at the time the claim is adjudicated such persons are deceased.

[26 FR 1609, Feb. 24, 1961, as amended at 27 FR 11893, Dec. 1, 1962]

§§ 3.1004-3.1006 [Reserved]

§ 3.1007 Hospitalized incompetent veter

ans.

Where an award of disability pension for an incompetent veteran without dependents was reduced under § 3.551(b) because of hospitalization, institutional or domiciliary care by the Veterans Administration, or an award of disability pension, compensation or emergency officers' retirement pay was discontinued under § 3.557(b) because the veteran was hospitalized by the United States or a political subdivision and had an estate which equaled or exceeded $1,500, and the veteran dies before payment of amounts withheld or not paid by reason of such care, no part of such amount will be paid to any person. The provisions of this section are applicable to amounts withheld for periods prior to as well as subsequent to the rating of incompetency. The term "dies before payment" includes cases in which a check was issued and the veteran died before negotiating the check. (38 U.S.C. 3203(b))

[39 FR 30349, Aug. 22, 1974]

§ 3.1008 Accrued benefits payable to foreign beneficiaries.

In case of death of the payee of any check in payment of periodic monetary benefits (other than insurance and servicemen's indemnity) accruing under laws administered by the Veterans Administration, while the amount thereof remains in the special deposit account established by Public Law 828, 76th Congress, such amount will be payable under section 3 of that act. (31 U.S.C. 125) However, the accrued amount will be payable only if the person on whose behalf checks were issued and the person claiming the accrued amount have not been guilty of mutiny, treason, sabotage, or rendering assistance to an enemy of the United States or of its allies.

[26 FR 1609, Feb. 24, 1961]

§ 3.1009 Personal funds of patients.

The provisions of this section are applicable to gratuitous benefits deposited by the Veterans Administration either before, on, or after December 1, 1959, in a personal funds of patients account for an incompetent veteran who was incompetent at the date of death. Where the veteran died after November 30, 1959:

(a) Eligible persons. Gratuitous benefits shall be paid to the living person first listed as follows:

(1) His or her spouse, as defined in § 3.1000(d)(1);

(2) His or her children (in equal shares), as defined in § 3.57 but without regard to their age or marital status;

(3) His or her dependent parents (in equal shares) as defined in § 3.59 or the surviving parent, provided that the parent was dependent within the meaning of 3.250 at the date of the veteran's death.

(4) In all other cases, only so much may be paid as may be necessary to reimburse a person who bore the expense of last sickness or burial. (See § 3.1002.) (38 U.S.C. 3202(d))

(b) Claim. Application must be filed with the Veterans Administration within 5 years after the death of the veteran. If, however, any person otherwise entitled is under legal disability at the time of the veteran's death, the 5-year period will run from the date of termination or removal of the legal disability.

(1) There is no time limit for the submission of evidence.

(2) Failure to file timely claim, or a waiver of rights, by a preferred dependent will not serve to vest title in a person in a lower class or a claimant for reimbursement; neither will such failure or waiver by a person or persons in a joint class serve to increase the amount payable to another or others in the class.

[27 FR 5539, June 12, 1962, as amended at 28 FR 10487, Sept. 28, 1963; 39 FR 30349, Aug. 22, 1974]

PROVISIONAL REGULATIONS

§3.1550 Instructions relating to the computation of annuities or pensions received from the Railroad Retirement Board as income for pension purposes. (a) Provisions of the law. (1) Section 4, Public Law 86-28 amends section 20 of the Railroad Retirement Act of 1937 to provide that "Pensions and annuities under this Act or the Railroad Retirement Act of 1935 shall not be considered as income for the purposes of section 522 of title 38 of the United States Code."

(2) Section 6(a) further provides that section 4 will be ". . . effective only with respect to pensions due in calendar months after the month next following the month of enactment of this Act and annuities accruing for months after the month of enactment of this Act."

(b) Scope of coverage—(1) Pension. Benefits received by former railroad employees as pensions, accrued or current, on and after July 1, 1959, will not be counted as income for the purposes of determining entitlement to pension under the provisions of 38 U.S.C. 522. Pension is a term used by the Railroad Retirement Board to identify the monetary benefit paid to former railroad employees who were on the gratuity rolls of the employer by reason of their employment and were on such rolls on March 1, 1937, when the administrative function of paying this benefit was assumed by the Railroad Retirement Board. Persons receiving pension made no contribution under the Railroad Retirement Act to the pension fund.

(2) Annuity. Accrued annuities due for any period prior to June 1, 1959, but paid on or after July 1, 1959, will be counted as income. Annuities accruing for periods on and after June 1, 1959, and paid on or after July 1, 1959, will not be counted as income under 38 U.S.C. 522. Annuity is defined for the purposes of payment of Railroad Retirement benefits as that benefit paid to individuals who are retired under the provisions of the Railroad Retirement Act of 1935 or the Railroad Retirement Act of 1937.

