Part X, Subpart ii, Chapter 6, Section FAwards Specific to Institutionalized, Incompetent Veterans

Revised January 8, 2020

X.ii.6.F.1.a#Notifying the Fiduciary Hub When a Veteran Is Admitted to a Medical Institution or Transferred to Another Institution

Following receipt of notice that an incompetent Veteran has been admitted to a medical institution or transferred from one medical institution to another, forward the notice to the fiduciary hub of jurisdiction. Note: Regional offices (ROs) are responsible for making any adjustments to an incompetent Veteran’s award that is necessitated by admission to a private or Department of Veterans Affairs (VA) institution. References: For more information on

• determining the fiduciary hub of jurisdiction, see M21-1, Part X, Subpart ii, 6.C.1.d, and
• transfers to nursing home care, see M21-1, Part X, Subpart ii, 6.F.2.

X.ii.6.F.1.b#Rating of Incompetency Subsequent to Admission to a Medical Institution

If a Veteran is rated incompetent subsequent to admission to a medical institution, request any information, reports, or summaries that may be required as a result of the Veteran’s incompetency. Note: Request information from a VA medical center (VAMC) via the Compensation and Pension Records Interchange (CAPRI). Reference: For more information on using CAPRI, see the CAPRI User Guide.

2Award Adjustments After a Veteran Transfers to Contract Nursing Home Care Under 38 U.S.C. 1720

Introduction

This topic contains information on award adjustments after a Veteran transfers to contract nursing home care under 38 U.S.C. 1720, including

• applicability of 38 U.S.C. 1720 for nursing home care
• awards subject to reduction under 38 CFR 3.551 and 3.552
• handling notification
  • from a VAMC of a change in a Veteran’s competency, and
  • of a Veteran’s release or termination of care at VA expense.

Revised January 8, 2020

X.ii.6.F.2.a#Applicability of 38 U.S.C. 1720 for Nursing Home Care

VA may provide for the cost of private or public nursing home care under 38 U.S.C. 1720 for a

• service member that
  • has been furnished care in an Armed Forces hospital, and
  • will become a Veteran on discharge from the Armed Forces hospital, or
• Veteran that
  • has been furnished VA hospital care, or
  • is directly admitted to a nursing home if the nursing home care is for a service-connected disability.

X.ii.6.F.2.b#Awards Subject to Reduction Under 38 CFR 3.551 and 3.552

The award of a Veteran who is transferred or directly admitted to a facility for care at VA expense is subject to adjustment under

• 38 CFR 3.551, if the Veteran is receiving pension, and
• 38 CFR 3.552, if the Veteran is receiving additional benefits based on the need of the aid and attendance (A&A) of another person.

Note: 38 CFR 3.552(b)(2) requires discontinuance of the A&A allowance if the Veteran is

• receiving disability compensation , and
• hospitalized at the expense of the U.S. Government.

References: For more information on

• the criteria for adjusting pension under 38 CFR 3.551, see M21-1, Part X, Subpart iii, 1.D.1.a, and
• discontinuing the A&A allowance under 38 CFR 3.552, see M21-1, Part X, Subpart iii, 1.C.1.a.

X.ii.6.F.2.c#Handling Notification From a VAMC of a Change in a Veteran’s Competency

If there is a change in a Veteran’s competency, the VAMC of jurisdiction will furnish a hospital summary to the appropriate RO upon the Veteran’s transfer to a nursing home. ROs must follow the steps in the table below following receipt of the hospital summary.

Note: If a fiduciary is already appointed to the Veteran, send a copy of the hospital summary to the fiduciary hub with geographical jurisdiction over the VAMC.

X.ii.6.F.2.d#Handling Notification of a Veteran’s Release or Termination of Care at VA Expense

The transferring VAMC authorizes and administratively controls nursing home care and notifies the appropriate RO of the Veteran’s release from the contract nursing home or when care at VA expense is terminated. Following receipt of such notification

• make any adjustment in the Veteran’s award that is necessitated by the release
• continue the award to the Director of the VAMC if a different fiduciary has not yet been appointed, and
• send the fiduciary hub of geographical jurisdiction a copy of the notice of release.

3Awards to Dependents of Incompetent Veterans

This topic contains information on awards to dependents of incompetent Veterans, including

• apportionment to dependents of non-institutionalized, incompetent Veterans
• awards to dependents of institutionalized, incompetent Veterans
• apportioning benefits when the Veteran is incompetent and institutionalized, and
• award adjustments for an incompetent Veteran with an estranged spouse.

Revised March 9, 2026

X.ii.6.F.3.a#Apportionment to Dependents of Non-Institutionalized, Incompetent Veterans

If VA grants a claim for apportionment of an incompetent Veteran’s benefits, but VA has not yet appointed the Veteran a fiduciary, 38 CFR 3.452 allows for payment of the apportionment without waiting for the appointment of a fiduciary.An initial action to suspend payments pending appointment of a fiduciary does not prohibit the payment of apportionments that are otherwise proper and equitable.If an apportionment is made prior to appointing a fiduciary, furnish the fiduciary hub of jurisdiction with a copy of the apportionee award and a request for expedited appointment.Reference: For information on claims for apportionment of a Veteran’s benefits, see M21-1, Part VI, Subpart iv, 2.A.

