WASHINGTON, D.C. — The Department of Veterans Affairs (VA) has finalized a landmark rule change aimed at eliminating the bureaucratic “red tape” that has historically delayed payments to the families of deceased veterans.
The new regulation, set to take effect on February 23, 2026, will overhaul how the agency processes two primary types of financial support: Dependency and Indemnity Compensation (DIC) and Survivors’ Pension.
Currently, the VA is required to conduct separate formal reviews for both DIC and Survivors’ Pension claims, even if a survivor is clearly eligible for both. This dual processing often leaves families waiting months for a final decision during their most difficult moments.
Under the new “higher-of-the-two” rule, the VA will now automatically award the benefit that provides the greater monthly payment—usually the DIC—without waiting to fully develop the claim for the lesser benefit.
“This common-sense change streamlines the survivors’ claims process, reduces administrative burdens, and delivers quicker decisions to beneficiaries during challenging times,” said VA Secretary Doug Collins.
While both benefits are tax-free monthly payments, they serve different purposes and have distinct eligibility requirements:
| Benefit | Eligibility Basis | Purpose |
| Dependency & Indemnity Compensation (DIC) | Service-connected death or disability. | Support for survivors of those who died in the line of duty or from service-related injuries. |
| Survivors Pension | Wartime service + financial need. | A needs-based “safety net” for low-income survivors of wartime veterans whose deaths were not service-related. |
The Medicaid Exception
The VA identified one specific scenario where the higher benefit (DIC) is not automatically awarded. If a surviving spouse has no dependents, is residing in a nursing home, and is receiving Medicaid, the Survivors’ Pension will be awarded instead.
However, the rule includes a protection: if that spouse leaves Medicaid-covered nursing care, they can file a claim within one year to have their DIC benefits reinstated retroactively to the date their Medicaid coverage ended.
This rule change is the latest step in a major survivors’ benefits reform effort launched in 2025. This “three-pronged” initiative has already included:
- Reorganization: Moving the Office of Survivors Assistance directly into the Office of the VA Secretary to ensure high-level oversight.
- “White-Glove” Service: Launching specialized outreach teams to guide families through the complex DIC application process.
- Automation: Identifying digital solutions to auto-verify certain service records, cutting down manual processing time.
“The last thing survivors need in their time of grief is frustrating red tape,” Secretary Collins added. “We are creating a better system to more quickly and effectively provide survivors the compassion they’ve earned.”
Survivors with questions about their current claims or the new regulation are encouraged to use the following resources:
- VA Benefits Hotline: 800-827-1000
- Media Inquiries: vapublicaffairs@va.gov
