[Federal Register Volume 76, Number 147 (Monday, August 1, 2011)]
[Rules and Regulations]
[Pages 45697-45705]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19473]
[[Page 45697]]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 21
RIN 2900-AO10
Vocational Rehabilitation and Employment Program--Changes to
Subsistence Allowance
AGENCY: Department of Veterans Affairs.
ACTION: Interim final rule.
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SUMMARY: This interim final rule amends Department of Veterans Affairs
(VA) regulations to reflect changes made by the Post-9/11 Veterans
Educational Assistance Improvements Act of 2010, effective August 1,
2011, that affect payment of vocational rehabilitation benefits for
certain service-disabled veterans. Pursuant to these changes, a
veteran, who is eligible for a subsistence allowance under chapter 31
of title 38, United States Code, and educational assistance under
chapter 33 of title 38, United States Code, may participate in a
rehabilitation program under chapter 31 and elect to receive a payment
equal in amount to an applicable military housing allowance payable
under title 37, United States Code, instead of the regular subsistence
allowance under chapter 31. In addition, payments of subsistence
allowances during periods between school terms are discontinued, and
payments during periods of temporary school closings are modified. This
rulemaking amends VA regulations consistent with this new authority.
DATES: This interim final rule is effective August 1, 2011. Comments
must be received on or before August 31, 2011.
ADDRESSES: Written comments may be submitted through http://www.Regulations.gov; by mail or hand-delivery to Director, Regulations
Management (02REG), Department of Veterans Affairs, 810 Vermont Ave.,
NW., Room 1068, Washington, DC 20420; or by fax to (202) 273-9026.
Comments should indicate that they are submitted in response to ``RIN
2900-AO10, Vocational Rehabilitation and Employment Program--Changes to
Subsistence Allowance.'' Copies of comments received will be available
for public inspection in the Office of Regulation Policy and
Management, Room 1063B, between the hours of 8:00 a.m. and 4:30 p.m.,
Monday through Friday (except holidays). Please call (202) 461-4902 for
an appointment. (This is not a toll-free number.) In addition, during
the comment period, comments are available online through the Federal
Docket Management System (FDMS) at http://www.Regulations.gov.
FOR FURTHER INFORMATION CONTACT: Alvin Bauman, Senior Policy Analyst,
Vocational Rehabilitation and Employment Service (28), Veterans
Benefits Administration, Department of Veterans Affairs, 810 Vermont
Ave., NW, Washington, DC 20420, (202) 461-9600 (not a toll-free
number).
SUPPLEMENTARY INFORMATION: Section 3108 of title 38, United States Code
(U.S.C.), requires the payment of a subsistence allowance to veterans
during a period of participation in a rehabilitation program under
chapter 31 of title 38, United States Code. Pursuant to 38 U.S.C.
3322(a), a veteran cannot receive assistance under chapter 31 and
chapter 33, Post-9/11 Educational Assistance, concurrently; he or she
must elect under which chapter to receive assistance. Because the
monthly housing allowance authorized under chapter 33 for eligible
individuals pursuing programs of education may be considerably higher
than the appropriate chapter 31 subsistence allowance, veterans with
service-connected disabilities have an incentive to apply for chapter
33 educational assistance rather than enroll in VA's chapter 31 program
of vocational rehabilitation and training. By doing so, they would
forego certain individualized rehabilitation services, such as
counseling and employment assistance, which are available under chapter
31. Congress recognized this and was ``concerned that the greater
benefit available under the chapter 33 program provides a disincentive
for service-connected disabled veterans to enroll in the chapter 31
program, which means they would forego the important and valuable
benefits, services, counseling, and employment assistance support that
are available under the chapter 31 program of training and
rehabilitation.'' S. Rep. No. 111-346 at 23 (2010). Congress intended
to remove this disincentive by allowing eligible veterans to elect a
payment equal in amount to an applicable military housing allowance
payable under title 37, United States Code, if they enroll in a chapter
31 rehabilitation program. Id.
Accordingly, Congress amended 38 U.S.C. 3108(b), effective August
1, 2011, to authorize a veteran, eligible for both a chapter 31
subsistence allowance and a chapter 33 educational assistance to
participate in a rehabilitation program under chapter 31 and elect to
receive a payment in an alternate amount in lieu of the chapter 31
subsistence allowance. The Post-9/11 Veterans Educational Assistance
Improvements Act of 2010, Public Law 111-377, sec. 205. The alternate
amount must be equal to the ``applicable monthly amount of basic
allowance for housing payable under [37 U.S.C. 403] for a member with
dependents in pay grade E-5 residing in the military housing area that
encompasses all or the majority portion of the ZIP code area in which
is located the institution providing the rehabilitation program
concerned'' (BAH). Id. Under the new law, veterans may receive the
individualized supportive services provided under chapter 31 and elect
the alternate amount to receive a greater monthly allowance than they
would otherwise receive.
We are therefore amending 38 CFR 21.264 to allow a veteran to elect
a subsistence allowance in an alternate amount, which we refer to as
the Post-9/11 subsistence allowance, in lieu of the amount provided for
in 38 CFR 21.260(b). We are indicating that, to be eligible to elect
the Post-9/11 subsistence allowance, a veteran must be found to be
eligible for training or education under chapter 31 and educational
assistance under chapter 33. We specifically indicate that entitlement
to all chapter 31 services and assistance remains when this election is
made. For administrative purposes, we will allow a veteran who has
elected to receive payment of the Post-9/11 subsistence allowance to
reelect payment of the chapter 31 subsistence allowance at the rate in
Sec. 21.260(b) only after completion of a term, quarter, semester, or
defined period of instruction, unless the veteran no longer meets the
eligibility criteria for the election or would be unable to continue in
a rehabilitation program without immediate approval of the reelection.
