(c), (d), (e), or (f) of section 1521 of this title on ac-
count of a child, 
rounded, in the case of any fraction, to the nearest whole 
number, but shall not in any case exceed 36 months.’’; and 
(3) by adding at the end the following new sub-
sections: 
‘‘(c)(1) The Secretary shall not deny or discontinue 
payment of pension under section 1513 or 1521 of this title 
or payment of increased pension under subsection (c), (d), 
(e), or (f) of section 1521 of this title on account of a child 
by reason of the application of subsection (a)(2) or (b)(2) 
of this section to the disposal of resources by an individual 
to the extent that— 
‘‘(A) a satisfactory showing is made to the Sec-
retary (in accordance with regulations promulgated 
by the Secretary) that all resources disposed of for less 
than fair market value have been returned to the indi-
vidual who disposed of the resources; or 
‘‘(B) the Secretary determines, under procedures 
established by the Secretary, that the denial or dis-
continuance of payment would work an undue hard-
ship as determined on the basis of criteria established 
by the Secretary. 
‘‘(2) At the time a veteran applies for pension under 
section 1513 or 1521 of this title or increased pension under 
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subsection (c), (d), (e), or (f) of section 1521 of this title 
on account of a child, and at such other times as the Sec-
retary considers appropriate, the Secretary shall— 
‘‘(A) inform such veteran of the provisions of 
subsections (a)(2) and (b)(2) providing for a period 
of ineligibility for payment of pension under such sec-
tions for individuals who make certain dispositions of 
resources for less than fair market value; and 
‘‘(B) obtain from such veteran information 
which may be used in determining whether or not a 
period of ineligibility for such payments would be re-
quired by reason of such subsections. 
‘‘(d) Subsections (a)(2) and (b)(2) shall not apply with 
respect to the disposal of resources or the transfer of an asset 
if such disposal or transfer is to a trust described in section 
1917(d)(4) of the Social Security Act (42 U.S.C. 
1396p(d)(4)) that is established for the benefit of a child 
of the veteran.’’. 
(b) SURVIVING SPOUSES
AND CHILDREN.—Section 
1543 of such title is amended— 
(1) in subsection (a)— 
(A) by redesignating paragraph (2) as 
paragraph (3); 
(B) by inserting after paragraph (1) the fol-
lowing new paragraph (2): 
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‘‘(2)(A) If a surviving spouse otherwise eligible for 
payment of pension under section 1541 of this title disposes 
of covered resources for less than fair market value on or 
after the look-back date described in subparagraph (C)(i), 
the Secretary shall deny or discontinue the payment of pen-
sion to such surviving spouse under section 1541 of this 
title for months during the period beginning on the date 
described in subparagraph (D) and equal to the number of 
months calculated as provided in subparagraph (E). 
‘‘(B)(i) For purposes of this paragraph, a covered re-
source is any resource that was a part of the corpus of the 
estate of the surviving spouse that the Secretary considers 
that under all the circumstances, if the surviving spouse 
had not disposed of such resource, it would be reasonable 
that the resource (or some portion of the resource) be con-
sumed for the surviving spouse’s maintenance. 
‘‘(ii) For purposes of this paragraph, the Secretary 
may consider, in accordance with regulations the Secretary 
shall prescribe, a transfer of an asset (including a transfer 
of an asset to an annuity, trust, or other financial instru-
ment or investment) a disposal of a covered resource for 
less than fair market value if such transfer reduces the 
amount in the corpus of the estate of the surviving spouse 
that the Secretary considers, under all the circumstances, 
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would be reasonable to be consumed for the surviving 
spouse’s maintenance. 
‘‘(C)(i) The look-back date described in this clause is 
a date that is 36 months before the date described in clause 
(ii). 
‘‘(ii) The date described in this clause is the date on 
which the surviving spouse applies for pension under sec-
tion 1541 of this title or, if later, the date on which the 
surviving spouse disposes of covered resources for less than 
fair market value. 
‘‘(D) The date described in this subparagraph is the 
first day of the first month in or after which covered re-
sources were disposed of for less than fair market value and 
which does not occur in any other period of ineligibility 
under this paragraph. 
‘‘(E) The number of months calculated under this sub-
paragraph shall be equal to— 
‘‘(i) the total, cumulative uncompensated value 
of the portion of covered resources so disposed of by 
the surviving spouse on or after the look-back date de-
scribed in subparagraph (C)(i) that the Secretary de-
termines would reasonably have been consumed for 
the surviving spouse’s maintenance; divided by 
‘‘(ii) the maximum amount of monthly pension 
that is payable to a surviving spouse under section 
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1541 of this title, including the maximum amount of 
increased pension payable under such section on ac-
count of a child, but not including any amount of 
pension payable under such section because a sur-
viving spouse is in need of regular aid and attend-
ance or is permanently housebound, 
rounded, in the case of any fraction, to the nearest whole 
number, but shall not in any case exceed 36 months. 
