‘‘§ 1206h. Definitions 
‘‘In this subchapter, the terms ‘disability’ and ‘phys-
ical disability’ include any disability based on a mental dis-
order. 
‘‘SUBCHAPTER III—ADMINISTRATIVE 
MATTERS’’. 
(b) CLERICAL AMENDMENTS.—Chapter 61 of such 
title is further amended— 
(1) by inserting after the chapter heading the 
following: 
‘‘Subchapter 
Sec.
‘‘I. Retirement or Separation Before Implementation of Enhanced De-
partment of Veterans Affairs Disability Compensation 
System ........................................................................... 1200
‘‘II. Retirement After Implementation of Enhanced Department of Vet-
erans Affairs Disability Compensation System .............1206a
‘‘III. Administrative Matters .................................................................... 1207’’; 
(2) by inserting after the subchapter heading 
for subchapter I, as added by subsection (a)(1) of 
this section, the following: 
‘‘Sec. 
‘‘1200. Applicability of subchapter: members retired or separated before imple-
mentation of enhanced Department of Veterans Affairs dis-
ability compensation system; certain members on temporary 
disability retired list as of implementation of enhanced Depart-
ment of Veterans Affairs disability compensation system. 
‘‘1201. Regulars and members on active duty for more than 30 days: retirement. 
‘‘1202. Regulars and members on active duty for more than 30 days: temporary 
disability retired list. 
‘‘1203. Regulars and members on active duty for more than 30 days: separation. 
‘‘1204. Members on active duty for 30 days or less or on inactive-duty training: 
retirement. 
‘‘1205. Members on active duty for 30 days or less or on inactive-duty training: 
temporary disability retired list. 
‘‘1206. Members on active duty for 30 days or less or on inactive-duty training: 
separation.’’; 
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(3) by inserting after the subchapter heading 
for subchapter II, as added by subsection (a)(3) of 
this section, the following: 
‘‘Sec. 
‘‘1206a. Applicability of subchapter: members retired on or after implementation 
of enhanced Department of Veterans Affairs disability com-
pensation system. 
‘‘1206b. Applicability of subchapter: certain members retired on or after October 
7, 2001, but before implementation of enhanced Department of 
Veterans Affairs disability compensation system. 
‘‘1206c. Applicability of subchapter: members on temporary disability retired list 
as of implementation of enhanced Department of Veterans Af-
fairs disability compensation system. 
‘‘1206d. Retirement. 
‘‘1206e. Temporary disability retired list. 
‘‘1206f. Treatment of retired pay. 
‘‘1206g. Determinations of unfitness. 
‘‘1206h. Definitions.’’; 
and 
(4) by inserting after the subchapter heading 
for subchapter III, as so added, the following: 
‘‘Sec. 
‘‘1207. Disability from intentional misconduct or willful neglect: separation. 
‘‘1207a. Members with over eight years of active service: eligibility for disability 
retirement for pre-existing conditions. 
‘‘1207b. Reserve component members unable to perform duties when ordered to 
active duty: disability system processing. 
‘‘1208. Computation of service. 
‘‘1209. Transfer to inactive status list instead of separation. 
‘‘1210. Members on temporary disability retired list: periodic physical examina-
tion; final determination of status. 
‘‘1211. Members on temporary disability retired list: return to active duty; pro-
motion. 
‘‘1212. Disability severance pay. 
‘‘1213. Effect of separation on benefits and claims. 
‘‘1214. Right to full and fair hearing. 
‘‘1215. Members other than Regulars: applicability of laws. 
‘‘1216. Secretaries: powers, functions, and duties. 
‘‘1217. Academy cadets and midshipmen: applicability of chapter. 
‘‘1218. Discharge or release from active duty: claims for compensation, pension, 
or hospitalization. 
‘‘1219. Statement of origin of disease or injury: limitations. 
‘‘1221. Effective date of retirement or placement of name on temporary dis-
ability retired list.’’. 
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SERVICE.—Section 1207a(a) of title 10, United States 
Code, is amended by striking ‘‘or 1203’’ and inserting 
‘‘1203, 1206b, 1206c, 1206d, or 1206e’’. 
(d) COMPUTATION OF RETIRED PAY.—The table in 
section 1401(a) of title 10, United States Code, is amend-
ed by inserting after the matter relating to Formula 2 the 
following matter: 
‘‘3 
1206b 
Retired pay base 
21⁄2% of years of service 
1206c 
as computed 
credited to the person 
1206d 
under section 
under section 1208.1’’. 
1206e 
1406(b) or 
1407. 
(e) CONFORMING AMENDMENTS RELATING TO RE-
TIRED PAY.— 
(1) RECOMPUTATION OF RETIRED PAY TO RE-
FLECT LATER ACTIVE DUTY.—Sections 1402(b) and 
1402a(b) of title 10, United States Code, are each 
amended by inserting ‘‘(as in effect before the effec-
tive date of the implementation of the enhanced De-
partment of Veterans Affairs disability compensation 
system (as determined in accordance with section 
206 of the Noble Warrior Act) or subchapter I of 
chapter 61 of this title (as in effect after such effec-
tive date), as applicable’’ after ‘‘chapter 61 of this 
title’’. 
(2) RETIRED PAY BASE FOR MEMBERS RETIRED 
BEFORE SEPTEMBER 8, 1980.—The items in the col-
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tive date), as applicable’’ after ‘‘chapter 61 of this 
title’’. 
