[Code of Federal Regulations]
[Title 38, Volume 1]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 38CFR3.12]

[Page 159-162]
 
            TITLE 38--PENSIONS, BONUSES, AND VETERANS' RELIEF
 
                CHAPTER I--DEPARTMENT OF VETERANS AFFAIRS
 
PART 3_ADJUDICATION--Table of Contents
 
     Subpart A_Pension, Compensation, and Dependency and Indemnity 
                              Compensation
 
Sec.  3.12  Character of discharge.

    (a) If the former service member did not die in service, pension, 
compensation, or dependency and indemnity compensation is not payable 
unless the period of service on which the claim is based was terminated 
by discharge or release under conditions other than dishonorable. (38 
U.S.C. 101(2)). A discharge under honorable conditions is binding on the 
Department of Veterans Affairs as to character of discharge.
    (b) A discharge or release from service under one of the conditions 
specified in this section is a bar to the payment of benefits unless it 
is found that the person was insane at the time of committing the 
offense causing such discharge or release or unless otherwise 
specifically provided (38 U.S.C. 5303(b)).
    (c) Benefits are not payable where the former service member was 
discharged or released under one of the following conditions:
    (1) As a conscientious objector who refused to perform military 
duty, wear the uniform, or comply with lawful order of competent 
military authorities.
    (2) By reason of the sentence of a general court-martial.
    (3) Resignation by an officer for the good of the service.
    (4) As a deserter.
    (5) As an alien during a period of hostilities, where it is 
affirmatively shown that the former service member requested his or her 
release. See Sec.  3.7(b).
    (6) By reason of a discharge under other than honorable conditions 
issued as a result of an absence without official leave (AWOL) for a 
continuous period of at least 180 days. This bar to benefit entitlement 
does not apply if there are compelling circumstances to warrant the 
prolonged unauthorized absence. This bar applies to any person awarded 
an honorable or general discharge prior to October 8, 1977, under one of 
the programs listed in paragraph (h) of this section, and to any person 
who prior to October 8, 1977, had not otherwise established basic 
eligibility

[[Page 160]]

to receive Department of Veterans Affairs benefits. The term established 
basic eligibility to receive Department of Veterans Affairs benefits 
means either a Department of Veterans Affairs determination that an 
other than honorable discharge was issued under conditions other than 
dishonorable, or an upgraded honorable or general discharge issued prior 
to October 8, 1977, under criteria other than those prescribed by one of 
the programs listed in paragraph (h) of this section. However, if a 
person was discharged or released by reason of the sentence of a general 
court-martial, only a finding of insanity (paragraph (b) of this 
section) or a decision of a board of correction of records established 
under 10 U.S.C. 1552 can estalish basic eligibility to receive 
Department of Veterans Affairs benefits. The following factors will be 
considered in determining whether there are compelling circumstances to 
warrant the prolonged unauthorized absence.
    (i) Length and character of service exclusive of the period of 
prolonged AWOL. Service exclusive of the period of prolonged AWOL should 
generally be of such quality and length that it can be characterized as 
honest, faithful and meritorious and of benefit to the Nation.
    (ii) Reasons for going AWOL. Reasons which are entitled to be given 
consideration when offered by the claimant include family emergencies or 
obligations, or similar types of obligations or duties owed to third 
parties. The reasons for going AWOL should be evaluated in terms of the 
person's age, cultural background, educational level and judgmental 
maturity. Consideration should be given to how the situation appeared to 
the person himself or herself, and not how the adjudicator might have 
reacted. Hardship or suffering incurred during overseas service, or as a 
result of combat wounds of other service-incurred or aggravated 
disability, is to be carefully and sympathetically considered in 
evaluating the person's state of mind at the time the prolonged AWOL 
period began.
    (iii) A valid legal defense exists for the absence which would have 
precluded a conviction for AWOL. Compelling circumstances could occur as 
a matter of law if the absence could not validly be charged as, or lead 
to a conviction of, an offense under the Uniform Code of Military 
Justice. For purposes of this paragraph the defense must go directly to 
the substantive issue of absence rather than to procedures, 
technicalities or formalities.
    (d) A discharge or release because of one of the offenses specified 
in this paragraph is considered to have been issued under dishonorable 
conditions.
    (1) Acceptance of an undesirable discharge to escape trial by 
general court-martial.
    (2) Mutiny or spying.
    (3) An offense involving moral turpitude. This includes, generally, 
conviction of a felony.
    (4) Willful and persistent misconduct. This includes a discharge 
under other than honorable conditions, if it is determined that it was 
issued because of willful and persistent misconduct. A discharge because 
of a minor offense will not, however, be considered willful and 
persistent misconduct if service was otherwise honest, faithful and 
meritorious.
    (5) Homosexual acts involving aggravating circumstances or other 
factors affecting the performance of duty. Examples of homosexual acts 
involving aggravating circumstances or other factors affecting the 
performance of duty include child molestation, homosexual prostitution, 
homosexual acts or conduct accompanied by assault or coercion, and 
homosexual acts or conduct taking place between service members of 
disparate rank, grade, or status when a service member has taken 
advantage of his or her superior rank, grade, or status.
    (e) An honorable discharge or discharge under honorable conditions 
issued through a board for correction of records established under 
authority of 10 U.S.C. 1552 is final and conclusive on the Department of 
Veterans Affairs. The action of the board sets aside any prior bar to 
benefits imposed under paragraph (c) or (d) of this section.
    (f) An honorable or general discharge issued prior to October 8, 
1977, under authority other than that listed in paragraphs (h) (1), (2) 
and (3) of this section by a discharge review board established under 10 
U.S.C. 1553 set aside any bar to benefits imposed under

