1. (a) Minimum period of participation. Each individual who agrees to participate must do so for a minimum period of 12 consecutive months, unless the participant:

   1. (1) Is allowed to disenroll for hardship reasons;
   2. (2) Is permitted to suspend participation for hardship reasons;
   3. (3) Is discharged or released from active duty;
   4. (4) Otherwise ceases to be legally eligible to participate; or

   5. (5) Elects to make a lump-sum contribution which, when taken together with his or her other contributions, equals the equivalent of at least 12 months' participation.

      (Authority: 38 U.S.C. 3221, 3222)

2. (b) Amount of monthly contribution. The individual shall specify the amount of his or her contribution to the fund.

   1. (1) The contribution shall be at least $25 per month but not more than $100 per month.
   2. (2) The contribution shall be evenly divided by five. See § 21.5292 for contributions made during the 1-year pilot program.
3. (c) Amount of total contribution. An individual may contribute for the number of months required to reach a total contribution of $2,700.
4. (d) Changing the monthly contribution. An individual may increase or decrease the amount of the monthly contribution, but may not do so more than once a month.

5. (e) Prohibition against contributing. An individual may not make contributions to the fund after the date of his or her discharge. The VA does not consider the return of an unnegotiated refund check to be a contribution. A person who returns a refund check remains continuously eligible for benefits.

   (Authority: 38 U.S.C. 3222)

6. (f) Lump-sum contribution. After September 30, 1980 an individual may make a lump-sum contribution or contributions in place of or in addition to monthly contributions.

   1. (1) A lump-sum contribution:

      1. (i) Must be evenly divisible by five,
      2. (ii) Must, when taken together with any monthly contributions the participant may have made or may agree to make, equal or exceed 12 months' participation, and
      3. (iii) Must not exceed $2,700 when taken together with any monthly contributions the participant may have made or may agree to make.

   2. (2) The Department of Veterans Affairs will consider the lump-sum contributions to have been made by monthly deductions from the participant's military pay at the rate of $100 per month unless the participant specifies a different rate which must be

      1. (i) No lower than $25 per month,
      2. (ii) No higher than $100 per month, and
      3. (iii) Evenly divisible by five.

   3. (3) If otherwise eligible to make contributions, a participant:

      1. (i) May make a lump-sum contribution to cover any period of his or her active duty. This may entail a retroactive period, including one which—

         1. (A) Begins after December 31, 1976, and before October 1, 1980, or

         2. (B) Although made after October 27, 1986, includes all or part of the period beginning on July 1, 1985, and ending on October 27, 1986.

            (Authority: Pub. L. 99-576, sec. 309(c))

      2. (ii) May make a lump-sum contribution which has the effect of increasing the amount of a monthly contribution the participant made previously, but the payment cannot have the effect of increasing the monthly contribution to an amount greater than $100;
      3. (iii) May make a lump-sum payment to cover a period for which he or she previously obtained a refund;
      4. (iv) May not make a lump-sum payment to cover a period during which the participant was not on active duty or will not be on active duty.

   4. (4) A participant may make as many lump-sum contributions as he or she desires, but he or she may not make more than one lump-sum contribution per month.

      (Authority: 38 U.S.C. 3222(d)

[45 FR 31, Jan. 2, 1980, as amended at 47 FR 51744, Nov. 17, 1982; 48 FR 50530, Nov. 2, 1983; 53 FR 617, Jan. 11, 1988; 53 FR 34496, Sept. 7, 1988]