‘‘(F) In the case of a transfer by the surviving spouse 
during the veteran’s lifetime that resulted in a period of 
ineligibility for the veteran under section 1522 of this title, 
the Secretary shall apply to the surviving spouse any re-
maining ineligibility for that period.’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(4)(A) If a surviving spouse otherwise eligible for 
payment of increased pension under subsection (c), (d), or 
(e) of section 1541 of this title on account of a child or 
the child disposes of covered resources for less than fair mar-
ket value on or after the look-back date described in sub-
paragraph (C)(i), the Secretary shall deny or discontinue 
payment of such increased pension for months during the 
period beginning on the date described in subparagraph (D) 
and equal to the number of months calculated as provided 
in subparagraph (E). 
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‘‘(B)(i) For purposes of this paragraph, a covered re-
source is any resource that was a part of the corpus of the 
estate of the child that the Secretary considers that under 
all the circumstances, if the surviving spouse or the child 
had not disposed of such resource, it would be reasonable 
that the resource (or some portion of the resource) be con-
sumed for the child’s maintenance. 
‘‘(ii) For purposes of this paragraph, the Secretary 
may consider, in accordance with regulations the Secretary 
shall prescribe, a transfer of an asset (including a transfer 
of an asset to an annuity, trust, or other financial instru-
ment or investment) a disposal of a covered resource for 
less than fair market value if such transfer reduces the 
amount in the corpus of the estate of the child that the Sec-
retary considers, under all the circumstances, would be rea-
sonable to be consumed for the child’s maintenance. 
‘‘(C)(i) The look-back date described in this clause is 
a date that is 36 months before the date described in clause 
(ii). 
‘‘(ii) The date described in this clause is the date on 
which the surviving spouse applies for payment of increased 
pension under subsection (c), (d), or (e) of section 1541 of 
this title on account of a child or, if later, the date on which 
the surviving spouse (or the child) disposes of covered re-
sources for less than fair market value. 
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‘‘(D) The date described in this subparagraph is the 
first day of the first month in or after which covered re-
sources were disposed of for less than fair market value and 
which does not occur in any other period of ineligibility 
under this paragraph. 
‘‘(E) The number of months calculated under this 
clause shall be equal to— 
‘‘(i) the total, cumulative uncompensated value 
of the portion of covered resources so disposed of by 
surviving spouse (or the child) on or after the look- 
back date described in subparagraph (C)(i) that the 
Secretary determines would reasonably have been con-
sumed for the child’s maintenance; divided by 
‘‘(ii) the maximum amount of increased monthly 
pension that is payable to a surviving spouse under 
subsection (c), (d), or (e) of section 1541 of this title 
on account of a child, 
rounded, in the case of any fraction, to the nearest whole 
number, but shall not in any case exceed 36 months.’’; 
(2) in subsection (b)— 
(A) by inserting ‘‘(1)’’ before ‘‘The Sec-
retary’’; and 
(B) by adding at the end the following new 
paragraph: 
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‘‘(2)(A) If a child otherwise eligible for payment of 
pension under section 1542 of this title or any person with 
whom such child is residing who is legally responsible for 
such child’s support disposes of covered resources for less 
than fair market value on or after the look-back date de-
scribed in subparagraph (C)(i), the Secretary shall deny or 
discontinue the payment of pension to such child under sec-
tion 1542 of this title for months during the period begin-
ning on the date described in subparagraph (D) and equal 
to the number of months calculated as provided in subpara-
graph (E). 
‘‘(B)(i) For purposes of this paragraph, a covered re-
source is any resource that was a part of the corpus of the 
estate of the child or the corpus of the estate of any person 
with whom such child is residing who is legally responsible 
for such child’s support that the Secretary considers that 
under all the circumstances, if the child or person had not 
disposed of such resource, it would be reasonable that the 
resource (or some portion of the resource) be consumed for 
the child’s maintenance. 
‘‘(ii) For purposes of this paragraph, the Secretary 
may consider, in accordance with regulations the Secretary 
shall prescribe, a transfer of an asset (including a transfer 
of an asset to an annuity, trust, or other financial instru-
ment or investment) a disposal of a covered resource for 
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less than fair market value if such transfer reduces the 
amount in the corpus of the estate described in clause (i) 
that the Secretary considers, under all the circumstances, 
would be reasonable to be consumed for the child’s mainte-
nance. 
‘‘(C)(i) The look-back date described in this clause is 
a date that is 36 months before the date described in clause 
(ii). 
‘‘(ii) The date described in this clause is the date on 
which the child applies for pension under section 1542 of 
this title or, if later, the date on which the child (or person 
described in subparagraph (B)) disposes of covered resources 
for less than fair market value. 