We are also amending 38 CFR 21.260(a) to include the Post-9/11
subsistence allowance as a type of subsistence allowance that a veteran
participating in a rehabilitation program under 38 U.S.C. chapter 31
may elect to receive. In addition, we are amending Sec. 21.260 by
adding a new paragraph (c) to provide for payment of the Post-9/11
subsistence allowance in the event of an election, beginning August 1,
2011, based on the basic allowance for housing payable under 37 U.S.C.
403. In a footnote, we clarify that the Post-9/11 subsistence allowance
is paid in lieu of the subsistence allowance authorized in Sec.
21.260(b) and is not adjusted for dependents. We interpret Congress'
intent in basing the alternate amount a veteran may elect to receive on
the basic allowance for housing payable to a member of the military
with dependents in pay grade E-5 to mean that all veterans who elect to
receive the Post-9/11 subsistence allowance should
[[Page 45698]]
receive an amount adjusted for dependents. Therefore, we are not
further adjusting the Post-9/11 subsistence allowance for dependents as
we do for chapter 31 subsistence allowance under Sec. 21.260(b).
The rehabilitation program under chapter 31 includes on-job
training and non-paid work experience, during which an employer or
agency rather than an institution provides the training or
rehabilitation. Pub. L. 111-377 authorizes any veteran eligible for
both a chapter 31 subsistence allowance and chapter 33 educational
assistance, to participate in a rehabilitation program and elect the
alternate amount of payment of subsistence allowance, but it does not
specify how to calculate the alternate amount in the absence of an
institution. To allow payment of the Post-9/11 subsistence allowance
for veterans who are participating in on-job training or non-paid work
experience, in Sec. 21.260(c)(1), we include in the definition of BAH
that the zip code of the institution, employer, or agency providing the
training or rehabilitation may be used in determining the amount of the
Post-9/11 subsistence allowance.
The applicable rates of payment of the subsistence allowance for
veterans participating in a chapter 31 rehabilitation program are set
forth in 38 U.S.C. 3108(b) and adjusted based on the rate of pursuit of
training, whether full-time, three-quarter-time, or half-time, and
increased yearly by the percentage by which the Consumer Price Index
increases. Rates of payment for each type of training or rehabilitation
program are also found in tables in 38 CFR 21.260(b), with current
rates published yearly on the VA's Internet Web site. As stated
previously, Pub. L. 111-377, sec. 205, specifies that the alternate
amount that may be elected in lieu of the subsistence allowance must be
equal to the applicable monthly amount of basic allowance for housing
payable under 37 U.S.C. 403 for a member with dependents in pay grade
E-5 residing in the military housing area that encompasses all or the
majority portion of the ZIP code area in which is located the
institution providing the rehabilitation program concerned. However,
the new law does not specify that this alternate amount be paid
regardless of whether the training is pursued full-time or part-time.
There is no indication by Congress that the Post-9/11 subsistence
allowance must be paid in a manner different than the way current
subsistence allowance is paid. We interpret the lack of specificity in
this regard as an indication that we may continue to follow our current
practice of adjusting subsistence allowance rates based on rate of
pursuit of training. Furthermore, we continue to believe that veterans
who pursue training on a less than full-time basis should not be paid
the full amount of subsistence allowance.
Accordingly, we are adjusting rates of the Post-9/11 subsistence
allowance based on rates of pursuit of training. In a table in new
Sec. 21.260(c), we specify the payments of the Post-9/11 subsistence
allowance for the rehabilitation program that currently qualifies for
payment of a subsistence allowance under chapter 31. In a footnote to
the table, we explain that payments for courses being taken
simultaneously at more than one institution will be based on the BAH of
the zip code assigned to the parent institution. We retain the rule
with respect to payment of the current subsistence allowance for on-job
training that the rate paid may not exceed the difference between the
monthly training wage, not including overtime, and the entrance
journeyman wage for the veteran's objective. We also retain the rule
with respect to payment of the current subsistence allowance for
improvement of rehabilitation potential that the quarter-time rate may
be paid only during a period of extended evaluation.
For veterans pursuing a program of in-home training, including
training with an independent instructor or training solely through
distance learning, in which case the institution is in a different zip
code than where the veteran is located, Public Law 111-377 does not
specify how to calculate payments of the alternate subsistence
allowance that may be elected under this law. With respect to payments
of the monthly living stipend for veterans receiving chapter 33
educational assistance for pursuit of a program of education solely by
distance learning, Public Law 111-377 does specify how to calculate
payments. For veterans pursuing a program of education on more than a
half-time basis, solely by distance learning, Public Law 111-377
provides for payment of the chapter 33 living stipend at the rate of up
to 50 percent of the national average of basic allowance for housing
payable under 37 U.S.C. 403 for a member of the military with
dependents in pay grade E-5, adjusted based on the rate of pursuit.
Congress provided for such rate because it believed that, although
``payment of some portion of the living allowance is appropriate . . .
since one of the basic purposes of the living allowance is to offset
the cost of housing away from home and since most distance learning is
pursued from home, the full allowance does not appear supported at this
time.'' S. Rep. No. 111-346 at 11 (2010). Similarly, for veterans
pursuing training or rehabilitation under chapter 31 through a program
of in-home training, including solely through distance learning, there
is no local institution providing the rehabilitation or training and no
housing costs to offset. We believe Congress' statement with regard to
the monthly living stipend for veterans pursuing a program of education
was intended to apply to the similarly situated veterans pursuing
training or rehabilitation under chapter 31.