(3) Survivor annuities. Survivor annuities will not be counted as income

under 38 U.S.C. 522. However, such annuities will be considered as income under 38 U.S.C. 545.

(c) Effective date. No payments by virtue of this bill may be effective prior to July 1, 1959. (Instruction 1, Pub. Law 86-28)

[26 FR 1609, Feb. 24, 1961] §3.1551 [Reserved]

§3.1552 Instructions relating to assistance in acquiring specially adapted housing to seriously disabled veterans. (a) Provisions of the law. Section 801, Title 38, United States Code was amended by Public Law 86-239 to provide assistance in acquiring specially adapted housing to any veteran, who is entitled to compensation under 38 U.S.C. ch. 11 based on service after April 20, 1898, for permanent and total service-connected disability:

(1) Due to the loss, or loss of use, of both lower extremities, such as to preIclude locomotion without the aid of braces, crutches, canes, or a wheelchair, or

(2) Which includes, (i) blindness in both eyes, having only light perception, plus (ii) loss or loss of use of one lower extremity, and such permanent and total disability is such as to preclude locomotion without the aid of a wheelchair.

(b) Effects of the act. Benefits are not restricted to veterans of wartime service.

(1) The act adds a new eligibility category set forth in paragraph (a)(2) of this section, to the laws providing specially adapted housing to veterans entitled to compensation under 38 U.S.C. ch. 11 for peacetime or wartime permanent and total service-connected disability.

(2) The act also eliminates the former requirement that inability to locomote be due to loss, or loss of use by reason of amputation, ankylosis, progressive muscular dystrophies or paralysis of both lower extremities. It will be sufficient for purposes of the act if locomotion without the aid of braces, crutches, canes, or a wheelchair is precluded by the permanent and total service-connected conditions, without regard to etiology of the dis

abilities enumerated in paragraph (a) of this section.

(3) A veteran entitled to compensation for permanent and total serviceconnected disability which includes blindness in both eyes, having only light perception and the loss or loss of use of one lower extremity is entitled to assistance under this act if his permanent and total disability precludes locomotion without the aid of a wheelchair. This requirement is in effect threefold: (i) There must be blindness in both eyes having only light perception, (ii) there must be an anatomical loss or loss of use of one lower extremity, (iii) locomotion by means other than a wheelchair must be precluded. When these three elements are present, the veteran is eligible for assistance under this act.

(4) The term "preclude locomotion" is not meant to signify that if motion by any other means is possible, the veteran would be ineligible for benefits under this act. If rare and occasional locomotion by other means is possible, but generally not feasible or recommended, benefits may be in order. It is sufficient for purposes of this act if resort to a wheelchair or other mechanical aid or contrivance is necessary, regular and constant. However, to qualify for assistance locomotion must be prevented by the disability; mere precautionary inactivity will be excluded from consideration.

(c) Effective date. This act is effective September 8, 1959. (Instruction 1, 38 U.S.C. 801, Pub. Law 86-239) [26 FR 1610, Feb. 24, 1961]

§3.1553 Implementation of the provisions

of the "Veterans' Pension Act of 1959." (a) Service requirements of deceased veterans. (1) Ninety days or more in either World War I, World War II, or the Korean conflict (for method of computing service see § 3.17); or

(2) A discharge or release from such service for a service-connected disability; or

(3) At the time of death was receiving (or entitled to receive) compensation or retirement pay based upon World War I, World War II or Korean conflict service-connected disability.

NOTE: The requirement is eliminated that a World War II or Korean conflict veteran be shown at the time of his death, in addition to the service requirement, to have had a service-connected disability for which compensation would have been payable if disabling to a degree of 10 percent or more.

(b) Amounts of pension payable within prescribed income limitations (1) Veteran-(i) With no dependents. If the veteran is unmarried (or married but not living with and not reasonably contributing to the support of his spouse) and has no child, pension will be paid at the monthly rate set forth in column II of the following table opposite the veteran's annual income as shown in column I:

$90

$95

$100

75

75

75

45

45

45

(iii) In need of aid and attendance. If the veteran is in need of regular aid and attendance, the monthly rate payable will be increased by $70.

(iv) Reasonably contributing to support of spouse. A veteran will be paid as a person without a spouse unless he is reasonably contributing to her sup

port. In determining whether a veteran is reasonably contributing to the support of his spouse all of the circumstances such as his income and estate and the separate income and estate of his spouse will be taken into consideration. In any case where a special apportionment is made the special apportionment will be considered as reasonable contribution. (v) Income of spouse. For the purpose of counting the income of a spouse, a veteran will be considered as living with his spouse, even though they reside apart, unless they are estranged. Where a veteran is living with his spouse the total annual income of the spouse which is reasonably available to or for the veteran except $1,200 will be considered as the income of the veteran, unless to do so would work a hardship upon the veteran. The income of the spouse will be considered as available to the veteran and counting such income will be presumed not to work a hardship upon him unless evidence is presented to rebut the presumption. Such evidence may consist of a showing that the spouse has incurred unusual family expenses as a result of sickness, hospitalization, prolonged care in a nursing home, or other unusual expenses (e.g., spouse working to help defray veteran's unusual medical expenses). However, the fact that the counting of a part of the spouse's income would reduce or deny the veteran pension will not be considered as working a hardship on him.