‘‘(D) The date described in this clause is the first day 
of the first month in or after which covered resources were 
disposed of for less than fair market value and which does 
not occur in any other period of ineligibility under this 
paragraph. 
‘‘(E) The number of months calculated under this 
clause shall be equal to— 
‘‘(i) the total, cumulative uncompensated value 
of the portion of covered resources so disposed of by 
the child (or person described in subparagraph (B)) 
on or after the look-back date described in subpara-
graph (C)(i) that the Secretary determines would rea-
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sonably have been consumed for the child’s mainte-
nance; divided by 
‘‘(ii) the maximum amount of monthly pension 
that is payable to a child under section 1542 of this 
title, 
rounded, in the case of any fraction, to the nearest whole 
number, but shall not in any case exceed 36 months.’’; and 
(3) by adding at the end the following new sub-
sections: 
‘‘(c)(1) The Secretary shall not deny or discontinue 
payment of pension under section 1541 or 1542 of this title 
or payment of increased pension under subsection (c), (d), 
or (e) of section 1541 of this title on account of a child 
by reason of the application of subsection (a)(2), (a)(4), or 
(b)(2) of this section to the disposal of resources by an indi-
vidual to the extent that— 
‘‘(A) a satisfactory showing is made to the Sec-
retary (in accordance with regulations promulgated 
by the Secretary) that all resources disposed of for less 
than fair market value have been returned to the indi-
vidual who disposed of the resources; or 
‘‘(B) the Secretary determines, under procedures 
established by the Secretary, that the denial or dis-
continuance of payment would work an undue hard-
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ship as determined on the basis of criteria established 
by the Secretary. 
‘‘(2) At the time a surviving spouse or child applies 
for pension under section 1541 or 1542 of this title or in-
creased pension under subsection (c), (d), or (e) of section 
1541 of this title on account of a child, and at such other 
times as the Secretary considers appropriate, the Secretary 
shall— 
‘‘(A) inform such surviving spouse or child of the 
provisions of subsections (a)(2), (a)(4), and (b)(2), as 
applicable, providing for a period of ineligibility for 
payment of pension or increased pension under such 
sections for individuals who make certain dispositions 
of resources for less than fair market value; and 
‘‘(B) obtain from such surviving spouse or child 
information which may be used in determining 
whether or not a period of ineligibility for such pay-
ments would be required by reason of such sub-
sections. 
‘‘(d) Paragraphs (2) and (4) of subsection (a) and sub-
section (b)(2) shall not apply with respect to the disposal 
of resources or the transfer of an asset if such disposal or 
transfer is to a trust described in section 1917(d)(4) of the 
Social Security Act (42 U.S.C. 1396p(d)(4)) that is estab-
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lished for the benefit of a child of the veteran or surviving 
spouse.’’. 
(c) EFFECTIVE DATE.—Subsections (a)(2), (b)(2), and 
(c) of section 1522 of title 38, United States Code, as added 
by subsection (a), and subsections (a)(2), (a)(4), (b)(2), and 
(c) of section 1543 of such title, as added by subsection (b), 
shall take effect on the date that is one year after the date 
of the enactment of this Act and shall apply with respect 
to payments of pension and increased pension applied for 
after such date and to payments of pension and increased 
pension for which eligibility is redetermined after such date, 
except that no reduction in pension shall be made under 
such subsections because of any disposal of covered resources 
made before such date. 
(d) ANNUAL REPORTS.— 
(1) IN GENERAL.—Not later than two years after 
the date of the enactment of this Act and not less fre-
quently than once each year thereafter through 2018, 
the Secretary of Veterans Affairs shall submit to the 
appropriate committees of Congress a report on the 
administration of subsections (a)(2), (b)(2), and (c) of 
section 1522 of title 38, United States Code, as added 
by subsection (a), and subsections (a)(2), (a)(4), 
(b)(2), and (c) of section 1543 of such title, as added 
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by subsection (b), during the most recent 12-month 
period. 
(2) ELEMENTS.—Each report submitted under 
paragraph (1) shall include the following, for the pe-
riod covered by the report: 
(A) The number of individuals who applied 
for pension under chapter 15 of such title. 
(B) The number of individuals who received 
pension under such chapter. 
(C) The number of individuals with respect 
to whom the Secretary denied or discontinued 
payment of pension under the subsections re-
ferred to in paragraph (1). 
(D) A description of any trends identified 
by the Secretary regarding pension payments 
that have occurred as a result of the amendments 
made by this section. 
(E) Such other information as the Secretary 
considers appropriate. 