Accordingly, we will base the rate of the Post-9/11 subsistence
allowance for veterans pursuing training or rehabilitation full-time
through a program of in-home training or solely through distance
learning on the national average of basic allowance for housing payable
under 37 U.S.C. 403 for a member of the military with dependents in pay
grade E-5 and pay the allowance at 50 percent of the national average.
In Sec. 21.260(c)(2) we define BAH National Average as ``the average
(i.e., unweighted arithmetic mean) monthly amount of the basic
allowance for housing payable under 37 U.S.C. 403 for a member of the
military with dependents in pay grade E-5 residing in the United
States''. We will continue to make payments, adjusted based on rate of
pursuit, for veterans pursuing training or rehabilitation in-home or
solely through distance learning. We will therefore calculate the rates
of the Post-9/11 subsistence allowance for those veterans pursuing
training or rehabilitation in home or solely through distance learning
at less than full-time (three-quarter time or half-time) in the same
manner as we do for veterans pursuing institutional training or
rehabilitation. Thus, veterans pursuing training or rehabilitation in-
home or solely through distance learning at three-quarter time will
receive \3/4\ of 50 percent of the BAH National Average, or \3/8\ of
the BAH National Average, and veterans pursuing training or
rehabilitation in-home or solely through distance learning half-time
will receive \1/2\ of 50 percent of the BAH National Average, or \1/4\
of the BAH National Average. These rates of payment will be found in
the table in Sec. 21.260(c). In a footnote to the table, we clarify
that payments for training consisting of both distance learning and
courses at a local institution are based on the BAH of the local
institution because the veteran will incur costs away from home that
the allowance is intended to offset.
[[Page 45699]]
In addition, for veterans pursuing training or rehabilitation under
chapter 31 in foreign institutions, in which case there is no
institution with a zip code on which to base the rates of payment,
Public Law 111-377 does not specify how to calculate payments of the
Post-9/11 subsistence allowance. For veterans pursuing a program of
education under chapter 33 in a foreign country, Public Law 111-377
does specify that payment of the living stipend be based on the
national average of basic allowance for housing payable under 37 U.S.C.
403 for a member of the military with dependents in pay grade E-5 and
adjusted based on the rate of pursuit. We believe it is reasonable to
calculate payments of the Post-911 subsistence allowance for veterans
pursuing training or rehabilitation under chapter 31 in foreign
institutions in the same manner that Congress provided for similarly
situated veterans pursuing a program of education under chapter 33.
Therefore, we will base rates of payment of the Post-9/11 subsistence
allowance for training in foreign institutions on the BAH National
Average amount. We will continue to make payments of the Post-9/11
subsistence allowance for training in foreign institutions adjusted
based on rate of pursuit of training.
Under 38 CFR 21.79, VA charges for entitlement usage to determine
remaining entitlement. VA bases charges for entitlement usage on the
principle that a veteran who pursues a rehabilitation program for one
day should be charged one day of entitlement. When a chapter 31
participant elects to receive payment of the Post-9/11 subsistence
allowance under Sec. 21.260(c) in lieu of a subsistence allowance
under Sec. 21.260(b), he or she will continue to receive chapter 31
benefits and services. In such cases, the entitlement usage will be
deducted from the veteran's chapter 31 entitlement. No entitlement
charges will be made against chapter 33 because the veteran will not be
using chapter 33 benefits. We are revising Sec. 21.79 to make clear
that we will determine entitlement usage in this manner in the event of
an election of the Post-9/11 subsistence allowance.
Section 3112 of title 38, United States Code, establishes a
revolving fund for VA to use to make advances of no more than twice the
amount of the full-time institutional monthly subsistence allowance for
a veteran with no dependents to veterans pursuing a rehabilitation
program under chapter 31. Section 21.274 of title 38, Code of Federal
Regulations, specifies that the fund is to pay veterans who would
otherwise be unable to begin or continue in a rehabilitation program
without such assistance. Section 21.274 also specifies that the amount
of the advance may not exceed the amount needed or twice the monthly
subsistence allowance for a veteran without dependents in full-time
institutional training. Section 3112 clearly establishes that the limit
on these advances is based on the full-time institutional rate for a
veteran with no dependents. The full-time institutional rate for a
veteran with no dependents is specified in Sec. 21.260(b), whereas all
rates in new Sec. 21.260(c) are based on an allowance that includes
dependents. Therefore, the limit on the advances may not be based on
the rates of the Post-9/11 subsistence allowance in Sec. 21.260(c).
Accordingly, we clarify in Sec. 21.274(d)(1)(iii) that the limit
placed on the amount advanced from the revolving fund is based on the
subsistence allowance in Sec. 21.260(b).
Pursuant to 38 U.S.C. 3680(a)(3)(B), subsistence allowances are
authorized to be paid during periods when schools are temporarily
closed under an established policy based upon an Executive Order of the
President or due to an emergency situation, during periods between
consecutive school terms if there is a transfer to enroll in and pursue
a similar course at a different educational institution if the period
between consecutive terms is 30 days or less, or, in certain
circumstances, during periods between school terms, where the
educational institution certifies enrollment on an individual term
basis. Section 206 of Public Law 111-377 removes the authority to
continue to pay allowances between consecutive school terms involving a
transfer to another educational institution and between school terms
where the educational institution certifies enrollment on an individual
term basis. Section 206 also restricts the total number of weeks for
which allowances may be paid during periods when schools are
temporarily closed under an established policy based upon an Executive
Order of the President or due to an emergency situation to 4 weeks in
any 12-month period.