X.ii.6.F.3.b#Awards to Dependents of Institutionalized, Incompetent Veterans

The full monthly rate otherwise payable, less the reduced rate paid to the institution, may be apportioned to the dependent(s) of an institutionalized, incompetent Veteran.

X.ii.6.F.3.c#Apportioning Benefits When the Veteran Is Incompetent and Institutionalized

When an incompetent Veteran without a fiduciary is receiving hospital treatment, nursing home, or domiciliary care provided by the U.S. or a political subdivision, 38 CFR 3.452(b)(1) provides that Veterans benefits can be apportioned to the Veteran’s spouse and/or child(ren).

X.ii.6.F.3.d#Award Adjustments for an Incompetent Veteran With an Estranged Spouse

If an incompetent, married Veteran, who is receiving Veterans Pension at the rate payable for a Veteran with no dependents because the Veteran and their spouse are estranged, is institutionalized at VA expense, reduce the Veteran’s award under 38 CFR 3.551 on the basis of the Veteran’s

• estrangement from their spouse, or
• failure to reasonably contribute to the support of their spouse.

If the Veteran’s spouse submits a claim for an apportionment and meets the criteria set forth in 38 CFR 3.452(b)(1)(i), apportion to the estranged spouse the difference between the rate payable to

• an institutionalized Veteran, and
• a Veteran with a spouse.

Reference: For information on apportioning benefits to an estranged spouse when consideration of the spouse’s income would result in a reduction in the Veteran’s pension rate, see M21-1, Part IX, Subpart iii, 1.F.2.o.

4Handling Funds in PFOP Accounts

This topic contains instructions for handling funds in PFOP accounts, including

• types of PFOP accounts
• award action on the two types of PFOP accounts
• use of funds for necessary comforts and desires by VAMCs and non-VA hospitals, and
• payment of funds in a PFOP account as accrued benefits upon the death of a Veteran.

Revised January 8, 2020

X.ii.6.F.4.a#Types of PFOP Accounts

There are two types of Personal Funds of Patients (PFOP) accounts, as outlined in the table below.

Note: August 8, 1946, was the date of passage of Public Law 662 , 79th Congress.

X.ii.6.F.4.b#Award Action on the Two Types of PFOP Accounts

Because there are two types of PFOP accounts, a distinction must be made in taking award action. The distinctions for award action on each type of account are listed below:

• An award should never include an allotment when it is an award to the Director of a VAMC. Fiduciary hubs award the total amount payable to the Director, VAMC, for the Veteran’s account. The Director will deposit all money not immediately required for the Veteran’s needs into the PFOP account under the Director’s control.
• Money is not placed into a PFOP account under the control of the Hines ITC unless an adjustment is made to the Veteran’s award that allots a definite sum to the PFOP account. This is done only when a Veteran is institutionalized in a non-VA institution.

X.ii.6.F.4.c#Use of Funds for Necessary Comforts and Desires by VAMCs and Non-VA Institutions

Use the table below to determine how funds from PFOP accounts needed for the comforts and desires of a Veteran are obtained by

• the Director of a VAMC, or
• a non-VA institution.

X.ii.6.F.4.d#Payment of Funds in a PFOP Account as Accrued Benefits Upon the Death of a Veteran

For information on the payment of funds in a PFOP account as accrued benefits upon the death of a Veteran, see M21-1, Part XI, Subpart ii, 3.E.6-9.

5Processing Notice That an Incompetent Veteran’s Status Has Changed to Non-Bed Care

This topic contains instructions for processing notice that an incompetent Veteran’s status has changed to non-bed care, including

• definition of non-bed care
• receiving and forwarding notice of non-bed care
• continuing awards while on non-bed care
• adjustments for release to non-bed care or absences of 30 days or more, and
• extension of non-bed care.

Revised January 8, 2020

X.ii.6.F.5.a#Definition: Non-Bed Care

Non-bed care is a temporary release from a hospital to determine

• the Veteran’s ability to make a satisfactory adjustment outside the hospital, and
• whether the Veteran should be discharged from or returned to the hospital, based on their ability to make that adjustment.

Note: Release on furlough by non-VA institutions is synonymous with release to non-bed care status.

X.ii.6.F.5.b#Receiving and Forwarding Notice of Non-Bed Care

When an RO requests a notice of discharge from a VAMC, the VAMC responds by notifying the RO of the Veteran’s departure on, or return from, a period of non-bed care of 30 days or more.Follow the instructions in the table below after receiving the notice referenced in the preceding paragraph.

X.ii.6.F.5.c#Continuing Awards While on Non-Bed Care

Continue payments to a Veteran on non-bed care, as Veterans have the right under 38 CFR 13.30(b)(1) to receive direct monthly benefit payments until VA appoints a fiduciary.

X.ii.6.F.5.d#Adjustments for Release to Non-Bed Care or Absences of 30 Days or More

Use the table below to determine how to make various adjustments to awards for

• release to non-bed care, or
• an authorized absence of 30 days or more.

