Veterans Benefits Administration
Department of Veterans Affairs
Washington, D.C. 20420

M22-4, Part V

Part V:  Chapter 12 - Additional Contributions

12.01 Overview
12.02 Background

SUBCHAPTER I PROVISIONS OF LAW
12.03 Description of Program
12.04 Eligibility Requirements
12.05 Contribution Requirements

SUBCHAPTER II IDENTIFICATON AND EVIDENCE
12.06 Identifying Buy-up Claims
12.07 Evidence of Participation

SUBCHAPTER III COLLECTIONS
12.08 Historical Procedure
12.09 Current Procedure
12.10 Miscellaneous Collection Issues

SUBCHAPTER IV AWARD PROCESSING
12.11 Payments
12.12 Payments to Active Duty Participants

12.13 Effective Date of Increased Rate
12.14 Effective Dates for "Continuing Contributors"

12.15 Paying the Additional Rate in the Benefits Delivery Network (BDN)
12.16 Flight, Correspondence, Apprenticeship and On-the-Job Training Procedures

SUBCHAPTER V FINANCE PROCEDURES - HISTORICAL
12.17 Purpose and History
12.18 Historical Procedures

APPENDICES
A. Chapter 30 Eligibility Categories
B. Access to the MGIB600 Website
C. Additional Contribution Conversions

12.01  OVERVIEW

(Change Date: October 15, 2007)


This chapter covers eligibility and claims processing procedures for the additional contributions program under chapter 30 of title 38, U.S. Code.  This program is also referred to as the "Buy-up" program. 

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12.02 BACKGROUND

(Change Date: October 15, 2007)


Section 105 of Public Law 106-419 revised 38 U.S.C. sections 3011(e), 3012(f), and 3015(g) to allow a servicemember participating in chapter 30 to make additional monetary contributions of up to $600.  These optional contributions, collected by the military, must be made while the servicemember is on active duty and result in a proportionately higher benefit rate while pursing training under chapter 30 (see par. 12.11).  The additional contributions are not considered a pay reduction (unlike the $1200 collected by the military during the first twelve months of service, which is a pay reduction).  The Buy-up program became effective November 1, 2000.

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SUBCHAPTER I PROVISIONS OF LAW

12.03 DESCRIPTION OF PROGAM

(Change Date: October 15, 2007)


Eligible chapter 30 participants can make additional contributions in $20 increments up to a maximum of $600; the minimum amount that the Department of Defense (DoD) will withhold is $20 per month.  Servicemembers may also contribute through a lump sum payment.  Participants earn an additional $5 of chapter 30 benefits per month for full-time training for each $20 contributed while on active duty. For persons who contribute the full $600, the additional amount added to their monthly benefit is $150 for full-time training. 

NOTE:  Buy-up is a voluntary program.  Servicemembers are not required to participate.

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12.04 ELIGIBILITY REQUIREMENTS

(Change Date: October 15, 2007)


a.  Basic Requirements.  Only those chapter 30 participants who first enter active duty service after June 30, 1985, and who have an obligation required to establish eligibility under category 1A, 1B, or 1C or are working toward establishing eligibility under one of those categories, may elect to pay into the Buy-up program.  Any period of active duty service meeting these requirements may be used to establish this eligibility.  For descriptions of chapter 30 eligibility categories, see Appendix A. It is possible to elect to participate in the Buy-up program and pay the additional contributions while working toward meeting the requirements of categories 1A, 1B, or 1C, but ultimately receive chapter 30 benefits under category III.  The participant is still eligible to receive the higher benefit rate based on the additional contributions.   Similarly, a servicemember may make the $600 additional contribution while on any period of active duty service (as defined in 38 CFR 21.7020(b)(1)) even though his or her current period of service may not be qualifying. 

NOTE: Individuals eligible under categories II and IV can never participate in the Buy-up program. 

