Section 1 Increase in gratuity for death of an employee incurred in connection with the employee’s service with an Armed Force
“(1)
“(A) With respect to a death gratuity payable upon the death of an employee covered by subsection (a)—
“(i) if the employee has a surviving spouse, 60 percent of the gratuity shall be paid to that spouse and the remaining 40 percent of the gratuity shall be paid in accordance with subparagraphs (B) and (C) of this paragraph and paragraphs (4) and (5); or
“(ii) if the employee has no surviving spouse, the gratuity shall be paid in accordance with subparagraphs (B) and (C) of this paragraph and paragraphs (4) and (5).
“(B) Subject to paragraph (5), the remainder of a death gratuity payable pursuant to subparagraph (A)(i), or a death gratuity payable pursuant to subparagraph (A)(ii), (as the case may be) shall be paid to or for the living survivor highest on the following list:
“(i) The employee’s children, as prescribed by paragraph (2), in equal shares.
“(ii) If designated by the employee, any one or more of the following persons:
“(I) The employee’s parents or persons in loco parentis, as prescribed by paragraph (3).
“(II) The employee’s brothers.
“(III) The employee’s sisters.
“(iii) The employee’s parents or persons in loco parentis, as prescribed by paragraph (3), in equal shares.
“(iv) The employee’s brothers and sisters in equal shares.
“(C) Clauses (ii) and (iv) of subparagraph (B) include brothers and sisters of the half blood and those through adoption.”