Accordingly, we are amending our regulation, Sec. 21.270,
``Payment of subsistence allowance during leave and between periods of
instruction'', that allows for the payment of subsistence allowance
between periods of instruction. We are removing paragraph (b),
``Payment for intervals between periods of instruction'', which
currently directs the payment of subsistence allowances for periods
between consecutive school terms involving a transfer and between
school terms where the educational institution certifies enrollment on
an individual term basis. We are also redesignating paragraph (c),
``Payment for other periods'', as paragraph (b). The new paragraph will
continue to specify that subsistence allowance will be paid for periods
in which the school is closed temporarily under emergency conditions
described in Sec. 21.4138(f). In a separate rulemaking, VA is
preparing a revision to Sec. 21.4138(f) to incorporate the change in
law regarding the restriction on the total number of weeks for which
allowances for veterans receiving any VA education benefit, including
chapter 31 benefits, may be paid during periods of temporary closure.
In addition, we are adding an authority citation to the end of the
section for clarification, correcting a misspelling, and revising the
section heading to replace the words ``between periods of instruction''
with the words ``other periods''.
Administrative Procedure Act
In accordance with 5 U.S.C. 553(b)(3)(B), the Secretary of Veterans
Affairs finds that there is good cause to dispense with advance public
notice and opportunity to comment on this rule and good cause to
publish this rule with an immediate effective date. The Secretary finds
that it is impracticable and contrary to the public interest to delay
this regulation for the purpose of soliciting prior public comment.
Sections 205 and 206 of Public Law 111-377 require that certain changes
to the rehabilitation program take effect on August 1, 2011. This
interim final rule is necessary to implement by August 1, 2011, the
statutory changes as they relate to chapter 31 subsistence allowances.
For instance, Public Law 111-377 does not address how the alternate
rate of subsistence allowance will be calculated in different
situations. Allowing veterans to elect an alternate rate of subsistence
allowance will ensure that such veterans receive the supportive
services under chapter 31 to assist them in the transition from
military to civilian careers. Because eligible veterans will begin to
make the election on August 1, 2011, it is important to have procedures
in place by this date to allow veterans to receive the alternate rate
of subsistence allowance authorized under the law as soon as they are
able. For these reasons, the Secretary of Veterans Affairs is issuing
this rule as an interim final rule. The Secretary of Veterans Affairs
will consider and address comments that are received within 30 days of
the date this
[[Page 45700]]
interim final rule is published in the Federal Register.
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 given year. This interim final rule will have no such
effect on State, local, and tribal governments, or on the private
sector.
Paperwork Reduction Act
This interim final rule does not contain any collections of
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521).
Regulatory Flexibility Act
The Secretary hereby certifies that this regulatory action 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. 601-612. This regulatory action will affect individuals and will
not affect any small entities. Therefore, pursuant to 5 U.S.C. 605(b),
this regulatory action is exempt from the initial and final flexibility
analysis requirements of sections 603 and 604.
Congressional Review Act
Under the Congressional Review Act, 5 U.S.C. 801-08, a major rule
is one that would have an annual effect on the economy of $100 million
or more, cause major increases in costs or prices for consumers, or
have significant adverse effects on competition or other aspects of the
economy. We have determined this rulemaking to be a major rule because
it will have an annual effect on the economy in excess of $100 million.
However, this rulemaking falls within an exception to the requirement
in 5 U.S.C. 801(a)(3) that a rule may not take effect until at least 60
days after the rule and accompanying report are submitted to Congress.
VA will submit a copy of this regulatory action and VA's Regulatory
Impact Analysis to the Comptroller General and to Congress, but the
rule will become effective upon publication in the Federal Register.
The Secretary has determined in accordance with 5 U.S.C. 808(2) that
there is good cause to make this regulatory action effective
immediately because advance public notice and opportunity to comment
thereon are impractical and contrary to the public interest. Sections
205 and 206 of Public Law 111-377 require that the changes to the
rehabilitation program take effect on August 1, 2011. VA regulations
must be in effect because Public Law 111-377 does not address how the
alternate rate of subsistence allowance will be calculated in different
situations. Allowing veterans to elect an alternate rate of subsistence
allowance will ensure that such veterans receive the supportive
services under chapter 31 to assist them in the transition from
military to civilian careers. Because eligible veterans will begin to
make the election on August 1, 2011, it is important to have procedures
in place by this date to allow veterans to receive the alternate rate
of subsistence allowance authorized under the law as soon as they are
able.
Executive Orders 13563 and 12866
Executive Orders 13563 and 12866 direct agencies to assess the
costs and benefits of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. Executive Order defines a ``significant regulatory
action,'' which requires review by the Office of Management and Budget
(OMB), 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 the Executive
Order. This rule has been designated an ``economically'' significant
regulatory action under section 3(f)(1) of Executive Order 12866.
Accordingly, the rule has been reviewed by OMB.
VA has examined the economic, interagency, budgetary, legal, and
policy implications of this regulatory action and followed OMB Circular
A-4 to the extent feasible in this Regulatory Impact Analysis. The
circular first calls for a discussion of the need for the regulatory
action.
Statement of Need
This rulemaking will amend VA regulations to reflect changes made
by the Post-9/11 Veterans Educational Assistance Improvements Act of
2010. We are revising Sec. 21.264 to allow veterans eligible for a
chapter 31 subsistence allowance and chapter 33 educational assistance
to elect either the allowable chapter 31 subsistence allowance or an
alternate amount of subsistence allowance, referred to as the Post-9/11
subsistence allowance. In addition, we are amending Sec. 21.260 to
include the Post-9/11 subsistence allowance rates, which are based on
the military housing allowance payable under title 37, United States
Code, referred to as the BAH. The BAH is based on the ZIP code area
where the institution providing the rehabilitation program is located.
