38 U.S.C. § 1302: Determination of pay grade

With respect to a veteran who died in the active military, naval, air, or space service, such veteran’s pay grade shall be determined as of the date of such veteran’s death or as of the date of a promotion after death while in a missing status. the time of such veteran’s last discharge or release from active duty under conditions other than dishonorable; or the time of such veteran’s discharge or release from any period of active duty for training or inactive duty training, if such veteran’s death results from service-connected disability incurred during such period and if such veteran was not thereafter discharged or released under conditions other than dishonorable from active duty. The pay grade of any veteran described in section 106(b) of this title shall be that to which such veteran would have been assigned upon final acceptance or entry upon active duty. If a veteran has satisfactorily served on active duty for a period of six months or more in a pay grade higher than that specified in subsection (a) or (b) and any subsequent discharge or release from active duty was under conditions other than dishonorable, the higher pay grade shall be used if it will result in greater monthly payments to such veteran’s surviving spouse under this chapter. The determination as to whether an individual has served satisfactorily for the required period in a higher pay grade shall be made by the Secretary of the department in which such higher pay grade was held. The pay grade of any person not otherwise described in this section, but who had a compensable status on the date of such person’s death under laws administered by the Secretary, shall be determined by the head of the department under which such person performed the services by which such person obtained such status (taking into consideration such person’s duties and responsibilities) and certified to the Secretary. For the purposes of this chapter, such person shall be deemed to have been on active duty while performing such services.