or         Sec.   5.315.
 discontinuance of additional disability
 compensation based on parental
 dependency.
(vii) Effective dates--award of            Sec.   5.316.
 additional disability compensation based
 on decrease in the net worth of
 dependent parents.
(viii) Effective dates--Special monthly    Sec.   5.333.
 compensation under Sec.  Sec.   5.331
 through 5.332.
(ix) Effective dates--Additional           Sec.   5.334.
 compensation for aid and attendance
 payable for a veteran's spouse.
(x) Effective date: Tuberculosis, special  Sec.   5.349.
 compensation for arrested.
(xi) Benefits under 38 U.S.C. 1151(a) for  Sec.   5.352(a)(2).
 additional disability or death due to
 hospitalization, medical or surgical
 treatment, examinations, or vocational
 rehabilitation training.
(xii) Effective dates for disability or    Sec.   5.353.
 death due to hospitalization, medical or
 surgical treatment, examinations, or
 vocational rehabilitation training.
------------------------------------------------------------------------
    (5) SUBPART F--NONSERVICE-CONNECTED DISABILITY PENSIONS AND DEATH
                                PENSIONS
------------------------------------------------------------------------
(i) Permanent and total disability         Sec.   5.381(b)(2).
 ratings for Improved Disability Pension
 purposes.
(ii) Effective dates for Improved          Sec.   5.383.
 Disability Pension.
(iii) Effective dates for awards of        Sec.   5.392.
 special monthly pension.
(iv) Automatic adjustment of maximum       Sec.   5.401(a).
 annual pension rates.
(v) Effective dates for Improved Pension   Sec.   5.415.
 awards based on a change in net worth.
(vi) Effective dates for changes to        Sec.   5.422.
 Improved Pension payments due to a
 change in income.
(vii) Time limits to establish             Sec.   5.424(b), (c).
 entitlement to Improved Pension or to
 increase the annual Improved Pension
 amount based on income.
(viii) Effective dates for Improved Death  Sec.   5.431.
 Pension.
(ix) Effective date of discontinuance of   Sec.   5.433.
 Improved Death Pension payments to a
 beneficiary no longer recognized as the
 veteran's surviving spouse.

[[Page 28788]]

