Initial Release Date:  October 21, 2010                             SUBJ:  Delayed Payment Provision of 38 C.F.R. §3.31 and Certain Dependency and Indemnity Compensation (DIC) Awards for Schoolchildren                            Purpose   This letter revises procedures for awarding DIC benefits to a child receiving benefits under an apportioned DIC award (e.g., a surviving spouse exists) when the child becomes entitled to DIC based on school attendance.                                We have determined that the delayed payment provision of 38 C.F.R. §3.31 (i.e., “Omnibus” or “OBRA”) does not apply in this situation.                           Background                        When a surviving spouse exists, a minor child [under age 18] is not independently entitled to DIC.  If the minor child is in the custody of the surviving spouse, the surviving spouse receives an additional allowance for the child.  If the minor child is not in the custody of the surviving spouse, VA generally apportions the additional allowance to the child’s fiduciary.                               When a surviving spouse exists, a child who attains age 18 and is attending school is eligible for a separate award at the DIC schoolchild rate (see 38 U.S.C. §1314(c)).  If the child is receiving benefits under an apportioned DIC award, current procedures (M21-1MR Part, III, Subpart iii Chapter 6, Section B.5.e) are to make a separate award to the schoolchild effective the date of his or her 18th birthday, continuing the apportioned benefit rate; effective the first day of the month following the child’s 18th birthday, the award is adjusted to pay the schoolchild rate.                               However, when a surviving spouse exists, the schoolchild rate is less than the minor child apportioned rate.  Therefore, the delayed payment provision of 38 C.F.R. §3.31 does not apply.  Procedures are revised as follows.                                             Revised Procedures                           Effective immediately, follow the steps in the table below for a child receiving benefits under an apportioned DIC award who becomes entitled to separate benefits based on school attendance.  For award purposes, if not otherwise instructed by this letter, continue to follow normal processing procedures.                                   Step Action 1 Terminate dependency and apportionment on the surviving spouse award effective the child’s 18th birthday. 2 Make a separate award to the child based on school attendance effective the child’s 18th birthday, paying the schoolchild rate.                 Note:  This procedure assumes that the schoolchild has submitted his or her school attendance claim within the prescribed time limits for entitlement to DIC from his or her 18th birthday (see 38 C.F.R. §3.667).                                              We will update the M21-1Manual Rewrite as necessary.                      Questions                                  Submit questions concerning this fast letter to your Veterans Service Officer (VSO).

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