## Section A. Evaluating Competency

#### Overview

+------------+---------------------------------------------------------+
| #          | > This section contains the following topics:           |
| #### In th |                                                         |
| is Section |                                                         |
+------------+---------------------------------------------------------+

  ------------ ---------------------------------------------- ------------
  Topic        Topic Name                                     See Page

  1            Guidelines for Evaluating Competency           8-A-2

  2            Considering Competency While Evaluating        8-A-4
               Evidence                                       

  3            Process for Making Competency Determinations   8-A-6

  4            Changing Competency Status                     8-A-7

  5            Evaluating Competency in Special Circumstances 8-A-9
  ------------ ---------------------------------------------- ------------

#### 1. Guidelines for Evaluating Competency

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on the guidelines for |
| troduction | > evaluating competency, including                      |
|            |                                                         |
|            | -   who has the authority to determine competency       |
|            |                                                         |
|            | -   the effect of judicial findings on the rating       |
|            |     activity                                            |
|            |                                                         |
|            | -   presuming competency                                |
|            |                                                         |
|            | -   making a finding of incompetency, and               |
|            |                                                         |
|            | -   considering the Veterans Service Center Manager's   |
|            |     (VSCM's) opinion.                                   |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > December 13, 2005                                     |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a. W | > The rating activity has sole authority to make        |
| ho Has Aut | > determinations of competency and incompetency for     |
| hority to  | > Department of Veterans Affairs (VA) purposes.         |
| Determine  | >                                                       |
| Competency | > ***Reference***: For more information determining     |
|            | > incompetency, see                                     |
|            |                                                         |
|            | -   M21-1MR, Part III, Subpart v, Chapter 9, and        |
|            |                                                         |
|            | -   [38 CFR                                             |
|            |     3.353(b)](http://w                                  |
|            | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_353.DOC). |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > Judicial findings of a court with respect to          |
|  b. Effect | > competency of a veteran are not binding on the rating |
|  of Judici | > activity.                                             |
| al Finding | >                                                       |
| s on Ratin | > However, if a veteran is declared by a court to be    |
| g Activity | > incompetent, develop all necessary evidence for a     |
|            | > rating determination.                                 |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### c.   | > In the absence of clear and convincing evidence to    |
| Presuming  | > the contrary, presume that a person is competent.     |
| Competency | >                                                       |
|            | > ***Reference***: For more information on presuming    |
|            | > competency, see [38 CFR                               |
|            | > 3.353(d)](http://w                                    |
|            | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_353.DOC). |
+------------+---------------------------------------------------------+

Continued on next page

1\. Guidelines for Evaluating Competency, Continued

+------------+---------------------------------------------------------+
| #          | > A finding of incompetency cannot be made without a    |
| #### d. Ma | > definite expression by a responsible medical          |
| king a Fin | > authority, unless the medical evidence of record is   |
| ding of In |                                                         |
| competency | -   clear                                               |
|            |                                                         |
|            | -   convincing, and                                     |
|            |                                                         |
|            | -   leaves no doubt as to the beneficiary's             |
|            |     incompetency.                                       |
|            |                                                         |
|            | > ***Reference***: For more information on medical      |
|            | > authority in a finding of competency, see [38 CFR     |
|            | > 3.353(c)](http://w                                    |
|            | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_353.DOC). |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### e.   | > After development of information with regard to       |
| Considerin | > social, economic, and industrial adjustment, the      |
| g the VSCM | > Veterans Service Center Manager (VSCM) may be of the  |
| 's Opinion | > opinion that a beneficiary rated, or proposed to be   |
|            | > rated, incompetent is actually capable of handling,   |
|            | > without limitation, the funds payable. In this case,  |
|            | > he/she will refer the evidence and finding to the     |
|            | > rating activity.                                      |
|            | >                                                       |
|            | > The rating activity should consider the VSCM's        |
|            | > finding as new evidence and, after any necessary      |
|            | > additional development, prepare a rating based on the |
|            | > evidence of record.                                   |
|            | >                                                       |
|            | > ***Reference***: For more information on procedures   |
|            | > related to evidence of incompetency, see M21-1MR,     |
|            | > Part III, Subpart v, 9.B.                             |
+------------+---------------------------------------------------------+

