Claim Raven explanation
What this means
When the same VA-caused disability or death supports both section 1151 benefits and a Federal Tort Claims Act judgment or settlement, VA may offset specified amounts to prevent duplicate recovery.
For a survivor, the offset is limited to the recovery for the veteran’s death received individually or through the estate for the survivor’s harm, plus the proportional attorney-fee share. Structured recoveries use the proportional cost to the United States rather than simply adding future nominal payments.
How this helps your claim
The offset depends on who received the recovery, what harm it compensated, when it became final, and whether it was structured. Separate provisions address a veteran’s compensation, a survivor’s DIC, and amounts specifically designated for automobile or housing adaptation purposes.
What to check in your records
Read the settlement or judgment allocation and identify the recipient’s actual share, attorney-fee share, covered harm, and final date before comparing it with VA’s offset.
- Keep the complete judgment, settlement, or compromise, including allocation schedules and structured-payment terms.
- Document the amount received by the veteran, survivor, or estate and the proportional attorney fees included in that share.
- Compare VA’s offset worksheet with the section 1151 award and any amount expressly designated for automobile or housing adaptation.
Do not calculate from the headline settlement number
Start with the documents showing allocation among claims, recipients, attorney fees, and designated purposes. The gross public number may not be the amount this regulation tells VA to offset.
For housing or automobile assistance, identify whether the settlement expressly designated an amount for the same purpose. The rule treats that designated overlap separately before addressing any excess against chapter 11 benefits.
Does every tort settlement eliminate section 1151 benefits?
No. This rule generally describes an offset, with the amount determined by the recovery and recipient. A separate historical bar in section 3.363 applies only to certain pre-December 1962 recoveries.
Official regulatory text
38 CFR § 3.362
eCFR snapshot: 2026-09-17. Layout and spacing are adapted for reading. The full section and its tables are included below.
§ 3.362 Offsets under 38 U.S.C. 1151(b) of benefits awarded under 38 U.S.C. 1151(a).
(a) Claims subject to this section. This section applies to claims received by VA on or after October 1, 1997. This includes original claims and claims to reopen or otherwise readjudicate a previous claim for benefits under 38 U.S.C. 1151 or its predecessors.
(b) Offset of veterans' awards of compensation. If a veteran's disability is the basis of a judgment under 28 U.S.C. 1346(b) awarded, or a settlement or compromise under 28 U.S.C. 2672 or 2677 entered, on or after December 1, 1962, the amount to be offset under 38 U.S.C. 1151 (b) from any compensation awarded under 38 U.S.C. 1151(a) is the entire amount of the veteran's share of the judgment, settlement, or compromise, including the veteran's proportional share of attorney fees.
(c) Offset of survivors' awards of dependency and indemnity compensation. If a veteran's death is the basis of a judgment under 28 U.S.C. 1346(b) awarded, or a settlement or compromise under 28 U.S.C. 2672 or 2677 entered, on or after December 1, 1962, the amount to be offset under 38 U.S.C. 1151 (b) from any dependency and indemnity compensation awarded under 38 U.S.C. 1151(a) to a survivor is only the amount of the judgment, settlement, or compromise representing damages for the veteran's death the survivor receives in an individual capacity or as distribution from the decedent veteran's estate of sums included in the judgment, settlement, or compromise to compensate for harm suffered by the survivor, plus the survivor's proportional share of attorney fees.
(d) Offset of structured settlements. This paragraph applies if a veteran's disability or death is the basis of a structured settlement or structured compromise under 28 U.S.C. 2672 or 2677 entered on or after December 1, 1962.
(1) The amount to be offset. The amount to be offset under 38 U.S.C. 1151 (b) from benefits awarded under 38 U.S.C. 1151(a) is the veteran's or survivor's proportional share of the cost to the United States of the settlement or compromise, including the veteran's or survivor's proportional share of attorney fees.
(2) When the offset begins. The offset of benefits awarded under 38 U.S.C. 1151(a) begins the first month after the structured settlement or structured compromise has become final that such benefits would otherwise be paid.
(e) Offset of award of benefits under 38 U.S.C. chapter 21 or 38 U.S.C. chapter 39.
(1) If a judgment, settlement, or compromise covered in paragraphs (b) through (d) of this section becomes final on or after December 10, 2004, and includes an amount that is specifically designated for a purpose for which benefits are provided under 38 U.S.C. chapter 21 (38 CFR 3.809 and 3.809a) or 38 U.S.C. chapter 39 (38 CFR 3.808), and if VA awards 38 U.S.C. chapter 21 or 38 U.S.C. chapter 39 benefits after the date on which the judgment, settlement, or compromise becomes final, the amount of the award will be reduced by the amount received under the judgment, settlement, or compromise for the same purpose.
(2) If the amount described in paragraph (e)(1) of this section is greater than the amount of an award under 38 U.S.C. chapter 21 or 38 U.S.C. chapter 39, the excess amount received under the judgment, settlement, or compromise will be offset against benefits otherwise payable under 38 U.S.C. chapter 11.
[69 FR 46434, Aug. 3, 2004, as amended at 71 FR 44918, Aug. 8, 2006; 75 FR 57861, Sept. 23, 2010]
Related references
- 38 CFR § 3.363: The historical pre-1962 bar to section 1151 benefits
- 38 USC § 1151: Compensation for Disability Caused by VA Care
- 38 CFR § 3.808: VA automobile and adaptive-equipment eligibility
- 38 CFR § 3.809: Eligibility for specially adapted housing
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