                                                           M arch 29, 1977


77-15     MEMORANDUM OPINION FOR THE
          SPECIAL ASSISTANT OFFICE OF THE
          SECRETARY OF DEFENSE
          Liability of Government for Retroactive Veterans’
          Benefits Where Discharges Are Upgraded


   We have reviewed the proposed Discharge Review Program sent to
the A ttorney General by your letter of March 9, 1977, with regard to
the question of the Government’s liability to pay retroactive veterans’
benefits to recipients of upgraded discharges who become entitled to
such benefits by reason of their receipt of an upgraded discharge. As
more fully explained below, it is our opinion that the issuance of
upgraded discharges under the Discharge Review Program will not
impose any substantial liability on the Government for retroactive vet­
erans’ benefits.
   Section 3010 of Title 38, United States Code, establishes the basic
rules for determining the effective dates o f awards of veterans’ benefits.
In effect, for purposes of the Discharge Review Program, this section
divides all potential recipients of upgraded discharges who are entitled
to veterans’ benefits into tw o categories: (1) those who have previously
applied for benefits and have had their claims denied because of the
character of their discharges; and (2) those who never applied for
benefits prior to their receipt of upgraded discharges, presumably be­
cause they knew they were not entitled to benefits due to the dishonor­
able character of their discharges.
   A veteran within the first category who becomes eligible for veter­
ans’ benefits by reason of the Discharge Review Program will be
entitled to benefits commencing on whichever o f the following is later:
(1) when he files for review of his discharge under the Discharge
Review Program; or (2) the date when the disallowed claim was filed.
38 U.S.C. § 3010(i). Thus, such a veteran would not be entitled to
retroactive benefits for the period preceding his application for an
upgraded discharge. Of course, under § 3010(i) he would be entitled to
retroactive benefits for the interval between his filing for a discharge
review and the award of a discharge qualifying for veterans’ benefits,
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assuming, as would most likely be the case, that his disallowed claim
preceded his application for review of his discharge. A further limita­
tion in this subsection provides that no retroactive award may be made
for any period more than one year prior to the reopening of the claim;
i.e., if the newly eligible veteran delays in reopening his claim for
veterans’ benefits more than one year after he applied for his upgraded
discharge, any retroactive benefits awarded will be limited to 1 year.
    With respect to the second category, benefits generally will be pay­
able from a time not “earlier than the date of receipt of application
therefor.” 38 U.S.C. § 3010(a). Thus, with respect to most new claims
for benefits from recipients of upgraded discharges who had not previ­
ously sought benefits, no claim for retroactive benefits will lie. How ev­
er, certain types of benefits may be awarded retroactive to the event
giving rise to the entitlement for benefits provided the claim is filed
within one year of such event. 38 U.S.C. § 3010(b)-(h), (j)-(l), (n).
However, since the veterans in question all were discharged on or
before March 28, 1973, most of the events giving rise to an entitlement
for benefits will have taken place more than a year ago and hence even
the limited one-year retroactivity entitlement is barred. In those unusual
cases where the event giving rise to benefits occurred within the past
year, such as where an old service-connected injury resulted in perma­
nent and total disability within the past year (§ 3010(b)(2)), or when an
old service-connected injury resulted in death during the past year
(§ 3010(g)) (assuming that the Discharge Review Program will consider
applications on behalf of decedents), the possibility exists of an award
of benefits back to the date of the event, if within 1 year. We
understand that the Veterans Administration estimates that the propor­
tion of veterans who would be entitled to any such retroactive pay­
ments would be small.
                                           John M. H   armon
                                 Acting Assistant Attorney General
                                                Office o f Legal Counsel




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