(2) RETIRED PAY BASE FOR MEMBERS RETIRED 
BEFORE SEPTEMBER 8, 1980.—The items in the col-
umn in the table in section 1406(b)(1) of such title 
designated ‘‘For a member entitled to retired pay 
under section:’’ are amended to read as follows: 
‘‘1201 
1202 
1204 
1205 
1206b 
1206c 
1206d 
1206e’’. 
(3) RETIRED PAY BASE FOR MEMBERS RETIRED 
AFTER SEPTEMBER 7, 1980.—Section 1407 of such 
title is amended— 
(A) in subsection (c)— 
(i) in paragraph (1), by striking 
‘‘other than section 1204 or 1205 or sec-
tion 12731 of this title’’ and inserting 
‘‘(other than section 1204, 1205, or 12731 
of this title, or section 1206b, 1206c, 
1206d, or 1206e of this title for nonreg-
ular service)’’; 
(ii) in paragraph (2), by inserting ‘‘, 
or under section 1206b, 1206c, 1206d, or 
1206e of this title for regular service,’’ 
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after ‘‘section 1201 or 1202 of this title’’; 
and 
(iii) in paragraph (3)— 
(I) by striking ‘‘section 1201 or 
1202’’ and inserting ‘‘section 1201, 
1202, 
1206b, 
1206c, 
1206d, 
or 
1206e’’; and 
(II) by inserting ‘‘or under sec-
tion 1206b, 1206c, 1206d, or 1206e 
of this title for nonregular service’’ 
before the period; and 
(B) in subsection (d)— 
(i) in paragraph (2), by inserting ‘‘, or 
under section 1206b, 1206c, 1206d, or 
1206e of this title for nonregular service,’’ 
after ‘‘section 1204 or 1205 of this title’’; 
and 
(ii) in paragraph (3), inserting ‘‘, or 
under section 1206, 1206c, 1206d, or 
1206e of this title for nonregular service,’’ 
after ‘‘section 1204 or 1205 of this title’’. 
(4) GRADE
ON
RETIREMENT
FOR
PHYSICAL 
DISABILITY.—Section 1372 of such title is amend-
ed— 
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(A) by striking ‘‘section 1201 or 1204’’ 
and inserting ‘‘section 1201, 1204, 1206b, 
1206c, or 1206d’’; and 
(B) by striking ‘‘section 1202 or 1205’’ 
and inserting ‘‘section 1202, 1205, or 1206e’’. 
(f) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), this section and the amendments made by 
this section shall take effect, if at all, on the effec-
tive date of the implementation of the enhanced De-
partment of Veterans Affairs disability compensation 
system as determined in accordance with section 
206. 
(2) ANTICIPATION OF IMPLEMENTATION.—The 
Secretary of Defense shall take appropriate actions 
to ensure that the amendments made by this section 
are implementable on the effective date described in 
paragraph (1) in the event of the implementation of 
the enhanced Department of Veterans Affairs dis-
ability compensation system on that date. 
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SEC. 102. CONTINUATION OF RESPITE CARE AND AID AND 
OTHER 
EXTENDED 
CARE 
BENEFITS 
FOR 
MEMBERS OF THE UNIFORMED SERVICES 
WHO INCUR A SERIOUS INJURY OR ILLNESS 
ON ACTIVE DUTY. 
Paragraph (4) of section 1074(c) of title 10, United 
States Code, as added by section 1633(a) of the Wounded 
Warrior Act (title XVI of the National Defense Authoriza-
tion Act for Fiscal Year 2008), is amended— 
(1) by redesignating subparagraph (B) as sub-
paragraph (C); and 
(2) by inserting after subparagraph (A) the fol-
lowing new subparagraph (B): 
‘‘(B) Coverage for a member under this paragraph 
may continue for such period after the discharge or sepa-
ration of the member from active duty as the Secretary 
considers appropriate.’’. 
TITLE 
II—COMPENSATION 
OF 
VETERANS 
FOR 
SERVICE- 
CONNECTED DISABILITY 
SEC. 201. STUDY ON VETERANS DISABILITY COMPENSA-
TION. 
(a) IN GENERAL.—The Secretary of Veterans Affairs 
shall conduct a study to determine the amount of com-
pensation for service-connected disability to be payable to 
veterans under chapter 12 of title 38, United States Code 
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(as added by section 207(b) of this Act), for each rating 
of disability assignable to veterans for service-connected 
disability. 
(b) MATTERS TO BE EXAMINED.—In conducting the 
study required by subsection (a), the Secretary shall exam-
ine the following: 
(1) The nature of injuries and combination of 
injuries for which disability compensation is payable 
under various disability compensation programs of 
the Federal Government, State governments, and 
other countries. 
(2) To the extent applicable, the nature of inju-
ries and combination of injuries for which disability 
compensation is payable under commercial disability 
insurance. 
(3) The extent to which quality of life and loss 
of earnings are independently taken into account in 
various disability compensation programs of the 
Federal Government, State governments, and other 
countries. 
(4) The effect of an injury or combination of in-
juries on— 
(A) average loss of earning capacity, such 
as inability to work in certain occupations; and 
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(B) a veteran’s quality of life, such as ac-
tivities of independent living, recreational and 
community activities, and personal relation-
ships, including the inability to participate in 
favorite activities, social problems related to dis-
figurement or cognitive difficulties, and the 
need to spend increased amounts of time per-
forming activities of daily living. 
(5) The measurement of the effect of an injury 
or combination of injuries on a veteran’s psycho-
logical state, loss of physical integrity, and social in-
ability to adapt. 
(6) The extent to which disability compensation 
for veterans may be used as an incentive to encour-
age veterans to seek and undergo appropriate med-
ical treatment and vocational rehabilitation. 
