[Federal Register Volume 74, Number 52 (Thursday, March 19, 2009)]
[Rules and Regulations]
[Pages 11646-11647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-5954]



[[Page 11646]]

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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AN19


Termination of Phase-In Period for Full Concurrent Receipt of 
Military Retired Pay and Veterans Disability Compensation Based on a VA 
Determination of Individual Unemployability

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is amending its 
adjudication regulations regarding entitlement to full concurrent 
receipt of military retired pay and veterans disability compensation 
based on a VA determination of individual unemployability (IU). This 
rulemaking is intended to implement section 642 of the National Defense 
Authorization Act for Fiscal Year 2008, which provides that veterans 
who are entitled to receive veterans disability compensation based on a 
VA determination of individual unemployability are no longer subject to 
a phase-in period. This regulatory amendment is necessary to conform to 
statutory provisions.

DATES: Effective Date: March 19, 2009.

FOR FURTHER INFORMATION CONTACT: Nancy Copeland, Regulations Staff 
(211D), Compensation and Pension Service, Veterans Benefits 
Administration, Department of Veterans Affairs, 810 Vermont Avenue, 
NW., Washington, DC 20420, (202) 461-9685. (This is not a toll-free 
number.)

SUPPLEMENTARY INFORMATION: Beginning in 2004, 10 U.S.C. 1414(a) 
authorized concurrent receipt of retired pay and VA disability 
compensation for certain veterans. However, rather than immediately 
authorizing full concurrent receipt, Congress imposed a ``phase-in'' 
period permitting partial concurrent receipt for the period from 
January 1, 2004, to December 31, 2013.
    Section 642 of the Ronald W. Reagan National Defense Authorization 
Act for Fiscal Year 2005, Public Law 108-375, amended section 1414 of 
title 10, United States Code, by eliminating the phase-in period for 
qualified retirees receiving veterans' disability compensation for a 
disability rated as 100-percent. Section 663 of the National Defense 
Authorization Act for Fiscal Year 2006, Public Law 109-163, further 
provided that veterans entitled to receive disability compensation 
based on a VA determination of IU were subject to the phase-in period 
only until September 30, 2009.
    Section 642 of the National Defense Authorization Act for Fiscal 
Year 2008, Public Law 110-181, has further amended section 1414 of 
title 10, United States Code. Effective December 31, 2004, qualified 
retirees receiving veterans' disability compensation at the rate 
payable for a 100-percent disability based on a VA determination of IU 
are no longer subject to a phase-in period. Any benefits due based on 
termination of the phase-in are payable from January 1, 2005.
    Based on this statutory change, VA is amending 38 CFR 3.750 by 
removing language that provides that qualified retirees who receive 
disability compensation based on a VA determination of IU are subject 
to a phase-in period. This is no longer required based on the statutory 
change. To avoid confusion, we are clarifying that both veterans who 
are rated 100 percent disabled under the VA rating schedule and 
veterans who are entitled to receive 100 percent disability 
compensation based on a VA determination of IU need not file waivers of 
military retired pay.

Administrative Procedures Act

    This final rule is an interpretive rule and the changes made by 
this rule merely reflect VA's interpretation of statutory requirements. 
The primary purpose of the amendment is to implement VA's statutory 
interpretation of 10 U.S.C. 1414 and to align Sec.  3.750 to the 
statute. Section 553(b) of title 5, U.S. Code, does not apply to 
interpretive rules. Accordingly, there is a basis for dispensing with 
prior notice and opportunity to comment. Moreover, under section 
553(d), interpretive rules do not require 30 days prior notice before 
they may become effective. Therefore, because the amendment to Sec.  
3.750 is an interpretive rule, the amendment may have an immediate 
effect. Accordingly, there is a basis for dispensing with the delayed 
effective date provisions of 5 U.S.C. 553(d).

Paperwork Reduction Act

    This action contains no provisions constituting a collection of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. This final rule would not affect any small entities. Only VA 
beneficiaries could be directly affected. Therefore, pursuant to 5 
U.S.C. 605(b), this final rule 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, 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 final rule have been examined, and it has been determined not 
to be a significant regulatory action under Executive Order 12866.

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 the 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 year. This final rule will have no such effect on 
State, local, and tribal governments, or on the private sector.

Catalog of Federal Domestic Assistance Numbers and Titles

    The Catalog of Federal Domestic Assistance program number and title 
for this rule is Veterans Compensation for Service-Connected 
Disability; 64.116.

List of Subjects in 38 CFR Part 3

    Administrative practice and procedure, Claims, Disability benefits,

[[Page 11647]]

Health care, Pensions, Radioactive materials, Veterans, Vietnam.

    Approved: February 24, 2009.
John R. Gingrich,
Chief of Staff, Department of Veterans Affairs.

0
For the reasons set out in the preamble, VA amends 38 CFR part 3 as 
follows:

PART 3--ADJUDICATION

0
1. The authority citation for part 3, subpart A continues to read as 
follows:

    Authority: 38 U.S.C. 501(a), unless otherwise noted.

0
2. Amend Sec.  3.750 by:
0
a. Revising paragraph (b)(1).
0
b. Revising paragraph (c)(1)(ii).
0
c. Redesignating paragraph (c)(2) as paragraph (c)(3).
0
d. Adding new paragraph (c)(2).
0
3. The revisions and addition read as follows:


Sec.  3.750  Entitlement to concurrent receipt of military retired pay 
and disability compensation.

* * * * *
    (b) * * *
    (1) Compensation. Subject to paragraphs (b)(2) and (b)(3) of this 
section, a veteran who is entitled to military retired pay and 
disability compensation for a service-connected disability rated 50 
percent or more, or a combination of service-connected disabilities 
rated 50 percent or more, under the schedule for rating disabilities 
(38 CFR part 4, subpart B), is entitled to receive both payments 
subject to the phase-in period described in paragraph (c) of this 
section.
* * * * *
    (c) * * *
    (1) * * *
    (ii) Except as provided in paragraph (c)(2) of this section, all 
veterans who are eligible to receive both military retired pay and 
disability compensation at the same time under paragraphs (b)(1) or 
(b)(2) of this section must file a waiver in order to receive the 
maximum allowable amount of disability compensation during the phase-in 
period. The phase-in period ends on December 31, 2013. After the phase-
in period, veterans retired under 10 U.S.C. chapter 61 who are eligible 
for concurrent receipt must still file a waiver under the circumstances 
described in paragraph (b)(2)(ii) of this section.
    (2) When a waiver is not necessary. Unless paragraph (b)(2)(ii) of 
this section applies, veterans who are entitled to receive disability 
compensation based on a VA determination of individual unemployability 
as well as veterans rated 100-percent disabled under the VA schedule 
for rating disabilities need not file waivers of military retired pay. 
The phase-in period does not apply to this group of veterans.
* * * * *

 [FR Doc. E9-5954 Filed 3-18-09; 8:45 am]
BILLING CODE 8320-01-P