Part VI, Subpart iv, Chapter 2, Section AApportionment Process

Revised March 9, 2026

VI.iv.2.A.1.a#Authority for Apportionment

Discretionary authority for apportionment of benefits is provided in

• 38 U.S.C. 5307
• 38 U.S.C. 5313(b)(1)
• 38 U.S.C. 5502(d)
• 38 U.S.C. 5503(a)(2), and
• 38 U.S.C. Chapter 31.

Department of Veterans Affairs (VA) regulations provide for apportionment of benefits in certain cases when a primary beneficiary is

• incarcerated, or
• hospitalized or receiving domiciliary or nursing home care provided by the U.S. or a political subdivision.

Reference: For more information on the general regulatory authority for apportionment claims, see 38 CFR 3.451.

VI.iv.2.A.1.b#Legacy Apportionments

Prior to February 9, 2026, VA regulations also provided for apportionment in situations in which a primary beneficiary’s dependents were not residing with the beneficiary and the apportionee presented evidence of financial need. Effective February 9, 2026, VA regulations were updated to discontinue need-based apportionments.

• Need-based apportionments are referred to as legacy apportionments beginning on February 9, 2026.
• Legacy apportionments in place as of the date of this regulatory change will continue until the circumstances warranting the apportionment cease to exist, as provided in 38 CFR 3.450(b).
• There is no regulatory authority to accept claims for increase or reduction of a legacy apportionment.
• A legacy apportionee may elect to discontinue a legacy apportionment in order to receive a greater apportionment, when warranted, based on a new claim for apportionment under the revised regulatory provisions that became effective on February 9, 2026. Once a legacy apportionment has been discontinued in favor of an apportionment under the regulations now in effect, the legacy apportionment cannot be reinstated.

Reference: For more information on maintenance of legacy apportionments, see M21-1, Part VI, Subpart iv, 2.C and D.

VI.iv.2.A.1.c#Requirement for a Prescribed Form

VA will consider a claim for an apportionment of a beneficiary’s VA benefits only upon receipt of VA Form 21-0788, Information Regarding Apportionment of Beneficiary’s Award.Notes:

• The apportionment claim must be submitted by the individual requesting the apportionment (or on behalf of the minor child). An apportionment claim cannot be submitted by the hospitalized or incarcerated primary beneficiary, as provided in 38 CFR 3.453(a).
• If a claimant requests an apportionment on anything other than a VA Form 21-0788,
  • treat the correspondence as a request for an application, and
  • follow the procedures in M21-1, Part II, Subpart iii, 2.G.1.

Reference: For more information on the requirement for a prescribed claim form, see 38 CFR 3.450(c).

VI.iv.2.A.1.d#Apportionable Benefits and Eligible Apportionees

Refer to the table below for information on the benefits that are subject to apportionment, the circumstances under which apportionment may occur, and the types of dependents eligible to receive an apportionment.

VI.iv.2.A.1.e#Circumstances Under Which VA May Not Apportion Benefits

Apportionment of benefits is prohibited in accordance with 38 CFR 3.453 when

• a claim has not been submitted
  • by a spouse, or
  • by or for the child
• the dependent has been determined by VA to have been guilty of mutiny, treason, sabotage, or rendering assistance to an enemy of the U.S. or its allies, or
• after September 1, 1959, a Veteran, spouse, child, or dependent parent or other primary beneficiary
  • forfeited benefits due to fraud or treasonable act, or
  • was convicted of subversive activity.

VI.iv.2.A.1.f#Apportionments as a Convenience on the Part of Beneficiaries

VA does not apportion benefits to a dependent as a convenience on the part of a beneficiary. 38 CFR 3.106 prohibits a beneficiary from renouncing a portion of benefits so that VA may allocate them to another person.

VI.iv.2.A.1.g#Restriction on the Concurrent Payment of Education Benefits and Apportioned Benefits

Use the table below to determine if the payment of VA education benefits (under 38 U.S.C. Chapter 33 or Chapter 35) to a claimant precludes an individual from receiving an apportionment of disability or survivors benefits.