 
(x) Award, or discontinuance of award, of  Sec.   5.434(b), (c).
 Improved Death Pension to a surviving
 spouse where Improved Death Pension
 payments to a child are involved.
(xi) Effective dates of improved pension   Sec.   5.463.
 elections.
(xii) Effective dates for section 306 and  Sec.   5.477.
 old-law pension reductions or
 discontinuances.
------------------------------------------------------------------------
       (6) SUBPART G--DEPENDENCY AND INDEMNITY COMPENSATION, DEATH
 COMPENSATION, ACCRUED BENEFITS, AND SPECIAL RULES APPLICABLE UPON DEATH
                            OF A BENEFICIARY
------------------------------------------------------------------------
(i) Awards of dependency and indemnity     Sec.   5.524(c).
 compensation benefits to children when
 there is a retroactive award to a school
 child.
(ii) Effective dates for DIC or death      Sec.   5.567.
 compensation awards.
(iii) Effective dates for discontinuance   Sec.   5.568.
 of DIC or death compensation payments to
 a person no longer recognized as the
 veteran's surviving spouse.
(iv) Effective date for award, or          Sec.   5.569.
 termination of award, of DIC or death
 compensation to a surviving spouse where
 DIC or death compensation payments to
 children are involved.
(v) Effective date for reduction in DIC--  Sec.   5.570.
 surviving spouses.
(vi) Effective date for an award or        Sec.   5.571.
 increased rate based on amended income
 information--parents' DIC.
(vii) Effective date for reduction or      Sec.   5.572.
 discontinuance based on increased
 income--parents' DIC.
(viii) Effective date for dependency and   Sec.   5.573.
 indemnity compensation rate adjustments
 when an additional dependent files an
 application.
(ix) Effective dates of awards and         Sec.   5.574.
 discontinuances of special monthly
 dependency and indemnity compensation.
------------------------------------------------------------------------
 (7) SUBPART H--SPECIAL AND ANCILLARY BENEFITS FOR VETERANS, DEPENDENTS,
                              AND SURVIVORS
------------------------------------------------------------------------
(i) Medal of Honor pension...............  Sec.   5.580(c).
(ii) Awards of VA benefits based on        Sec.   5.581(d).
 special acts or private laws.
(iii) Special allowance payable under      Sec.   5.588(f).
 section 156 of Pub. L. 97-377.
(iv) Effective dates of awards for         Sec.   5.591.
 certain disabled children of Vietnam
 veterans.
(v) Clothing allowance...................  Sec.   5.606(e).
------------------------------------------------------------------------
   (8) SUBPART I--BENEFITS FOR CERTAIN FILIPINO VETERANS AND SURVIVORS
------------------------------------------------------------------------
(i) Filipino veterans and their            Sec.   5.614.
 survivors: Effective dates for benefits
 at the full-dollar rate.
(ii) Filipino veterans and their           Sec.   5.618.
 survivors: Effective dates of reductions
 and discontinuances for benefits at the
 full-dollar rate.
------------------------------------------------------------------------
        (9) SUBPART K--MATTERS AFFECTING THE RECEIPT OF BENEFITS
------------------------------------------------------------------------
(i) Remission of forfeiture..............  Sec.   5.680(c)(2).
(ii) Effective dates--forfeiture.........  Sec.   5.681.
(iii) Presidential pardon for offenses     Sec.   5.682(b), (d).
 causing forfeiture.
(iv) Renouncement of benefits............  Sec.   5.683(c), (e)(1)(ii).
------------------------------------------------------------------------
          (10) SUBPART L--PAYMENTS AND ADJUSTMENTS TO PAYMENTS
------------------------------------------------------------------------
(i) Benefits paid to a child attending an  Sec.   5.695(c)-(g).
 approved educational institution.
(ii) General effective dates for           Sec.   5.705.
 reduction or discontinuance of benefits.
(iii) Eligibility verification reports...  Sec.   5.708(f).
(iv) Adjustment in benefits due to         Sec.   5.710(b).
 reduction or discontinuance of a benefit
 to another payee.
(v) Disappearance of veteran for 90 days   Sec.   5.711(b)(2), (c)(2),
 or more.                                   (d)(1).
(vi) Resumption of payments when a         Sec.   5.712.
 payee's whereabouts become known.
(vii) Restriction on VA benefit payments   Sec.   5.713.
 to an alien located in enemy territory.
(viii) Reduction of Improved Pension when  Sec.   5.720(a)(4), (d).
 a veteran is receiving domiciliary or
 nursing home care.
(ix) Reduction of Section 306 Pension      Sec.   5.721(a)(4), (d).
 when a veteran is receiving hospital
 care.
(x) Reduction of Old-Law Pension when a    Sec.   5.722(a)(4).
 veteran is receiving hospital care.
(xi) Reduction of Improved Pension when a  Sec.   5.723(b).
 veteran or surviving spouse is receiving
 Medicaid-covered nursing home care.
(xii) Reduction of special monthly         Sec.   5.724(b), (e), (f).
 compensation involving aid and
 attendance when a veteran is receiving
 hospital care.
(xiii) Reduction of special monthly        Sec.   5.725(b), (d), (e).
 pension involving aid and attendance for
 Improved Pension when a veteran is
 receiving hospital care.
(xiv) Reduction of special monthly         Sec.   5.726(b), (e).
 pension involving aid and attendance for
 Old-Law Pension or Section 306 Pension
 when a veteran is receiving hospital
 care.
(xv) Resumption of Section 306 Pension     Sec.   5.727(b), (e), (f).
 and special monthly pension involving
 aid and attendance when a veteran is
 discharged or released from hospital
 care.
(xvi) Resumption of Old-Law Pension and    Sec.   5.728(b), (d), (e).
 special monthly pension involving aid
 and attendance when a veteran is
 discharged or released from hospital
 care.
(xvii) General effective dates for         Sec.   5.743.
 awarding, reducing, or discontinuing VA
 benefits because of an election.
(xviii) Prohibition against receipt of     Sec.   5.746(c), (d)(1).
 active military service pay and VA
 benefits for the same period.
(xix) Procedures for elections between VA  Sec.   5.752(b).
 benefits and FECA compensation.
(xx) Effect of election of compensation    Sec.   5.754(d).
 under the Radiation Exposure
 Compensation Act of 1990 on payment of
 certain VA benefits.
(xxi) Payment of multiple VA benefits to   Sec.   5.762(c)(6)(ii).
 a surviving child based on the service
 of more than one veteran.

[[Page 28789]]

 
(xxii) Payment of dependents' educational  Sec.   5.764(a)(3).
 assistance (DEA) and VA pension or
 dependency and indemnity compensation
 (DIC) for the same period.
------------------------------------------------------------------------
(11) SUBPART M--APPORTIONMENTS TO DEPENDENTS AND PAYMENTS TO FIDUCIARIES
                     AND INCARCERATED BENEFICIARIES
------------------------------------------------------------------------
(i) Effective date of apportionment grant  Sec.   5.783.
 or increase.
(ii) Effective date of apportionment       Sec.   5.784.
 discontinuance or reduction.
(iii) Determinations of incompetency.....  Sec.   5.791(d).
(iv) Effective date after certification    Sec.   5.794.
 or when a beneficiary regains competency.
(v) Payments upon reaching age of          Sec.   5.795(b).
 majority.
(vi) Incarcerated beneficiaries--general   Sec.   5.810(c).
 provisions and definitions.
(vii) Discontinuance of pension during     Sec.   5.813(b)(2).
 incarceration.
(viii) Apportionment where a primary       Sec.   5.814(e).
 beneficiary is incarcerated.
(ix) Resumptions of disability             Sec.   5.815(a), (b)(1),
 compensation, dependency and indemnity     (c)(2).
 compensation, or death compensation upon
 a beneficiary's release from
 incarceration.
(x) Resumptions of pension upon a          Sec.   5.816(b), (c)(1).
 beneficiary's release from incarceration.
------------------------------------------------------------------------


(Authority: 38 U.S.C. 501, 5110(a))

Sec.  5.151  Date of receipt.