#### 2. Considering Competency While Evaluating Evidence

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information about evaluating the  |
| troduction | > evidence and considering the competency of            |
|            |                                                         |
|            | -   veterans                                            |
|            |                                                         |
|            | -   helpless children, and                              |
|            |                                                         |
|            | -   other beneficiaries.                                |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > December 13, 2005                                     |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a.   | If the claimant is a veteran, consider competency an    |
|  Consideri | inferred issue                                          |
| ng the Com |                                                         |
| petency of | -   in every case of a totally disabling mental         |
|  a Veteran |     disorder, or                                        |
|            |                                                         |
|            | -   if other evidence raises a question as to the       |
|            |     beneficiary's mental capacity to contract or to     |
|            |     manage his/her own affairs, including disbursement  |
|            |     of funds without limitation.                        |
|            |                                                         |
|            | > ***Reference***: For more information on inferred     |
|            | > issues, see M21-1MR, Part III, Subpart iv, 6.B.3.     |
+------------+---------------------------------------------------------+

Continued on next page

2\. Considering Competency While Evaluating Evidence, Continued

+------------+---------------------------------------------------------+
| #####      | > If the claimant is a helpless child, the rating       |
|  b. Consid | > activity must resolve the issue of competency for a   |
| ering the  | > child over age 18, because entitlement depends upon   |
| Competency | > permanent incapacity for self-support due to physical |
|  of a Help | > or mental disability.                                 |
| less Child | >                                                       |
|            | > If incapacity is due to mental disability             |
|            |                                                         |
|            | -   consider competency a factor in determining whether |
|            |     the child is permanently incapable of self-support  |
|            |                                                         |
|            | -   determine competency under the same criteria        |
|            |     applicable to veterans, and                         |
|            |                                                         |
|            | -   record the determination in a rating.               |
|            |                                                         |
|            | > ***References***: For information on                  |
|            |                                                         |
|            | -   due process procedures in incompetency cases, see   |
|            |     M21-1MR, Part III, Subpart v, 9.B.6, and            |
|            |                                                         |
|            | -   conditions which determine permanent incapacity for |
|            |     self-support, see [38 CFR                           |
|            |     3.356](http://w                                     |
|            | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_356.DOC). |
|            |                                                         |
|            | > ***Note***: Since the incompetency procedures         |
|            | > referred to in M21-1MR, Part III, Subpart v, 9.B.6    |
|            | > are for payment purposes, do not apply those          |
|            | > procedures except in cases where the child would      |
|            | > receive direct payment in his/her own right.          |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### c.   | > If there is evidence of incompetency and the claimant |
|  Consideri | > is another beneficiary, such as a surviving spouse,   |
| ng the Com | > parent, or VA insurance beneficiary                   |
| petency of |                                                         |
|  Other Ben | -   consider competency a rating issue under [38 CFR    |
| eficiaries |     3.353](http://                                      |
|            | www.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_353.DOC) |
|            |     *except* when there has been a judicial             |
|            |     determination of incompetency, and                  |
|            |                                                         |
|            | -   propose a rating on the issue or undertake any      |
|            |     required development.                               |
|            |                                                         |
|            | > ***References***: For more information on             |
|            |                                                         |
|            | -   rating actions required after judicial              |
|            |     determinations of incompetency, see M21-1MR, Part   |
|            |     III, Subpart v, 9.B.5.g, and                        |
|            |                                                         |
|            | -   development required with different determinations  |
|            |     of competency, see M21-1MR, Part III, Subpart v,    |
|            |     9.B.5.f and M21-1MR, Part III, Subpart v, 9.B.6.    |
+------------+---------------------------------------------------------+

#### 3. Process for Making Competency Determinations

+------------+---------------------------------------------------------+
| ##### C    | > December 13, 2005                                     |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ###        | > The table below describes the actions involved in     |
| ## a. Proc | > making competency determinations.                     |
| ess for Ma | >                                                       |
| king Compe | > ***Reference***: For more information on due process  |
| tency Dete | > in incompetency determinations, see M21-1MR, Part     |
| rminations | > III, Subpart v, 9.B.6.                                |
+------------+---------------------------------------------------------+

