05-5973. Exclusions From Income and Net Worth Computations

AGENCY:

Department of Veterans Affairs.

ACTION:

Final rule.

SUMMARY:

This document amends the Department of Veterans Affairs (VA) adjudication regulations to exclude from income and net worth computations in the pension and parents' dependency and indemnity compensation programs benefits or payments received pursuant to the Medicare Prescription Drug Discount Card and Transitional Assistance Program in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. This amendment is necessary to conform the regulations to statutory provisions.

DATES:

Effective date: March 28, 2005.

FOR FURTHER INFORMATION CONTACT:

Maya Ferrandino, Consultant (211A), Compensation and Pension Service, Policy and Regulations Staff, Veterans Benefits Administration, 810 Vermont Avenue, NW., Washington, DC 20420, [phone].

SUPPLEMENTARY INFORMATION:

All income is countable when VA determines entitlement to income-based benefits unless specifically excluded by law. Section 101 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Public Law 108-173, added section 1860D-31 to the Social Security Act (42 U.S.C. 1395w-141), creating a Medicare prescription drug discount card and transitional assistance program. This program allows Medicare beneficiaries to pool their purchasing power to secure substantial discounts on their medicines. Medicare beneficiaries at or below 135 percent of the federal poverty level can qualify for $600 in additional assistance for the remainder of 2004 and another $600 in 2005. The drug discounts and $600 in transitional assistance became available on June 1, 2004.

A provision of the MMA clarifies the potential interaction between the drug discount card and transitional assistance and VA's pension and parents dependency and indemnity compensation benefits by stating that, “[t]he availability of negotiated prices or transitional assistance under this Section shall not be treated as benefits or otherwise taken into account in determining an individual's eligibility for, or the amount of benefits under, any other Federal program.” Section 1860D-31(g)(6) of the Social Security Act. Therefore, the transitional assistance program and any savings associated with the prescription drug discount card are not income or net worth for VA purposes. This document amends 38 CFR 3.261, 3.262, 3.263, 3.272, and 3.275 to reflect this statutory change.

This final rule merely restates statutory provisions. Accordingly, there is a basis for dispensing with prior notice and comment and the delayed effective date provisions of 5 U.S.C. 552 and 553.

Paperwork Reduction Act

This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).

Regulatory Flexibility Act

Because no notice of proposed rulemaking was required in connection with the adoption of this final rule, no regulatory flexibility analysis is required under the Regulatory Flexibility Act (5 U.S.C. 601-612). Even so, the Secretary hereby certifies that this regulatory amendment will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act.

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 developing any rule that may result in an expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any given year. This rule would have no such effect on State, local, or tribal governments, or the private sector.

Catalog of Federal Domestic Assistance Numbers

The Catalog of Federal Domestic Assistance program numbers for this proposal are 64.104, 64.105, and 64.110.

List of Subjects in 38 CFR Part 3

• Administrative practice and procedure
• Claims
• Disability benefits
• Health care
• Pensions
• Veterans
• Vietnam

Approved: February 10, 2005.

Gordon H. Mansfield,

Deputy Secretary of Veterans Affairs.

For the reasons set forth in the preamble, 38 CFR part 3 is amended as follows:

PART 3—ADJUDICATION

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

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

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

2. In § 3.261, paragraph (a) is amended by adding entry (42) at the end of the table to read as follows:

§ 3.261

Character of income; exclusions and estates.

* * * * *

(a) * * *

Income	Dependency (parents)	Dependency and indemnity compensation (parents)	Pension; old-law (veterans, surviving spouses and children)	Pension; section 306 (veterans, surviving spouses and children)	See-
*         *         *         *         *         *         *
(42) Income received under the Medicare prescription drug discount card and transitional assistance program (42 U.S.C. 1395w-141(g)(6))	Excluded	Excluded	Excluded	Excluded	§ 3.262 (aa)

3. Section 3.262 is amended by:

a. Adding paragraph (aa) immediately following the first authority citation at the end of paragraph (z); and

b. Removing the second authority citation at the end of the section.

The addition reads as follows:

§ 3.262

Evaluation of income.

* * * * *

(aa) Medicare Prescription Drug Discount Card and Transitional Assistance Program. For purposes of old law pension, section 306 pension, and parents' dependency and indemnity compensation, the payments received under the Medicare transitional assistance program and any savings associated with the Medicare prescription drug discount card will not be considered income.

(Authority: 42 U.S.C. 1395w-141(g)(6))

4. Section 3.263 is amended by:

a. Adding an authority citation at the end of paragraph (f).

b. Adding paragraph (i) immediately following the first authority citation at the end of paragraph (h).

c. Removing the second authority citation at the end of section.

The additions read as follows:

§ 3.263

Corpus of estate; net worth.

* * * * *

(f) * * *

(Authority: Sec. 105, Pub. L. 100-383; 102 Stat. 905; Sec. 6. Pub. L. 102-371; 106 Stat. 1167, 1168)

* * * * *

(i) Medicare Prescription Drug Discount Card and Transitional Assistance Program. There shall be excluded from the corpus of estate or net worth of a claimant payments received under the Medicare transitional assistance program and any savings associated with the Medicare prescription drug discount card.

(Authority: 42 U.S.C. 1395w-141(g)(6))

5. Section 3.272 is amended by:

a. Revising the authority citation at the end of paragraph (u).

b. Adding paragraph (w) immediately following the first authority citation at the end of paragraph (v).

c. Removing the second authority citation at the end of the section.

The revision and addition read as follows:

§ 3.272

Exclusions from income.

* * * * *

(u) * * *

(Authority: 38 U.S.C. 1833(c))

* * * * *

(w) Medicare Prescription Drug Discount Card and Transitional Assistance Program. The payments received under the Medicare transitional assistance program and any savings associated with the Medicare prescription drug discount card.

(Authority: 42 U.S.C. 1395w-141(g)(6))

6. Section 3.275 is amended by:

a. Revising the authority citation for paragraph (i).

b. Adding paragraph (k) immediately following the first authority citation at the end of paragraph (j).

c. Removing the second authority citation at the end of the section.

The revision and addition read as follows:

§ 3.275

Criteria for evaluating net worth.

* * * * *

(i) * * *

(Authority: 38 U.S.C. 1833(c))

* * * * *

(k) Medicare Prescription Drug Discount Card and Transitional Assistance Program. There shall be excluded from the corpus of estate or net worth of a claimant payments received under the Medicare transitional assistance program and any savings associated with the Medicare prescription drug discount card.

(Authority: 42 U.S.C. 1395w-141(g)(6))