VI.iv.2.A.1.h#Apportionments Involving a Beneficiary or Claimant That Resides in a Foreign Country

Any regional office (RO) may process an apportionment claim as long as the beneficiary is not a foreign resident. The residency of the claimant is irrelevant in this case. Only the ROs identified in M21-1, Part X, Subpart i, 3.A.2.a, may process an apportionment claim if the beneficiary is a foreign resident. Reference: For more information on handling cases in which the primary beneficiary or claimant resides in a foreign country, see M21-1, Part X, Subpart i, 3.B.

2Screening and Development of Apportionment Claims

This topic contains information on initial screening and development for an apportionment claim, including

• initial screening of apportionment claims
• issuing notice of a proposed adverse action
• due process for an incompetent Veteran in receipt of compensation without a VA-appointed Fiduciary
• information to include in the notice of a proposed adverse action
• establishing withholding, and
• undertaking development with the claimant.

Revised March 9, 2026

VI.iv.2.A.2.a#Initial Screening of Apportionment Claims

The claimant is not entitled to an apportionment as a matter of law in any/all of the following situations.

• The application is not submitted by the proper applicant, as described in 38 CFR 3.453(a).
• The applicant has been found guilty of the crimes described in 38 CFR 3.453(b).
• The applicant or primary beneficiary has forfeited benefits due to fraud or a treasonable act or was convicted of subversive activity.
• The entitling factors described in 38 CFR 3.451 are not present. Particularly, the request for apportionment is not associated with a primary beneficiary’s
  • incarceration, or
  • receipt of hospital, domiciliary, or nursing home care at government expense.

Upon receipt of an application for apportionment for which there is no entitlement as a matter of law, place the claim under proper end product (EP) control and deny the claim without undertaking further development. Reference: For more information on circumstances in which VA will refrain from or discontinue providing assistance for a claim, see

• M21-1, Part I, Subpart i, 1.A.4.b, and
• 38 CFR 3.159(d).

VI.iv.2.A.2.b#Issuing Notice of a Proposed Adverse Action

Notice of proposed adverse action, issued when the primary beneficiary’s benefits are proposed to be reduced due to incarceration or institutionalization at VA expense, is sufficient to provide the notice required for a reduction of benefits that will precede apportionment. Notice, as well as VA Form 21-0788, will be provided to

• the primary beneficiary advising that an apportionment of benefits is available, and
• eligible dependents whose address is of record advising them of eligibility for an apportionment.

No additional notice of a proposed adverse action is necessary following receipt of the apportionment claim. Exception: Due process for a proposed apportionment is required when an incompetent Veteran in receipt of compensation does not have a VA-appointed fiduciary and is hospitalized at government expense. References: For more information on issuing notice of a proposed adverse action

• following incarceration, see M21-1, Part VI, Subpart iv, 1.A.3.a, Step 17, and
• when an incompetent Veteran in receipt of compensation does not have a VA-appointed fiduciary and is hospitalized at government expense, see M21-1, Part VI, Subpart iv, 2.A.2.c.

VI.iv.2.A.2.c#Due Process for an Incompetent Veteran in Receipt of Compensation Without a VA-Appointed Fiduciary

38 U.S.C. 5502(d) provides that when an incompetent Veteran without a VA-appointed fiduciary is hospitalized at VA expense, the benefits payable to the Veteran will be paid to the chief officer of the institution in which the Veteran is a patient or held by the Treasury except when the Veteran has dependents. In such a case, the benefits may be apportioned to dependents. 38 CFR 3.551 provides for reduction of a Veteran’s pension upon hospitalization, but there is no equivalent procedure for reduction of compensation during hospitalization, with the exception of reduction of special monthly compensation based on receipt of aid and attendance.When a claim for apportionment is received from a beneficiary based on the hospitalization at government expense of an incompetent Veteran in receipt of compensation who does not have a VA-appointed fiduciary, provide due process to the Veteran as described in M21-1, Part VI, Subpart iv, 2.A.2.d.

VI.iv.2.A.2.d#Information to Include in the Notice of a Proposed Adverse Action

When notice of proposed adverse action is required in the situation of an incompetent Veteran in receipt of compensation without a VA-appointed fiduciary, as described in M21-1, Part VI, Subpart iv, 2.A.2.c, prepare a notice of proposed adverse action that

• informs the beneficiary
  • of the pending claim for an apportionment of benefits
  • of the proposed amount of the apportionment
  • of the statutory authority for granting an apportionment (38 U.S.C. 5307)
  • of the effective date from which VA proposes to commence the apportionment, and
  • that the
    • award will be reduced by the monthly amount of the apportionment VA authorizes, and
    • apportionment applies only during the period in which hospitalization at government expense occurs or until a fiduciary is appointed, whichever occurs first, and
• asks the beneficiary to respond within 60 days, after which time VA will decide the apportionment claim unless the beneficiary provides good cause for extending the time limit for a response.