+------+--------------+-----------------------------------------------+
| S    | Who Is       | Action                                        |
| tage | Responsible  |                                               |
+------+--------------+-----------------------------------------------+
| 1    | Rating       | Prepares a rating decision proposing a        |
|      | Veterans     | finding of incompetency after receiving clear |
|      | Service      | and convincing evidence that the payee is     |
|      | Re           | incapable of managing his/her own affairs,    |
|      | presentative | including disbursement of funds without       |
|      | (RVSR)       | limitation.                                   |
|      |              |                                               |
|      |              | ***Note***: A rating is not necessary for any |
|      |              | payee besides a veteran, if there is a        |
|      |              | finding of incompetency by a court. For all   |
|      |              | payees, however, a court adjudication waives  |
|      |              | the due process requirement.                  |
+------+--------------+-----------------------------------------------+
| 2    | Veterans     | -   Provides the payee notice of              |
|      | Service      |                                               |
|      | Re           | ```{=html}                                    |
|      | presentative | <!-- -->                                      |
|      | (VSR)        | ```                                           |
|      |              | -   the proposed incompetency rating, and     |
|      |              |                                               |
|      |              | -   the opportunity for a hearing, and        |
|      |              |                                               |
|      |              | ```{=html}                                    |
|      |              | <!-- -->                                      |
|      |              | ```                                           |
|      |              | -   allows 65 days for a response.            |
|      |              |                                               |
|      |              | ***Note***: If a request for a hearing is     |
|      |              | received within 30 days of the notice, no     |
|      |              | rating action can be completed until the      |
|      |              | hearing is held or the payee fails to report. |
|      |              | At the hearing, allow the next of kin or any  |
|      |              | other person of the payee's choice to         |
|      |              | participate and assist the payee.             |
+------+--------------+-----------------------------------------------+
| 3    | RVSR         | Makes a final decision based on all of the    |
|      |              | evidence of record.                           |
+------+--------------+-----------------------------------------------+

#### 4. Changing Competency Status

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information about changing        |
| troduction | > competency status, including                          |
|            |                                                         |
|            | -   proposing a loss of competency                      |
|            |                                                         |
|            | -   determining restored competency                     |
|            |                                                         |
|            | -   limitations after competency is restored, and       |
|            |                                                         |
|            | -   evidence required to restore competency.            |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > August 1, 2006                                        |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a.   | > Issue a rating proposing a change in competency       |
| Proposing  | > status if the evidence of record will result in a     |
| a Loss of  | > change in competency status from competent to         |
| Competency | > incompetent.                                          |
|            | >                                                       |
|            | > This proposal may be included in a rating addressing  |
|            | > other issues, such as evaluation of a mental          |
|            | > disorder.                                             |
|            | >                                                       |
|            | > ***Reference***: For more information on procedures   |
|            | > to follow upon receipt of evidence of incompetency,   |
|            | > see M21-1MR, Part III, Subpart v, 9.B.                |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### b. D | > In any case in which the beneficiary has been rated   |
| etermining | > incompetent, take necessary development and rating    |
|  Restored  | > action to determine whether competency has been       |
| Competency | > regained if so indicated in a                         |
|            |                                                         |
|            | -   hospital summary                                    |
|            |                                                         |
|            | -   report of release to or discharge from non-bed      |
|            |     care, or                                            |
|            |                                                         |
|            | -   report of other material change in condition.       |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### c.   | > Restored competency does not of itself                |
| Limitation |                                                         |
| s After Co | -   warrant a reduction in the evaluation of a          |
| mpetency I |     veteran's disability, or                            |
| s Restored |                                                         |
|            | -   establish that a parent or surviving spouse is no   |
|            |     longer entitled to Aid and Attendance (A&A).        |
+------------+---------------------------------------------------------+

Continued on next page

4\. Changing Competency Status, Continued

+------------+---------------------------------------------------------+
| ##### d.   | > Any evidence showing the beneficiary may be capable   |
|  Evidence  | > of handling funds should be referred to the rating    |
| Required t | > activity. The rating activity will consider this      |
| o Restore  | > evidence, along with all other evidence of record, to |
| Competency | > determine whether competency should be restored.      |
|            | >                                                       |
|            | > Under [38 CFR                                         |
|            | > 3.353(b)(3)](http://w                                 |
|            | ww.warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_353.DOC), |
|            | > a beneficiary is not required to undergo a            |
|            | > psychiatric examination and/or field examination      |
|            | > before his/her competency may be restored. However, a |
|            | > current psychiatric examination and/or field          |
|            | > examination may be requested if needed to properly    |
|            | > evaluate the beneficiary's mental capacity to handle  |
|            | > his/her own funds.                                    |
+------------+---------------------------------------------------------+

