Revised August 27, 2025
X.v.2.B.1.aRelinquishment of Benefits Upon Return to Active Duty
Under 38 U.S.C. 5304(c), Veterans receiving Department of Veterans Affairs (VA) disability compensation or pension must relinquish these benefits when they return to active duty. This includes members of the National Guard who are activated under 10 U.S.C. or who serve full time in the Active Guard Reserve under 32 U.S.C.. Notes:
- This restriction does not apply to recipients of Dependency and Indemnity Compensation (DIC). For example, a surviving spouse may concurrently receive active service pay and DIC.
- The title of an activation, be it Title 10, 14, or 32, is not relevant for the purpose of discontinuing compensation due to return to active duty. However, to determine if a period of duty is considered active military, naval, or air service under 38 U.S.C. 101(22) for the purposes of establishing service connection (SC), see M21-1, Part III, Subpart i, 1.A.
References: For more information on
- the prohibition against concurrent receipt of active service pay and VA compensation or pension, see
- 38 CFR 3.654, and
- 38 CFR 3.700(a)(1), and
- full-time service in the
- Reserve, see M21-1, Part III, Subpart i, 1.A.3.b, and
- National Guard, see M21-1, Part III, Subpart i, 1.A.4.b and c.
X.v.2.B.1.bHandling Notice That a Veteran Has Returned to Active Duty
Follow the instructions in the table below upon receipt of notice that a Veteran has returned to active duty.
| If ... | Then ... |
|---|---|
the Veteran provided written or telephonic notification or other credible evidence to establish the date of return to active duty |
|
VA received notice the Veteran returned to active duty from a source other than the Veteran | follow the instructions in the table below. Step Action |
1 | Determine the date the Veteran returned to active duty by using the
Important:
|
2 | Does VIS or DPRIS confirm the Veteran had an unreported period of active duty?
|
3 | Clear an EP 290 unless this EP was previously cleared for the period(s) of active duty under review. |
4 |
Notes:
|
5 | Notify the Veteran that VA proposes to discontinue benefits effective the date(s) the Veteran returned to active duty. In the notice, ask the Veteran to submit the following with regard to the time period(s) in question:
Notes:
Reference: For more information on preparing a notice of proposed adverse action, see M21-1, Part X, Subpart ii, 3.A. |
6 | After the Veteran responds or has had 65 days to respond to the notice,
|
In the decision notice, if the latest of the end dates is unknown, then inform the Veteran that VA will reinstate benefits effective the day following release from active duty if the Veteran submits a request for reinstatement within one year of that date. Note: Follow the instructions in M21-1, Part X, Subpart ii, 3.B.3, if a Veteran requests a hearing in response to a notice of proposed adverse action.
References: For more information on
- sending notice of a proposed adverse action, see M21-1, Part X, Subpart ii, 3.A
- VIS, see the VIS User Guide, and
- DPRIS, see the DPRIS User Guide.
Notes:
- When establishing EP 290 based on VA’s discovery that a Veteran returned to active duty, use the date VA made the discovery as the date of claim.
- If a Veteran requests benefits be discontinued during a training period, discontinue compensation or pension in accordance with the Veteran’s request.
X.v.2.B.1.cEffective Date for Discontinuing Compensation or Pension
According to 38 CFR 3.501(a) and 3.654(b), an award of compensation or pension to a Veteran will be discontinued effective the day preceding the date of return to active duty. For the purpose of discontinuing an award in VBMS-A because a Veteran returned to active duty, this means
- the last day the Veteran is entitled to benefits is the day preceding the date of return to active duty, and
- the date the Veteran returned to active duty represents the first day of non-payment of VA benefits.
Because system programming requires users to enter the first day of non-payment as the effective date of discontinuance of an award due to a Veteran’s return to active duty, the “effective date of discontinuance” referred to in this section is the date on which the Veteran returned to active duty, not the day preceding it. Important:
- Preparation of a rating decision that reflects loss of entitlement to benefits based on a Veteran’s return to active duty is not necessary. Discontinue benefits by award action, making the appropriate entries on the BASIC ELIGIBILITY page.
- VA typically learns of a Veteran’s return to active duty after active duty has begun. If a Veteran will return to active duty on a date that is in the future , follow the instructions in M21-1, Part X, Subpart v, 2.B.1.d, for discontinuing the Veteran’s benefits in VBMS-A.
Reference: For more information on making entries on the BASIC ELIGIBILITY page in VBMS-A, see the VBMS Awards User Guide.
