Reference: See for a discussion regarding the payment of benefits a beneficiary is on parole, and re-incarceration of a beneficiary. i. Handling Notice That Charges Were Dismissed or Overturned or the Type of Conviction Was Changed Restore to a beneficiary, benefits VA reduced or discontinued due to his/her incarceration, all benefits to which the beneficiary is otherwise entitled, upon receipt of notice from an official source that the charges that resulted in the beneficiary’s incarceration have been dismissed or were overturned, or the type of conviction (felony or misdemeanor) that resulted in the beneficiary’s incarceration has changed such that a reduction or discontinuance of benefits is no longer required under , or . Restore benefits to the beneficiary effective the same date VA reduced or discontinued them as a result of the beneficiary’s incarceration. Important: Do not restore benefits to the beneficiary that VA apportioned (disability compensation/DIC) or paid (pension) to the beneficiary’s dependents as a result of the beneficiary’s incarceration. Reference: For a definition of “official source,” see M21-1, Part III, Subpart v, 8.A.3.b. For more information about apportioning an incarcerated Veteran’s disability compensation to his/her dependent(s), see M21-1, Part III, Subpart v, 8.B.2, and paying pension to the dependent(s) of an incarcerated Veteran, see M21-1, Part III, Subpart v, 8.B.1. 4. Other Considerations When Adjusting an Award Due to Incarceration Introduction This contains information on effective dates and rates for the discontinuance or reduction of benefit awards due to incarceration, including calculating the 61st day of incarceration beneficiaries transferred from a foreign to a U.S. penal institution, and recoupment of separation benefits during incarceration .
Note: If entitlement exists, VA may apportion to the Veteran’s dependent(s) all or a part of the remaining disability compensation that VA does not withhold during incarceration. When incarceration ends, the apportionment ends, as well. some but not all of the Veteran’s disability compensation to recoup his/her separation benefits limit the amount of disability compensation that is payable to the Veteran during the period of incarceration to the rate specified in M21-1, Part III, Subpart v, 8.A.2.a, and suspend the withholding for recoupment of separation benefits until incarceration ends. Note: If entitlement exists, VA may apportion all or a part of the remaining disability compensation – to include the amount VA was withholding to recoup separation benefits prior to incarceration – to the Veteran’s dependent(s) until incarceration ends. Reference: For information about recouping separation benefits, see M21-1, Part III, Subpart v, 4.B, or resuming the payment of benefits after incarceration ends, see M21-1, Part III, Subpart v, 8.A.5. 5. Resuming the Payment of Benefits When Incarceration Ends
of a Beneficiary’s Award When Incarceration Ends The effective date for adjusting the beneficiary’s award to reflect the change in status is the date incarceration ended, if VA receives notice within one year of that date. Otherwise, the effective date is the date VA first receives notice that incarceration has ended. Exception: The principle described in the preceding paragraph is based on the assumption that VA received notice incarceration had ended after VA had already discontinued or reduced benefits due to incarceration. When discontinuing or reducing benefits and resuming them in a single award action (because, for example, VA was unaware of a beneficiary’s incarceration until it received notice that incarceration had ended), the proper effective date for resuming benefits is the date incarceration ended, regardless of how long after this date VA received notice. The table below describes other principles that apply to the adjustment of a beneficiary’s award at the end of a period of incarceration. If ... Then ... VA receives notice from a parole or other official source that indicates a beneficiary’s incarceration will end on a specific date in the future, and VA receives the notice no more than 30 days to the date incarceration will end it is acceptable to adjust the beneficiary’s award while he/she is still incarcerated to reflect that incarceration will end on the future date. Important: Inform the beneficiary in the corresponding decision notice that if incarceration does not end on the specified date, VA will discontinue or reduce benefits without advance notice, effective the same date it had resumed them. VA paid disability compensation in lieu of pension to a Veteran whose benefits were subject to discontinuance due to incarceration award whichever benefit is more favorable to the Veteran when incarceration ends. VA was paying the beneficiary either Section 306 or Old Law Pension prior to incarceration resume payment of the same benefit when incarceration ends, as long as entitlement still exists. Important: Do not switch the beneficiary to current-law pension unless he/she specifically elects that benefit. Important: Some of the principles and instructions contained in this block apply only to beneficiaries whose disability compensation or DIC was not apportioned, or