Note: The apportionable amount will be all compensation that would otherwise be payable to the Veteran during the hospitalization. The reduction of aid and attendance, when warranted, should be considered when providing the proposed amount of the apportionment.Reference: For more information on the amount apportionable when an incompetent Veteran in receipt of compensation without a VA-appointed fiduciary is hospitalized at government expense, see M21-1, Part VI, Subpart iv, 2.A.4.a.

VI.iv.2.A.2.e#Establishing Withholding

After taking the actions described in the previous blocks of this topic, amend the beneficiary’s award by establishing a withholding of the amount of the apportionment, effective the first day of the month following the month in which the beneficiary’s response period ends.Reference: For more information on processing awards and adjustments inthe Veterans Benefits Management System (VBMS) Awards, see the VBMS Awards User Guide.

VI.iv.2.A.2.f#Undertaking Development With the Claimant

It is often unnecessary to undertake development with a claimant that has submitted a completed VA Form 21-0788. When additional evidence or information is needed from a claimant in order to make an equitable decision, prepare and send to the claimant a development letter that

• asks the claimant to provide the missing evidence or information within 30 days, and
• informs the claimant VA will make a decision based on the evidence of record after the 30-day response period has passed, unless good cause is shown for extending the time limit for a response.

Note: When the development described in this block is necessary, undertake it at the same time the notice of proposed adverse action (when necessary) is prepared and sent to the beneficiary.Reference: For more information on handling requests for hearings received in conjunction with apportionment claims, see M21-1, Part X, Subpart v, 1.D.

3Dependency Considerations for Apportionment Claims

This topic contains information on dependency considerations specific to apportionment claims, including

• apportioning benefits to a dependent that is not on the beneficiary’s award
• handling a beneficiary’s assertion that a child does not meet the definition of a child under 38 CFR 3.57
• fiduciary appointment for a beneficiary’s minor child(ren)
• children adopted out of a Veteran’s family, and
• children on active duty.

Revised March 9, 2026

VI.iv.2.A.3.a#Apportioning Benefits to a Dependent That Is Not on the Beneficiary’s Award

VA may apportion benefits to a dependent, even if the dependent is not on the beneficiary’s award, as long as the dependent’s relationship to the Veteran, on whose service the award is based, is properly established. However, VA cannot add such a dependent to the award unless the beneficiary submits the appropriate form. Example: A Veteran is receiving compensation as a single Veteran evaluated as 50-percent disabled. The Veteran has been incarcerated for more than 60 days following felony conviction. An ex-wife submits a claim for an apportionment on behalf of a 10-year old son who is in her custody. She submits a certified birth certificate showing the Veteran is, in fact, the biological father of the child. Analysis: Even though the Veteran is not currently receiving additional benefits for the child, and regardless of whether or not the Veteran submits the appropriate form to add the child to his award, VA may apportion benefits for the child because

• the relationship to the Veteran is properly established, and
• there is no indication the Veteran has given up the child for adoption.

References: For more information on

• establishing a Veteran’s relationship to a child, see M21-1, Part VII, Subpart i, 3.B
• forms beneficiaries must use to add a dependent to their award, see M21-1, Part VII, Subpart i, 1.A.4.a, and
• cases involving a child that is given up for adoption, see M21-1, Part VI, Subpart iv, 2.A.3.d.

VI.iv.2.A.3.b#Handling a Beneficiary’s Assertion That a Child Does Not Meet the Definition of a Child Under 38 CFR 3.57

If a claim for an apportionment involving a child is pending, and the beneficiary from whose benefits an apportionment may be paid asserts the child does not meet the definition of “child” under 38 CFR 3.57, follow the instructions in the table below. Example: A male Veteran whose benefits are subject to apportionment for a child submits a statement asserting that he did not father the child.

Note: If VA is already apportioning benefits to or for a child, and the primary beneficiary asserts the child does not meet the definition of “child” under 38 CFR 3.57, follow the instructions in M21-1, Part VI, Subpart iv, 2.C.4.a.