(2) Widow-(i) Without child. If there is no child, pension will be paid at the monthly rate set forth in column II of the following table opposite the widow's annual income as shown in column I:

(iii) With more than one child. If there is a widow and more than one child, the monthly rate payable under paragraph (b)(2)(ii) of this section will be increased by $15 for each additional child.

(iv) Income of child. The separate income received by a child or children, regardless of custody, will not be considered in computing the widow's income unless given to the widow. In that case only so much money as is left after deducting any expenses for maintenance of the child will be considered the widow's income.

(3) Child. (i) If there is no widow entitled to pension, the monthly rates payable are:

(a) If there is more than one child the total pension payable will be paid in equal shares.

(b) Pension will not be paid to a child whose annual income, excluding earned income, exceeds $1,800. Earned income is that derived from wages or self-employment.

(c) Computation of annual income(1) Basic rule. Total income for the full calendar year will be considered except as provided in paragraphs (c) (3) and (6) of this section. The following inclusions apply to the income of a widow, a child where there is no veteran or widow, a veteran and his spouse. (2) Income included.

(i) Income of the spouse as provided in paragraph (b)(1)(v) of this section. (ii) Special allowance under 38 U.S.C. 412.

(iii) Except as otherwise provided in paragraphs (c)(2) (viii) (b) and (ix) of this section, total salary, retirement or annuity payments, or similar income, irrespective of whether a part of such benefit was waived pursuant to statute, contract, or otherwise.

(iv) The inclusions contained in § 3.252(c).

(v) Commercial life insurance (including Federal employees Government life insurance) consisting of lump sum or installment payments.

(a) Commercial life insurance received by a beneficiary will be considered as income in the calendar year in which received even though the beneficiary had the right to elect a lump sum or installment payments.

(b) Where an annuity or payment of endowment insurance is received by the purchaser, no part of the payment received will be considered annual income until the full amount of the consideration has been received after which the full amount of such payments will be considered income.

(c) Disability, accident or health insurance (less payment of medical or hospital expenses resulting from the disease or accident for which such insurance payments are made).

(vi) Where proceeds of matured life insurance policies or other income is received in one year and payments are made in the following year for just debts or expenses of last illness and burial of the veteran, retroactive adjustment of the pension award may be authorized. In other words, such payments may be offset against prior income when this is to the claimant's advantage. (See also paragraph (c)(3)(vii) of this section.)

(vii) Compensation paid by the Bureau of Employees' Compensation, Department of Labor (of the United States), or pursuant to any workmen's compensation or employer's liability statute, or damages collected because of personal injury or death, less medical, legal, or other expenses incident to the injury or death or the collection or recovery of such moneys. Where monthly payments of such employee's compensation are withheld until the value equals a lump sum paid as damages by a third party, the lump sum

will be considered as income when actually received.

(viii) Retirement benefits paid under a Federal, State, municipal or private business or industrial plan, including Railroad Retirement and Social Security benefits (Federal Old Age and Survivors' Insurance and Disability Insurance Benefits).

(a) Where the payments received consist of part principal and part interest, interest will not be counted separately.

(b) Where the retirement benefit is based on the claimant's own employment, the payments will not be considered income until the amount of the claimant's personal contribution (as distinguished from amounts contributed by the employer) has been received. After he has received an amount equal to his personal contribution, all payments will be considered income.

(c) Benefits received by a widow based on her husband's employment will be considered income as received.

(ix) Retirement pay received direct from a service department (except amounts waived under 38 U.S.C. 3105).

(x) Proceeds of bequests and inheritances received in the settlement of estates. However, such property, including stocks and bonds received by inheritance or otherwise, will not be considered as "annual income" until the property or other property acquired in lieu thereof by exchange or barter, has been converted into cash. Where such property is converted into cash, the amount of the claimant's personal contribution will be deducted in determining the net income.

(xi) Gifts.

(xii) World war adjusted compensation.

(xiii) Family allowances authorized by service personnel.

(xiv) Bonus or similar cash gratuity by any State based on service in the Armed Forces of the United States.

(xv) Reasonable value of allowances to a person in military or naval service in addition to base pay, such as clothing, subsistence and quarters.

(xvi) Insurance paid under the Merchant Marine Act of 1936, as amended.

(xvii) Payments under chapter 73 of Title 10 of the United States Code (formerly the Uniformed Services