We propose to state that the retroactive payment provisions of these proposed rules do not apply if
the veteran's Vietnam service ended before August 5, 1964 and the class member's prior claim for benefits was denied by VA
before January 1, 1997. In such cases, the denial was required by statute and VA is prohibited from paying retroactive benefits
based on the prior claim. We propose to state that the effective date of any subsequent award in such cases will be governed
by 38 U.S.C. 5110(g). We further propose to state that, if a veteran's Vietnam service ended before August 5, 1964 and the
class member's claim for benefits was pending on or was received by VA after January 1, 1997, the effective date shall be
the later of the effective date provided for in the proposed rules or January 1, 1997. This would conform to the requirement
in Public Law 104-275 that VA may not pay benefits in such cases for any period before January 1, 1997.
Payment of Benefits to Survivors of Deceased Beneficiaries
1. Requirements of the Nehmer Court Orders
In its December 12, 2000 order, the district court held that, when a Nehmer class member entitled to retroactive benefits
under the Nehmer stipulation and order dies prior to receiving payment of such benefits, VA must pay the full amount of such
benefits to the class member's estate. Under 38 U.S.C. 5121 and 38 CFR 3.1000, when any monetary benefits remain due and unpaid
at the time of a beneficiary's death, VA may pay to certain individuals only the portion of such benefits that accrued during
the two-year period preceding death. Further, VA cannot pay any such accrued benefits unless the appropriate payee files a
claim for accrued benefits within one year after the date of death. However, the Nehmer court held that these restrictions
do not apply to payments of amounts payable pursuant to the Nehmer stipulation and order. Rather, the court held that VA must
pay the entire amount of such retroactive payment to the class member's estate and must do so without requiring a claim for
accrued benefits.
2. Persons Eligible for Payments
3. Inapplicability of Certain Accrued Benefit
Requirements
As stated above, the district court indicated that the statutory two-year limit on payment of accrued benefits and the
statutory requirement that a qualified payee or payees file a claim for accrued benefits do not apply to payments of retroactive
benefits due and unpaid to a Nehmer class member at the time of death. Accordingly, we propose to state, in paragraph (f)(2),
that those requirements do not apply. We further propose to state that, if a class member dies before receiving payment of
retroactive benefits due to him or her, VA will pay the amount to the known payee(s) without requiring a claim. A veteran's
VA claim file will often contain information identifying the surviving spouse, children, or parents of a class member. By
clarifying that VA will release payment based on such information without awaiting communication from such survivors, this
provision would permit expeditious release of payments.
4. Identifying Payees
We propose
to state, in paragraph (f)(3), that VA shall make reasonable efforts to identify appropriate payees based on information contained
in the veteran's claims file. We propose to state that, if further information is needed to determine whether an appropriate
payee exists, or whether there is any person having precedence equal to or greater than a known survivor, VA will request
such information from a known survivor or the class member's authorized representative if the claims file contains sufficient
contact information. We also propose to state that, before releasing payment to a known survivor, VA will request information
from the survivor concerning the possible existence of other survivors with equal or greater priority for payment, unless
the circumstances clearly indicate that such a request is unnecessary. For example, if the claims file contained the name
and address of a child of the deceased class member, VA would contact the child to inquire whether there is a surviving spouse
or any other children of the class member in existence. |
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