(c) CONSIDERATIONS
IN
DETERMINATIONS
OF 
AMOUNTS OF COMPENSATION.— 
(1) GENERAL
CONSIDERATIONS.—In deter-
mining amounts of compensation under the study re-
quired by subsection (a), the Secretary shall ensure 
that the determinations— 
(A) reflect current concepts of medicine 
and disability; and 
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(B) take into account loss of quality of life 
and average loss of earning capacity resulting 
from specific injuries or combinations of inju-
ries. 
(2) 
SPECIFIC
CONSIDERATIONS.—In 
deter-
mining amounts of compensation, the Secretary shall 
consider the following: 
(A) The appropriate injuries or combina-
tion of injuries to be covered by the new sched-
ule for rating service-connected disabilities. 
(B) The appropriate level of compensation 
under that schedule for loss of quality of life. 
(C) The appropriate standards for deter-
mining for purposes of that schedule whether 
an injury or combination of injuries has caused 
a loss in a veteran’s quality of life. 
(D) The appropriate level of compensation, 
including an age-appropriate level of compensa-
tion at time of initial filing of claims, under 
that schedule for loss of earnings. 
(E) The appropriate standards for pur-
poses of that schedule for determining whether 
an injury or combination of injuries causes loss 
of earnings. 
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(F) The appropriate relationship between 
the receipt of compensation under that sched-
ule, and, where appropriate, assurances by the 
veterans concerned of participation in a regi-
men of medical treatment or vocational rehabili-
tation. 
(d) CONSULTATION.—In conducting the study re-
quired by subsection (a), the Secretary— 
(1) shall consult with such veterans and mili-
tary service organizations and with such public and 
private organizations and individuals as the Sec-
retary considers appropriate; and 
(2) may employ consultants. 
(e) CONSIDERATION OF COMPLETED AND ON-GOING 
STUDIES.—In conducting the study required by subsection 
(a), the Secretary may take into account the findings, de-
terminations, and results of any completed or on-going 
study or report applicable to the matters addressed by the 
study required by subsection (a) that the Secretary con-
siders appropriate. 
(f) REPORT.—Not later than 270 days after the com-
mencement of the study required by subsection (a), the 
Secretary shall submit to the Committee on Veterans’ Af-
fairs of the Senate and the Committee on Veterans’ Af-
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fairs of the House of Representatives a report on the 
study. The report shall include the following: 
(1) The findings of the Secretary under the 
study. 
(2) The findings of the Secretary with respect 
to matters covered by the study arising from— 
(A) the report of the Veterans’ Disability 
Benefits Commission established pursuant to 
section 1501 of the National Defense Author-
ization Act of 2004 (38 U.S.C. 1101 note); and 
(B) the reports of any other independent 
advisory commission that has studied the mat-
ters covered by the study as the Secretary con-
siders appropriate. 
(3) The recommendations of the Secretary on 
the matters considered under subparagraphs (A), 
(C), (E), and (F) of subsection (c)(2), including a 
proposal for such legislative or administrative action 
as the Secretary considers appropriate to implement 
the recommendations. 
SEC. 202. STUDY ON VETERANS TRANSITION BENEFITS. 
(a) IN GENERAL.—The Secretary of Veterans Affairs 
shall conduct a study to determine the appropriate 
amounts and duration of transition payments to be pay-
able under chapter 12 of title 38, United States Code (as 
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(2) may employ consultants. 
(d) CONSIDERATION OF COMPLETED AND ON-GOING 
STUDIES.—In conducting the study required by subsection 
(a), the Secretary may take into account the findings, de-
terminations, and results of any completed or on-going 
study or report applicable to the matters addressed by the 
study required by subsection (a) that the Secretary con-
siders appropriate. 
(e) REPORT.—Not later than 270 days after the com-
mencement of the study required by subsection (a), the 
Secretary shall submit to the Committee on Veterans’ Af-
fairs of the Senate and the Committee on Veterans’ Af-
fairs of the House of Representatives a report on the 
study. The report shall include the following: 
(1) The findings of the Secretary under the 
study. 
(2) The findings of the Secretary with respect 
to matters covered by the study arising from— 
(A) the report of the Veterans’ Disability 
Benefits Commission established pursuant to 
section 1501 of the National Defense Author-
ization Act of 2004 (38 U.S.C. 1101 note); and 
(B) the reports of such other independent 
advisory commissions that have studied the 
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matters covered by the study as the Secretary 
considers appropriate. 
SEC. 203. STUDY ON MEASURES TO ASSIST AND ENCOUR-
AGE VETERANS IN THE COMPLETION OF 
THEIR VOCATIONAL REHABILITATION PLANS. 
(a) IN GENERAL.—The Secretary of Veterans Affairs 
shall conduct a study to identify the following: 
(1) The various factors that may prevent or 
preclude veterans from completing their vocational 
rehabilitation plans through the Department of Vet-
erans Affairs or otherwise achieving the vocational 
rehabilitation objectives of such plans. 
(2) Actions to be taken by the Secretary to as-
sist and encourage veterans in overcoming such fac-
tors and in otherwise completing their vocational re-
habilitation plans or achieving the vocational reha-
bilitation objectives of such plans. 
(b) MATTERS TO BE EXAMINED.—In conducting the 
study required by subsection (a), the Secretary shall exam-
ine the following: 
(1) Measures utilized in other disability systems 
in the United States, and in other countries, to en-
courage completion of vocational rehabilitation. 
(2) Any survey data available to the Secretary 
that relates to the matters covered by the study. 