EXAMPLE #1:  An individual enters service under circumstances that would establish eligibility under category IB and makes the additional contributions.  He is involuntarily separated before meeting the service requirements of category 1B, but he meets the eligibility requirements of category IIIA.   This individual may receive the Buy-up benefit even though he ultimately receives benefits under category IIIA eligibility rules rather than category 1B eligibility rules. 

EXAMPLE #2:  An individual is currently on active duty in the Coast Guard and will receive a general discharge from the Coast Guard.  The individual, however, previously received an honorable discharge from the Navy.  He will use this period of Navy service to establish chapter 30 eligibility.  Therefore, he may contribute while on active duty with the Coast Guard.

b.  Call-up.  Those in the Selected Reserve who are eligible for chapter 30 benefits and who are called to active duty may contribute.  The individual must make all contributions while on active duty, but there is no minimum number of days of service required for an individual to make a contribution.  The servicemember must either have been called to active duty under section 12301(a), 12301(d), 12301(g), 12302, or 12304 of title 10, U.S. Code, or have been called to active duty under title 32 U.S.C. for a qualifying reason. For more information regarding qualifying reasons under title 32, see part V, paragraphs 1.02a(6) and (7).

NOTE:  A person on active duty for training (ACDUTRA) or in a Selected Reserve drilling status cannot participate in Buy-up. 

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12.05 CONTRIBUTION REQUIREMENTS

(Change Date: October 15, 2007)


Additional contributions must be made on or after May 1, 2001, and must be made while the individual is on active duty. Contributions may only be made once a month.

NOTE:  Chapter 30 participants who were discharged from service between November 1, 2000, and April 30, 2001, could make these additional payments beginning on May 1, 2001, and ending on July 31, 2001. VA, rather than DoD, collected these contributions. VA has no authority to accept contributions except for this limited group. 

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SUBCHAPTER II — IDENTIFICATION AND EVIDENCE

12.06 IDENTIFYING BUY-UP CLAIMS

(Change Date: October 15, 2007)


Veterans Claims Examiners (VCEs) should attempt to identify Buy-up claimants. If a claimant indicates he or she is applying for the additional contribution benefit, or if any evidence suggests the claimant may have made additional contributions, the VCE must then confirm the additional contribution amount using the MGIB600 website (see Appendix B) or develop for acceptable documentation as outlined in paragraph 12.07. The following list (not all-inclusive) includes documents that may indicate additional contributions: 

a.  VA Form 22-1990, Application for Education Benefits, including an application received through the Veterans Online Application (VONAPP).

b.  VA Form 21-4138, Statement in Support of Claim

c.  Letter or e-mail

d.  DD Form 2366-1, Increased Benefit Contribution Program

NOTE:  VA does not consider these documents to be evidence of participation in the program.

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12.07 EVIDENCE OF PARTICIPATION

(Change Date: October 15, 2007)


If there is an indication of Buy-up participation as indicated in paragraph 12.06 above, then use one of the following methods to verify Buy-up participation. 

a.  Online Verification.  VCEs should use the MGIB600 website to verify participation in Buy-up, including the date of the final or latest deduction.  VCEs who are authorized by the Education Officer or designee have direct access to this website (https://vbaw.vba.va.gov/app's/weblogon.asp), which is within VA's firewall.  This site provides all the pertinent information needed to determine a claimant's entitlement to Buy-up. The Defense Manpower Data Center (DMDC) updates the information monthly.  See Appendix B for instructions on how to access the MGIB600 website.

b.  Acceptable Documentation.  If a claimant's information isn't on the website, the following documents are acceptable to establish Buy-up:    

(1) DD Form 2366-1, Increased Benefit Contribution Program.  This form will show the benefit was elected but will not show the date of contribution or verify the amount of any contribution. If the claimant submits DD Form 2366-1, he or she must also submit one of the following:

(a) A Leave and Earning Statement (LES) showing payment of the contribution.  A separate LES is required for each payment (most often in $100 increments).  The LES shows "MGIB additional contribution" as the deduction title for this program.  The Defense Finance and Accounting Service (DFAS) did not list a specific title for the additional contribution program on the LES at the beginning of the program and may have listed full or partial contributions as "Miscellaneous."  If the servicemember makes a payment to the additional contribution program just before discharge or terminal leave, the payment may not immediately appear on the LES.

