What if a Claimant Dies before a VA Compensation or Pension Decision is Made?
If a claimant dies before a claim decision is made, and there is a surviving spouse or dependent child, there may be back pay available to the surviving spouse or dependent child or to individuals or companies who paid for last costs.
Sometimes the claimant will die before the adjudication process is complete and before a decision has been made on the claim. There is almost always a number of weeks or months between the effective date of the claim and the date of death of the claimant. Because of the difference between the claim date and date of decision there could be retroactive payments – backpay – due under a pending claim to a survivor of the claimant under certain conditions. VA calls these benefits "accrued benefits."
If a veteran was already receiving VA benefits and the new claim was for a reevaluation or secondary service condition, a surviving spouse or dependent child will receive one month's worth of disability income for the month of death of the veteran. But this is not an accrued benefit, it is a benefit guaranteed under the regulation.
If the claimant is a single veteran or a surviving spouse of a veteran or a dependent child of a veteran there is generally no "accrued benefit" that would be made for a pending claim to members of the family unless there is one or more other remaining dependent children of the veteran. On the other hand, if other individuals such as family members not in the hierarchy listed below or other individuals or companies had paid for last costs of the deceased claimant or were owed just debts, any potential accrued benefits could be paid to these entities.
In this section we will discuss the rules pertaining to what happens if a claim is pending and a decision has not been made when the claimant dies. The regulation below is applicable when un-paid monies are owed the deceased. This is found in Title 38 CFR §3.1000.
The Scope of 38 CFR §3.1000
This regulation covers several different issues.
- The first issue is if the death occurred and there was no evidence in the file at the date of death that would have entitled the claimant to any ratings or decisions based on the information in the file, there would be no benefit. (Exception: See information for substitute claimant)
- The second issue is if at the death of the claimant there was evidence in the file to award a decision and entitlement under existing rules, an "accrued benefit" would be paid to any one of a hierarchy of survivors.
- The hierarchy or priority – as VA calls it – of survivors who would be paid or possibly apportioned the "accrued benefit" would be in this order
a. the veteran's spouse
b. if the veteran's spouse is deceased or dies, the veteran's children in equal shares
c. if the veteran's spouse is deceased and there are no dependent children, the veteran's dependent parents in equal shares
There is no provision under the rules to pay the estate of the claimant if there are no survivors in the hierarchy above. There is still potential for payment from a portion of the accrued benefits or all of the accrued benefits which is called a "reimbursement accrued benefit." This amount, which could be a part of or up to the total amount of accrued benefit, is paid to other persons not in the hierarchy.
This payment could be made for reimbursement for final expenses incurred on behalf of the claimant. Reimbursement could include out-of-pocket costs for final expenses of the deceased, out-of-pocket repayment for just debts and so forth. Final expenses include hospital, hospice, funeral, and burial. They do not include expenses like unpaid homecare or nursing home bills. Reimbursement will not be paid for any out-of-pocket costs that are reimbursed by insurance or other means. We will discuss the special reimbursement accrued benefit further on.
The regulation also specifies that certain education benefits, certain back payments and allowances will be paid regardless. Evidence on file with VA is also further defined in the adjudication manual M21-1.
Claims for Accrued Benefits can be made using VA Form 21-601. We have provided this form for you on the Claim Support Disc. It is advisable to include the deceased veteran's death certificate and all receipts and paid invoices that the person paid on behalf of the deceased claimant.
A Cure for VA Avoiding Payment of a Retroactive Amount
Because of the requirement that at the death, sufficient evidence had to be in the file in the Regional Office or at the Board of Veterans Appeals in order to approve a claim, very few claims involving death of a claimant in the past were actually approved. The suspicion was that VA had the information but because the claimant was dead, none of the survivors knew the true nature of the case – only the Regional Office had the details. In this case of a pending claim, reasons for not awarding a benefit could easily be explained away by the Regional Office. This injustice commonly resulted in the phrase "the claim dies with the claimant."
We don't really believe VA would act in this manner as federal law requires the Regional Office to always be an advocate for the claimant. There are specific rules pertaining to pending claims at the death of the claimant and we will discuss them further on in this section.
Nevertheless, a surviving spouse or dependent child or dependent parent should have a right to continue the claim or an appeal before the BVA on behalf of the claimant.
Congress recognized the inequity of this situation and passed legislation in 2008 to correct it. This is found in §3.1010 Substitution under 38 U.S.C. 5121A following death of a claimant.
Further Discussion of the Substitution Option
VA Form 21-0847 is usually required to initiate the substitution covered in the regulation above. Substitution can also be initiated through written request.
Unfortunately, if an accrued benefit appears to exist, VA will not notify a survivor of the possibility of substituting for the claim. Instead, the Regional Office will typically send the appropriate forms for an accrued benefit, but this is not always in the interest of the survivors. In a way, this is a disfavor to following through on a claim where perhaps substitution might be a better strategy. In other words, a survivor may never know about the opportunity for substitution, because of the way VA handles accrued benefits.
Consider this example. The Regional Office has enough information to make a decision when the veteran dies, but the evidence has not been fully weighed for a final award or denial. The Regional Office would not notify the surviving spouse of substitution because there is likely an accrued benefit. In this example, substitution would be important in the case the deceased claimant had additional evidence to submit and then died. This new evidence would have resulted in a more favorable decision. These types of situations where more evidence is pending at death but not submitted, occur at least more frequently than not.
Unfortunately, if VA has enough evidence on file to make a decision the Regional Office will send out the forms pertaining to accrued benefits and not the form for substitution. But what if the final decision for accrued benefits is not favorable such as a lower disability rating or no disability rating at all. Or as in the case we discuss below, a denial was issued, but the veteran was in the process of reopening the claim with new and relevant evidence when he died. The surviving spouse in this case had no idea that she could step in and continue the claim on his behalf. The claim was closed as far as VA was concerned. There are numerous cases like these where the survivors may never know about the option for substitution and they lose the potentially better benefit or they lose the benefit entirely.
In our particular case, the veteran died after receiving a denial letter and before the Regional Office had adequate new information to reopen the claim. The surviving spouse, as a substitute, submitted new and relevant evidence to reopen the claim along with a strong opinion letter from the veteran's treating physician. This new evidence allowed the Regional Office to award a benefit posthumously.
Had we not taken the initiative to assist the surviving spouse to become a substitute, using VA Form 21-0847, the entire award of $32,500 for back payment, $2,000 for funeral and burial and an award of DIC for $1,340 a month (subject to annual increases) to the surviving spouse for the rest of her life would have been lost. There would have been no benefit at all. Without our assistance, the surviving spouse had no idea she could step in and take over for her deceased husband's claim.
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