Revised January 28, 2021
XII.ii.1.1.aDefinition: Death Compensation
Death Compensation is a monthly payment made to a surviving spouse, child, or parent because
- of a service-connected (SC) death occurring before January 1, 1957, or
- an in-service waiver of National Service Life Insurance (NSLI) or United States Government Life Insurance (USGLI) under 38 U.S.C. 1924 was in effect at the time of death, and death occurred
- on or after May 1, 1957, but
- prior to January 1, 1972.
Important: The parent(s) of a deceased Veteran must also meet the requirements set forth in 38 CFR 3.250 in order to establish entitlement to Death Compensation. References: For more information on
- Death Compensation, see 38 CFR 3.4(c), and
- NSLI or USGLI, see 38 U.S.C. 1924.
XII.ii.1.1.bAction to Take if Death Compensation Is the Greater Benefit for a Surviving Parent
Upon receipt of VA Form 21P-535 , Application for Dependency and Indemnity Compensation by Parent(s) (Including Accrued Benefits and Death Compensation when Applicable), from a surviving parent, ask the parent to complete and return VA Form 21P-509, Statement of Dependency of Parent(s), if
- the circumstances described in M21-1, Part XII, Subpart ii, 1.1.a exist, and
- the rate of Dependency and Indemnity Compensation (DIC) payable to the parent is less than the rate of Death Compensation payable.
Use the information the parent provides on the form to determine whether, based on the criteria in 38 CFR 3.250, the parent was dependent on the Veteran prior to the Veteran’s death.
XII.ii.1.1.cElection of DIC in Lieu of Death Compensation
Claimants and beneficiaries with entitlement to Death Compensation have the right to elect DIC under certain circumstances. Follow the steps in the table below upon receipt of an application from a claimant/beneficiary that is in receipt of Death Compensation.
| Step | Action |
|---|---|
| 1 | Is the claimant/beneficiary entitled to DIC?
|
| 2 | Is the amount of DIC that is payable greater than the amount of Death Compensation that is payable?
|
| Step | Action |
|---|---|
| 1 | Pay/Continue paying Death Compensation. |
| 2 | Notify the claimant/beneficiary
|
| 3 | Proceed no further. |
| 3 | Assume the claimant/beneficiary is electing DIC in lieu of Death Compensation and award DIC from the date of receipt of election. In the decision notice, inform the claimant/beneficiary
|
| 4 | Did the claimant/beneficiary ask VA to cancel the election of DIC before his/her financial institution received the first payment of DIC?
|
References: For more information on
-
finality of election to receive DIC, see 38 CFR 3.702 (d)(1), and
-
effective date of DIC upon election, see 38 CFR 3.400 (c)(4).
XII.ii.1.1.dConsidering In-Service Waiver of Insurance Premium Cases
Situation: Cases may be encountered in which the beneficiaries are receiving Death Compensation because the Veteran died on or after May 1, 1957, and prior to January 1, 1972, with insurance in force by waiver of premiums under 38 U.S.C. 1924. Pursuant to Public Law (PL) 92-197 , effective January 1, 1972, these beneficiaries have an unrestricted right to elect DIC. Action:
- Provide notice to all affected Death Compensation beneficiaries of their right to elect DIC.
- If cases are encountered during routine handling, in which the beneficiaries have not elected DIC, furnish a reminder of the right of election and take related actions as provided in this section.
Notes:
- PL 92-197 repealed 38 U.S.C. 417(a) that had limited entitlement to Death Compensation under 38 CFR 3.5(b)(3) and 38 CFR 3.702(a).
- If election of DIC is received, the effective date provisions of 38 CFR 3.114(a)(3) apply.
End of Part XII, Subpart ii, Chapter 1