X.ii.6.F.5.e#Extension of Non-Bed Care

If the original period of non-bed care or authorized absence is extended, make no further adjustment of an apportionment or the Veteran’s award pending expiration of the extension. The chief officer of the corresponding medical institution must carefully review each case in which there is an extension to ascertain if any special circumstances exist that

• relate to the safeguarding of the interests of the Veteran and their dependents, or
• may indicate continuance of the existing payments is not justifiable.

If the facts warrant it, the chief officer will submit appropriate recommendations to the RO as to any action or adjustment considered advisable.

6Discontinuing an Institutional Award (Established Prior to August 13, 2018) When a Veteran Is Discharged From a Hospital

This topic contains information on discontinuing institutional awards and authorizing payment to a Veteran or fiduciary when a Veteran is discharged from a hospital, including

• definition of an institutional award
• preventing the interruption of award payments
• instructions for discontinuing an institutional award
• awaiting a determination regarding a contemplated discharge date before requesting a fiduciary
• referring the hospital summary to the rating activity
• requesting a field examination and possible reconsideration by the rating activity, and
• terminating PFOP allotments.

Revised March 9, 2026

X.ii.6.F.6.a#Definition: Institutional Award

An institutional award is an award fiduciary hubs made to the Director of a VAMC or the chief officer of a non-VA institution when an incompetent Veteran was institutionalized for treatment or care. Fiduciary hubs stopped establishing institutional awards August 13, 2018.

X.ii.6.F.6.b#Preventing the Interruption of Award Payments

Avoid interruption of payments when an incompetent Veteran in receipt of an institutional award is finally discharged from the hospital. This requires close coordination between the medical institution and the RO.

X.ii.6.F.6.c#Instructions for Discontinuing an Institutional Award

When a Veteran is discharged from a hospital, discontinue an institutional award effective the date in the LAST PAID DATE field on the CURRENT AND HISTORICAL AWARD INFORMATION page in the Veterans Benefits Management System, per 38 CFR 3.558. If another fiduciary has been appointed, discontinue the institutional award by amending the award to the fiduciary. Make payment of all funds due the incompetent Veteran, including money on deposit in PFOP, to the fiduciary, if otherwise in order.Note: When an institutional award to the Director of a VAMC is discontinued, notify that Director of the action taken.Reference: For information concerning transfers to a nursing home, see M21-1, Part X, Subpart ii, 6.F.2.

X.ii.6.F.6.d#Awaiting a Determination Regarding a Contemplated Discharge Date Before Requesting a Fiduciary

Due to the indefinite period during which non-bed care status may continue, and the possibility that competency may be regained, do not request the appointment of a fiduciary until a contemplated date of discharge has been determined. When a Veteran without a fiduciary, for whom an institutional award has been authorized, is discharged from a VA hospital, the VAMC

• advises the RO of an impending discharge, and
• furnishes the RO an interim discharge summary.

Following submission of this report, the chief officer of the corresponding medical institution will retain the patient on non-bed care status until the necessary rating and guardianship procedures have been concluded.

X.ii.6.F.6.e#Referring the Hospital Summary to the Rating Activity

Following receipt of a hospital summary indicating a medical opinion of regained competency, refer the summary to the rating activity for consideration.Use the table below to determine the appropriate action to take based on the determination by the rating activity.Reference: For more information on evaluating competency, see M21-1, Part X, Subpart ii, 6.A.1.

Note: The fiduciary hub will request a field examination to determine the need for a fiduciary. References: For more information on

• requests by a fiduciary hub for a field examination, see M21-1, Part X, Subpart ii, 6.F.6.f, and
• the geographical jurisdiction of individual fiduciary hubs, see M21-1, Part X, Subpart ii, 6.C.1.d.

X.ii.6.F.6.f#Requesting a Field Examination and Possible Reconsideration by the Rating Activity

Following receipt of a copy of a hospital summary based on an impending discharge, along with the rating decision referenced in M21-1, Part X, Subpart ii, 6.F.6.e, a fiduciary hub may initiate a field examination to determine the need for appointment of another fiduciary. The table below describes the process for

• requesting a field examination, and
• submitting an opinion for possible reconsideration by the rating activity.

Reference: For more information on the field examination process, see the FPM, Part I, 2.

X.ii.6.F.6.g#Terminating PFOP Allotments

Discontinue an allotment for PFOP to release accumulated funds or to provide for direct payment of current benefits when

• PFOP are needed for care and maintenance, as discussed in M21-1, Part X, Subpart ii, 6.F.4.c
• a Veteran is discharged from a hospital, as discussed in M21-1, Part X, Subpart ii, 6.F.6.c
• a new fiduciary is appointed under the circumstances described in M21-1, Part X, Subpart ii, 6.F.6.c, or
• competency is restored under the circumstances described in M21-1, Part X, Subpart ii, 6.F.6.e.

Authorize payments to the Veteran or fiduciary.Discontinue the allotment effective

• the date the allotment was first put into effect, when full release is in order, or
• the first of the month following the month for which VA last paid benefits to the current fiduciary, when only the release of current benefits is in order.