(3) APPROPRIATE
COMMITTEES
OF
CONGRESS 
DEFINED.—In this subsection, the term ‘‘appropriate 
committees of Congress’’ means— 
(A) the Committee on Veterans’ Affairs and 
the Select Committee on Aging of the Senate; 
and 
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(B) the Committee on Veterans’ Affairs of 
the House of Representatives. 
SEC. 203. BIFURCATED PAYMENTS OF COMPENSATION BEN-
EFITS UNDER LAWS ADMINISTERED BY THE 
SECRETARY OF VETERANS AFFAIRS. 
(a) IN GENERAL.—Subchapter III of chapter 51 of 
title 38, United States Code, is amended by adding at the 
end the following new section: 
‘‘§ 5127. Bifurcated payments of compensation benefits 
‘‘(a) IN GENERAL.—During the eight-year period be-
ginning on the date of the enactment of this section, in the 
case of a claim described in subsection (b), prior to adjudi-
cating the claim, the Secretary shall make payments of 
monetary benefits to the claimant based on any disability 
for which the Secretary has made a decision. Upon the ad-
judication of the claim, the Secretary shall pay to the 
claimant any monetary benefits awarded to the claimant 
for the period of payment under section 5111 of this title 
less the amount of such benefits paid to the claimant under 
this section. 
‘‘(b) CLAIM DESCRIBED.—A claim described in this 
subsection is a claim for disability compensation under 
chapter 11 of this title— 
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‘‘(1) the adjudication of which requires the Sec-
retary to make decisions with respect to two or more 
disabilities; and 
‘‘(2) for which, before completing the adjudica-
tion of the claim, the Secretary makes a decision with 
respect to a disability that would result in the pay-
ment of monetary benefits to the claimant upon the 
adjudication of the claim.’’. 
(b) CLERICAL AMENDMENT.—The table of sections at 
the beginning of such chapter is amended by adding at the 
end of the items relating to such subchapter the following 
new item: 
‘‘5127. Bifurcated payments of compensation benefits.’’. 
(c) EFFECTIVE DATE.—Section 5127 of title 38, 
United State Code, as added by subsection (a) shall take 
effect on the date that is one year after the date of the enact-
ment of this Act. 
SEC. 204. PENSION FOR CERTAIN VETERANS COVERED BY 
MEDICAID PLANS FOR SERVICES FURNISHED 
BY NURSING FACILITIES. 
Section 5503(d)(7) of title 38, United States Code, is 
amended by striking ‘‘November 30, 2016’’ and inserting 
‘‘September 30, 2018’’. 
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TITLE III—OTHER MATTERS 
SEC. 301. REVIEW OF OPERATION OF CERTAIN SHIPS DUR-
ING THE VIETNAM ERA. 
(a) REVIEW REQUIRED.—By not later than one year 
after the date of the enactment of this Act, the Secretary 
of Defense shall review the logs of each ship under the au-
thority of the Secretary of the Navy that is known to have 
operated in the waters near Vietnam during the period be-
ginning on January 9, 1962, and ending on May 7, 1975, 
to determine— 
(1) whether each such ship operated in the terri-
torial waters of the Republic of Vietnam during such 
period; and 
(2) for each such ship that so operated— 
(A) the date or dates when the ship so oper-
ated; and 
(B) the distance from the shore of the loca-
tion where the ship operated that was the closest 
proximity to shore. 
(b) PROVISION OF INFORMATION TO THE SECRETARY 
OF VETERANS AFFAIRS.—Upon a determination that any 
such ship so operated, the Secretary of Defense shall provide 
such determination, together with the information described 
in subsection (a)(2) about the ship, to the Secretary of Vet-
erans Affairs. 
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(c) PUBLIC AVAILABILITY OF INFORMATION.—The Sec-
retary of Veterans Affairs shall make publicly available all 
unclassified information provided to the Secretary under 
subsection (b). 
SEC. 302. METHODS FOR VALIDATING CERTAIN SERVICE 
CONSIDERED TO BE ACTIVE SERVICE BY THE 
SECRETARY OF VETERANS AFFAIRS. 
(a) FINDINGS.—Congress makes the following findings: 
(1) The Merchant Marine Act, 1936 established 
the United States Maritime Commission, and stated 
as a matter of policy that the United States should 
have a merchant marine that is ‘‘capable of serving 
as a naval and military auxiliary in time of war or 
national emergency’’. 
(2) The Social Security Act Amendments of 1939 
(Public Law 76–379) expanded the definition of em-
ployment to include service ‘‘on or in connection with 
an American vessel under contract of service which is 
entered into within the United States or during the 
performance of which the vessel touches at a port in 
the United States, if the employee is employed on and 
in connection with such vessel’’. 
(3) The Joint Resolution to repeal sections 2, 3, 
and 6 of the Neutrality Act of 1939, and for other 
purposes (Public Law 77–294; 55 Stat. 764) repealed 
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