(b) A Cash Collection Voucher showing payment of the contribution.

(c) A statement from DFAS showing collection of the contribution.

NOTE:  Accept evidence of additional contributions as outlined in subparagraphs (a), (b), and (c) above as proof of payment even if DD Form 2366-1 is not received. 

(2) DD Form 214 . Some services may use the DD Form 214 to show proof of participation in the program.  The DD Form 214 shows information about contributions in the Remarks section, which may list the contribution amount as $1,800 (initial $1,200 pay reduction plus $600 contribution).  If there is no date of contribution shown, consider the Release from Active Duty (RAD) date on the DD Form 214 to be the date of contribution.  If this date overlaps with the beginning of a term, it may be necessary to have the DoD coordinator develop with the service department's Montgomery GI Bill (MGIB) contact point to determine the exact date of contribution. 

(3) Verification from MGIB Contact Point.  A letter or e-mail from the military service contact point (or DFAS) showing payment of the contribution and date of payment.

NOTE:  Any needed development should be with the MGIB contact point except for Army cases.  For Army cases, contact DFAS directly for information regarding additional contributions. 

(4) VA Field Services Receipt.  This is only acceptable in cases where VA collected the contribution.  See paragraph 12.08 below for more information.

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SUBCHAPTER III —- COLLECTIONS

12.08 HISTORICAL PROCEDURE

(Change Date: October 15, 2007)


Participants who were discharged from service between November 1, 2000, and April 30, 2001, must have made their additional contributions directly to VA during the period beginning on May 1, 2001, and ending on July 31, 2001.  See also paragraph 12.17 below.

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12.09 CURRENT PROCEDURE

(Change Date: October 15, 2007)


DFAS will collect the contributions, which are non-refundable.  If contributions were collected in error, refer the case to DFAS for a refund of contributions. 

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12.10 MISCELLANEOUS COLLECTION ISSUES

(Change Date: October 15, 2007)


a.  Contributions Referred to VA.  Some servicemembers may send the additional contribution to VA in error.  In this case, VA should send the payment back to the servicemember and instruct him or her to go directly to his or her military finance office in order to make a payment.

b.  Delayed Contributions. If additional contributions are not collected before the person is discharged because of DoD error, the claimant should not be penalized.  VA recognizes that the military services occasionally may need to correct their own administrative errors.  Because VA may not accept additional contribution payments, the veteran should forward the balance due to his or her service department. See paragraph 12.13c regarding administrative error cases.  

c. Conflicting Evidence.  In cases where a DD 214 shows that DoD has collected more than $1200 but less than $1800 (the standard $1200 collection plus the $600 additional contribution) or the MGIB600 website shows less than $600 in additional contributions, but the RPO has sufficient evidence of contribution of the $600, pay the claimant as if $600 had been collected. 

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SUBCHAPTER IV — AWARD PROCESSING

12.11 PAYMENTS

(Change Date: October 15, 2007)


Veterans training full time will be paid an additional $5 per month for each $20 contributed. The additional payment amounts for less than full-time are reduced proportionately.  Use the table in Appendix C to determine the proper amount to add to the chapter 30 monthly rate that would be otherwise payable.   If a claimant exhausts his or her entitlement during a semester, quarter, or term, VA will pay the additional monthly rate through the end of the enrollment period.

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12.12 PAYMENTS TO ACTIVE DUTY PARTICIPANTS

(Change Date: October 15, 2007)


VA will pay servicemembers tuition and fees up to the maximum applicable rate, which includes kickers and any increase due to additional contributions.  In other words, the only time the additional contributions will affect an active duty participant’s payment is when tuition and fees exceed the statutory rate otherwise payable for the claimant's training time. 