We are also amending Sec. 21.274 to clarify that the maximum
amount allowable for an advance from the revolving fund will stay the
same--twice the amount of full-time subsistence allowance for a veteran
with no dependents in institutional training. In Sec. 21.274, we are
adding the phrase ``specified in 21.260(b)'' to clarify that the
advance from the revolving fund is based on the chapter 31 subsistence
allowance rates and not on the Post-9/11 subsistence allowance rates
specified in Sec. 21.260(c).
In addition, we are amending Sec. 21.270 to prohibit payment of
either the chapter 31 subsistence allowance or the Post-9/11
subsistence allowance during intervals between school terms. Payments
of subsistence allowance between school terms are no longer authorized
and payments of subsistence allowance during temporary school closings
are limited to 4 weeks in any 12-month period.
Summary of Estimated Impact
The estimated costs associated with this regulation are
$111,239,000.00 for Fiscal Year (FY) 2012 and $854,897,000.00 over a 5
year period. These are estimated costs based on the fact that there are
significant costs to VA based on new provisions to Sec. 21.264 and an
offset of costs (projected savings) from the new provisions to Sec.
21.270 of this rulemaking.
[[Page 45701]]
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Projected savings from
Estimated impact of no longer allowing
paying increased payment of subsistence
Fiscal year subsistence allowance allowance during Estimated costs ($000)
based on BAH ($000) intervals between terms
($000)
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2012................................. $162,579 $51,340 $111,239
2013................................. 194,298 53,685 140,613
2014................................. 224,957 55,252 169,705
2015................................. 257,256 56,865 200,391
2016................................. 291,533 58,584 232,949
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5-Year Total..................... 1,130,623 275,726 854,897
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Estimated costs and projections are based on the best reasonably
obtainable and available economic information. This analysis sets forth
the basic assumptions, methods, and data underlying the analysis and
discusses the uncertainties associated with the estimates. Assumptions
and methodologies for each portion of the analysis are explained in
more detail in the Estimate of Potential Program Costs below. VA
invites public comments on all of these projections.
Cost Benefit
The Post-9/11 subsistence allowance rates are greater than the
current chapter 31 subsistence allowance rates. Therefore, VA believes
that chapter 31 participants who are eligible to receive the greater
subsistence allowance will require less dependence on support programs
and will be able to devote more attention to their chapter 31 training/
rehabilitation program, thus creating better employment opportunities
and a better quality of life.
Alternatives
VA believes that there are no alternatives to the promulgation of
this rulemaking. The provisions of sections 205 and 206 of Public Law
111-377 must be implemented in the Code of Federal Regulations to
ensure accurate and consistent application of the law.
Estimate of Potential Program Costs
Section 21.264
To project the best possible economic impact of Sec. 21.264 in
this rulemaking, VA conducted an analysis to determine the average
annual difference between the chapter 31 subsistence allowance rate and
the new Post-9/11 subsistence allowance rate. Utilizing the FY 2012
President's Budget, the average annual chapter 31 subsistence allowance
rate is estimated to be $4,962.12 in FY 2012, and the average annual
Post-9/11 subsistence allowance rate is estimated to be $12,444.94 in
FY 2012. With the average annual Post-9/11 subsistence allowance rate
being $7,482.82 more than the average annual chapter 31 subsistence
allowance rate, VA assumes that all eligible chapter 31 participants
will elect to receive the Post-9/11 subsistence allowance rate under
the new provisions of Sec. 21.264.
VA also conducted an analysis on the total population of
participants in the Vocational Rehabilitation and Employment's (VR&E)
chapter 31 program. The analysis focused on the number of participants
who are currently receiving a monthly chapter 31 subsistence allowance
and who also have Operations Enduring Freedom and Iraqi Freedom (OEF/
OIF) military service.
Data from VR&E's FY 2012 Workload Projections for Trainees/
Participants indicate that there will be approximately a total of
62,078 chapter 31 participants receiving chapter 31 subsistence
allowance in FY 2012. Workload projections for the number of
participants receiving subsistence allowance were based on FY 2010
actual number of 61,405 from the VA Benefits Delivery Network Computer
Output Identification Number Target System Report 6002 with projected
increases for FY 2011 and FY 2012. To align with projections from the
FY 2012 President's Budget, the number of participants for FY 2012
(63,259) was then reduced by the number of participants that VA
projected would transfer from chapter 31 benefits to the Post-9/11 GI
Bill. Data-Matching between the Department of Defense and VA databases
indicated that approximately 30% of VR&E participants in FY 2011 had
OEF/OIF military service that qualified them to elect the Post-9/11
subsistence allowance. Over the next five years, VR&E projects an
increase of 5% per year of VR&E participants who have OEF/OIF service
based on the influx of more recent veterans leaving active duty and
applying for benefits while veterans from previous eras complete
participation in VR&E.
This data also identified an estimated 21,727 chapter 31
participants, or 35% of the total chapter 31 participants (62,078), who
will receive a monthly subsistence allowance in FY 2012 and have OEF/
OIF military service. It is estimated that all of these 21,727
participants will elect and receive the Post-9/11 subsistence allowance
based on their OEF/OIF service in FY 2012.
