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Income Withholding for Support (IWO’s) and VA Benefits Part II: When to Apportion

If a veteran has waived all retired or retainer pay to receive a VA benefit, that individual’s disability compensation is not subject to income withholding for child support.  Instead, the apportionment process should be used to credit the veteran for monies remitted.

Workers may wish to call VA Regional Office Inquiry Line at 1-800-827-100 to inquire about whether a veteran has waived all (or only a portion) of retired or retainer pay to receive the VA benefit.  If, however, a worker is unable to receive this information by calling the number above, FCRL can be consulted.  When FCRL reflects no current DFAS QW reporting, the case in question likely qualifies for apportionment rather than a VA IWO.

The VA determines whether to apportion VA benefits according to regulations found in 38 CFR 3.450-3.461.

VA regulation 38 CFR 3.450 (a)(1)(ii) as well as 38 U.S.C. § 5307 provide that if the veteran is not residing with a spouse or children, and the veteran is not reasonably discharging a responsibility for the spouse’s or children’s support, then the veteran’s pension, compensation, or emergency officer’s retirement pay may be apportioned.

VA regulation 38 CFR 3.451 also authorizes a special apportionment of a veteran’s pension, compensation, emergency officer’s retirement payment, or dependency and indemnity compensation, between the veteran and spouse or children when the spouse or children demonstrate a need for the benefit.

The worker should write to the VA using agency letterhead to request an apportionment review.  Both the worker and the custodial parent should sign the letter. After receiving an apportionment application, the VA usually requests a completed VA Form 21-0788 – “Information Regarding Apportionment of Beneficiary’s Award.” A downloadable PDF is available here:

https://www.va.gov/find-forms/about-form-21-0788/

The worker will use the form to provide information regarding the custodial parent’s income and net worth.  When returning the form, the worker should also attach a copy of the current support order to assist the VA in reviewing the request for the apportionment award, along with an arrearage computation and/or payment records.

Next, the VA will review the application, notify the noncustodial parent, and (if the VA’s qualification is met) apply the apportionment. The apportionment is then sent to the custodian directly.  Once the apportionment is in place, the custodian is to notify OCSS, and the case should go through a modification process for these payments to be credited.

The VA bases an apportionment on the facts in the individual case, such as amount of VA benefits payable, other resources and income of the veteran, spouse and children, and special needs of the veteran, spouse, or children. An apportionment is not made if it would cause undue hardship to the veteran or in certain other circumstances specified by statute or regulation.

For further information about child support and VA Benefits, workers may also find it helpful to reference the CS Quest articles listed below:

Income Withholding for Support (IWO’s) and VA Benefits

VA Apportionment

VA Benefits Suspended? Not Really