VI.iv.2.A.3.c#Fiduciary Appointment for a Beneficiary’s Minor Child(ren)

If a beneficiary’s minor child(ren) is entitled to an apportionment of the beneficiary’s benefits, request the appointment of a fiduciary for the minor child(ren) by taking the following actions:

• after the award granting the apportionment has been authorized, verify that an EP 590, Expedited Initial Apportionment Field Examination , was automatically established. If the EP 590 was not automatically established, establish an EP 290, FID-Fiduciary Adjustment , for automatic routing to the fiduciary hub of jurisdiction, and
• complete and upload a VA Form 21-592, Request for Appointment of a Fiduciary, Custodian or Guardian, to the claims folder.

When the apportionment is for a minor child and the beneficiary is

• competent, make payments to a custodian on behalf of the minor child until a fiduciary is appointed if the situation meets the conditions for releasing funds to a custodian as outlined in M21-1, Part X, Subpart ii, 6.E.4, or
• incompetent, or the situation does not meet the conditions for releasing funds to a custodian as outlined in M21-1, Part X, Subpart ii, 6.E.4, do not pay the apportionment until a fiduciary is appointed.

References: For more information on

• preparing a VA Form 21-592 to request the appointment of a fiduciary, see M21-1, Part X, Subpart ii, 6.C.1.c
• authorizing awards involving a custodian under 38 U.S.C. 5502, see M21-1, Part X, Subpart ii, 6.E.4, and
• circumstances under which it is appropriate to request the appointment (certification) of a fiduciary, see M21-1, Part X, Subpart ii, 6.C.1.a.

VI.iv.2.A.3.d#Children Adopted Out of a Veteran’s Family

Regulatory revisions to 38 CFR 3.210(c)(1)(ii) effective on February 9, 2026, eliminated apportionment eligibility in the situation of a child adopted out of a Veteran’s family.

VI.iv.2.A.3.e#Children on Active Duty

An apportionment will not be

• made to a child already on active duty as of the date the apportionment claim is received, or
• changed because a child enters active duty after an apportionment has been made.

Reference: For more information on apportionment to a child on active duty, see 38 CFR 3.451(b).

4Decisions on Apportionment Claims

This topic contains information on deciding an apportionment claim and notifying the beneficiary and claimant of the decision, including

• determining the amount of the apportionment
• apportioning to multiple apportionees
• rounding the apportioned amount
• effective date of apportionment
• apportionments involving children age 18 and over
• effect of rate changes on the apportionment award
• notifying the beneficiary and claimant of the apportionment decision, and
• handling evidence after the appeal period ends.

Revised March 9, 2026

VI.iv.2.A.4.a#Determining the Amount of an Apportionment

Apportionments granted on or after February 9, 2026, occur only in association with reduction of benefits due to incarceration or hospitalization. The regulatory guidance for those reductions specifies the amount of benefits that will be paid to the primary beneficiary, if any. The remaining benefits not otherwise payable to the primary beneficiary may be apportioned.Exception: When an incompetent Veteran in receipt of compensation is without a fiduciary and hospitalized at government expense, only special monthly compensation is subject to reduction by Veterans Benefits Administration during the hospitalization. However, 38 U.S.C. 5502(d) provides that the incompetent Veteran’s funds may be held by the institution or the Treasury. When the incompetent Veteran has dependents, and an apportionment is claimed, apportion all funds normally payable to the Veteran to the eligible dependents in lieu of those benefits being held by the institution or Treasury. Note: Effective February 9, 2026, there is no requirement to document an apportionment decision on VA Form 21-441, Special Apportionment Decision. References: For more information on benefit entitlement for a primary beneficiary during

• incarceration, see
  • 38 CFR 3.665, and
  • 38 CFR 3.666, and
• hospitalization of a Veteran, see 38 CFR 3.551.

VI.iv.2.A.4.b#Apportioning to Multiple Apportionees

Apportionments payable to multiple dependents will be divided in equal shares.References: For more information on apportionment to multiple dependents associated with

• incarceration, see 38 CFR 3.665(e), and
• receipt of death benefits, see 38 CFR 3.451.

