--- title: "Part X, Subpart ii, Chapter 4, Section B Authorization for Reductions in Disability Evaluations Under 38 CFR 3.105(e)" document: "M-21-1" section: "Part X, Subpart ii, Chapter 4, Section B" canonical: "https://veteranai.co/va-regulations/m21-1/x.ii.4.b-authorization-for-reductions-in-disability-evaluations-under" source: "https://www.knowva.ebenefits.va.gov/system/templates/selfservice/va_ssnew/help/customer/locale/en-US/portal/554400000001018/content/554400000177970/M21-1-Part-X-Subpart-ii-Chapter-4-Section-B-Authorization-for-Reductions-in-Disability-Evaluations-Under-38-CFR-3105e" updated: "2026-09-06T14:37:31.875988Z" --- August 19, 2021 ### X.ii.4.B.1.a. Role of the Rating Activity The rating activity * decides whether a reduction in the evaluation of a service-connected (SC) disability under [38 CFR 3.105(e)]() is in order, and * dictates (via a rating decision) the type of award adjustment, if any, the authorization activity must make. **Reference:** For more information on rating procedures for * proposed reductions, see [M21-1, Part X, Subpart ii, 3.D]() * reductions due to a clear and unmistakable error (CUE), see [M21-1, Part X, Subpart ii, 5.C](), and * reductions due to improvement, see [M21-1, Part X, Subpart ii, 4.A](). ### X.ii.4.B.1.b. Application of 38 CFR 3.105(e) [38 CFR 3.105(e)]() and the information in this topic apply _only_ when a reduction or discontinuance of a running award of disability compensation is necessary as a result of * a reduction in the evaluation of an SC disability, or * loss of entitlement to a total disability rating based on individual unemployability. **Example:** If the rating activity increases the evaluation of one or more SC disabilities or grants service connection (SC) for a new disability, _but_ the combined disability evaluation decreases because of a reduction in the evaluation of another disability, then * award the increase from the applicable effective date, and * apply the provisions of [38 CFR 3.105(e)]() to propose reduction of the combined disability evaluation. **Reference:** For more information on notification requirements for reduced disability evaluations, see [_Stelzel v. Mansfield_](), 508 F.3d 1345 (2007). ### X.ii.4.B.1.c. Initial Rating Activity Action Proposing a Reduction in a Disability Evaluation The rating activity prepares a rating decision proposing changes in the evaluation(s) assigned to SC disabilities that will result in a reduction or discontinuance of benefits. This rating decision * cites all the material facts and justification for the proposed action, and * provides the beneficiary with the proposed * evaluation(s) of the disability(ies) in question, and * combined evaluation, if applicable. ### X.ii.4.B.1.d. When 38 CFR 3.105(e) Does Not Apply Use the table below to determine when [38 CFR 3.105(e)]() does not apply.| If …| Then … the award is suspended| * reduce or discontinue the award in accordance with facts found, but not earlier than the date of suspension, and * notify the Veteran of the change in the evaluation of the SC disability(ies). * the evaluation of one or more SC disabilities is decreased, _but_ * the combined disability evaluation remains the same * take no further award action, and * notify the Veteran of the change in the evaluation of the SC disability(ies). * the evaluation of one or more SC disabilities is decreased, _but_ * the combined disability evaluation is increased because of an offsetting increase in the evaluation of another SC disability * award the increase from the appropriate effective date, and * notify the Veteran of the change in the evaluation of the SC disability(ies). the evaluation of an SC disability is decreased as part of a staged rating | * reduce the award in accordance with facts found, and * notify the Veteran of the change in the evaluation of the SC disability(ies) in the staged rating. **Note:** [_Tatum v. Shinseki_](), Vet.App 139, 141 (2010), held that notice under [38 CFR 3.105(e)]() is only required when there is a reduction in compensation payments currently being made. **Important:** In cases in which the rating schedule provides for a period of convalescence, the reduction may not take effect prior to the end of that period. **Example:** A malignant neoplasm of the genitourinary system evaluated under [38 CFR 4.115b, diagnostic code 7528](), must be evaluated as 100-percent disabling for a minimum of six months from the time treatment for the malignancy ceases. **Reference:** For more information on circumstances under which [38 CFR 3.105(e)]() does not apply to a change in a disability evaluation, see [VAOPGCPREC 71-1991](). 2. Authorization Procedures for Reductions in Disability Evaluations Under 38 CFR 3.105(e) Introduction| | This topic contains information on reductions in disability evaluations, including * initial notification of the proposed adverse action * action to take * if a Veteran expresses disagreement before VA makes a final decision, and * after a Veteran responds or fails to respond to a notice of proposed adverse action * withdrawing a proposal to reduce a disability evaluation under 38 CFR 3.105(e) * action to take on final rating decisions prepared under 38 CFR 3.105(e) * providing notification of a final rating decision * handling evidence received after preparation of a final rating decision but prior to the effective date of reduction, and * military retired pay (MRP) adjustment following a reduction in disability compensation. April 28, 2025 ### X.ii.4.B.2.a. Initial Notification of the Proposed Adverse Action Send a notice of proposed adverse action with a rating decision that proposes a reduction in a disability evaluation under [38 CFR 3.105(e)]() to the Veteran’s current address of record. The notice must * meet the requirements set forth in [M21-1, Part X, Subpart ii, 3.A](), and * inform the Veteran of the proposed date of the reduction, which is the last day of the month, 60 days after the date the Department of Veterans Affairs (VA) will notify the Veteran of the final rating decision. **Important:** If the Veteran meets basic eligibility criteria for pension, and the evidence of record suggests pension would be the greater or the only disability benefit to which the Veteran is entitled if VA takes the proposed