    (a) General. The date of receipt of a document, claim, information, 
or evidence is the date on which it was received by VA, except as 
provided in paragraph (b) of this section, in specific provisions for 
claims or evidence received in a foreign country by a Department of 
State representative (Sec.  5.132(a)) or in the Social Security 
Administration (Sec. Sec.  5.131(a) or 5.131(b)), or in rules of the 
Department of Defense relating to initial claims filed at or before 
separation.
    (b) Exception to date-of-receipt rule. VA may establish, by notice 
published in the Federal Register, exceptions to paragraph (a), using 
factors such as postmark or the date the claimant signed the 
correspondence, when VA determines that a natural or man-made 
interference with the normal channels through which VA ordinarily 
receives correspondence has resulted in one or more VA regional offices 
experiencing extended delays in receipt of documents, claims, 
information, or evidence from claimants served by the affected office 
or offices to an extent that, if not addressed, would adversely affect 
such claimants through no fault of their own.

(Authority: 38 U.S.C. 501(a), 512(a), 5110)

Sec.  5.152  Effective dates based on change of law or VA issue.

    (a) Effective date of award. Where pension, compensation, 
dependency and indemnity compensation, or a monetary allowance under 38 
U.S.C. chapter 18 for an individual who is a child of a Vietnam veteran 
is awarded or increased pursuant to a liberalizing law, or a 
liberalizing VA issue approved by the Secretary or by the Secretary's 
direction, the effective date of such award or increase shall be fixed 
in accordance with the date entitlement arose, but shall not be earlier 
than the effective date of the act or administrative issue. Where 
pension, compensation, dependency and indemnity compensation, or a 
monetary allowance under 38 U.S.C. chapter 18 for an individual who is 
a child of a Vietnam veteran is awarded or increased pursuant to a 
liberalizing law or VA issue which became effective on or after the 
date of its enactment or issuance, in order for a claimant to be 
eligible for a retroactive payment under the provisions of this 
paragraph the evidence must show that the claimant met all eligibility 
criteria for the liberalized benefit on the effective date of the 
liberalizing law or VA issue and that such eligibility existed 
continuously from that date to the date of claim or administrative 
determination of entitlement. The provisions of this paragraph are 
applicable to original and reopened claims as well as claims for 
increase.
    (1) If a claim is reviewed on the initiative of VA within 1 year 
from the effective date of the law or VA issue, or at the request of a 
claimant received within 1 year from that date, benefits may be 
authorized from the effective date of the law or VA issue.
    (2) If a claim is reviewed on the initiative of VA more than 1 year 
after the effective date of the law or VA issue, benefits may be 
authorized for a period of 1 year prior to the date of administrative 
determination of entitlement.
    (3) If a claim is reviewed at the request of the claimant more than 
1 year after the effective date of the law or VA issue, benefits may be 
authorized for a period of 1 year prior to the date of receipt of such 
request.

(Authority: 38 U.S.C. 1822, 5110(g))


    (b) Reduction or discontinuance of benefits. Where the reduction or 
discontinuance of an award is in order because of a change in law or a 
Department of Veterans Affairs issue, or because of a change in 
interpretation of a law or Department of Veterans Affairs issue, the 
payee will be notified at his or her latest address of record of the 
contemplated action and furnished detailed reasons therefor, and will 
be given 60 days for the presentation of additional evidence. If VA 
receives no additional evidence within the 60-day period, or the 
evidence received does not demonstrate that the proposed action should 
not be taken, the award will be reduced or discontinued effective the 
last day of the month in which the 60-day period expired.

(Authority: 38 U.S.C. 5112(b)(6))

Sec.  5.153  Effective date of awards based on receipt of evidence 
prior to end of appeal period.

    VA will consider information or evidence received before the 
expiration of the period for initiating or perfecting an appeal to the 
Board, or before the Board renders a decision (if a timely appeal was 
filed), without regard to whether the information or evidence is ``new 
and material.'' An award of the benefit sought based on that 
information or evidence is effective on the date prescribed by Sec.  
5.150.

(Authority: 38 U.S.C. 501)

Sec. Sec.  5.154-5.159  [Reserved]

General Rules on Revision of Decisions


Sec.  5.160  Binding effect of VA decisions.