VI.iv.2.A.4.c#Rounding the Apportioned Amount

If multiple apportionees are sharing a single apportionment, and dividing the single apportionment among the apportionees results in an apportionment to each apportionee that includes a fraction of a cent , drop the fraction of a cent, per 38 CFR 3.112. Do not , however, round the amount of the individual apportionments in such a case to an even dollar amount. Example: An apportionment of $550.00 to three children would result in an apportionment of $183.33 to each child.

VI.iv.2.A.4.d#Effective Date of Apportionment

Refer to 38 CFR 3.665 and 38 CFR 3.666 for effective date provisions for apportionment following incarceration of the primary beneficiary.For other apportionments, 38 CFR 3.400(e)(1) provides that the general rule for the effective date of the apportionment will be the first day of the month after the month in which VA receives the apportionment claim.38 CFR 3.400(e)(2) also provides exceptions to the general rules, as provided below.

• When the primary beneficiary has a claim for benefits pending on the date of receipt of the apportionment claim, the effective date will be the date
  • of the primary beneficiary’s award, or
  • the apportionment claimant’s entitlement arose, whichever is later.
• When an apportionment claimant is not established as the beneficiary’s dependent and VA receives an apportionment claim within one year of the award of benefits to the primary beneficiary, the effective date will be the
  • effective date of the primary beneficiary’s award, or
  • date the apportionment claimant’s entitlement arose, whichever is later.

VI.iv.2.A.4.e#Apportionments Involving Children Age 18 and Over

An apportionment award for a child that is under the age of 18 must reflect termination of the apportionment on the date the child turns 18.After deciding to grant an apportionment to a child for whom VA was previously apportioning benefits until the child turned 18, follow the instructions in

• the table below if VA received the child’s apportionment claim within one year of the 18th birthday, or
• M21-1, Part VI, Subpart iv, 2.A.4.d if VA received the child’s apportionment claim one or more years after the 18th birthday.

Important:

• It might be necessary, under the circumstances described in this block, to require separate VA Forms 21-674, Request for Approval of School Attendance, from the primary beneficiary and the child.

• The primary beneficiary must submit VA Form 21-674 as certification of school attendance for the purpose of establishing entitlement to additional benefits for the child to continue paying dependency benefits for the child.

• Unless the primary beneficiary submits VA Form 21-674, the child must submit VA Form 21-674 to establish eligibility for an apportionment as a school child. VA may not use a VA Form 21-674 that a child submits to establish the primary beneficiary’s entitlement to additional benefits for the child.

• 38 CFR 3.453(a) requires submission of a claim, via VA Form 21-0788 , by the child to establish an apportionment to the child.

VI.iv.2.A.4.f#Effect of Rate Changes on the Apportionment Award

A primary beneficiary’s benefits may be subject to future rate changes. All such rate changes not payable to the primary beneficiary will be payable to the apportionee(s).Example: The Veteran’s award (total award) will be prospectively reduced based on a reduction in her combined disability rating from 100 percent to 80 percent. The apportioned amount will be correspondingly changed.An apportionee's award must not provide for any future rate change for any period beyond the last future rate provided for by the Veteran’s award.Reference : For more information on cost-of-living increases for apportionment awards, see M21-1, Part X, Subpart v, 2.C.1.

VI.iv.2.A.4.g#Notifying the Beneficiary and Claimant of the Apportionment Decision

Advise both the primary beneficiary and the claimant of the apportionment decision and furnish them notice of the

• effective date of payment, if the apportionment is granted
• amount of the apportionment, if granted
• reasons for the decision
• evidence used to make the decision
• rights to representation, and
• right to appeal the decision by filing a notice of disagreement with the Board of Veterans Appeals (Board) within 60 days from the date of the decision notice, as provided in
  • 38 U.S.C. 7105A, and
  • 38 CFR 20.402.

The notice must also advise the primary beneficiary and apportionee that

• entitlement to the apportionment is temporary, and
• the apportionment will end without due process after incarceration or hospitalization ends.

