38 U.S.C. § 5313 — Limitation on payment of compensation and dependency and indemnity compensation to persons incarcerated for conviction of a felony

(a) (1) Subject to subsection (d), a person entitled to compensation or dependency and indemnity compensation who is imprisoned in a Federal, State^*, local, or other penal institution or correctional facility for more than 60 days because of a felony conviction may not receive, beginning on the 61st day and ending when the imprisonment ends, more than— (A) for a veteran^* whose service-connected^* disability is rated at least 20 percent, the compensation rate under section 1114(a); or (B) for a veteran rated below 20 percent, or for a surviving spouse^*, parent^*, or child^*, one-half of that rate. (2) This limit does not apply while the person is in a work-release program or living in a halfway house. (b) (1) Compensation withheld from a veteran under subsection (a) may, when appropriate, be divided under the same terms and conditions as section 5307. (2) Dependency and indemnity compensation withheld from a surviving spouse^* or child may be divided as follows: (A) If it was withheld from a surviving spouse, it may go to the surviving child or children. (B) If it was withheld from a surviving child, it may go to the surviving spouse or other surviving children, as applicable. (3) No payment may be divided under this subsection to or for a person imprisoned for a felony conviction. (c) While a veteran is imprisoned for a felony conviction, the Secretary^* may not assign that veteran a total-disability rating based on individual unemployability resulting from a service-connected disability. (d) Subsection (a) applies to imprisonment for a felony committed after October 7, 1980. It also applies to imprisonment on or after October 1, 1980, of a person who was imprisoned for that felony on October 1, 1980, if the award action was taken on or after that date. (e) For this section, “compensation” includes disability compensation payable under section 1151. “Dependency and indemnity compensation” means death compensation under section 1121 or 1141, death compensation and dependency and indemnity compensation under section 1151, and any benefit under chapter 13. This section does not define the quoted terms beyond these statements.