    (a) General rule. A decision of a duly constituted rating agency or 
other agency of original jurisdiction shall be binding on all field 
offices of the Department of Veterans Affairs as to conclusions based 
on the evidence on file at the time VA issues written notification in 
accordance with 38 U.S.C. 5104. A binding agency decision shall not be 
subject to revision on the same factual basis except by duly

[[Page 28790]]

constituted appellate authorities or except as provided in Sec. Sec.  
5.161, 5.162, and 5.163 of this part.
    (b) Particular issues. A decision made by a Veterans Service Center 
on any one of the issues listed below is binding on the VA Insurance 
Center, and vice versa, unless the decision was based on clear and 
unmistakable error. Absent clear and unmistakable error, neither a 
Veterans Service Center nor the VA Insurance Center may change a 
decision of the other if doing so would involve applying the same 
criteria and be based on the same facts. The issues to which this 
paragraph (b) applies are:
    (1) Line of duty;
    (2) Character of discharge;
    (3) Relationship;
    (4) Dependency;
    (5) Domestic relations issues such as marriage, divorce, adoption 
and child custody and support;
    (6) Homicide; and
    (7) Findings of fact of death or presumption of death.

(Authority: 38 U.S.C. 501)

Sec.  5.161  Review of benefit claims decisions.

    (a) A claimant who has filed a timely Notice of Disagreement with a 
decision of an agency of original jurisdiction on a benefit claim has a 
right to review of that decision under this section. The review will be 
conducted by a Veterans Service Center Manager or Decision Review 
Officer, at VA's discretion. An individual who did not participate in 
the decision being reviewed will conduct this review. Only a decision 
that has not yet become final (by appellate decision or failure to 
timely appeal) may be reviewed. Review under this section will 
encompass only decisions with which the claimant has expressed 
disagreement in the Notice of Disagreement. The reviewer will consider 
all evidence of record and applicable law, and will give no deference 
to the decision being reviewed.
    (b) Unless the claimant has requested review under this section 
with his or her Notice of Disagreement, VA will, upon receipt of the 
Notice of Disagreement, notify the claimant in writing of his or her 
right to review under this section. To obtain such a review, the 
claimant must request it not later than 60 days after the date VA mails 
the notice. This 60-day time limit may not be extended. If the claimant 
fails to request review under this section not later than 60 days after 
the date VA mails the notice, VA will proceed with the traditional 
appellate process by issuing a Statement of the Case. A claimant may 
not have more than one review under this section of the same decision.
    (c) The reviewer may conduct whatever development he or she 
considers necessary to resolve any disagreements in the Notice of 
Disagreement, consistent with applicable law. This may include an 
attempt to obtain additional evidence or the holding of an informal 
conference with the claimant. Upon the request of the claimant, the 
reviewer will conduct a hearing under Sec.  5.82.
    (d) The reviewer may grant a benefit sought in the claim 
notwithstanding Sec.  5.163, but, except as provided in paragraph (e) 
of this section, may not revise the decision in a manner that is less 
advantageous to the claimant than the decision under review. A review 
decision made under this section will include a summary of the 
evidence, a citation to pertinent laws, a discussion of how those laws 
affect the decision, and a summary of the reasons for the decision.
    (e) Notwithstanding any other provisions of this section, the 
reviewer may reverse or revise (even if disadvantageous to the 
claimant) prior decisions of an agency of original jurisdiction 
(including the decision being reviewed or any prior decision that has 
become final due to failure to timely appeal) on the grounds of clear 
and unmistakable error (see Sec.  5.162).
    (f) Review under this section does not limit the appeal rights of a 
claimant. Unless a claimant withdraws his or her Notice of Disagreement 
as a result of this review process, VA will proceed with the 
traditional appellate process by issuing a Statement of the Case.
    (g) This section applies to all claims in which a Notice of 
Disagreement is filed on or after June 1, 2001.

(Authority: 38 U.S.C. 5109A, 7105(d))

Sec.  5.162  Revision of decisions based on clear and unmistakable 
error (CUE).

    (a) General. In the absence of clear and unmistakable error (CUE), 
VA will accept all final decisions as correct. Where evidence 
establishes such CUE, a prior decision will be reversed or revised. 
Review to determine whether CUE exists in a case may be instituted by 
VA on its own motion or upon request of the claimant. A request for 
revision of a VA decision based on CUE may be made at any time after 
that decision is made.
    Cross-reference: Explanation of what constitutes CUE and what does 
not. See Sec.  20.1403 of this chapter.
    (b) Effect of revision on benefits. For the purpose of granting 
benefits, a new decision that constitutes a reversal or revision of a 
prior decision on the grounds of CUE has the same effect as if the new 
decision had been made on the date of the prior decision. For effective 
dates for reductions or discontinuances, based on CUE, VA will apply 
Sec.  5.165(c)(1). However, for reductions or discontinuances based on 
CUE resulting from an act of commission or omission by the beneficiary 
or with the beneficiary's knowledge, VA will apply Sec.  5.165(b).

