--- title: "Part X, Subpart v, Chapter 2, Section D Proceeds" document: "M-21-1" section: "Part X, Subpart v, Chapter 2, Section D" canonical: "https://veteranai.co/va-regulations/m21-1/x.v.2.d-proceeds" source: "https://www.knowva.ebenefits.va.gov/system/templates/selfservice/va_ssnew/help/customer/locale/en-US/portal/554400000001018/content/554400000325573/M21-1-Part-X-Subpart-v-Chapter-2-Section-D-Proceeds" updated: "2026-09-07T14:37:59.682633Z" --- June 10, 2026 ### X.v.2.D.1.a. Creation of a Proceed Balance When Department of Veterans Affairs (VA) benefit payments are cancelled and/or returned after issuance by the Department of Treasury, these payments become non-negotiated benefit payments which create a proceed balance** __** in a beneficiary’s corporate record. When a proceed balance is created, an end product (EP) 290 is established with a claim label describing the reason the payment was returned. Common proceed reason descriptions associated with EP 290 include * bad address * non-entitlement, or * reportedly deceased. **References:** For more information on * proceed reason descriptions, see [M24-2, Chapter 08, Section 2.03](), and * claim labels associated with proceeds, see [M21-4, Appendix C](). ### X.v.2.D.1.b. Reviewing the Award Status A returned payment will often result in an automatic suspension of the beneficiary’s award. Upon receipt of the EP 290 described in M21-1, Part X, Subpart v, 2.D.1.a, review the beneficiary’s AWARD STATUS in the Veterans Benefits Management System (VBMS) as noted in the table below. | **Award Status**| **Significance** _Authorized_| The beneficiary’s payments are active. _Terminated_| The beneficiary is either deceased or currently not entitled to benefits. _Suspended_| The beneficiary’s payments have been discontinued effective the date shown in the LAST PAID DATE field in the CURRENT AND HISTORICAL AWARD SCREEN in VBMS. ### X.v.2.D.1.c. Accounts Receivable and Proceeds Returned payments are generally applied to any outstanding debt through system functionality when they are for the same VA benefit. However, there will be instances when a proceed balance is created and needs to be released manually.During the initial review of the claims folder, identify whether the beneficiary has an accounts receivable as discussed in [M21-1, Part VI, Subpart iii, 2.B](), and review for a payment plan or recurring recoupment.Release the proceeds without additional recoupment when * a payment plan exists, or * VA already collected from the returned payment. Follow local regional office procedures to contact the finance activity for assistance in determining whether the proceed balance should be applied to an accounts receivable balance.**Reference:** For more information on reviewing for accounts receivable and recoupments, see the [_Proceeds Workflow Job Aid_](). ### X.v.2.D.1.d. Information About Fiscal Transactions When award action does not release a proceed balance, send the [_Proceeds Memorandum_]() to the finance activity with instructions to complete a specific fiscal transaction.Detailed information about fiscal transactions to release the proceed balance is provided in the following table.| **Code**| **Transaction Label**| **Action** 75A| One-time payment| Releases the payment to the beneficiary. 75B| Apply to accounts receivable| Applies the payment to the beneficiary’s account receivable balance. 75C| Return to appropriation| Removes the payment from the beneficiary’s account completely and returns the funds to VA’s overall budget for allocation of benefits. **References:** For more information on * fiscal transactions, see [M24-1, Chapter 01, Part 03, Appendix H](), and * when to send the [_Proceeds Memorandum_]() __ to the finance activity, see M21-1, Part X, Subpart v, 2.D.2.b-d. ## 2. Releasing Proceeds This topic contains information on releasing proceeds, including * general review of the Veteran’s claims folder, and * proceeds created due to * a bad address * non-entitlement, and * the death of the beneficiary. June 10, 2026 ### X.v.2.D.2.a. General Review of the Veteran’s Claims Folder After completing a general review of the Veteran’s claims folder, take action based on the claim label associated with the pending EP 290 as directed in M21-1, Part X, Subpart v, 2.D.2.b-d.**Important:** When review of all relevant evidence reveals that no proceeds exist or no action is needed to resume an award, * cancel the pending EP 290 as directed in [M21-4, Appendix B, 1.b](), using the reason _Message Received, No Action Necessary_ , and * add a VBMS note explaining why no action was taken. ### X.v.2.D.2.b. Proceeds Created Due to a Bad Address Follow the steps in the table below when an EP 290 is established indicating a proceed balance was created due to a bad address.| **Step**| **Action** 1| Attempt to obtain a corrected address by telephone and document the results in accordance with [M21-1, Part III, Subpart i, 2.D.1.e]().Was an updated address obtained? * If _yes_ , go to Step 5. * If _no_ , go to the next step. 2| Follow Steps 1 through 6 of the procedure described in [M21-1, Part II, Subpart i, 2.C.6.d]() to obtain an updated address.Was an updated address obtained? * If _yes_ , go to Step 5. * If _no_ , go to the next step. 3| Is the direct deposit information available? * If _yes_ , * send a letter to the financial institution of record, requesting the beneficiary’s address, and * go to the next step after the 30-day suspense period for the letter expires. * If _no_ , go to Step 10. 