action, * attach [_VA Form 21P-527EZ, Application for Veterans Pension_](), to the notice of proposed adverse action, and * explain to the Veteran why the form should be completed and returned. **Notes:** * The system claims processors use to adjust awards requires entry of the _first day_ of the month following a 60-day period that begins on the date VA notifies the Veteran of the final rating decision as the effective date of an award adjustment under [38 CFR 3.105(e)](). * There is no _requirement_ to include language about minimizing an overpayment since no overpayment will be created by the proposed award adjustment. However, when system-generated letters automatically include the language about minimizing an overpayment, the letter does not need to be revised to remove it. **Reference:** For more information on establishing entitlement to pension, see [M21-1, Part IX, Subpart i, 2](). ### X.ii.4.B.2.b. Action to Take if a Veteran Expresses Disagreement Before VA Makes a Final Decision Follow the instructions in [M21-1, Part X, Subpart ii, 3.B.2.b](), if a Veteran expresses disagreement with or requests decision review of a proposed action before VA makes a final decision. ### X.ii.4.B.2.c. Action to Take After a Veteran Responds or Fails to Respond to a Notice of Proposed Adverse Action Use the table below to determine the action to take after a Veteran * responds to the notice of proposed adverse action referenced in M21-1, Part X, Subpart ii, 4.B.2.a, or * fails to respond to the notice of proposed action within 65 days of the date VA sent it. | **If the Veteran …**| **Then …** * presents new evidence, or * requests a hearing within 30 days of the date of the notice of proposed adverse action | the rating activity will * ** _not_** prepare a final rating decision until the evidence is considered, the hearing is held, or the 60-day due process period elapses (whichever is _later_), and * take final rating action to reduce the evaluation(s) effective the last day of the month following a 60-day period that begins on the date VA will notify the Veteran of the final rating action, if a reduction is still warranted. **Note:** The system claims processors use to adjust awards requires entry of the _first day_ of the month following a 60-day period that begins on the date VA notified the Veteran of the final rating decision as the effective date of an award adjustment under [38 CFR 3.105(e)](). submits evidence that establishes a reasonable basis for reexamination| * request the examination, and * wait until the examination report has been received and considered before taking final rating action under [M21-1, Part X, Subpart ii, 4.A.1](). * does not submit additional evidence within 60 days, and * does not request a hearing | take final rating action. ### X.ii.4.B.2.d. Withdrawing a Proposal to Reduce a Disability Evaluation Under 38 CFR 3.105(e) To withdraw a proposal to reduce a disability evaluation under [38 CFR 3.105(e)](), the rating activity must prepare a rating decision that confirms and continues the current disability evaluation. ### X.ii.4.B.2.e. Action to Take on Final Rating Decisions Prepared Under 38 CFR 3.105(e) Promulgate final rating decisions prepared under [38 CFR 3.105(e)]() by * ensuring rating decision data is correctly reflected in the award application, and * making any necessary award adjustments. **References:** For more information on * final actions related to adverse action proposals, see [M21-1, Part X, Subpart ii, 3.B.4](), and * promulgating rating decisions in the Veterans Benefits Management System – Awards (VBMS-A), see the _VBMS Awards User Guide_. ### X.ii.4.B.2.f. Providing Notification of a Final Rating Decision After promulgating a final rating decision, * follow the instructions in [M21-1, Part VI, Subpart i, 1.B](), for preparing and sending a decision notice to the Veteran, even if the proposed action is not taken, and * send a copy of the decision notice to the Veterans Readiness and Employment activity for appropriate action if evidence of record indicates the Veteran is receiving training under [38 U.S.C. Chapter 31](). ### X.ii.4.B.2.g. Handling Evidence Received After Preparation of a Final Rating Decision but Prior to the Effective Date of Reduction Use the table below to determine what steps to take if VA receives evidence _after_ making a final rating decision under [38 CFR 3.105(e)]() but _prior to_ the effective date of a corresponding reduction in benefits. | **If the rating activity …**| **Then …** decides the evidence establishes a need for a reexamination| * prepare an amended award to continue the rate previously in effect, and * maintain end product control for receipt of the examination report. prepares a new rating decision restoring the prior disability evaluation(s)| * prepare an amended award to cancel the scheduled reduction * use as the effective date the earlier of either the first day of the * current month, or * month the canceled reduction was scheduled, and * annotate the award document _New rating_ **[date]**_cancels prior rating_ **[date]**. prepares a new rating decision partially restoring the prior disability evaluation(s)| reduce the award effective the last day of the month, 60 days after the date VA notifies the Veteran of the _final_ rating decision. **Note:** The system claims processors use to adjust awards requires entry of the _first day_ of the month following a 60-day period that begins on the date VA notified the Veteran of the final rating decision as the effective date of an award adjustment under [38 CFR 3.105(e)](). _**References**_ : For more information on * new rating decisions based on new evidence, see [M21-1, Part X, Subpart ii, 3.D.1.f](), and * procedures to follow when corrected notice of proposed adverse action is required, see [M21-1, Part X, Subpart ii, 3.A.3.e](). ### X.ii.4.B.2.h. MRP Adjustment Following a Reduction in Disability Compensation When VA reduces a Veteran’s disability compensation to reflect a reduced disability evaluation, the Veteran’s retired pay center receives notification (via a computerized data exchange) of the reduction and makes corresponding changes to the Veteran’s military retired pay (MRP) if the Veteran waived all or a portion of the MRP to receive disability compensation.