80 FR 48450 - Additional Compensation on Account of Children Adopted Out of Veteran's Family

DEPARTMENT OF VETERANS AFFAIRS

Federal Register Volume 80, Issue 156 (August 13, 2015)

The Department of Veterans Affairs (VA) is amending its adjudication regulations to clarify that a veteran will not receive the dependent rate of disability compensation for a child who is adopted out of the veteran's family. This action is necessary because applicable VA adjudication regulations are currently construed as permitting a veteran, whose former child was adopted out of the veteran's family, to receive the dependent rate of disability compensation for the adopted-out child, which constitutes an unwarranted award of benefits not supported by the applicable statute and legislative history. This document adopts as a final rule, without change, the proposed rule published in the Federal Register on December 2, 2014.

[Federal Register Volume 80, Number 156 (Thursday, August 13, 2015)]
[Rules and Regulations]
[Pages 48450-48451]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-19949]



[[Page 48450]]

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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AP18


Additional Compensation on Account of Children Adopted Out of 
Veteran's Family

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is amending its 
adjudication regulations to clarify that a veteran will not receive the 
dependent rate of disability compensation for a child who is adopted 
out of the veteran's family. This action is necessary because 
applicable VA adjudication regulations are currently construed as 
permitting a veteran, whose former child was adopted out of the 
veteran's family, to receive the dependent rate of disability 
compensation for the adopted-out child, which constitutes an 
unwarranted award of benefits not supported by the applicable statute 
and legislative history. This document adopts as a final rule, without 
change, the proposed rule published in the Federal Register on December 
2, 2014.

DATES: This rule is effective September 14, 2015.

FOR FURTHER INFORMATION CONTACT: Stephanie Li, Chief, Regulations Staff 
(211D), Compensation Service, Department of Veterans Affairs, 810 
Vermont Avenue NW., Washington, DC 20420, (202) 461-9700. (This is not 
a toll-free telephone number.)

SUPPLEMENTARY INFORMATION: On December 2, 2014, VA published in the 
Federal Register (79 FR 71366), a proposed rule to amend 38 CFR 3.57 
and 3.58 to clarify that a veteran will not receive the dependent rate 
of disability compensation for a child who is adopted out of the 
veteran's family. In this regard, pursuant to 38 U.S.C. 1115, a veteran 
entitled to compensation based on a service-connected disability rating 
of not less than 30 percent is entitled to an additional rate of 
disability compensation for each of his or her children. Additionally, 
38 CFR 3.58 provides that ``[a] child of a veteran adopted out of the 
family of the veteran . . . is nevertheless a child within the meaning 
of that term as defined by Sec.  3.57 and is eligible for benefits 
payable under all laws administered by the Department of Veterans 
Affairs.'' However, VA believes its longstanding interpretation in 
Sec.  3.58, as it applies to 38 U.S.C. 1115, is inconsistent with the 
statute's clear purpose to provide for payments to a veteran that are 
based primarily upon the veteran's needs for purposes of supporting his 
or her dependent family members.
    VA, therefore, believes Congress did not intend for section 1115 to 
provide additional disability compensation to a veteran on account of a 
child who is adopted out of the veteran's family. In such cases, it is 
clear that any payment to the veteran on account of the adopted-out 
child would rarely, if ever, fulfill the clear purpose of section 1115 
to provide for the expense of supporting that child. As such, VA is 
amending its regulations, particularly 38 CFR 3.57, 3.58, and 3.458, to 
eliminate this additional compensation paid to veterans for such 
children.
    Any child, however, who is adopted out of the veterans family does 
not, as the result of the amendments to 38 CFR 3.57 and 3.58, lose any 
rights to receive VA benefits in the child's own right, such as 
dependency and indemnity compensation, which is not necessarily 
dependent upon a continuing, legally based parent-child relationship.
    The proposed rule was published in the Federal Register (79 FR 
71366) on December 2, 2014. A 60-day comment period was provided. No 
public comments were received regarding the proposed rule. As a result, 
based on the rationale set forth in the proposed rule, we adopt the 
provisions of the proposed rule as a final rule without change. This 
rule will apply as of the effective date of the final rule, namely 30 
days following the date of publication of the final rule.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, select regulatory approaches that maximize net 
benefits (including potential economic, environmental, public health, 
and safety effects, and other advantages; distributive impacts; and 
equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action'' requiring review by the Office of 
Management and Budget (OMB), unless OMB waives such review, as ``any 
regulatory action that is likely to result in a rule that may: (1) Have 
an annual effect on the economy of $100 million or more or adversely 
affect in a material way the economy, a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, or tribal governments or communities; (2) 
Create a serious inconsistency or otherwise interfere with an action 
taken or planned by another agency; (3) Materially alter the budgetary 
impact of entitlements, grants, user fees, or loan programs or the 
rights and obligations of recipients thereof; or (4) Raise novel legal 
or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined, and it has 
been determined not to be a significant regulatory action under 
Executive Order 12866. VA's impact analysis can be found as a 
supporting document at http://www.regulations.gov, usually within 48 
hours after the rulemaking document is published. Additionally, a copy 
of the rulemaking and its impact analysis are available on VA's Web 
site at http://www.va.gov/orpm/, by following the link for ``VA 
Regulations Published From FY 2004 Through Fiscal Year to Date.''

