Further, such a system we feel tends to discourage a single veteran with health problems from attempting to establish a meaningful household for himself outside the hospital environment, with the concomitant assumption of financial obligations, and thus, tends to encourage chronic illness. Moreover, the reduction provisions discriminates against, and financially disadvantages, the single veteran, since no reduction is made in benefits for veterans with dependents.

The bill would not change the existing law which precludes further payment of pension, compensation or emergency officers' retirement pay to an incompetent veteran having neither wife nor child, being furnished hospital treatment, institutional, or domiciliary care by the United States, or any political subdivision thereof, from the time such veteran's estate equals or exceeds $1,500, until the estate is reduced to $500.

We note that no provision is proposed for the disposition of money being withheld from veterans pursuant to the provision of existing law which would be removed by enactment of this measure. In order to preclude confusion and indecision as to the appropriate manner of handling such withheld amounts, we recommend that H.R. 14086 be amended to specifically provide for disposition of such amounts under the possible varying conditions. A draft of a suggested amendment to accomplish the foregoing recommendation is enclosed.

The amendment would provide for lump-sum payments to competent living veterans of amounts being withheld pursuant to the provision to be removed. In the case of incompetents, the amount of money released at any particular time would be subject to the $1,500 and $500 limitations mentioned above as being retained in the law. Where a competent veteran dies before the described lump sum is paid, the withheld amounts would be paid pursuant to a specified order of precedence as to surviving dependents and a time limitation for claims. In the event of the death of an incompetent veteran before payment of all withheld amounts, no part of the remainder would be payable under the amendment.

No cost would result from enactment of H.R. 14086.

In summary, we feel that measured against its disadvantages, the subject withholding provision does not in general serve the best interest of the single hospitalized veterans concerned, and moreover does not justify the administrative costs involved. Consequently, we recommend favorable consideration of H.R. 14086 if amended as suggested above.

Advice has been received from the Office of Management and Budget that there is no objection to the presentation of this report from the standpoint of the administration's program.

Sincerely,

DONALD E. JOHNSON,
Administrator.

SUGGESTED AMENDMENT TO H.R. 14086

On page 3 in line 18 strike out "SEC. 3." and insert in lieu thereof "SEC. 4."; and after line 17 on such page 3 insert the following new section:

78-995 O 72 4

"SEC. 3. All compensation or retirement pay which is being withheld pursuant to the provisions of subsections (a) and (b)(1) of section 3203, title 38, United States Code, in effect on the day before the effective date of this Act, shall be paid to the veteran, if competent, in a lump sum. If the veteran is incompetent, the withheld amounts shall be paid in a lump sum, or successive lump sums, subject to the $1,500 and $500 limitations of subsection (b) (1) of such section 3203 as amended by this Act. If a competent veteran dies before payment is made the withheld amounts shall be paid according to the order of precedence, and subject to the time limitation, of subsection (a) (2) of such section 3203 in effect the day before the effective date of this Act. In the event of the death of an incompetent veteran before payment of all withheld amounts, no part of the remainder shall be payable."

92D CONGRESS 2D SESSION

H. R. 14086

IN THE HOUSE OF REPRESENTATIVES

MARCH 23, 1972

Mr. TEAGUE of Texas introduced the following bill; which was referred to the Committee on Veterans' Affairs

A BILL

To amend title 38, United States Code, to eliminate the withholding of compensation and retirement pay for certain veterans being furnished hospital treatment or domiciliary care by the Veterans' Administration.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That (a) subsection (a) of section 3203 of title 38, United 4 States Code, is repealed.

5 (b) Subsection (d) of such section 3203 is redesignated 6 as subsection (a) of such section 3203.

7 (c) Paragraphs (1) and (2) of subsection (b) of such

8 section 3203 are redesignated as paragraph (1) and as so

9 redesignated are amended to read as follows:

1

2

"(b) (1) In any case in which a veteran having neither

2 wife nor child is being furnished hospital treatment, institu3 tional or domiciliary care without charge or otherwise by 4 the United States, or any political subdivision thereof, is 5 rated by the Veterans' Administration in accordance with 6 regulations as being incompetent by reason of mental illness, 7 and his estate from any source equals or exceeds $1,500, 8 further payments of pension, compensation, or emergency 9 officers' retirement pay shall not be made until the estate is 10 reduced to $500. The amount which would be payable but 11 for this paragraph shall be paid to the veteran in a lump 12 sum; however, no payment of a lump sum herein authorized 13 shall be made to the veteran until after the expiration of six 14 months following a finding of competency and in the event 15 of the veteran's death before payment of such lump sum no part thereof shall be payable."

16

17

(d) Paragraphs (3) and (4) of subsection (b) of such 18 section 3203 are redesignated as paragraphs (2) and (3), 19 respectively; and the references in said redesignated para20 graph (2) to "paragraph (2)" and "Paragraph (2)" are 21 changed to "paragraph (1)" and "Paragraph (1)", re22 spectively.

23 (e) Subsection (c) of such section 3203 is amended by 24 deleting "(a) or”.

25

(f) Subsection (e) of such section 3203 is amended by

8

1 deleting ", compensation, or retirement pay"; and as so

2 amended is redesignated as subsection (d).

3 (g) Subsection (f) of such section 3203 is redesignated

5 SEC. 2. (a) Subsection (d) of section 3202 of title 38, 6 United States Code, is amended by adding at the end thereof 7 the following new sentence: "No payment shall be made 8 under the two preceding sentences of this subsection unless 9 claim therefor is filed with the Veterans' Administration 10 within five years after the death of the veteran, except that, 11 if any person so entitled under said two sentences is under 12 legal disability at the time of death of the veteran, such five13 year period of limitation shall run from the termination or 14 removal of the legal disability."

15

(b) Section 3021 (a) of title 38, United States Code, is 16 amended by deleting "section 3203 (a) (2) (A) of this title 17 and".

18 SEC. 3. This Act shall take effect on the first day of the 19 second calendar month which begins after the date of 20 enactment.