(Authority: 38 U.S.C. 5109A)

Sec.  5.163  Revision of decisions based on difference of opinion.

    If the Veterans Service Center Manager (VSCM) within an agency of 
original jurisdiction (AOJ) believes that revision of a previous AOJ 
decision (that is not final and has not been the subject of a 
Substantive Appeal) is warranted, based on a difference of opinion, and 
that revision would lead to a more favorable decision on the claim that 
was the subject of that previous decision, the VSCM will recommend such 
revision to the Director of the Compensation and Pension Service of the 
Veterans Benefits Administration for a binding determination.

(Authority: 38 U.S.C. 501)

Sec.  5.164  Effective dates for revision of decisions based on 
difference of opinion.

    If a decision is revised based on difference of opinion under Sec.  
5.163, the effective date of the revision is the date the benefits 
would have been paid if the previous decision had been favorable.

(Authority: 38 U.S.C. 501, 5110)

Sec.  5.165  Effective dates for reduction or discontinuance of awards 
based on error.

    (a) Scope. The rules in this section apply when determining the 
proper effective date to assign for the reduction or discontinuance of 
VA benefits based on error. This section does not apply to a payment 
amount not authorized by a rating decision, such as a payment of an 
incorrect amount or a duplicative payment. Such amounts are 
overpayments, subject to recoupment.
    (b) Effective date of reduction or discontinuance based on 
beneficiary error. If an award was based on an act of commission or 
omission by the beneficiary or any act of omission or commission with 
the beneficiary's knowledge, VA will pay a reduced rate or discontinue 
benefits effective the latest of the following dates:
    (1) The effective date of the award;
    (2) The date preceding the act of commission or omission; or
    (3) The date entitlement to the benefit ceased.
    (c) VA administrative error. (1) Effective date. Except as provided 
in

[[Page 28791]]

Sec.  5.177 (d) and (f), if an award was based solely on administrative 
error or an error in judgment by VA, VA will pay a reduced rate or 
discontinue benefits effective the first of the month that follows the 
month for which VA last paid benefits.
    (2) Administrative error or an error in judgment. Administrative 
errors or errors in judgment include:
    (i) Overlooking facts;
    (ii) Clerical errors; or
    (iii) Failure to follow or properly apply VA instructions, 
regulations, or statutes.

(Authority: 38 U.S.C. 5112(b)(9) and (10))

Sec.  5.166  New and material evidence based on service department 
records.

    (a) Notwithstanding any other section in this part, at any time 
after VA issues a decision on a claim, if VA receives or associates 
with the claims file relevant official service department records that 
existed and had not been associated with the claims file when VA first 
decided the claim, VA will reconsider the claim, notwithstanding Sec.  
3.156(a). Such records include, but are not limited to:
    (1) Service records that are related to a claimed in-service event, 
injury, or disease, regardless of whether such records mention the 
veteran by name, as long as the other requirements of this Sec.  5.166 
are met;
    (2) Additional service records forwarded by the Department of 
Defense or the service department to VA any time after VA's original 
request for service records; and
    (3) Declassified records that could not have been obtained because 
the records were classified when VA decided the claim.
    (b) Paragraph (a) of this section does not apply to records that VA 
could not have obtained when it decided the claim because the records 
did not exist when VA decided the claim, or because the claimant failed 
to provide sufficient information for VA to identify and obtain the 
records from the respective service department, the Joint Services 
Records Research Center, or from any other official source.
    (c) An award made based all or in part on the records identified by 
paragraph (a) of this section is effective on the date entitlement 
arose or the date VA received the previously decided claim, whichever 
is later, or such other date as may be authorized by the provisions of 
this part applicable to the previously decided claim.
    (d) A retroactive rating of disability resulting from disease or 
injury subsequently service connected on the basis of the new evidence 
from the service department must be supported adequately by medical 
evidence. Where such records clearly support the assignment of a 
specific rating over a part or the entire period of time involved, a 
retroactive rating will be assigned accordingly, except as it may be 
affected by the filing date of the original claim.

(Authority: 38 U.S.C. 501(a))

Sec. Sec.  5.167-5.169  [Reserved]

General Rules on Protection or Reduction of Existing Ratings


Sec.  5.170  Calculation of 5-year, 10-year, and 20-year protection 
periods.