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12.13 EFFECTIVE DATE OF INCREASED RATE

(Change Date: October 15, 2007)


a.  General Principle.  The effective date of the increased rate is the first day of the first enrollment period (term, quarter, semester, or other period) occurring after receipt of additional contributions.   If a person is not enrolled on a term, quarter, or semester basis, the effective date is the first day of the enrollment period after receipt of additional contributions. The basis for these rules is 38 U.S.C. 3015(g).  See 38 CFR 21.7131(j) with respect to servicemembers. 

EXAMPLE 1:  Claimant pays the full additional $600 on August 30, 2006.  He is discharged on September 2, 2006. The term began on August 24, 2006, before his payment.  The next term begins October 24, 2006.  VA will pay the higher rate from October 24, 2006, which is the first day of the enrollment period following receipt of the contributions.

EXAMPLE 2:  Claimant pays the full additional $600 on August 14, 2006.  He is discharged on August 20, 2006.  The term begins August 24, 2006. VA pays the higher rate from August 24, 2006.

b.  Continuing Contributor.  If a servicemember is a "continuing contributor", see paragraph 12.14 for additional clarification. 

c.  Administrative Error.  If a service department accepts a participant's contribution(s) after release from active duty because of administrative error (see par. 12.10b), the RPO should obtain a statement from the service department that the contribution was considered to have been made while the person was on active duty and the date. If necessary, request the service's MGIB contact point to furnish this statement.  When VA receives the statement, VA will pay based on the additional contribution as though the person made the contribution on the date indicated by the statement.  In the absence of a specific date, use the date preceding the date of discharge. (The law requires that additional contributions be made while a person is on active duty.) 

EXAMPLE:  The claimant was discharged from active duty on August 20, 2005.  Because of administrative error, the service received the additional contributions after discharge on August 30, 2006. The claimant begins an OJT program August 25, 2006.  The service department confirms they consider the payment received on August 20, 2006 even though it was actually received later due to administrative error.   VA will accept that the contributions were made on August 20, 2006, and pay the additional contributions for the entire OJT program since this program began after the contributions were made.

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12.14 EFFECTIVE DATES FOR "CONTINUING CONTRIBUTORS"

(Change Date: October 15, 2007)


A “continuing contributor” is an in-service claimant otherwise eligible who has contributed less than $600 and may continue to contribute in the future.  Payment is effective the first day of the enrollment period after receipt of a contribution. In the case where continuing contributors are identified, develop with the service department points of contact in order to obtain a precise reconstruction of the claimant’s case, including all additional contribution amounts and dates of contribution.  The following are some examples of continuing contribution cases:

EXAMPLE 1:  A servicemember contributes $20 in April and begins school in August.  In this case, the maximum payable full-time rate will include the additional amount ($5).  This additional amount would be payable from the beginning of the August term.

EXAMPLE 2:  A servicemember contributes $20 in September but began school in August. In this case, the maximum payable full-time rate will not include the additional amount ($5).  This additional amount is not payable until the following (spring) term.

EXAMPLE 3:  A servicemember contributes $20 monthly, beginning in April.  The servicemember attends terms beginning the following August and January. The additional amount is effective starting with the term beginning in August.  Since the servicemember has been contributing continuously, he or she will have contributed $80 (April, May, June, July).  In this case, the maximum payable full-time rate would be increased by an additional $20 per month for the term beginning in August.

In Example 3, the maximum payable rate will increase again starting with the term beginning in January.  Since the servicemember has been contributing continuously, he or she will have contributed $180 through December  (April, May, June, July, August, September, October, November, and December).  In this case, the maximum payable full-time rate would be increased by an additional $45 per month for the term beginning in January. 