4| Was an updated address identified? * If _yes_ , go to the next step. * If _no_ , go to Step 10. 5| Process a change of address (CADD) with the updated address.**Note:** Notify the fiduciary hub of jurisdiction when a valid change of address or direct deposit information is received for a beneficiary that has a fiduciary, as discussed in [M21-1, Part II, Subpart iii, 3.B.1.c](). 6| Does the beneficiary’s PAY STATUS field show _Authorized_ , and the PROCEEDS BALANCE table display _No Proceeds Balance Items Found_? * If _yes_ , * clear the EP 290, and * disregard the remaining steps in this table. * If _no_ , go to the next step. **Reference:** For more information on reviewing the beneficiary’s PAY STATUS field or PROCEEDS BALANCE table, see the [_Proceeds Workflow Job Aid_](). 7| If the PAY STATUS field shows _Suspended_ or _Terminated_ , or a CADD completed in Step 5 did not release the proceeds, * take the necessary steps within VBMS – Awards (VBMS-A) to resume the payment, and * refer the claim to authorization. **References:** For more information on * reviewing the beneficiary’s PAY STATUS field, see the [_Proceeds Workflow Job Aid_](), and * resuming benefits by award action, see the _VBMS-A User Guide_. 8| After authorizing the claim, validate that the beneficiary’s PAY STATUS field shows _Authorized_ , and review the PROCEEDS balance field. Were the proceeds released? * If _yes_ , disregard the remaining steps in this table. * If _no_ , go to the next step. **Reference:** For more information on reviewing the beneficiary’s PAY STATUS field or PROCEEDS BALANCE table, see the [_Proceeds Workflow Job Aid_](). 9| Complete the [_Proceeds Memorandum_]() to notify the finance activity to release the proceeds and upload it to the claims folder, identifying the memorandum by entering the following information: * CATEGORY – TYPE: _Determinations: VA Memo_ * SOURCE: _User_ , and * SUBJECT: _Proceeds Memo_. Disregard the remaining steps in this table.**Reference:** For more information on the available fiscal transactions used to release the proceed balance, see M21-1, Part X, Subpart v, 2.D.1.d. 10| * Discontinue the beneficiary’s award as of the date in the LAST PAID DATE field on the CURRENT AND HISTORICAL AWARD INFORMATION field in VBMS-A, using _Whereabouts Unknown_ in the DECISION field on the BASIC ELIGIBILITY tab * send contemporaneous notice of the discontinuation, and * complete the [_Proceeds Memorandum_]() to notify the finance activity to return the proceeds to appropriation and upload it to the claims folder, identifying the memorandum by entering the following information: * CATEGORY – TYPE: _Determinations: VA Memo_ * SOURCE: _User_ , and * SUBJECT: _Proceeds Memo_. **Reference:** For more information on the available fiscal transactions used to release the proceed balance, see M21-1, Part X, Subpart v, 2.D.1.d. ### X.v.2.D.2.c. Proceeds Created Due to Non-Entitlement The _non-entitlement_ claim label does not indicate that the beneficiary is ineligible for the payment. Reasons outside of _bad address_ and _death of beneficiary_ automatically get assigned to this category.Conduct a thorough review of the following items to establish a timeline of events to aid in the determination of entitlement, including, but not limited to * beneficiary correspondence * documents from the finance activity * recent award activity, and * mailing and payment address history. After conducting the review of the beneficiary’s record, follow the steps in the table below.| **Step**| **Action** 1| Is the beneficiary entitled to the proceed balance? * If _yes_ , go to Step 3. * If _no_ , * terminate the award, allowing for due process, as necessary, and * go to the next step. 2| Was the proceed balance removed by the award termination? * If _yes_ , no further action is needed. * If _no_ , go to Step 5. 3| * Take the necessary steps within VBMS-A to resume the payment, and * refer the claim to authorization. **Reference:** For more information on resuming benefits by award action, see the _VBMS-A User Guide_. 4| After authorizing the claim, validate that the beneficiary’s PAY STATUS field shows _Authorized_ , and review the PROCEEDS BALANCE field. Were the proceeds released? * If _yes_ , disregard the remaining step in this table. * If _no_ , go to the next step. **Reference:** For more information on reviewing the beneficiary’s PAY STATUS field or PROCEEDS BALANCE table, see the [_Proceeds Workflow Job Aid_](). 5| Complete the [_Proceeds Memorandum_]() to notify the finance activity to release the funds and upload it to the claims folder, identifying the memorandum by entering the following information: * CATEGORY – TYPE: _Determinations: VA Memo_ * SOURCE: _User_ , and * SUBJECT: _Proceeds Memo_. **Reference:** For more information on the available fiscal transactions used to release the proceed balance, see M21-1, Part X, Subpart v, 2.D.1.d. ### X.v.2.D.2.d. Proceeds Created Due to the Death of the Beneficiary Follow the steps in the table below when an EP 290 is established indicating a proceed balance was created due to the death of the beneficiary.