[[Page 161]]

paragraph (c) or (d) of this section except the bar contained in 
paragraph (c)(2) of this section.
    (g) An honorable or general discharge issued on or after October 8, 
1977, by a discharge review board established under 10 U.S.C. 1553, sets 
aside a bar to benefits imposed under paragraph (d), but not paragraph 
(c), of this section provided that:
    (1) The discharge is upgraded as a result of an individual case 
review;
    (2) The discharge is upgraded under uniform published standards and 
procedures that generally apply to all persons administratively 
discharged or released from active military, naval or air service under 
conditions other than honorable; and
    (3) Such standards are consistent with historical standards for 
determining honorable service and do not contain any provision for 
automatically granting or denying an upgraded discharge.
    (h) Unless a discharge review board established under 10 U.S.C. 1553 
determines on an individual case basis that the discharge would be 
upgraded under uniform standards meeting the requirements set forth in 
paragraph (g) of this section, an honorable or general discharge awarded 
under one of the following programs does not remove any bar to benefits 
imposed under this section:
    (1) The President's directive of January 19, 1977, implementing 
Presidential Proclamation 4313 of September 16, 1974; or
    (2) The Department of Defense's special discharge review program 
effective April 5, 1977; or
    (3) Any discharge review program implemented after April 5, 1977, 
that does not apply to all persons administratively discharged or 
released from active military service under other than honorable 
conditions.


(Authority: 38 U.S.C. 5303 (e))

    (i) No overpayments shall be created as a result of payments made 
after October 8, 1977, based on an upgraded honorable or general 
discharge issued under one of the programs listed in paragraph (h) of 
this section which would not be awarded under the standards set forth in 
paragraph (g) of this section. Accounts in payment status on or after 
October 8, 1977, shall be terminated the end of the month in which it is 
determined that the original other than honorable discharge was not 
issued under conditions other than dishonorable following notice from 
the appropriate discharge review board that the discharge would not have 
been upgraded under the standards set forth in paragraph (g) of this 
section, or April 7, 1978, whichever is the earliest. Accounts in 
suspense (either before or after October 8, 1977) shall be terminated on 
the date of last payment or April 7, 1978, whichever is the earliest.
    (j) No overpayment shall be created as a result of payments made 
after October 8, 1977, in cases in which the bar contained in paragraph 
(c)(6) of this section is for application. Accounts in payment status on 
or after October 8, 1977, shall be terminated at the end of the month in 
which it is determined that compelling circumstances do not exist, or 
April 7, 1978, whichever is the earliest. Accounts in suspense (either 
before or after October 8, 1977) shall be terminated on the date of last 
payment, or April 7, 1978, whichever is the earliest.
    (k) Uncharacterized separations. Where enlisted personnel are 
administratively separated from service on the basis of proceedings 
initiated on or after October 1, 1982, the separation may be classified 
as one of the three categories of administrative separation that do not 
require characterization of service by the military department 
concerned. In such cases conditions of discharge will be determined by 
the VA as follows:
    (1) Entry level separation. Uncharacterized administrative 
separations of this type shall be considered under conditions other than 
dishonorable.
    (2) Void enlistment or induction. Uncharacterized administrative 
separations of this type shall be reviewed based on facts and 
circumstances surrounding separation, with reference to the provisions 
of Sec.  3.14 of this part, to determine whether separation was under 
conditions other than dishonorable.
    (3) Dropped from the rolls. Uncharacterized administrative 
separations of this type shall be reviewed

[[Page 162]]

based on facts and circumstances surrounding separation to determine 
whether separation was under conditions other than dishonorable.

(Authority: 38 U.S.C. 501)

    Cross References: Validity of enlistments. See Sec.  3.14. Revision 
of decisions. See Sec.  3.105. Effective dates. See Sec.  3.400(g). 
Minimum active-duty service requirement. See Sec.  3.12a.

[28 FR 123, Jan. 4, 1963, as amended at 41 FR 12656, Mar. 26, 1976; 43 
FR 15153, Apr. 11, 1978; 45 FR 2318, Jan. 11, 1980; 49 FR 44099, Nov. 2, 
1984; 62 FR 14823, Mar. 28, 1997]