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12.15 PAYING THE ADDITIONAL RATE IN THE BENEFITS DELIVERY NETWORK (BDN)

(Change Date: October 15, 2007)


Until changes can be made to the BDN system, VCEs must compute the rate manually when additional contributions are a factor.  VCEs will add the additional monthly rate payable and use the “C” override indicator on the award screen.  The "C" override takes precedence even if the claimant may be due additional rate increases, such as a chapter 1606 kicker.  Compute the total amount payable (including all additional increases), and use the "C" override on the 312 screen.  Enter a STOP message on the award screen with the contribution amount and date of last contribution. (The STOP message will ensure that the Education Certification Automated Processing (ECAP) system will not incorrectly process the case.) VCEs should also use the CORR (Correction) command to enter the date and amount of contributions on the M23 screen.  This will ensure the claimant will be paid the additional contribution at the time BDN system changes are made in the future. 

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12.16 FLIGHT, CORRESPONDENCE, APPRENTICESHIP AND ON-THE-JOB TRAINING PROCEDURES

(Change Date: October 15, 2007)


To ensure that an individual receives the correct rate and entitlement charge, the VCE must be sure to enter the amount payable based on the individual’s contribution in the Kicker field in the Chapter 30 PC system.  For instance, the VCE would enter $150 if the individual has contributed the full $600.  The Chapter 30 PC system will make the appropriate step reductions for apprenticeship and on-the-job training.  See RPO letter 22-07-14 for special procedures to correctly pay additional contributions in apprenticeship/OJT cases for the period from October 1, 2005 through December 31, 2007. 

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SUBCHAPTER V — FINANCE PROCEDURES — HISTORICAL

12.17 PURPOSE AND HISTORY

(Change Date: October 15, 2007)


This subchapter is included for historical reference purposes only.  As indicated in paragraph 12.08, VA collected the $600 contributions for a short period back in 2001.  RPO Finance activities should not accept additional contribution payments after July 31, 2001.  If there are any disputes concerning amounts contributed, or whether contributions were made while on active duty, the claimant must contact the military service for resolution.

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12.18 HISTORICAL PROCEDURES

(Change Date: October 15, 2007)


The regional office Finance activity that collected additional contributions in 2001 sent the contributions to the Department of Treasury and notified the appropriate RPO of the date and amount of collection.

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Appendix A.  Chapter 30 Eligibility Categories

This chart provides a brief summary of the various chapter 30 eligibility categories as referenced by VA in its internal publications.  Each category has distinct eligibility requirements.  More detailed information on these eligibility categories can be found in part V, chapter I

Eligibility Category Description Title 38 Section
Category IA First entered active duty after 6/30/85 and < 3-year service obligation

3011(a)(1)(A)

Category IB First entered active duty after 6/30/85 and 3-year or greater service obligation

3011(a)(1)(A)

Category IC First entered active duty after 6/30/85 and 2 years of active duty plus 4 years in Selected Reserve

3012(a)(1)(A)

Open Period
Open window from 12/1/88 through 6/30/89 for persons who previously declined chapter 30

3018

Category IIA Chapter 34 converter with reenlistment or reentry after 10/19/84 and 3 years active duty starting 6/30/85

3011(a)(1)(B)

Category IIB Chapter 34 converter with reenlistment or reentry after 10/19/84 and 2 years of active duty starting 6/30/85 plus 4 years Selected Reserve

3012 (a)(1)(B)

Category IIC Chapter 34 converter with reenlistment or reentry after 10/19/84 and 3 years active duty starting anytime after 6/30/85

3011(a)(1)(C)

Category IID Chapter 34 converter with reenlistment or reentry after 10/19/84 and 2 years of active duty starting anytime after 6/30/85 plus 4 years Selected Reserve

3012(a)(1)(C)

Category IIIA Involuntary separation after February 2, 1991

3018A

Category IIIB Voluntary separation on or after October 23, 1992

3018B(a)(1)

Category IIIC Voluntary separation between December 5, 1991 and October 22, 1992

3018B(a)(2)

Category IVA First One-year VEAP open window

3018C

Category IVB 9-month National Guard open window PL 104-275, title I, section 107 (not in title 38)
Category IVC Second One-year VEAP open window

3018C

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Appendix B.  Access to the MGIB600 Website

The Education Officer (EO), or designee, will determine who should have access to the MGIB600 website. It is suggested that at least those employees who work original claims, the Education Case Managers, and the DoD Coordinator(s) should have access. The EO, or designee, will complete VA Form 20-8824e and submit it to the RPO's Information Security Officer (ISO).  Under the section titled WEBLOGON, find the subsection titled MGIB600 and check the appropriate box that applies to the individual who needs access. 