X.v.2.B.1.dDiscontinuing Benefits in VBMS-A When the Veteran Will Return to Active Duty on a Date That Is in the Future
VBMS-A currently lacks the functionality to discontinue benefits from a future date entered in the EVENT DATE field. Until this functionality is added, claims processors must use the workaround described in the table below to discontinue benefits from a future effective date in VBMS-A.
| Step | Action |
|---|---|
| 1 | Select Return to Active Duty from the drop-down box in the DECISION field on the BASIC ELIGIBILITY page. |
| 2 | Enter the current date in the EVENT DATE field. |
| 3 | Enter the effective date for the (future) discontinuation of benefits in the AWARD EFFECTIVE DATE field. |
| 4 | Generate the award (discontinuation). |
| 5 | Use Redesigned Automated Decision Letters to prepare a decision notice. |
X.v.2.B.1.eHandling the Pending Claim of a Veteran Who Returns to Active Duty
VA is prohibited from paying compensation or pension to a Veteran while the Veteran is receiving active service pay. If, however, a Veteran files a claim before returning to active duty, VA may not deny the claim solely because the Veteran returned to active duty. Rationale: If VA ultimately grants the Veteran’s claim, it may pay the Veteran any benefits due for the period preceding the return to active duty. Important: According to VAOPGCPREC 10-2004, the return of a Veteran to active duty under the circumstances described above does not change VA’s duty to assist in substantiating a pending claim, to include providing the Veteran an examination, when necessary, to decide the claim. Reference: For more information on handling the pending claim of a Veteran who returns to active duty, see M21-1, Part X, Subpart v, 2.A.
X.v.2.B.1.fAction to Take Upon Receipt of DD Form 214
Following receipt of DD Form 214 or other credible evidence showing a Veteran has been released from active duty,
- ensure VA properly discontinued benefits effective the day the Veteran returned to active duty, and
- notify the Veteran that VA will reinstate benefits effective the day following release from active duty if the Veteran submits a request for reinstatement within one year of that date.
X.v.2.B.1.gAction to Take Upon Receipt of a Request for Reinstatement of Compensation
Follow the steps in the table below following receipt of a request for reinstatement of compensation from a Veteran who is no longer on active duty. Important:
- VA does not require a Veteran to use a prescribed form to request reinstatement of benefits unless the Veteran is concurrently pursuing an initial or supplemental claim.
- Accept as a request for reinstatement of compensation a Veteran’s communication of an intent to file (ITF) a claim for VA disability benefits.
References: For more information on
- the use of prescribed forms, see M21-1, Part II, Subpart iii, 1.A.1.a.
- informal claims received prior to March 24, 2015, see M21-1, Part II, Subpart iii, 2.H, and
- handling a
- communication of an ITF, see M21-1, Part II, Subpart iii, 2.A, and
- request for an application for VA benefits, see M21-1, Part II, Subpart iii, 2.G.
| Step | Action |
|---|---|
1 | Did VA accept the request for reinstatement as a Benefits Delivery at Discharge (BDD) claim, or will VA concurrently process a claim the Veteran submitted with the request for reinstatement under the BDD program?
Note: Claims processors skip the instructions in Steps 2 through 5 of this table if the Veteran filed a BDD claim, as VA takes actions similar to those described in these steps during the course of processing the BDD claim. References: For more information on
|
2 | Use DPRIS or VIS to confirm the date the Veteran was discharged from active duty.Note: If attempts to confirm the date of discharge through DPRIS or VIS are unsuccessful, ask the Veteran to provide official documentation (such as a DD Form 214 or order to duty) that shows the date of discharge.
|
3 | Follow the instructions in the table below. If … Then …
Exception: Go to Step 4 instead of Step 6 if
|
the Veteran is requesting reinstatement and concurrently pursuing an initial or supplemental claim |
Notes:
|
4 |
Note: Take no action on the STRs after they’re obtained. The purpose of the action described in this step is to ensure STRs from the Veteran’s most recent period of active duty are available for the rating activity to review in connection with the future review examination. |
5 | Follow the instructions in the table below. Step Action |
1 | Is the Veteran a member of the Reserve or National Guard?
|
2 | Does the corporate record show the Veteran’s most recent period of active duty ended on or after September 1, 2014 (if the period of active duty was in the Coast Guard), or January 1, 2014 (if the period of active duty was in a branch of service other than the Coast Guard)?
|
3 |
|
6 | If VA received the Veteran’s request for reinstatement
Important:
References : For more information on
|
7 | Was a rating EP established in Steps 1 or 3 of this table?
Note: EP 290 is not a rating EP. |
8 | Undertake any necessary development, to include issuing Section 5103 notice, if the Veteran is pursuing an initial or supplemental claim.Reference: For more information on the circumstances under which it is necessary to issue Section 5103 notice, see |
9 | Follow the instructions in the table below for each of the Veteran's non-static, SC disabilities. If the designated date for the future review examination ... Then ... |
falls between the current date and the dates during which the Veteran was on active duty | schedule the Veteran for a review examination unless the evidence of record is sufficient to assign a disability rating without an examination report. |
is a future date | do not schedule the examination until the review examination control referenced in M21-1, Part IV, Subpart ii, 1.B, matures. Example:Scenario:
Result: The only non-static disability that is subject to reexamination concurrent with reinstatement of the Veteran’s benefits is the back disorder. |
10 | Refer the claim to the rating activity for a decision
|
Note: Do not postpone rating action based solely on the absence of the Veteran’s STRs if the evidence of record supports an award of the benefit the Veteran is seeking. In such cases,
- process the rating decision
- continue the EP at authorization, and
- refer the STRs to the rating activity when the STRs arrive.
