38 U.S.C. § 1718

(a) In providing rehabilitative services under this chapter, the Secretary, upon the recommendation of the Under Secretary for Health, may use the services of patients and members in Department health care facilities for therapeutic and rehabilitative purposes. Such patients and members shall not under these circumstances be held or considered as employees of the United States for any purpose. The Secretary shall prescribe the conditions for the use of such services. (b) (1) In furnishing rehabilitative services under this chapter, the Secretary, upon the recommendation of the Under Secretary for Health, may enter into a contract or other arrangement with any appropriate source (whether or not an element of the Department of Veterans Affairs or of any other Federal entity) to provide for therapeutic work for patients and members in Department health care facilities. (2) Notwithstanding any other provision of law, the Secretary may also furnish rehabilitative services under this subsection through contractual arrangements with nonprofit entities to provide for such therapeutic work for such patients. The Secretary shall establish appropriate fiscal, accounting, management, recordkeeping, and reporting requirements with respect to the activities of any such nonprofit entity in connection with such contractual arrangements. (c) (1) There is hereby established in the Treasury of the United States a revolving fund known as the Department of Veterans Affairs Special Therapeutic and Rehabilitation Activities Fund (hereinafter in this section referred to as the “fund”) for the purpose of furnishing rehabilitative services authorized in subsection (b) or (d). Such amounts of the fund as the Secretary may determine to be necessary to establish and maintain operating accounts for the various rehabilitative services activities may be deposited in checking accounts in other depositaries selected or established by the Secretary. (2) All funds received by the Department under contractual arrangements made under subsection (b) or (d), or by nonprofit entities described in subsection (b)(2), shall be deposited in or credited to the fund, and the Secretary shall distribute out of the fund moneys to participants at rates not less than the wage rates specified in the Fair Labor Standards Act of 1938 ( 29 U.S.C. 201 et seq.) and regulations prescribed thereunder for work of similar character. (3) The Under Secretary for Health shall prepare, for inclusion in the annual report submitted to Congress under section 529 of this title , a description of the scope and achievements of activities carried out under this section (including pertinent data regarding productivity and rates of distribution) during the prior twelve months and an estimate of the needs of the program of therapeutic and rehabilitation activities to be carried out under this section for the ensuing fiscal year. (d) In providing to a veteran rehabilitative services under this chapter, the Secretary may furnish the veteran with the following: (1) Work skills training and development services. (2) Employment support services. (3) Job development and placement services. (e) In providing rehabilitative services under this chapter, the Secretary shall take appropriate action to make it possible for the patient to take maximum advantage of any benefits to which such patient is entitled under chapter 31, 34, or 35 of this title, and, if the patient is still receiving treatment of a prolonged nature under this chapter, the provision of rehabilitative services under this chapter shall be continued during, and coordinated with, the pursuit of education and training under such chapter 31, 34, or 35. (f) The Secretary shall prescribe regulations to ensure that the priorities set forth in section 1705 of this title shall be applied, insofar as practicable, to participation in therapeutic and rehabilitation activities carried out under this section. (g) (1) The Secretary may not consider any of the matters stated in paragraph (2) as a basis for the denial or discontinuance of a rating of total disability for purposes of compensation or pension based on the veteran’s inability to secure or follow a substantially gainful occupation as a result of disability. (2) Paragraph (1) applies to the following: (A) A veteran’s participation in an activity carried out under this section. (B) A veteran’s receipt of a distribution as a result of participation in an activity carried out under this section. (C) A veteran’s participation in a program of rehabilitative services that (i) is provided as part of the veteran’s care furnished by a State home and (ii) is approved by the Secretary as conforming appropriately to standards for activities carried out under this section. (D) A veteran’s receipt of payment as a result of participation in a program described in subparagraph (C). (3) A distribution of funds made under this section and a payment made to a veteran under a program of rehabilitative services described in paragraph (2)(C) shall be considered for the purposes of chapter 15 of this title to be a donation from a public or private relief or welfare organization.