The estimated total number of chapter 31 participants (21,727) who
will be eligible to elect and receive the Post-9/11 subsistence
allowance based on their OEF/OIF service in FY 2012 was multiplied by
the difference between the two subsistence allowance rates ($7,482.82),
totaling approximately $163 million in FY 2012.
Projected increases to participants receiving subsistence
allowance, average annual payments, and the percentage of chapter 31
participants receiving subsistence allowance were applied in the out-
years and shown in the table below.
Estimated Impact of Paying Increased Subsistence Allowance Based on BAH
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total
of Chapter 31 Total * Percent of Average annual
(CH31) of CH31 CH31 difference
FY participants participants participants between current Obligations
receiving receiving SA receiving SA CH31 SA and new ($000)
Subsistence with OEF/OIF with OEF/OIF post-9/11 SA
Allowance (SA) service service
--------------------------------------------------------------------------------------------------------------------------------------------------------
2012.......................................................... 62,078 21,727 35 $7,482.82 $162,579
[[Page 45702]]
2013.......................................................... 63,892 25,557 40 7,602.54 194,298
2014.......................................................... 64,531 29,038 45 7,746.99 224,957
2015.......................................................... 65,176 32,588 50 7,894.19 257,256
2016.......................................................... 65,828 36,206 55 8,052.07 291,533
-----------------------------------------------------------------------------------------
5-Year Total.............................................. ................ ................ ................ ................ 1,130,623
--------------------------------------------------------------------------------------------------------------------------------------------------------
* VA assumes that the percentage of CH31 participants receiving SA and who have OEF/OIF military service will increase by 5% each year based on the
influx of more recent veterans leaving active duty and applying for benefits while veterans from previous eras complete participation in VR&E.
Section 21.270
To project the best possible economic impact of Sec. 21.270 in
this rulemaking, VA conducted an analysis to determine the associated
costs and/or savings by no longer allowing payment of either chapter 31
or Post-9/11 subsistence allowance during intervals between school
terms.
This amendment applies to all participants of the chapter 31
program who are currently participating in a training/rehabilitation
program for which subsistence allowance is payable.
Based on the FY 2012 President's Budget, the average annual
subsistence allowance payment is estimated to be $4,962.12 in FY 2012.
The average annual payment is based on 9 months of enrollment;
therefore, an average monthly subsistence payment would be $551.35. We
assumed that, on average, participants would have received one-and-a-
half months of interval subsistence allowance based on enrollment in
training for 9 months of the year. Therefore, the average annual
interval subsistence allowance rate for this 1.5 month interval period
is estimated to be $827.03 ($551.35 x 1.5) in FY 2012.
Data from VR&E's FY 2012 Workload Projections for Trainees/
Participants indicate that there will be approximately 62,078 chapter
31 participants receiving chapter 31 subsistence allowance in FY 2012.
Workload projections for the number of participants receiving
subsistence allowance were based on FY 2010 actual number of 61,405
from the VA Benefits Delivery Network Computer Output Identification
Number Target System Report 6002 with projected increases for FY 2011
and FY 2012. To align with projections from the FY 2012 President's
Budget, the number of participants for FY 2012 (63,259) was then
reduced by the number of participants that VA projected would transfer
from chapter 31 benefits to the Post-9/11 GI Bill.
The FY 2012 average annual interval subsistence allowance rate
($827.03) was multiplied by the FY 2012 total number of CH31
participants receiving subsistence allowance (62,078), totaling
approximately $51,340,000.00 in projected savings to VA in FY 2012.
Projected savings are estimated to be $51.3 million during FY 2012 and
$275.7 million over a five-year period.
Projected increases to participants receiving subsistence allowance
and average annual payments were applied in the out-years and are shown
in the table below.
Projected Savings From No Longer Allowing Payment of Subsistence Allowance During Intervals Between Terms
----------------------------------------------------------------------------------------------------------------
Total
of CH31 Average annual
participants interval SA Obligations
FY receiving rate (1.5 mths. ($000)
subsistence of SA)
allowance (SA)
----------------------------------------------------------------------------------------------------------------
2012...................................................... 62,078 $827.03 $51,340
2013...................................................... 63,892 840.25 53,685
2014...................................................... 64,530 856.22 55,252
2015...................................................... 65,176 872.49 56,865
2016...................................................... 65,829 889.94 58,584
-----------------------------------------------------
5-Year Total.......................................... ................ ................ 275,726
----------------------------------------------------------------------------------------------------------------
Accounting Statement and Table
As required by OMB Circular A-4, in the table below, VA has
prepared an accounting statement showing the classification of
transfers, benefits and costs associated with the provisions of this
rulemaking.
[[Page 45703]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Transfers
-----------------------------------------------------------------------------------------
Category Year dollar Present value Annualized
FY2012 FY2013 FY2014 FY2015 FY2016 ---------------------------------------
3% 7% 3% 7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Federal Annualized Monetized Transfers 2010.................. $111.2 $140.6 $169.7 $200.4 $232.9 $774.7 $684.2 $164.2 $156.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Qualitative benefits.................. The Post-9/11 subsistence allowance rates are greater than the current CH31 subsistence
allowance rates. Therefore, VA believes that CH31 participants who are eligible to
receive the greater subsistence allowance will require less dependence on support
programs and will be able to devote more attention to their CH31 training/rehabilitation
program, thus creating better employment opportunities and a better quality of life.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs................................. None.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Identification of Duplicative, Overlapping, or Conflicting Federal
Rules
There are no duplicative, overlapping, or conflicting Federal rules
identified with this regulatory action.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance number and title for the
program that would be affected by this interim final rule is 64.116,
Vocational Rehabilitation for Disabled Veterans.