Exception: There is no requirement to notify a beneficiary that VA has denied a claim for an apportionment if VA decided the apportionment claim without issuing the notice of proposed adverse action specific to the apportionment claim.Important:

• If a decision is made to grant an apportionment for a child that is under the age of 18, inform the claimant in the decision notice that the apportionment to that child will automatically end when the child turns 18. At that point in time, if the child wishes to continue receiving the apportionment, the child must submit a claim, using VA Form 21-0788, and certify school attendance, using VA Form 21-674.
• An apportionment claim is a contested claim.
  • Attach VA Form 20-0998, Your Right to Seek Review of Our Decision, to decision notices involving an apportionment claim.
  • Claimants have 60 days – not one year – to appeal a decision to the Board on a contested claim.
  • Decision review options outside of an appeal to the Board do not exist for decisions on contested claims.
• Because contested claims commonly involve specific, factual findings that are favorable to one party but not the other, decision notices communicating the outcome of a contested claim, such as an apportionment claim, need not identify or discuss
  • findings found favorable to the claimant under 38 CFR 3.104(c), or
  • elements required to grant the claim that were not met.

VI.iv.2.A.4.h#Handling Evidence Received After the Appeal Period Ends

Treat additional evidence in support of a previously denied claim for an apportionment that an RO receives after the 60-day appeal period ends as a new claim for an apportionment. If the claimant did not include VA Form 21-0788 with the additional evidence, follow the instructions in M21-1, Part II, Subpart iii, 2.G.1.a, for handling the claimant’s action as a request for an application.Exception: If an appeal of the prior decision on the apportionment claim is pending with the Board, forward the additional evidence to the Board according to the instructions in M21-1, Part II, Subpart i, 1.A.

5Apportionments Impacted by Benefit Offset or Withholding

This topic contains information on handling a claim for apportionment when a Veteran’s award is being offset under 38 U.S.C. 1151 or withheld due to the receipt of separation benefits, including

• effect of an offset or withholding of a Veteran’s entire award on a claim for apportionment
• actions to take following receipt of a claim for apportionment when a Veteran’s entire award is being offset or withheld, and
• action to take if only part of a Veteran’s award is being offset or withheld.

Revised March 9, 2026

VI.iv.2.A.5.a#Effect of an Offset or Withholding of a Veteran’s Entire Award on a Claim for Apportionment

In some cases, a Veteran’s total award must be

• offset under 38 U.S.C. 1151, or
• withheld to recoup separation benefits the Veteran received.

In such cases, the Veteran’s award is not subject to apportionment until the offset or withholding ends.Exception: When a Veteran, whose disability compensation is being withheld in its entirety to recoup separation benefits, is incarcerated following conviction of a felony, VA must reduce the withholding to the amount specified in 38 CFR 3.665(d), effective the 61st day of incarceration. Once VA makes the reduction, the remaining disability compensation becomes available for apportionment. When incarceration ends, the apportionment ends, as well, and withholding of the Veteran’s entire award resumes.
References: For more information on

• recouping separation benefits, see M21-1, Part VI, Subpart ii, 2
• reducing a Veteran’s disability compensation due to incarceration, see M21-1, Part VI, Subpart iv, 1.A , and
• apportioning an incarcerated Veteran’s disability compensation to dependent(s), see M21-1, Part VI, Subpart iv, 2.B.2.

VI.iv.2.A.5.b#Actions to Take Following Receipt of a Claim for Apportionment When a Veteran’s Entire Award Is Being Offset or Withheld

Following receipt of an apportionment claim for a Veteran whose entire award is being offset under 38 U.S.C. 1151, or withheld to recoup separation benefits,

• deny the apportionment claim
• inform the claimant(s) that
  • there are no monetary benefits available for apportionment, and
  • a new apportionment claim should be submitted when funds are anticipated to be available (include the approximate date recoupment/offset is scheduled to terminate)
• attach VA Form 20-0998, and
• clear the pending EP.

VI.iv.2.A.5.c#Action to Take if Only Part of a Veteran’s Award Is Being Offset or Withheld

In some cases,

• a Veteran is entitled to benefits for two or more disabilities, and
• the amount to be recouped is only the amount payable for the disability(ies) which resulted in
  • an award under 38 U.S.C. 1151, or
  • the payment of disability severance pay.

In such cases,

• determine the amount to be apportioned or withheld on the basis of the balance of compensation payable to the Veteran, not on the basis of the total award, and
• apportion the available remaining amount that cannot be paid to the Veteran during incarceration or hospitalization.

Reference: For more information on the recoupment of disability severance pay, see M21-1, Part VI, Subpart ii, 2.3.