| **Step**| **Action** 1| Review the claims folder for evidence that the beneficiary is deceased, and/or verify the beneficiary’s death using the SSA INQUIRY command in VBMS.Is confirmation of the beneficiary’s death of record? * If _yes_ , go to Step 5. * If _no_ , go to the next step. 2| * Remove any erroneous death data from Share and/or VBMS * resume the beneficiary’s award * send a decision notice, and * refer the claim to authorization. **Important:** Review and confirm the beneficiary’s payment address using Steps 1 through 6 of the procedure described in [M21-1, Part II, Subpart i, 2.C.6.d]() prior to resuming the award. 3| After authorizing the claim, validate that the beneficiary’s PAY STATUS field shows _Authorized_ , and review the PROCEEDS BALANCE field. Were the proceeds released? * If _yes_ , disregard the remaining steps in this table. * If _no_ , go to the next step. **Reference:** For more information on reviewing the beneficiary’s PAY STATUS field or PROCEEDS BALANCE table, see the [_Proceeds Workflow Job Aid_](). 4| * Complete the [_Proceeds Memorandum_]() to notify the finance activity to release the funds and upload it to the claims folder, identifying the memorandum by entering the following information: * CATEGORY – TYPE: _Determinations: VA Memo_ * SOURCE: _User_ , and * SUBJECT: _Proceeds Memo_ , and * disregard the remaining steps in the table. **Reference:** For more information on the available fiscal transactions used to release the proceed balance, see M21-1, Part X, Subpart v, 2.D.1.d. 5| Verify that the beneficiary’s award was terminated correctly.If the award has not been terminated, follow the instructions in * [M21-1, Part XI, Subpart i, 1.A]() or [B](), for a Veteran * [M21-1, Part VI, Subpart iv, 2.C](), for an apportionee, or * [M21-1, Part XII, Subpart i, 3.B]() and [M21-1, Part XI, Subpart i, 1.D](), for a survivor. **Important:** If the beneficiary was in the Fiduciary Program, notify the fiduciary hub of jurisdiction of the award termination, as additional actions may be needed as provided in [FPM, Part II, 1.D](). 6| Payments made to the beneficiary but not negotiated prior to death are considered non-negotiated benefits and are payable in the same manner as accrued benefits.Review the payment dates associated with the proceed balance and follow the instructions in the table below to determine how to release the proceeds.| **If the proceed payment dates cover a period that ...**| **Then ...** does **_not_** extend beyond the last day of the month preceding the month of death (MOD) of the beneficiary| the entire proceed balance is available to be paid based on relationship or reimbursement, as instructed in [M21-1, Part XI, Subpart ii, 3.E.4](). * is prior to the last day of the month preceding the MOD of the beneficiary, **_and_** * extends beyond the last day of the month preceding the MOD of the beneficiary * the proceed balance up to the MOD is available to be paid based on relationship or reimbursement, as instructed in [M21-1, Part XI, Subpart ii, 3.E.4](), and * the proceed balance that extends beyond the MOD must be returned to appropriation as directed in Step 7. **Note:** The Veteran’s MOD payment is not payable under accrued benefit awards but must be addressed separately.**Reference:** For more information on processing MOD payments, see [M21-1, Part XI, Subpart ii, 2.1.c-e](). **_only_** extends beyond the last day of the month preceding the MOD of the beneficiary| return the proceeds to appropriation, as directed in Step 7.**Note:** The Veteran’s MOD payment is not payable under accrued benefit awards but must be addressed separately.**Reference:** For more information on processing MOD payments, see [M21-1, Part XI, Subpart ii, 2.1.c-e](). **Note:** Receipt of a standardized application is required prior to paying proceeds as accrued benefits. If an application is not of record, follow the instructions in [M21-1, Part XI, Subpart ii, 3.C.1.c]() to notify individuals who are potentially entitled to funds. 7| Complete the [_Proceeds Memorandum_]() to notify the finance activity to return the proceeds to appropriation and upload it to the claims folder, identifying the memo by entering the following information: * CATEGORY – TYPE: _Determinations: VA Memo_ * SOURCE: _User_ , and * SUBJECT: _Proceeds Memo_. **Reference:** For more information on the available fiscal transactions used to release the proceed balance, see M21-1, Part X, Subpart v, 2.D.1.d. ## 3. Reissuing Proceeds Previously Returned to Appropriation June 10, 2026 ### X.v.2.D.3.a. Reissuing Proceeds Returned to Appropriation Proceeds that have been returned to appropriation can be reissued when evidence shows that they are owed to the beneficiary. When a beneficiary’s payments have been resumed following a terminated status, review the following items to determine whether proceeds need to be reissued: * documents from the finance activity * recent award activity * decision notices, and * mailing and payment address history. Complete a new [_Proceeds Memorandum_]() to notify the finance activity to reissue the proceeds and upload it to the claims folder, identifying the memorandum by entering the following information: * CATEGORY – TYPE: _Determinations: VA Memo_ * SOURCE: _User_ , and * SUBJECT: _Proceeds Memo_. **Reference:** For more information on the available fiscal transactions used to release the proceed balance, see M21-1, Part X, Subpart v, 2.D.1.d.