#### 5. Evaluating Competency in Special Circumstances

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information about evaluating      |
| troduction | > competency in special circumstances, including        |
|            |                                                         |
|            | -   a competency rating after a decree by a court, and  |
|            |                                                         |
|            | -   appropriate action after court adjudication.        |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > December 13, 2005                                     |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > Use the table below to decide how to proceed with a   |
| ### a. Com | > competency rating of payees who have been found       |
| petency Ra | > incompetent by a court.                               |
| ting After | >                                                       |
|  a Decree  | > ***Note***: Judicial findings of a court with respect |
| by a Court | > to the competency of a veteran are not binding on the |
|            | > rating activity.                                      |
+------------+---------------------------------------------------------+

+------------------+---------------------------------------------------+
| If determining   | Then ...                                          |
| the competency   |                                                   |
| of ...           |                                                   |
+------------------+---------------------------------------------------+
| non-veteran      | a rating is not required except under certain     |
| beneficiaries    | conditions.                                       |
| such as a        |                                                   |
|                  | ***Reference***: For more information on a        |
| -   parent       | child's permanent incapacity for self-support,    |
|                  | see M21-1MR, Part III, Subpart iii, Chapter 7.    |
| -   surviving    |                                                   |
|     spouse, or   |                                                   |
|                  |                                                   |
| -   helpless     |                                                   |
|     child        |                                                   |
+------------------+---------------------------------------------------+

Continued on next page

5\. Evaluating Competency in Special Circumstances, Continued

  -----------------------------------------------------------------------
  a\. Competency Rating After a Decree by a Court (continued)

  -----------------------------------------------------------------------

+------------------+---------------------------------------------------+
| If determining   | Then ...                                          |
| the competency   |                                                   |
| of ...           |                                                   |
+------------------+---------------------------------------------------+
| a veteran        | -   develop all necessary evidence for a rating   |
|                  |     activity determination, such as               |
|                  |                                                   |
|                  | ```{=html}                                        |
|                  | <!-- -->                                          |
|                  | ```                                               |
|                  | -   an examination                                |
|                  |                                                   |
|                  | -   hospital observation, or                      |
|                  |                                                   |
|                  | -   a field examination                           |
|                  |                                                   |
|                  | ```{=html}                                        |
|                  | <!-- -->                                          |
|                  | ```                                               |
|                  | -   give great weight to a court decree of        |
|                  |     incompetency in conjunction with              |
|                  |     hospitalization for a mental condition, and   |
|                  |                                                   |
|                  | -   do not make a rating of competency unless     |
|                  |     there is clear and convincing evidence of     |
|                  |     that fact.                                    |
|                  |                                                   |
|                  | ***Important***: In the following cases a payee   |
|                  | may be considered to have had notice and hearing  |
|                  | under the laws of the state, so that additional   |
|                  | notice and hearing are not required:              |
|                  |                                                   |
|                  | -   a payee held by a court of jurisdiction to be |
|                  |     incompetent, or                               |
|                  |                                                   |
|                  | -   a payee for whom a court having jurisdiction  |
|                  |     has appointed a guardian by reason of         |
|                  |     incompetency.                                 |
|                  |                                                   |
|                  | ***Note***: If the veteran continues to be rated  |
|                  | incompetent, prominently note the finding of      |
|                  | competency by a court on the rating.              |
+------------------+---------------------------------------------------+

Continued on next page

5\. Evaluating Competency in Special Circumstances, Continued

+------------+---------------------------------------------------------+
| ##### b    | > Use the table below to determine the appropriate      |
| . Appropri | > action after court decrees concerning competency.     |
| ate Action | >                                                       |
|  After Cou | > ***Reference***: For more information on competency   |
| rt Decrees | > payment code award data, see [M21-1, Part V,          |
|            | > 13.05](htt                                            |
|            | p://www.warms.vba.va.gov/admin21/m21_1/part5/ch13.doc). |
+------------+---------------------------------------------------------+

+------------------------------+---------------------------------------+
| If a court decree ...        | Then ...                              |
+------------------------------+---------------------------------------+
| declares a veteran,          | -   take the necessary development    |
| previously rated             |     action, and                       |
| incompetent, competent       |                                       |
|                              | -   prepare a new rating, prominently |
|                              |     entering a notation of the        |
|                              |     court's declaration on the        |
|                              |     rating, if incompetency is        |
|                              |     confirmed and continued.          |
+------------------------------+---------------------------------------+
| applies to a non-veteran     | request the VSCM to promptly certify  |
| beneficiary for whom a       | the validity of the decree so that    |
| rating of incompetency is    | direct payments may be made to the    |
| not required                 | beneficiary.                          |
+------------------------------+---------------------------------------+