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(3) The results of the studies conducted pursu-
ant to sections 201 and 202, including any analysis 
for purposes of such studies of the extent to which 
disability compensation may be used as an incentive 
to encourage veterans to undergo and complete voca-
tional rehabilitation. 
(4) The report of the Veterans’ Disability Bene-
fits Commission established pursuant to section 
1501 of the National Defense Authorization Act of 
2004 (38 U.S.C. 1101 note). 
(5) The report of the President’s Commission 
on Care for America’s Returning Wounded War-
riors. 
(c) CONSIDERATIONS.—In conducting the study re-
quired by subsection (a), the Secretary shall consider— 
(1) the extent to which bonus payments or 
other incentives may be used to encourage veterans 
to complete their vocational rehabilitation plans or 
otherwise achieve the vocational rehabilitation objec-
tives of such plans; and 
(2) such other matters as the Secretary con-
siders appropriate. 
(d) CONSULTATION.—In conducting the study re-
quired by subsection (a), the Secretary— 
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(1) shall consult with such veterans and mili-
tary service organizations and with such public and 
private organizations and individuals as the Sec-
retary considers appropriate; and 
(2) may employ consultants. 
(e) REPORT.—Not later than 270 days after the com-
mencement of the study required by subsection (a), the 
Secretary shall submit to the Committee on Veterans’ Af-
fairs of the Senate and the Committee on Veterans’ Af-
fairs of the House of Representatives a report on the 
study. The report shall include the following: 
(1) The findings of the Secretary under the 
study. 
(2) Any recommendations that the Secretary 
considers appropriate for actions to be taken by the 
Secretary in light of the study, including a proposal 
for such legislative or administrative action as the 
Secretary considers appropriate to implement the 
recommendations. 
SEC. 204. PROPOSAL ON VETERANS DISABILITY COMPENSA-
TION AND VETERANS TRANSITION BENEFITS. 
Not later than one year after the later of the dates 
of the reports required by sections 201(f) and 202(d), the 
Secretary of Veterans Affairs shall submit to Congress a 
proposal setting forth the following: 
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(1) A statement of the purpose or purposes of 
the disability compensation and transition payments 
to be payable to veterans under chapter 12 of title 
38, United States Code (as added by section 207(b) 
of this Act). 
(2) A statement of the amounts of compensa-
tion for service-connected disability to be payable to 
veterans under chapter 12 of title 38, United States 
Code (as so added), for each rating of disability as-
signable to veterans for service-connected disability. 
(3) A statement of the amounts and duration of 
transition benefits to be payable to veterans under 
chapter 12 of title 38, United States Code (as so 
added), including the amount of monthly transition 
payments to be payable under section 1204(b) of 
title 38, United States Code (as so added), and the 
amount and duration of rehabilitation transition al-
lowances to be payable under section 1204(c) of title 
38, United States Code (as so added), to veterans 
who are participating in a rehabilitation program 
under chapter 17 or 31 of title 38, United States 
Code. 
SEC. 205. CONGRESSIONAL CONSIDERATION OF PROPOSAL. 
(a) TERMS OF JOINT RESOLUTION.—For purposes of 
this section, the term ‘‘joint resolution’’ means only a joint 
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resolution which is introduced within the 10-day period 
beginning on the date on which the Secretary of Veterans 
Affairs submits to Congress the proposal of the Secretary 
of Veterans Affairs on veterans disability compensation 
and veterans transition benefits under section 204, and— 
(1) which does not have a preamble; 
(2) the matter after the resolving clause of 
which is as follows: ‘‘That Congress disapproves the 
proposal on veterans disability compensation and 
veterans transition benefits under section 204 of the 
Noble Warrior Act as submitted to Congress on 
lllll’’, the blank space being filled in with 
the appropriate date; and 
(3) the title of which is as follows: ‘‘Joint reso-
lution disapproving the proposal of the Secretary of 
Veterans Affairs on veterans disability compensation 
and veterans transition benefits under the Noble 
Warrior Act.’’. 
(b) REFERRAL.—A resolution described in subsection 
(a) that is introduced in the House of Representatives 
shall be referred to the Committee on Veterans’ Affairs 
of the House of Representatives. A resolution described 
in subsection (a) introduced in the Senate shall be referred 
to the Committee on Veterans’ Affairs of the Senate. 
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(c) DISCHARGE.—If the committee to which a resolu-
tion described in subsection (a) is referred has not re-
ported such resolution (or an identical resolution) by the 
end of the 60-day period beginning on the date on which 
the Secretary of Veterans Affairs submits to Congress the 
proposal under section 204, such committee shall be, at 
the end of such period, discharged from further consider-
ation of such resolution, and such resolution shall be 
placed on the appropriate calendar of the House involved. 
(d) CONSIDERATION.— 
(1) On or after the third day after the date on 
which the committee to which such a resolution is 
referred has reported, or has been discharged (under 
subsection (c)) from further consideration of, such a 
resolution, it is in order (even though a previous mo-
tion to the same effect has been disagreed to) for 
any Member of the respective House to move to pro-
ceed to the consideration of the resolution. A Mem-
ber may make the motion only on the day after the 
calendar day on which the Member announces to the 
House concerned the Member’s intention to make 
the motion, except that, in the case of the House of 
Representatives, the motion may be made without 
such prior announcement if the motion is made by 
direction of the committee to which the resolution 
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in the same manner, and to the same extent as in 
the case of any other rule of that House. 
SEC. 206. EFFECTIVE DATE OF IMPLEMENTATION OF EN-
HANCED DEPARTMENT OF VETERANS AF-
FAIRS DISABILITY COMPENSATION SYSTEM. 
