Source: https://www.federalregister.gov/documents/2009/06/05/E9-13212/severance-pay-separation-pay-and-special-separation-benefits
Timestamp: 2017-10-22 12:48:39
Document Index: 793358101

Matched Legal Cases: ['§\u20093', '§\u20093', '§\u20093', '§\u20093', '§\u20093', '§\u20093']

Federal Register :: Severance Pay, Separation Pay, and Special Separation Benefits
A Rule by the Veterans Affairs Department on 06/05/2009
38 CFR 3.700(a)(3)—Disability Severance Pay
38 CFR 3.700(a)(5)—Separation Pay and Special Separation Benefits
https://www.federalregister.gov/d/E9-13212 https://www.federalregister.gov/d/E9-13212
This document amends the Department of Veterans Affairs (VA) adjudication regulations to incorporate relevant statutory provisions regarding severance pay, separation pay, and special separation benefits. These amendments are necessary to conform the regulation to statutory provisions.
Effective Date: These amendments are effective June 5, 2009.
Applicability Date: The amendment to 38 CFR 3.700(a)(3) applies to members of the Armed Forces separated under 10 U.S.C. chapter 61 on or after January 28, 2008. The amendment to 38 CFR 3.700(a)(5) applies to payments of special separation benefits made on or after December 5, 1991.
Thomas J. Kniffen, Chief, Regulations Staff (211D), Compensation and Pension Service, Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, (202) 461-9725.
We are amending 38 CFR 3.700 to implement statutory changes.
Section 1212 of title 10, United States Code, which authorizes disability severance pay, generally requires that the amount of disability severance pay received for a disability be deducted from any VA compensation awarded for the same disability. However, the National Defense Authorization Act for Fiscal Year 2008, Public Law 110-181, Div. A, Title XVI, Subtitle D, section 1646(b), amended 10 U.S.C. 1212 to provide that no deduction may be made from VA compensation for disability severance pay received for disabilities incurred in line of duty in a combat zone or incurred during performance of duty in combat-related operations as designated by the Department of Defense (DoD). The DoD designation of whether a disability was incurred in a combat zone or incurred during performance of duty in combat-related operations will govern only whether a deduction may be made from VA compensation paid for the disability for which disability severance pay was received. VA will continue to determine whether the disability resulted from disease or injury incurred or aggravated in line of duty in active service for purposes of determining entitlement to VA disability compensation. The amendment applies to members of the Armed Forces separated from the Armed Forces under Chapter 61 of title 10, United States Code, on or after January 28, 2008.
Section 3.700(a)(3) is VA's regulation governing offset of disability severance pay from VA compensation. Generally, an award of compensation will be made subject to recoupment of any disability severance pay received for the same disability. We are adding to the regulation a new provision specifying that there will be no recoupment of disability severance pay for disabilities identified by the DoD as being incurred in combat zones or during performance of duty in combat-related operations.Start Printed Page 26957
Because of the amendments to 38 U.S.C. 1212 made by the National Defense Authorization Act for Fiscal Year 2008, the authority for § 3.700(a)(3) has changed from section 1212(c) to section 1212(d). We are making this change in the authority citation in the regulation.
In Public Law 102-190, section 661(a)(1), effective December 5, 1991, Congress added the special separation benefits program to be carried out by the DoD. See 10 U.S.C. 1174a.
To avoid duplication of benefits resulting from the special separation benefits program, section 1174a(g) makes the provisions of 10 U.S.C. 1174(h)(2) applicable to special separation benefits. Section 1174(h)(2) states that a member who has received separation pay based on service in the Armed Forces shall not be deprived, by reason of his receipt of such pay, of any disability compensation to which he is entitled under the laws administered by VA, but there shall be deducted from that disability compensation an amount equal to the total amount of separation pay received. In Public Law 104-201, section 653, Congress amended section 1174(h)(2) by providing that the amount deducted from disability compensation would be the total amount of separation pay received less the amount of Federal income tax withheld from such pay (such withholding being at the flat withholding rate for Federal income tax withholding). This amendment was made applicable to payments of separation pay made after September 30, 1996.
In 1998, Congress enacted Public Law 105-178, section 8208, which extended the applicability of the amendment made by Public Law 104-201 to any payment of special separation benefits under section 1174a made during the period beginning on December 5, 1991, and ending on September 30, 1996.
In 2002, VA revised its regulation concerning concurrent benefits, 38 CFR 3.700, to incorporate the offset requirements, including the reduction of the amount of offset by the amount of Federal income tax withheld from separation pay or special separation benefits. 67 FR 60867 (Sept. 27, 2002). However, VA did not specify that the reduction for Federal income tax withheld was applicable to payments of special separation benefits made on or after December 5, 1991. Nonetheless, VA's practice has been to recoup the after-tax amount since December 5, 1991. We are now amending the regulation to conform to the statute and current practice. We are amending § 3.700(a)(5) by creating a new § 3.700(a)(5)(iii) that will address special separation benefits, and we will remove the special separation benefits references from current § 3.700(a)(5)(i).
We will also add a clarification in § 3.700(a)(5) for both separation pay and special separation benefits that the Federal income tax withholding amount is at the flat withholding rate for Federal income tax withholding, to ensure the regulations accurately reflect the statute.
This final rule merely restates statutory provisions. Accordingly, there is a basis for dispensing with prior notice and comment and the delayed effective date provisions of 5 U.S.C. 553.
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.
2. Amend § 3.700 as follows:
a. In paragraph (a)(3), add a sentence at the end of the paragraph and revise its authority citation.
b. In paragraph (a)(5)(i), remove “or special separation benefits” and “under section 1174a” each place it appears, and add a sentence at the end of the paragraph.
c. Remove the authority citation at the end of paragraph (a)(5)(ii).
d. Add paragraph (a)(5)(iii) and an authority citation.
(3) * * * For members of the Armed Forces who separated under Chapter 61 of title 10, United States Code, on or after January 28, 2008, no recoupment of severance pay will be made for disabilities incurred in line of duty in a combat zone or incurred during performance of duty in combat-related operations as designated by the Department of Defense.
(i) * * * The Federal income tax withholding amount is the flat withholding rate for Federal income tax withholding.
[FR Doc. E9-13212 Filed 6-4-09; 8:45 am]