    (a) VA will apply the following principles in determining whether 
service connection has been ``in effect'' for the 10-year period in 
Sec.  5.175 and whether a rating has been ``continuous'' for the 5-year 
period in Sec.  5.171 or the 20-year period in Sec.  5.172.
    (b) A protection period begins on the effective date of the rating 
decision and ends on the date that service connection would be severed 
or the rating would be reduced, after due process has been provided.
    Cross-reference: Due process provisions for reducing compensation 
benefits or severing service connection. See Sec.  5.176.
    (c) For purposes of Sec. Sec.  5.171 and 5.172, a rating is not 
continuous if benefits based on that rating are discontinued or 
interrupted because the veteran reentered active service.
    Cross-reference: Rule on discontinuance of awards based on reentry 
into active service. See Sec.  3.654(b).
    (d) A rating period may be protected even if the beneficiary did 
not receive VA compensation based on that rating. This includes a 
beneficiary whose payments were adjusted by deduction, recoupment, 
apportionment, reduction in compensation due to incarceration, or 
because the beneficiary elected to receive retirement pay.
    (e) A retroactive increase or award of service connection, 
including one made under Sec.  5.162 of this part (revision based on 
clear and unmistakable error), which results in a veteran being rated 
or awarded service connection for a period of 5, 10, or 20 years will 
be protected under Sec. Sec.  5.171, 5.175, and 5.172, respectively, of 
this part. This paragraph applies to any protection period, even if it 
includes a period based on a retroactive award.
    Cross-reference: Specific procedural due process in reducing 
ratings or severing service connection. See Sec.  5.176.

(Authority: 38 U.S.C. 110, 501, 1159)

Sec.  5.171  Protection of 5-year stabilized ratings.

    (a) Purpose. VA will adjudicate cases affected by change of medical 
findings or diagnosis to produce the greatest degree of stability of 
disability ratings consistent with the laws and regulations governing 
disability compensation and pension.
    (b) Stabilized rating. For the purposes of this section, if a 
disability has been rated at or above a specific level for 5 years or 
more, VA will consider it to be stabilized at that specific level.
    (c) Material improvement. VA will not reduce a stabilized rating 
unless there is evidence of material improvement. VA may reduce a 
stabilized rating when:
    (1) An examination shows sustainable material improvement, physical 
or mental, in the disability, as explained in paragraph (d) of this 
section; and
    (2) The evidence shows that it is reasonably certain that the 
material improvement will be maintained under the ordinary conditions 
of life.
    (d) How VA determines whether there has been material improvement. 
VA will consider the following when determining whether a disability 
has undergone material improvement:
    (1) In order to reduce a stabilized rating, there must be evidence 
of an examination demonstrating improvement. Examinations less complete 
than those on which payments were authorized or continued will not be 
used as a basis for reduction. A complete medical record includes all 
of the following, when such records exist:
    (i) The entire case history;
    (ii) Medical-industrial history;
    (iii) Records related to treatment of intercurrent diseases and 
exacerbations, including hospital reports, bedside examinations, 
examinations by designated physicians, and examinations that reflect 
the results of tests conducted by laboratory facilities and the 
cooperation of specialists in related lines;
    (iv) Private and VA medical examination records; and
    (v) Special examinations indicated as a result of general 
examination.
    (2) VA will not use only one examination as the basis for a 
reduction of stabilized ratings assigned to diseases that tend to show 
temporary or episodic improvement, unless the evidence of record 
clearly demonstrates sustained improvement. Diseases subject to 
temporary or episodic improvement include but are not limited to:
    (i) Arteriosclerotic heart disease;
    (ii) Bronchial asthma;
    (iii) Epilepsy;
    (iv) Gastric or duodenal ulcer;
    (v) Bipolar disorders or other psychotic reaction;

[[Page 28792]]

    (vi) Anxiety disorders;
    (vii) Many skin diseases.
    (3) VA will not reduce a stabilized rating assigned to a disease 
that becomes comparatively symptom free (findings absent) after bed 
rest based on an examination that reflects the results of bed rest.
    (4) Material improvement will be held to exist only where, after 
full compliance with the procedure outlined in this paragraph (d), the 
medical record clearly demonstrates that the disability does not meet 
the requirements for the currently assigned disability rating.
    (5) Where there is evidence of a change in diagnosis, VA will 
follow 38 CFR 4.13 (``Effect of change of diagnosis''), as well as this 
section. VA will consider whether evidence of a change in diagnosis 
represents a progression of the previously diagnosed condition, an 
error in prior diagnosis, or a disease entity independent of the 
service-connected disability. When a new diagnosis reflects only a 
mental deficiency or personality disorder, VA will consider the 
possibility of temporary remission of a super-imposed psychiatric 
disease.
    (6) When syphilis of the central nervous system or alcoholic 
deterioration is diagnosed following a long prior history of psychosis, 
psychoneurosis, epilepsy, or the like, it is rarely possible to exclude 
persistence, in masked form, of the preceding innocently acquired 
manifestations.
    (e) Reexamination. If VA cannot conclude that a reduction is 
warranted after considering the evidence as described in paragraphs (c) 
and (d) of this section, VA will continue the rating in effect, citing 
the former diagnosis with the new diagnosis, if any, in parentheses, 
with a notation that the rating will be continued pending reexamination 
to be conducted on a date to be determined on the basis of the facts of 
each individual case.