(a) IN GENERAL.—For purposes of this Act and the 
amendments made by this Act, the effective date of the 
implementation of the enhanced Department of Veterans 
Affair disability compensation system is the date, as pro-
vided in subsection (b), on which the authority of Congress 
under section 205 to disapprove the proposal of the Sec-
retary of Veterans Affairs on veterans disability com-
pensation and veterans transition benefits under section 
204 expires, but only if Congress does not so disapprove 
the proposal of the Secretary before such date. 
(b) DISAPPROVAL BY CONGRESS.— 
(1) IN GENERAL.—The Secretary of Veterans 
Affairs shall not implement the enhanced Depart-
ment of Veterans Affairs disability compensation 
system if a joint resolution is enacted, in accordance 
with section 205, disapproving the proposal of the 
Secretary of Veterans Affairs on veterans disability 
compensation and veterans transition benefits under 
section 204 before the earlier of— 
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(A) the end of the 85-day period beginning 
on the date on which the Secretary submits the 
proposal to Congress; or 
(B) the adjournment of Congress sine die 
for the session during which the proposal is 
submitted. 
(2) COMPUTATION OF PERIODS.—For purposes 
of paragraph (1) and section 205, the days on which 
either House of Congress is not in session because 
of an adjournment of more than three days to a day 
certain shall be excluded in the computation of a pe-
riod. 
(c) ENHANCED DEPARTMENT
OF VETERANS AF-
FAIRS DISABILITY COMPENSATION SYSTEM DEFINED.— 
For purposes of this Act and the amendments made by 
this Act, the term ‘‘enhanced Department of Veterans Af-
fairs disability compensation system’’ means— 
(1) the elements of the proposal of the Sec-
retary of Veterans Affairs on veterans disability 
compensation and veterans transition benefits under 
section 204; and 
(2) the amendments to section 1155 of title 38, 
United States Code, made by section 207(a) of this 
Act; and 
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(3) chapter 12 of title 38, United States Code, 
as added by section 207(b) of this Act. 
SEC. 207. ENHANCED DEPARTMENT OF VETERANS AFFAIRS 
DISABILITY COMPENSATION SYSTEM. 
(a) MODIFICATION OF SCHEDULE OF RATINGS TO 
ACCOUNT FOR LOSS OF EARNING CAPACITY AND QUAL-
ITY OF LIFE.— 
(1) IN
GENERAL.—Section 1155 of title 38, 
United States Code, is amended to read as follows: 
‘‘§ 1155. Schedule for rating disabilities 
‘‘(a) IN GENERAL.—The Secretary shall adopt and 
apply a schedule of ratings of disability of veterans associ-
ated with specific injuries or combinations of injuries. 
‘‘(b) SCOPE
OF RATINGS.—(1) For veterans for 
whom disability compensation is payable under this chap-
ter, the ratings under subsection (a) shall be based, as 
far as practicable, upon the average impairments of earn-
ing capacity in civil occupations resulting from the injuries 
concerned. 
‘‘(2) For veterans for whom disability compensation 
is payable under chapter 12 of this title, the ratings shall 
reflect, as far as practicable, each of the following: 
‘‘(A) Average loss of earning capacity, such as 
inability to work in certain occupations. 
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‘‘(B) Quality of life, such as activities of inde-
pendent living, recreational and community activi-
ties, and personal relationships, including the inabil-
ity to participate in favorite activities, social prob-
lems related to disfigurement or cognitive difficul-
ties, and the need to spend increased amounts of 
time performing activities of daily living. 
‘‘(c) GRADES OF DISABILITY.—(1) For veterans for 
whom disability compensation is payable under this chap-
ter, the schedule of ratings shall be constructed so as to 
provide ten grades of disability and no more, upon which 
payments of compensation shall be based, namely 10 per-
cent, 20 percent, 30 percent, 40 percent, 50 percent, 60 
percent, 70 percent, 80 percent, 90 percent, and total, 100 
percent. 
‘‘(2) For veterans for whom disability compensation 
is payable under chapter 12 of this title, the schedule of 
ratings shall be constructed— 
‘‘(A) at the discretion of the Secretary in light 
of the study required by section 201 of the Noble 
Warrior Act, so as to provide such number of grades 
of disability as the Secretary considers appropriate; 
‘‘(B) at the discretion of the Secretary in light 
of the study referred to in subparagraph (A), so as 
to provide either— 
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‘‘(i) the assignment to veterans of separate 
grades of disability reflecting each matter speci-
fied in subparagraphs (A) and (B) of subsection 
(b)(2); or 
‘‘(ii) the assignment to veterans of a single 
grade of disability reflecting both such matters; 
and 
‘‘(C) if provided in the schedule at the discre-
tion of the Secretary in light of the study referred 
to in subparagraph (A), so as to reflect in the grade 
of disability assignable to a veteran for average loss 
of earning capacity the effect of the age of the vet-
eran on the potential future earnings of the veteran 
at the time of assignment. 
‘‘(d) ADJUSTMENT.—The Secretary shall from time 
to time adjust the schedule of ratings in accordance with 
experience. 
‘‘(e) PRESERVATION OF RATING.—(1) Except as pro-
vided in paragraph (2), an adjustment in the schedule of 
ratings under subsection (d) shall not cause a veteran’s 
disability rating in effect on the effective date of the ad-
justment to be reduced unless an improvement in the vet-
eran’s disability is shown to have occurred. 
