**§3.353 Determinations of incompetency and competency.**

\(a\) *Definition of mental incompeten*cy. A mentally incompetent person
is one who because of injury or disease lacks the mental capacity to
contract or to manage his or her own affairs, including disbursement of
funds without limitation.

\(b\) *Authority*.

\(1\) Rating agencies have sole authority to make official
determinations of competency and incompetency for purposes of: insurance
(38 U.S.C. 1922), and, subject to §13.56 of this chapter, disbursement
of benefits. Such determinations are final and binding on field stations
for these purposes.

\(2\) Where the beneficiary is rated incompetent, the Veterans Service
Center Manager will develop information as to the beneficiary's social,
economic and industrial adjustment; appoint (or recommend appointment
of) a fiduciary as provided in §13.55 of this chapter; select a method
of disbursing payment as provided in §13.56 of this chapter, or in the
case of a married beneficiary, appoint the beneficiary's spouse to
receive payments as provided in §13.57 of this chapter; and authorize
disbursement of the benefit.

\(3\) If in the course of fulfilling the responsibilities assigned in
paragraph (b)(2) the Veterans Service Center Manager develops evidence
indicating that the beneficiary may be capable of administering the
funds payable without limitation, he or she will refer that evidence to
the rating agency with a statement as to his or her findings. The rating
agency will consider this evidence, together with all other evidence of
record, to determine whether its prior determination of incompetency
should remain in effect. Reexamination may be requested as provided in
§3.327(a) if necessary to properly evaluate the beneficiary's mental
capacity to contract or manage his or her own affairs.

\(c\) *Medical opinion.* Unless the medical evidence is clear,
convincing and leaves no doubt as to the person's incompetency, the
rating agency will make no determination of incompetency without a
definite expression regarding the question by the responsible medical
authorities. Considerations of medical opinions will be in accordance
with the principles in paragraph (a) of this section. Determinations
relative to incompetency should be based upon all evidence of record and
there should be a consistent relationship between the percentage of
disability, facts relating to commitment or hospitalization and the
holding of incompetency.

\(d\) *Presumption in favor of competency.* Where reasonable doubt
arises regarding a beneficiary's mental capacity to contract or to
manage his or her own affairs, including the disbursement of funds
without limitation, such doubt will be resolved in favor of competency
(see §3.102 on reasonable doubt).

\(e\) *Due process.* Whenever it is proposed to make an incompetency
determination, the beneficiary will be notified of the proposed action
and of the right to a hearing as provided in §3.103. Such notice is not
necessary if the beneficiary has been declared incompetent by a court of
competent jurisdiction or if a guardian has been appointed for the
beneficiary based upon a court finding of incompetency. If a hearing is
requested it must be held prior to a rating decision of incompetency.
Failure or refusal of the beneficiary after proper notice to request or
cooperate in such a hearing will not preclude a rating decision based on
the evidence of record. (Authority: 38 U.S.C. 501(a))

\[36 FR 19020, Sept. 25, 1571, and 40 FR 1241, Jan. 7, 1975, as amended
at 42 FR 2069, Jan. 10, 1977; 58 FR 37856, July 14, 1993; 60 FR 55792,
Nov. 3, 1995; 66 FR 48560, Sept. 21, 2001; 67 FR 46868, July 17, 2002;
68 FR 34542, June 10, 2003\]

**Supplement *Highlights* references**: 8(6), 19(1), 47(2), 57(1).