(Authority: 38 U.S.C. 501)


    Cross-reference: For specific procedural due process in reducing 
ratings, see Sec.  5.176.


Sec.  5.172  Protection of continuous 20-year ratings.

    (a) Compensation rating. If a disability has been rated at or above 
a specific level for 20 years, VA may not reduce the rating below such 
level unless the rating was based on fraud.
    (b) Pension rating. VA will not reduce a permanent total disability 
rating for pension purposes that has been continuously in effect for 20 
or more years, unless the rating was based on fraud.
    (c) Effect of election regarding receipt of disability 
compensation. The provisions of paragraph (a) or (b) of this section 
apply whether or not the veteran elects to receive disability 
compensation or pension during all or any part of the 20-year period.

(Authority: 38 U.S.C. 110)

Sec.  5.173  Protection against reduction of disability ratings when 
revisions are made to the Schedule for Rating Disabilities.

    (a) General. VA will not reduce a disability rating in effect on 
the effective date of a revision of the applicable Schedule for Rating 
Disabilities unless medical evidence establishes that the rated 
disability has actually improved, except when the rating was assigned 
under the 1925 Schedule of Disability Ratings (as provided in paragraph 
(b) of this section).

(Authority: 38 U.S.C. 1155)


    (b) Ratings under 1925 Schedule. (1) VA will reduce a rating that 
was assigned under the 1925 Schedule of Disability Ratings that was the 
basis of compensation on April 1, 1946, when the rated disability has 
undergone a sustained material improvement that would have required a 
reduction under the 1925 Schedule.
    (2) Subject to paragraph (b)(3) of this section, VA will modify a 
rating that was assigned under the 1925 Schedule when an increased 
rating is appropriate under the Schedule for Rating Disabilities in 
part 4 of this chapter. After such modification, VA will assign all 
future ratings of that disability under the Schedule for Rating 
Disabilities in part 4 of this chapter. The increase in disability 
level must not be temporary (due to hospitalization, surgery, etc.). If 
a temporary increased rating is assigned, VA will restore the prior 
rating under the 1925 Schedule after the period of increase has elapsed 
unless:
    (i) The permanent residuals require reduction under the 1925 
Schedule; or
    (ii) An increased rating is appropriate under the Schedule for 
Rating Disabilities in part 4 of this chapter.
    (3) VA will not increase a rating assigned under the 1925 Schedule 
when the changed condition represents an increased degree of disability 
under either the 1925 Schedule or the Schedule for Rating Disabilities 
in part 4 of this chapter, but the rating provided by the Schedule for 
Rating Disabilities in part 4 of this chapter is less than the rating 
in effect under the 1925 Schedule on April 1, 1946.
    Cross-reference: For procedural due process before reduction of 
rating under this section, see Sec.  5.176.

(Authority: 38 U.S.C. 501)

Sec.  5.174  Protection of entitlement to benefits established before 
1959.

    (a) Persons in receipt of or entitled to receive benefits on 
December 31, 1958. Any person receiving or entitled to receive benefits 
under any public law administered by VA on December 31, 1958, may, 
except where there was fraud, clear and unmistakable error of fact or 
law, or misrepresentation of material facts, continue to receive such 
benefits as long as the conditions warranting such payment under those 
laws continue. VA will pay the greater benefit under the previous law 
or the corresponding current section of title 38 U.S.C. in the absence 
of an election to receive the lesser benefit.

(Authority: Section 10, Pub. L. 85-857)


    (b) Service connection established under prior laws. Awards of 
service connection and the rate of disability compensation paid under 
prior laws repealed by Public Law 85-56 are protected, provided that 
the conditions warranting such status and rate continue and the award 
was not based on fraud, misrepresentation of facts, or clear and 
unmistakable error. With respect to such protected awards, VA may award 
compensation and special monthly compensation under current law if such 
award would result in compensation payment at a rate equal to or higher 
than that payable on December 31, 1957. Where a changed physical 
condition warrants re-rating of service-connected disabilities, the 
amounts of compensation and special monthly compensation will be 
determined under 38 U.S.C. 1114.

(Authority: Pub. L. 85-86; Pub. L. 85-857)

Sec.  5.175  Protection or severance of service connection.

    (a) Protected service connection. (1) VA may not sever service 
connection that has been in effect for 10 years or more unless evidence 
shows that:
    (i) The original grant was obtained through fraud, or;
    (ii) It is clear from military records that the person identified 
as a veteran did not have the requisite qualifying military service or 
the veteran's discharge from service is of a type to prevent service 
connection as described in Sec.  5.30.
    (2) The protection afforded in this section extends to 
determinations of service connection that were the basis for grants of 
entitlement to dependency and indemnity compensation or death 
compensation.
    (b) Severance of service connection. (1) VA will sever service 
connection when evidence establishes that it is clearly and 
unmistakably erroneous (the

[[Page 28793]]

burden of proof being upon VA), subject to Sec. Sec.  5.152 and 5.176.
    (2) A change in diagnosis may be accepted as a basis for severance 
of service connection if the examining physician or physicians or other 
proper medical authority certifies that, in the light of all 
accumulated evidence, the diagnosis that was the basis of the award of 
service connection is clearly erroneous. This certification must be 
accompanied by a summary of the facts, findings, and reasons supporting 
the conclusion that the diagnosis is erroneous.