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‘‘(2) An adjustment in the schedule of ratings may 
result in a reduction in a veteran’s disability rating as pro-
vided in section 1205 of this title.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 11 of such title is 
amended by striking the item relating to section 
1155 and inserting the following new item: 
‘‘1155. Schedule for rating disabilities.’’. 
(3) EFFECTIVE DATE.—Except as provided in 
paragraph (4), this subsection and the amendments 
made by this subsection shall take effect, if at all, 
on the effective date of the implementation of the 
enhanced Department of Veterans Affairs disability 
compensation system as determined in accordance 
with section 206. 
(4) ANTICIPATION OF IMPLEMENTATION.—The 
Secretary of Veterans Affairs shall take appropriate 
actions to ensure that the amendments made by this 
subsection are implementable on the effective date 
described in paragraph (3) in the event of the imple-
mentation of the enhanced Department of Veterans 
Affairs disability compensation system on that date. 
(b) DISABILITY COMPENSATION FOR LOSS OF EARN-
ING CAPACITY AND QUALITY OF LIFE AND TRANSITION 
PAYMENTS
FOR
PARTICIPATION
IN
MEDICAL
OR 
REHABILITATIONAL REGIMEN.— 
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(1) IN GENERAL.—Part II of title 38, United 
States Code, is amended by inserting after chapter 
11 the following new chapter: 
‘‘CHAPTER 
12—COMPENSATION 
AND 
TRANSITION PAYMENTS FOR SERVICE- 
CONNECTED DISABILITY 
‘‘Sec. 
‘‘1201. Compensation for service-connected disability: veterans not rated as serv-
ice-connected disabled who file claims for compensation on or 
after implementation of enhanced Department of Veterans Af-
fairs disability compensation system. 
‘‘1202. Compensation for service-connected disability: veterans rated as service- 
connected disabled as of implementation of enhanced Depart-
ment of Veterans Affairs disability compensation system who 
file claims on or after implementation. 
‘‘1203. Rates of compensation. 
‘‘1204. Transition benefits: payments; allowances. 
‘‘1205. Periodic review of extent of disability. 
‘‘1206. Prohibition on duplication of benefits. 
‘‘§ 1201. Compensation for service-connected dis-
ability: veterans not rated as service-con-
nected disabled who file claims for com-
pensation on or after implementation of 
enhanced Department of Veterans Affairs 
disability compensation system 
‘‘(a) IN GENERAL.—In the case of a veteran who has 
not been rated as having a service-connected disability 
under chapter 11 of this title as of the effective date of 
the implementation of the enhanced Department of Vet-
erans Affairs disability compensation system (as deter-
mined in accordance with section 206 of the Noble War-
rior Act) and who files with the Secretary a claim with 
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respect to disability on or after that effective date, for dis-
ability resulting from personal injury suffered or disease 
contracted in line of duty, or from aggravation of a pre-
existing injury suffered or disease contracted in line of 
duty, in the active military, naval, or air service, the 
United States will pay such veteran thus disabled and who 
was discharged or released under conditions other than 
dishonorable from the period of service in which such in-
jury or disease was incurred, or preexisting injury or dis-
ease was aggravated, compensation as provided in section 
1203 of this title, but no compensation shall be paid if 
the disability is a result of such veteran’s own willful mis-
conduct or abuse of alcohol or drugs. 
‘‘(b) RATING OF DISABILITY.—The rating of dis-
ability for which compensation is payable under this sec-
tion shall be assigned utilizing the schedule of ratings 
under section 1155 of this title that is applicable to vet-
erans for whom disability compensation is payable under 
this chapter. 
‘‘(c) LIMITATIONS.—(1) The payment of compensa-
tion pursuant to this section shall be subject to the provi-
sions of sections 5110 and 5112 of this title. 
‘‘(2) Compensation shall not be paid under this sec-
tion to a veteran who is retired for disability under sub-
chapter II of chapter 61 of title 10 pursuant to section 
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1206a of that title for any period before the first day fol-
lowing termination of the veteran’s receipt of benefits 
under section 1204 of this title. 
‘‘§ 1202. Compensation for service-connected dis-
ability: veterans rated as service-con-
nected disabled as of implementation of 
enhanced Department of Veterans Affairs 
disability compensation system who file 
claims on or after implementation 
‘‘(a) IN GENERAL.—In the case of a veteran who is 
rated as having a service-connected disability under chap-
ter 11 of this title as of the effective date of the implemen-
tation of the enhanced Department of Veterans Affairs 
disability compensation system (as determined in accord-
ance with section 206 of the Noble Warrior Act) who files 
with the Secretary a claim with respect to such disability 
or disabilities, or another disability, on or after that date, 
for disability resulting from personal injury suffered or 
disease contracted in line of duty, or from aggravation of 
a preexisting injury suffered or disease contracted in line 
of duty, in the active military, naval, or air service, the 
United States will pay such veteran thus disabled and who 
was discharged or released under conditions other than 
dishonorable from the period of service in which such in-
jury or disease was incurred, or preexisting injury or dis-
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ease was aggravated, compensation as provided in section 
1203 of this title, but no compensation shall be paid if 
such disability is a result of such veteran’s own willful mis-
conduct or abuse of alcohol or drugs. 
‘‘(b) RATING OF DISABILITY.—The rating of dis-
ability for which compensation is payable under this sec-
tion shall— 
‘‘(1) take into account all service-connected dis-
abilities of the veteran concerned, including any dis-
ability for which such veteran was rated as having 
a service-connected as described in subsection (a) 
and the disability with respect to which such veteran 
files a claim as described in that subsection; and 
‘‘(2) be assigned utilizing the schedule of rat-
ings under section 1155 of this title that is applica-
ble to veterans for whom disability compensation is 
payable under this chapter. 