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. John R.
Gingrich, Chief of Staff, Department of Veterans Affairs, approved this
document on July 21, 2011, for publication.
List of Subjects in 38 CFR Part 21
Administrative practice and procedure, Armed forces, Civil rights,
Claims, Colleges and universities, Conflict of interests, Education,
Employment, Grant programs--education, Grant programs--veterans, Health
care, Loan programs--education, Loan programs--veterans, Manpower
training programs, Reporting and recordkeeping requirements, Schools,
Travel and transportation expenses, Veterans, Vocational education,
Vocational rehabilitation.
Dated: July 21, 2011.
Robert C. McFetridge,
Director, Regulation Policy and Management, Office of the General
Counsel, Department of Veterans Affairs.
For the reasons set forth in the preamble, VA amends 38 CFR part 21
(subpart A) as follows:
PART 21--VOCATIONAL REHABILITATION AND EDUCATION
Subpart A--Vocational Rehabilitation and Employment Under 38 U.S.C.
Chapter 31
0
1. The authority citation for part 21, subpart A continues to read as
follows:
Authority: 38 U.S.C. 501(a), chs. 18, 31, and as noted in
specific sections.
0
2. Amend Sec. 21.79 by:
0
a. Redesignating paragraphs (f)(2), (f)(2)(i), (f)(2)(ii), and (f)(3)
as paragraphs (f)(3), (f)(3)(i), (f)(3)(ii), and (f)(4) respectively.
0
b. Adding a new paragraph (f)(2).
0
c. Adding an authority citation at the end of new paragraph (f)(2).
The additions read as follows:
Sec. 21.79 Determining entitlement usage under Chapter 31.
* * * * *
(f) Special situations. * * *
(2) When a chapter 31 participant elects to receive payment of the
Post-9/11 subsistence allowance under Sec. 21.260(c) in lieu of a
subsistence allowance under Sec. 21.260(b), the entitlement usage is
deducted from the veteran's chapter 31 entitlement. No entitlement
charges are made against chapter 33. (Authority: 38 U.S.C. 3108(b))
* * * * *
0
3. Amend Sec. 21.260 by:
0
a. Revising paragraph (a).
0
b. Redesignating paragraphs (c) and (d) as paragraphs (d) and (e),
respectively.
0
c. Adding a new paragraph (c).
The revisions and addition read as follows:
Sec. 21.260 Subsistence allowance.
(a) General. A veteran participating in a rehabilitation program
under 38 U.S.C. chapter 31 will receive a monthly subsistence allowance
at the rates in paragraph (b) of this section, unless the veteran
elects to receive an alternate payment (for the purposes of part 21,
subpart A, referred to as the Post-9/11 subsistence allowance) as
specified in paragraph (c) of this section, or payment at the rate of
monthly educational assistance allowance payable under 38 U.S.C.
chapter 30 for the veteran's type of training. See Sec. 21.264(a) for
election of payment at the chapter 30 rate and Sec. 21.264(b) for
election of the Post-9/11 subsistence allowance. See Sec. Sec.
21.7136, 21.7137, and 21.7138 to determine the applicable chapter 30
rate.
(Authority: 38 U.S.C. 3108(a), 3108(b), 3108(f))
* * * * *
(c) Rate of payment of Post-9/11 subsistence allowance. In lieu of
the subsistence allowance payable under paragraph (b) of this section,
VA pays the Post-9/11 subsistence allowance at the rates in the table
at the end of this paragraph, effective August 1, 2011, based on the
basic allowance for housing payable under 37 U.S.C. 403. For purposes
of the following table:
(1) BAH means ``the applicable amount of basic allowance for
housing payable under 37 U.S.C. 403 for a member of the military with
dependents in pay grade E-5 residing in the military housing area that
encompasses all or the majority portion of the ZIP code area in which
is located the institution, agency,
[[Page 45704]]
or employer providing the rehabilitation program concerned''.
(2) BAH National Average means ``the average (i.e., unweighted
arithmetic mean) monthly amount of the basic allowance for housing
payable under 37 U.S.C. 403 for a member of the military with
dependents in pay grade E-5 residing in the United States''.
Payment of Post-9/11 Subsistence Allowance in Accordance With Public Law
111-377
[Effective August 1, 2011] \1\
------------------------------------------------------------------------
Type of program Payment
------------------------------------------------------------------------
Institutional: \2\ .........................
Full-time................................ Entire BAH of institution
ZIP code.
\3/4\ time............................... \3/4\ BAH of institution
ZIP code.
\1/2\ time............................... \1/2\ BAH of institution
ZIP code.
Nonpay or nominal pay on-job training in a .........................
Federal, State, local, or federally
recognized Indian tribe agency; vocational
course in a rehabilitation facility or
sheltered workshop; institutional non-farm
cooperative:
Full-time only........................... Entire BAH of agency or
institution ZIP code.
Nonpay or nominal pay work experience in a
Federal, State, local, or federally
recognized Indian tribe agency:
Full-time................................ Entire BAH of agency ZIP
code.
\3/4\ time............................... \3/4\ BAH of agency ZIP
code.
\1/2\ time............................... \1/2\ BAH of agency ZIP
code.
Farm cooperative, apprenticeship, or other on- .........................
job training (OJT): \3\
Full-time only........................... Entire BAH of employer
ZIP code.
Combination of institutional and OJT (Full- .........................
time only):
Institutional greater than \1/2\ time.... Entire BAH of institution
ZIP code.
OJT greater than \1/2\ time \3\.......... Entire BAH of employer
ZIP code.