(Authority: 38 U.S.C. 1159, 5104)

Sec.  5.176  Due process procedures for severing service connection or 
reducing or discontinuing compensation benefits.

    Except as provided in Sec.  5.83(c), when VA is contemplating 
severing service connection or reducing or discontinuing compensation 
benefit payments (including those based on individual unemployability), 
VA will:
    (a) Prepare a rating proposing severance of service connection or 
reduction or discontinuance of compensation benefit payments and 
setting forth all material facts and reasons;
    (b) Consistent with Sec.  5.83, notify the beneficiary at his or 
her latest address of record of the contemplated action and furnish 
detailed reasons therefor; and
    (c) Allow the beneficiary 60 days from the date of the notice 
proposing severance, reduction, or discontinuance, to present 
additional evidence to show that service connection should be 
maintained, the rating should not be reduced, or the benefits should 
remain intact. If VA receives no additional evidence within the 60-day 
period, or the evidence received does not demonstrate that the proposed 
action should not be taken, VA will notify the beneficiary that VA is 
severing service connection or reducing or discontinuing the benefit.

(Authority: 38 U.S.C. 501, 1159)

Sec.  5.177  Effective dates for severing service connection or 
discontinuing or reducing benefit payments.

    (a) Suspended awards. If an award has been suspended and it is 
determined that no additional payments are in order, VA will 
discontinue the award effective the first of the month that follows the 
month for which VA last paid benefits.
    (b) Running awards. If an award is running, VA will discontinue the 
award effective as appropriate under paragraphs (d) through (i) of this 
section.
    (c) Exceptions. This section does not apply if:
    (1) There is a change in law or a VA administrative issue or a 
change in interpretation of law or VA issue; if so, Sec.  5.152 applies 
(effective dates based on change of law or VA issue);
    (2) An award was erroneous due to an act of commission or omission 
by the beneficiary or with the beneficiary's knowledge; if so, Sec.  
5.165(b) applies; or
    (3) An award was based solely on administrative error or an error 
in judgment by VA; if so, Sec.  5.165(c) applies in cases other than 
severance of service connection under paragraph (d) of this section or 
reduction of compensation under paragraph (f) of this section.
    (d) Severance of service connection. This paragraph (d) applies 
when VA severs service connection. In such cases, two 60-day periods 
apply. After applying the 60-day notice period described in Sec.  
5.176, VA will sever service connection effective the first day of the 
month after a second 60-day period beginning on the day of notice to 
the beneficiary of the final decision.
    (e) Character of discharge or line of duty. This paragraph (e) 
applies when VA discontinues benefits based on a determination as to 
character of discharge or line of duty. In such cases, two 60-day 
periods apply. After applying the 60-day notice period described in 
Sec.  5.176, VA will discontinue benefits effective the first day of 
the month after a second 60-day period beginning on the day of notice 
to the beneficiary of the final decision.
    (f) Disability compensation. This paragraph (f) applies when VA 
reduces or discontinues disability compensation because of a change in 
service-connected disability or employability status. In such cases, 
two 60-day periods apply. After applying the 60-day notice period 
described in Sec.  5.176, VA will pay a reduced rate or discontinue 
compensation effective the first day of the month after a second 60-day 
period beginning on the day of notice to the beneficiary of the final 
decision.
    (g) Pension. This paragraph (g) applies when VA reduces or 
discontinues pension payments because of a change in disability or 
employability status. In such cases, VA will reduce the rate or 
discontinue pension effective the first day of the month after a second 
60-day period beginning on the day of notice to the beneficiary of the 
final decision.
    (h) Chapter 18 monetary allowance. This paragraph (h) applies when 
VA reduces or discontinues payments of a monetary allowance under 38 
U.S.C. chapter 18 for children with certain birth defects. In such 
cases, VA will pay a reduced rate or discontinue the monetary allowance 
effective the first day of the month that follows the end of the 60-day 
notice period concerning the proposed reduction or discontinuance. The 
60-day notice period is the one described in Sec.  5.176.
    (i) Other. The effective date for other reductions or 
discontinuances of benefit payments will be based upon the reasons for 
the change as described in Sec.  3.500 through Sec.  3.503 of this 
chapter.

(Authority: 38 U.S.C. 1110, 1131, 1117, 5112)

Sec. Sec.  5.178-5.179  [Reserved]

[FR Doc. E7-9542 Filed 5-21-07; 8:45 am]
BILLING CODE 8320-01-P