‘‘(c) LIMITATION.—The payment of compensation 
pursuant to this section shall be subject to the provisions 
of sections 5110 and 5112 of this title. 
‘‘§ 1203. Rates of compensation 
‘‘(a) IN GENERAL.—For purposes of sections 1201 
and 1202 of this title, the rates of compensation payable 
for disabilities shall be the applicable rates specified for 
grade of disability in the proposal of the Secretary of Vet-
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erans Affairs under section 204(2) of the Noble Warrior 
Act. 
‘‘(b) REDUCTION FOR PERSONS INCARCERATED FOR 
CONVICTION OF A FELONY.—The payment of compensa-
tion for disabilities under sections 1201 and 1202 shall 
be subject to the provisions of section 5313 of this title. 
‘‘(c) SOURCE OF FUNDS.—Amounts for the payment 
of compensation under this section shall be derived from 
amounts available in the Compensation and Pension ac-
count of the Department of Veterans Affairs. 
‘‘§ 1204. Transition benefits: payments; allowances 
‘‘(a) ELIGIBLE VETERANS.—For purposes of this 
section, an eligible veteran is any veteran who is retired 
under subchapter II of chapter 61 of title 10 pursuant 
to section 1206a of that title. 
‘‘(b) MONTHLY TRANSITION PAYMENTS.—(1) Sub-
ject to the provisions of this subsection, the Secretary shall 
pay to each eligible veteran a monthly transition payment. 
‘‘(2) A veteran entitled to monthly transition pay-
ments under this subsection shall be paid— 
‘‘(A) a monthly transition payment in an 
amount equal to the amount specified with respect 
to the veteran in the proposal of the Secretary of 
Veterans Affairs under section 204(3) of the Noble 
Warrior Act for each of the first three months be-
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ginning on the date of the veteran’s retirement as 
described in paragraph (1); and 
‘‘(B) a one-time prorated payment of such 
amount for the remaining portion of the month in 
which the retirement of the veteran occurred. 
‘‘(3) No payment shall be made to a veteran under 
this subsection for any period for which a rehabilitation 
transition allowance is paid the veteran under subsection 
(c). 
‘‘(c) REHABILITATION TRANSITION ALLOWANCE.— 
(1) Subject to the provisions of this subsection, the Sec-
retary shall pay to each eligible veteran who is partici-
pating in a rehabilitation program under chapter 17 or 
31 of this title a monthly rehabilitation transition allow-
ance described in paragraph (3) during the period de-
scribed in paragraph (4). 
‘‘(2)(A) For purposes of this subsection, a veteran 
shall be treated as participating in a rehabilitation pro-
gram under chapter 17 of this title if, as determined by 
the Secretary, the veteran is participating in an intensive 
treatment program under that chapter for a service-con-
nected disability which program is intended to assist the 
veteran in restoring the veteran’s ability to obtain and 
maintain substantially gainful employment. 
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‘‘(B) For purposes of this subsection, a veteran shall 
be treated as participating in a rehabilitation program 
under chapter 31 of this title during any period, as deter-
mined by the Secretary, during which the veteran is eligi-
ble, notwithstanding paragraph (7), for the subsistence al-
lowance authorized by section 3108(a)(1) of this title. 
‘‘(3)(A) The amount of the monthly rehabilitation 
transition allowance payable to a veteran under this sub-
section is the amount equal to the amount specified with 
respect to the veteran in the proposal of the Secretary of 
Veterans Affairs under section 204(3) of the Noble War-
rior Act. 
‘‘(B) For any month in which an eligible veteran par-
ticipates in a rehabilitation program described in para-
graph (1) for less than the full month, the amount payable 
to the veteran under this paragraph shall be prorated for 
the portion of the month in which the veteran so partici-
pates. 
‘‘(C) In the case of a veteran entitled to assistance 
under this subsection who is participating in a rehabilita-
tion program that includes paid training on the job, the 
Secretary may reduce the veteran’s rehabilitation transi-
tion allowance under this subsection by one dollar for each 
dollar of wages, compensation, or other income paid (di-
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rectly or indirectly) by the employer to the veteran for 
such training. 
‘‘(4) The period for which a monthly rehabilitation 
transition allowance is payable to a veteran under this 
subsection is the period specified with respect to the vet-
eran in the proposal of the Secretary of Veterans Affairs 
under section 204(3) of the Noble Warrior Act. 
‘‘(5) A veteran may be paid a rehabilitation transition 
allowance under this subsection only if the veteran is com-
plying substantially with the individual rehabilitation or 
recovery plan developed by the Secretary for purposes of 
the rehabilitation program described in paragraph (1). 
‘‘(6)(A) Except as provided in subparagraph (B), no 
rehabilitation transition allowance may be paid under this 
subsection to a veteran who is participating in a vocational 
rehabilitation program under chapter 31 of this title while 
such veteran is incarcerated in a Federal, State, local, or 
other penal institution or correctional facility for convic-
tion of a felony. 
‘‘(B) Subparagraph (A) shall not apply to a veteran 
who is participating in a vocational rehabilitation program 
while residing in a halfway house or participating in a 
work-release program in connection with the veteran’s 
conviction of a felony. 
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‘‘(7) A veteran paid a rehabilitation transition allow-
ance for a month under this subsection may not be paid 
the subsistence allowance otherwise authorized for the vet-
eran under section 3108 of this title for that month. 
‘‘(d) SOURCE OF FUNDS.—Amounts for payments 
under this section shall be derived from amounts available 
in the Readjustment Benefits account of the Department 
of Veterans Affairs. 