The employees must register to have access.  To register:

Log onto https://vbaw.vba.va.gov/apps/weblogon.asp and click on "Click Here to Register".  Provide your user ID (6 to 8 alphanumeric characters) and password, as instructed on the registration page, and click "Register". (Note: this login page only works within the VA network.)

Once access has been granted by the RPO's ISO and the employee is notified of his or her acceptance, access the website by supplying the authorized user ID and password and clicking on Log On.

How to Use the Montgomery GI BILL - $600.00 Contributions website:

On the next page displayed, click on MGIB600 and enter the claimant's social security number. The following information is displayed:

Capture the screen into the claimant's TIMS folder and annotate the record with the claimant's $600.00 Additional Contribution status, and pay accordingly.

NOTE: The MGIB600 website may be used to establish a claimant's Release from Active Duty (RAD) date.  Consider this date with other documented evidence when determining the RAD.

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Appendix C.  Additional Contribution Conversions

If this amount paid
Add this amount to FT
Add this amount to ¾ time
Add this amount to ½ time
Add this amount to less than ½ time but more than ¼ time
Add this amount to ¼ time

$20

$5.00

$3.75

$2.50

$2.50

$1.25

$40

$10.00

$7.50

$5.00

$5.00

$2.50

$60

$15.00

$11.25

$7.50

$7.50

$3.75

$80

$20.00

$15.00

$10.00

$10.00

$5.00

$100

$25.00

$18.75

$12.50

$12.50

$6.25

$20

$30.00

$22.50

$15.00

$15.00

$7.50

$140

$35.00

$26.25

$17.50

$17.50

$8.75

$160

$40.00

$30.00

$20.00

$20.00

$10.00

$180

$45.00

$33.75

$22.50

$22.50

$11.25

$200

$50.00

$37.50

$25.00

$25.00

$12.50

$220

$55.00

$41.25

$27.50

$27.50

$13.75

$240

$60.00

$45.00

$30.00

$30.00

$15.00

$260

$65.00

$48.75

$32.50

$32.50

$16.25

$280

$70.00

$52.50

$35.00

$35.00

$17.50

$300

$75.00

$56.25

$37.50

$37.50

$18.75

$320

$80.00

$60.00

$40.00

$40.00

$20.00

$340

$85.00

$63.75

$42.50

$42.50

$21.25

$360

$90.00

$67.50

$45.00

$45.00

$22.50

$380

$95.00

$71.25

$47.50

$47.50

$23.75

$400

$100.00

$75.00

$50.00

$50.00

$25.00

$420

$105.00

$78.75

$52.50

$52.50

$26.25

$440

$110.00

$82.50

$55.00

$55.00

$27.50

$460

$115.00

$86.25

$57.50

$57.50

$28.75

$480

$120.00

$90.00

$60.00

$60.00

$30.00

$500

$125.00

$93.75

$62.50

$62.50

$31.25

$520

$130.00

$97.50

$65.00

$65.00

$32.50

$540

$135.00

$101.25

$67.50

$67.50

$33.75

$560

$140.00

$105.00

$70.00

$70.00

$35.00

$580

$145.00

$108.75

$72.50

$72.50

$36.25

$600

$150.00

$112.50

$75.00

$75.00

$37.50

NOTE: The amounts added for apprenticeship and on-the-job training are less than shown in the above table.  For the first 6 months of training, VA pays 75% of the amount shown.  For the second 6 months of training, VA pays 55%.  For the third 6 months of training, VA pays 55%.  These percentages are temporarily increased to 85%, 65%, and 45% for the period from October 1, 2005, through December 31, 2007 based on Public Law 108-454.

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