Note: The establishment of a rating EP triggers an automatic request for STRs through the Department of Defense’s Healthcare Artifacts and Images Management Solution (HAIMS) unless the
-
Veteran is a member of the Reserve or National Guard, and
-
corporate record shows the Veteran’s most recent period of active duty ended prior to
-
September 1, 2014, if the period of active duty was in the Coast Guard, or
-
January 1, 2014, if the period of active duty was in a branch of service other than the Coast Guard.
-
References: For more information on
-
reinstating benefits following release from active duty, see 38 CFR 3.654(b)(2)
-
handling notice of a Veteran’s return to active duty and subsequent discharge that VA received more than one year after discharge occurred, see M21-1, Part X, Subpart v, 2.B.1.k
-
resuming a claim VA previously suspended based on an inability to develop the claim due to the Veteran’s return to active duty, see M21-1, Part X, Subpart v, 2.A
-
EPs, see M21-4, Appendix B, and
-
HAIMS, see M21-1, Part III, Subpart ii, 2.B.1.c.
X.v.2.B.1.hRating Decisions That Show Loss of Entitlement During Periods of Active Duty
At one point in the past, it was common practice for the rating activity to prepare a rating decision that reflected a Veteran’s loss of entitlement to disability compensation when the Veteran returned to active duty. The authorization activity then discontinued the Veteran’s benefits based on the rating decision. As indicated in M21-1, Part X, Subpart v, 2.B.1.c, the authorization activity now administratively (without a rating decision) discontinues a Veteran’s benefits when the Veteran returns to active duty. When claims processors identify a rating decision that reflects loss of entitlement to disability compensation during a period or periods of active duty,
- the rating activity must prepare a rating decision that removes all previous Active Duty Discontinuance selections from the Codesheet , per the instructions in M21-1, Part V, Subpart iv, 1.C.6.d, and
- the authorization activity must
- promulgate the rating decision
- recreate the previously coded discontinuances by way of award action, and
- ensure updates to the Codesheet are reflected in the corporate record.
X.v.2.B.1.iProper Effective Date for a Grant of Entitlement to an Increased Disability Rating or SC
If, in connection with a request for reinstatement of disability compensation following discharge, a Veteran files, and VA grants, a claim for
- an increased disability rating, assign an effective date in accordance with the instructions in M21-1, Part V, Subpart ii, 4.A.5.f
- SC for a new disability, assign an effective date in accordance with the instructions in M21-1, Part V, Subpart ii, 4.A.3.a, or
- SC for a disability for which VA previously denied SC, assign an effective date in accordance with the instructions in M21-1, Part X, Subpart ii, 2.A.
X.v.2.B.1.jProper Application of 38 CFR 3.31
The reinstatement of compensation VA previously discontinued because a Veteran returned to active duty does not constitute a new award of or increase in benefits. Therefore, the requirement in 38 CFR 3.31 to award benefits effective the first of the month following the month of entitlement is not for application. The provisions of 38 CFR 3.31 do apply if, in connection with a Veteran’s request for reinstatement, VA awards additional benefits based on the
- establishment of SC for a new disability or a disability for which VA previously denied SC
- assignment of an increased disability rating to an existing, SC disability, and/or
- Veteran's claim to add a new dependent.
Example:Scenario:
- A Veteran with a static, SC knee disorder, which VA rated 10-percent disabling, returns to active duty on August 1, 2020.
- VA discontinues the Veteran’s benefits effective the date she returned to active duty.
- The Veteran’s active duty ends August 15, 2021.
- On August 18, 2021, the Veteran files a request for reinstatement of her compensation and a claim for an increased rating for the knee disorder.
- VA determines the knee disorder worsened during service and subsequently assigns the knee disorder a disability rating of 30 percent.
Result: The effective date of the award that reinstates compensation at the rate payable for a disability rated 10-percent disabling is August 16, 2021. Although the Veteran is entitled to the 30-percent disability rating for the knee disorder effective August 18, 2021, the proper effective date of payment for the increased award, per 38 CFR 3.31, is September 1, 2021. References: For more information on the effective date of
- the increased disability rating referenced in the preceding paragraph, see M21-1, Part V, Subpart ii, 4.A.5.f, and
- payment under 38 CFR 3.31, see M21-1, Part VI, Subpart i, 1.A.2.b.
X.v.2.B.1.kDiscontinuing and Reinstating VA Benefits in the Same Award Action
Sometimes, VA may not discover that a Veteran in receipt of VA benefits returned to active duty and was subsequently discharged until years after the fact. When retroactively discontinuing benefits during the period of active duty, do not discontinue benefits beyond the date of discharge, even though the Veteran did not notify VA of the discharge within one year. Example:Scenario: On August 10, 2020, a Veteran in receipt of compensation reports a period of active duty that began December 15, 2017, and ended January 5, 2019.Action:** Discontinue the Veteran’s compensation effective December 15, 2017, and reinstate it effective January 6, 2019.
End of Part X, Subpart v, Chapter 2, Section B