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

in the case of a veteran with a service-connected disability rated at 20 percent or more, the rate of compensation payable under section 1114(a) of this title ; or in the case of a veteran with a service-connected disability not rated at 20 percent or more or in the case of a surviving spouse, parent, or child, one-half of the rate of compensation payable under section 1114(a) of this title . The provisions of paragraph (1) of this subsection shall not apply with respect to any period during which a person is participating in a work-release program or is residing in a halfway house. All or any part of the compensation not paid to a veteran by reason of subsection (a) of this section may, as appropriate in an individual case, be apportioned under the same terms and conditions as are provided under section 5307 of this title . In the case of dependency and indemnity compensation not paid to a surviving spouse, any apportionment shall be to the surviving child or children. In the case of dependency and indemnity compensation not paid to a surviving child, any apportionment shall be to the surviving spouse or other surviving children, as applicable. No apportionment may be made under this subsection to or on behalf of any person who is incarcerated in a Federal, State, local, or other penal institution or correctional facility for conviction of a felony. The Secretary shall not assign to any veteran a rating of total disability based on the individual unemployability of the veteran resulting from a service-connected disability during any period during which the veteran is incarcerated in a Federal, State, local, or other penal institution or correctional facility for conviction of a felony. The provisions of subsection (a) of this section shall apply (1) with respect to any period of incarceration of a person for conviction of a felony committed after October 7, 1980 , and (2) with respect to any period of incarceration on or after October 1, 1980 , for conviction of a felony of a person who on October 1, 1980 , is incarcerated for conviction of such felony and with respect to whom the action granting an award of compensation or dependency and indemnity compensation is taken on or after such date. The term “compensation” includes disability compensation payable under section 1151 of this title . The term “dependency and indemnity compensation” means death compensation payable under section 1121 or 1141 of this title, death compensation and dependency and indemnity compensation payable under section 1151 of this title , and any benefit payable under chapter 13 of this title. Section 5313 of title 38 , United States Code, other than subsection (d) of that section, shall apply with respect to the payment of compensation to or with respect to any veteran described in subsection (b). on October 7, 1980 , was incarcerated in a Federal, State, or local penal institution for a felony committed before that date; and remains so incarcerated for conviction of that felony as of the date of the enactment of this Act [ Dec. 27, 2001 ]. This section shall apply with respect to the payment of compensation for months beginning on or after the end of the 90-day period beginning on the date of the enactment of this Act [ Dec. 27, 2001 ]. For purposes of this section, the term ‘compensation’ has the meaning given that term in section 5313 of title 38 , United States Code.”