Non-farm cooperative (Full-time only): .........................
Institutional............................ Entire BAH of institution
ZIP code.
On-job \3\............................... Entire BAH of employer
ZIP code.
Improvement of rehabilitation potential: .........................
Full-time................................ Entire BAH of institution
ZIP code.
\3/4\ time............................... \3/4\ BAH of institution
ZIP code.
\1/2\ time............................... \1/2\ BAH of institution
ZIP code.
\1/4\ time \4\........................... \1/4\ BAH of institution
ZIP code.
Training consisting of solely distance .........................
learning: \5\
Full-time................................ \1/2\ BAH National
Average.
\3/4\ time............................... \3/8\ BAH National
Average.
\1/2\ time............................... \1/4\ BAH National
Average.
Training in the home, including independent .........................
instructor:
Full-time only........................... \1/2\ BAH National
Average.
Training in an institution not assigned a ZIP
code, including foreign institutions:
Full-time................................ Entire BAH National
Average.
\3/4\ time............................... \3/4\ BAH National
Average.
\1/2\ time............................... \1/2\ BAH National
Average.
------------------------------------------------------------------------
\1\ Effective August 1, 2011, the Post-9/11 subsistence allowance may be
paid in lieu of subsistence allowance authorized in Sec. 21.260(b),
and is not adjusted to include dependents.
\2\ For measurement of rate of pursuit, see Sec. Sec. 21.4270 and
21.4272 through 21.4275. Payments for courses being taken
simultaneously at more than one institution are based on the BAH of
the ZIP code assigned to the parent institution.
\3\ For on-job training, payment of the Post-9/11 subsistence allowance
may not exceed the difference between the monthly training wage, not
including overtime, and the entrance journeyman wage for the veteran's
objective.
\4\ The quarter-time rate may be paid only during extended evaluation.
\5\ Payment for training consisting of both distance learning and
courses taken at a local institution is based on the BAH of the ZIP
code assigned to the local institution.
(Authority: 38 U.S.C. 3108, 3115(a)(1))
* * * * *
0
4. Amend Sec. 21.264 by:
0
a. Revising the section heading.
0
b. Redesignating paragraphs (a) introductory text, (a)(1), (a)(2), and
(a)(3) as paragraphs (a)(1), (a)(1)(i), (a)(1)(ii), and (a)(1)(iii)
respectively.
0
c. Adding a new heading to paragraph (a).
0
d. Redesignating paragraphs (b) introductory text, (b)(1), and (b)(2)
as paragraphs (a)(2), (a)(2)(i), and (a)(2)(ii), respectively.
0
e. Redesignating paragraphs (c) introductory text, (c)(1), (c)(2), and
(c)(3) as paragraph (a)(3), (a)(3)(i), (a)(3)(ii), and (a)(3)(iii),
respectively.
0
f. Further redesignating paragraphs (c)(3)(i), (c)(3)(ii), and
(c)(3)(iii) as paragraphs (a)(3)(iii)(A), (a)(3)(iii)(B), and
(a)(3)(iii)(C), respectively.
0
g. Redesignating paragraph (d) as paragraph (a)(4).
0
h. Adding a new paragraph (b).
0
i. Revising the authority citation at the end of the section.
The revisions and additions read as follows:
Sec. 21.264 Election of payment at the 38 U.S.C. chapter 30
educational assistance rate or election of payment of Post-9/11
subsistence allowance.
(a) Election of chapter 30 educational assistance rate. * * *
(b) Election of payment of Post-9/11 subsistence allowance.
(1) Eligibility. Effective August 1, 2011, a veteran who applies
and is eligible for training or education under chapter 31 may elect to
receive payment of the Post-9/11 subsistence allowance under Sec.
21.260(c) in lieu of a subsistence allowance under Sec. 21.260(b),
provided the veteran has remaining eligibility for, and
[[Page 45705]]
entitlement to, educational assistance under chapter 33, Post-9/11 GI
Bill.
(2) Reelection of subsistence allowance under Sec. 21.260(b).
Reelection of payment of benefits at the chapter 31 subsistence
allowance rate under Sec. 21.260(b) may be made only after completion
of a term, quarter, semester, or other period of instruction unless:
(i) Chapter 33 eligibility or entitlement ends earlier; or
(ii) Failure to approve immediate reelection would prevent the
veteran from continuing in the rehabilitation program.
(3) Services under chapter 31. A veteran who elects payment of the
Post-9/11 subsistence allowance remains entitled to all other services
and assistance under chapter 31.
(Authority: 38 U.S.C. 3108(b))
0
5. Amend Sec. 21.270 by:
0
a. Revising the section heading.
0
b. Removing paragraph (b).
0
c. Redesignating paragraph (c) as paragraph (b).
0
d. In newly redesignated paragraph (b), removing ``Weeekend'' and
adding, in its place, ``Weekend''.
0
e. Adding an authority citation at the end of the section.
The revision and addition read as follows:
Sec. 21.270 Payment of subsistence allowance during leave and other
periods.
* * * * *
(Authority: 38 U.S.C. 3680(a))
0
6. Revise Sec. 21.274 (d)(1)(iii) to read as follows:
Sec. 21.274 Revolving fund loan.
* * * * *
(d) * * *
(1) * * *
(iii) The advance does not exceed either the amount needed, or
twice the monthly subsistence allowance for a veteran without
dependents in full-time institutional training specified in Sec.
21.260(b); and
* * * * *
[FR Doc. 2011-19473 Filed 7-29-11; 8:45 am]
BILLING CODE 8320-01-P