‘‘§ 1205. Periodic review of extent of disability 
‘‘(a) IN GENERAL.—Except as provided under this 
section, the Secretary shall— 
‘‘(1) reevaluate and adjust, if appropriate, the 
disability rating of each veteran entitled to com-
pensation under section 1201 or 1202 of this title, 
as the Secretary considers appropriate; and 
‘‘(2) adjust the rate of compensation payable to 
such veteran under section 1203 of this title accord-
ing to the new disability rating as adjusted under 
paragraph (1) and to any adjustment of the schedule 
of ratings under section 1155 of this title applicable 
to veterans for whom compensation is payable under 
this chapter that has occurred since the preceding 
assignment of a disability rating to such veteran. 
‘‘(b) FREQUENCY OF REEVALUATIONS AND ADJUST-
MENTS.—The Secretary shall carry out the reevaluations 
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and adjustments required by subsection (a) with respect 
to a veteran described in that subsection with such fre-
quency as the Secretary considers appropriate. In making 
a determination regarding the appropriate frequency of re-
evaluations for a veteran, the Secretary shall be guided 
by recommendations made by an examining physician or 
other appropriate medical professional who has evaluated 
the veteran and by such other factors as the Secretary 
considers appropriate. 
‘‘(c) REEVALUATION AT REQUEST OF VETERAN.—At 
the request of a veteran receiving compensation under sec-
tion 1201 or 1202 of this title, the Secretary may— 
‘‘(1) reevaluate and adjust, if appropriate, the 
disability rating of the veteran as the Secretary con-
siders appropriate; and 
‘‘(2) adjust the rate of compensation payable to 
such veteran under section 1203 of this title accord-
ing to the new disability rating as adjusted under 
paragraph (1) and to any adjustment of the schedule 
of ratings under section 1155 of this title applicable 
to veterans for whom compensation is payable under 
this chapter that has occurred since the preceding 
assignment of a disability rating to such veteran. 
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‘‘§ 1206. Prohibition on duplication of benefits 
‘‘(a) IN GENERAL.—A veteran entitled to compensa-
tion under section 1201 or 1202 of this title is not entitled 
to compensation under chapter 11 of this title. 
‘‘(b) PRESERVATION
OF
ENTITLEMENT
UNDER 
OTHER SYSTEM.—(1)(A) Except as provided in para-
graph (2), any veteran in receipt of compensation under 
chapter 11 of this title (other than compensation paid as 
a result of a temporary rating of disability) as of the effec-
tive date of the implementation of the enhanced Depart-
ment of Veterans Affairs disability compensation system 
(as determined in accordance with section 206 of the 
Noble Warrior Act) shall remain entitled to compensation 
in accordance with the provisions of chapter 11 of this 
title after that date. 
‘‘(B) For provisions relating to the protection of rat-
ings of disability of veterans covered by subparagraph (A), 
see section 110(c) of this title. 
‘‘(2)(A) The entitlement to compensation of, and 
amount of compensation payable to, a veteran described 
in paragraph (1) who files a claim for compensation under 
this title on or after the effective date of the implementa-
tion of the enhanced Department of Veterans Affairs dis-
ability compensation system shall be determined in accord-
ance with the facts found under the provisions of section 
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1155 of this title and this chapter as such provisions are 
in effect on the date of the filing of the claim. 
‘‘(B) The objection of a veteran to a proposed reduc-
tion in rating of service-connected disability or other re-
sponse of a veteran to a proposed adverse action by the 
Secretary concerning compensation for a service-connected 
disability under chapter 11 of this title shall not be treated 
as a claim for purposes of subparagraph (A).’’. 
(2) CLERICAL
AMENDMENTS.—The table of 
chapters at the beginning of title 38, United States 
Code, and the beginning of part II of such title, are 
each amended by inserting after the item related to 
chapter 11 the following new item: 
‘‘12. Compensation and Transition Payments for Service- 
Connected Disability ............................................ 1201’’. 
(3) DISABILITY EVALUATIONS SUBJECT TO RE-
EVALUATION.—Section 110 of title 38, United 
States Code, is amended— 
(A) in the first sentence, by striking ‘‘A 
rating’’ and inserting ‘‘(a) Except as otherwise 
provided in this title, a rating’’; 
(B) by designating the second sentence as 
subsection (b) and indenting such subsection, as 
so designated, two ems from the left margin; 
(C) in subsection (b), as so designated, by 
striking ‘‘A disability’’ and inserting ‘‘Except as 
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otherwise provided in this title, a disability’’; 
and 
(D) by adding at the end the following new 
subsection: 
‘‘(c) The rating of disability assigned to a veteran 
who continues to remain entitled to compensation under 
chapter 11 of this title after the effective date of the imple-
mentation of the enhanced Department of Veterans Af-
fairs disability compensation system (as determined in ac-
cordance with section 206 of the Noble Warrior Act) by 
reason of section 1206(b) of this title may not be reduced 
while the veteran continues to remain so entitled, except 
upon a showing that such rating was based on fraud.’’. 
(4) MATTERS NOT SUBJECT TO REVIEW.—Not-
withstanding any other provision of law, the fol-
lowing matters shall not be subject to review by any 
other official or by any court, whether by an action 
in the nature of mandamus or otherwise: 
(A) Any rate of disability compensation 
payable under chapter 12 of title 38, United 
States Code (as amended by this subsection), 
that is prescribed by the Secretary of Veterans 
Affairs for purposes of the proposal under sec-
tion 204(2) . 
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