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-
12). This final rule will not directly affect small entities. 
Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from 
the final regulatory flexibility analysis requirements of section 604.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This final rule will have no such effect on 
State, local, and tribal governments, or on the private sector.

Paperwork Reduction Act

    This final rule contains no provisions constituting a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
21).

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
the

[[Page 48451]]

programs affected by this document are 64.102, Compensation for 
Service-Connected Deaths for Veterans' Dependents; 64.105, Pension to 
Veterans, Surviving Spouses, and Children; 64.109, Veterans 
Compensation for Service-Connected Disability; and 64.110, Veterans 
Dependency and Indemnity Compensation for Service-Connected Death.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. Robert L. 
Nabors II, Chief of Staff, Department of Veterans Affairs, approved 
this document on August 7, 2015, for publication.

List of Subjects in 38 CFR Part 3

    Administrative practice and procedure, Claims, Disability benefits, 
Health care, Pensions, Radioactive materials, Veterans, Vietnam.

    Dated: August 10, 2015.
Michael Shores,
Chief Impact Analyst, Office of Regulation Policy & Management, Office 
of the General Counsel, Department of Veterans Affairs.

    For the reasons set forth in the preamble, VA amends 38 CFR part 3 
as follows:

PART 3--ADJUDICATION

Subpart A--Pension, Compensation, and Dependency and Indemnity 
Compensation

0
1. The authority citation for part 3, subpart A continues to read as 
follows:

    Authority:  38 U.S.C. 501(a), unless otherwise noted.


0
2. Amend Sec.  3.57:
0
a. In paragraph (a)(1) introductory text, by removing the phrase 
``paragraphs (a)(2) and (3)'' and adding in its place ``paragraphs 
(a)(2) through (4)''.
0
b. By adding paragraph (a)(4).
0
c. By adding an authority citation immediately following newly added 
paragraph (a)(4).
0
d. By revising the Cross References at the end of the section.
    The revisions and additions read as follows:


Sec.  3.57  Child.

    (a) * * *
    (4) For purposes of any benefits provided under 38 U.S.C. 1115, 
Additional compensation for dependents, the term child does not include 
a child of a veteran who is adopted out of the family of the veteran. 
This limitation does not apply to any benefit administered by the 
Secretary that is payable directly to a child in the child's own right, 
such as dependency and indemnity compensation under 38 CFR 3.5.

(Authority: 38 U.S.C. 101(4), 501, 1115).

* * * * *
    CROSS REFERENCES: Improved pension rates. See Sec.  3.23. Improved 
pension rates; surviving children. See Sec.  3.24. Child adopted out of 
family. See Sec.  3.58. Child's relationship. See Sec.  3.210. 
Helplessness. See Sec.  3.403(a)(1). Helplessness. See Sec.  
3.503(a)(3). Veteran's benefits not apportionable. See Sec.  3.458. 
School attendance. See Sec.  3.667. Helpless children--Spanish-American 
and prior wars. See Sec.  3.950.

0
3. Revise Sec.  3.58 to read as follows:


Sec.  3.58  Child adopted out of family.

    (a) Except as provided in paragraph (b) of this section, a child of 
a veteran adopted out of the family of the veteran either prior or 
subsequent to the veteran's death is nevertheless a child within the 
meaning of that term as defined by Sec.  3.57 and is eligible for 
benefits payable under all laws administered by the Department of 
Veterans Affairs.
    (b) A child of a veteran adopted out of the family of the veteran 
is not a child within the meaning of Sec.  3.57 for purposes of any 
benefits provided under 38 U.S.C. 1115, Additional compensation for 
dependents.

(Authority: 38 U.S.C. 101(4)(A), 1115).


    CROSS REFERENCES: Child. See Sec.  3.57. Veteran's benefits not 
apportionable. See Sec.  3.458.

0
4. Amend Sec.  3.458:
0
(a) In paragraph (d), by removing the phrase ``, except the additional 
compensation payable for the child''.
0
(b) By adding Cross References at the end of the section.
    The addition reads as follows:


Sec.  3.458  Veterans benefits not apportionable.

* * * * *
    CROSS REFERENCES: Child. See Sec.  3.57. Child adopted out of 
family. See Sec.  3.58.

[FR Doc. 2015-19949 Filed 8-12-15; 8:45 am]
 BILLING CODE 8320-01-P