Stage Who Is Responsible Description Reference 1 AAFC Determines whether direct payment of fees is at issue by analyzing whether a valid fee agreement that VA can honor has been timely submitted. M21-1, Part I, 3.C.4.g. 2 Veterans Service Representative (VSR) Under review of the AAFC, prepares the claimant’s award, leaving it in a pending status. M21-1, Part I, 3.C.3.f 3 AAFC Determines the amount of past due benefits awarded computes the amount of past-due benefits to be withheld for fees in the event eligibility to fees is established. M21-1, Part I, 3.C.3. 4 AAFC Requests the RO’s finance activity to establish a withholding of the amount payable. M21-1, Part I, 3.C.3.f. 5 Finance Activity Establishes the withholding. M21-1, Part I, 3.C.3.f and g. 6 AAFC/Senior Veterans Service Representative (SVSR) Authorizes the award when the withholding appears in the corporate record, and Notifies the claimant and his/her attorney/agent of the rating decision and award. M21-1, Part I, 3.C.3.g. 7 AAFC Determines whether the attorney/agent is eligible to receive fees, and Notifies the claimant and his/her attorney/agent of the fee eligibility decision. M21-1, Part 1, 3.C.4. pay
Note: specifically excludes military previously paid from the definition of “cash payment.” Important: In cases where the Veteran was in receipt of retired pay, and there is not past due benefit, the attorney cannot be paid. In determining the amount used for past due calculations consider any issued Audit Error Worksheet (AEW). If any of the past due benefits were withheld due to the Veteran’s receipt of military retired pay and an AEW is generated showing some or all of those withheld amounts should be released to the Veteran, the amounts to be released are subject to the direct-pay fee agreement. If Defense Finance and Accounting Service (DFAS) later submits an AEW authorizing Concurrent Retirement and Disability Pay (CRDP)/Combat Related Special Compensation (CRSC) concurrent receipt for the issues successfully appealed, this will be considered a past due benefit and the attorney should receive attorney fees from this past due amount. e. Making a Direct-Pay Fee Decision Based on Past Due Benefit Calculation The table below provides guidance on making a decision on direct payment of fees based on the past due benefit amount calculation derived from M21-1, Part I, 3.C.3.c. If, based on the calculation described above, the amount of past due benefits... Then ... is $0 deny direct payment of fees send the decision notice No Cash Payment to the Claimant shown in Part I, 3.C.11, Exhibit 4, to both the claimant and the attorney, separately addressed to each, and take a 290 end product (EP) credit. is greater than $0 withhold a portion of past-due benefits and authorize the claimant’s award as provided in this topic. f. Withholding via VBMS Awards Follow the steps in the table below to withhold a portion of the past-due benefits via VBMS Awards regardless of whether a running award exists.
determination listed in M21-1, Part I, 3.C.5.a, a motion for a reasonableness review is appropriate when a claimant believes that the attorney or agent did not earn the fee called for in the fee agreement the fee is too high, or the fee is otherwise unreasonable. A reasonableness review must also be requested when eligibility to fees from past due benefits is established for multiple attorneys and/or agents. Reference: For more information on motions for reasonableness reviews see the OGC Fact Sheet “.” b. Time Limit for Motions For Reasonableness Review OGC may only review the fee agreement on motion before the expiration of 120 days after final VA action. In most cases final VA action means 120 days from the date of the fee eligibility decision. c. Statements that Possibly Constitute Requests for Reasonableness Review Although requires that a claimant’s motion be filed with OGC, when the claimant submits the following statements, immediately refer the matter to OGC for consideration as a request for reasonableness the attorney/agent fee amount or percentage is excessive, or unreasonable the attorney or agent did not earn the fee called for in the fee agreement the attorney or agent should be paid for fees only until the date the POA was revoked, or the claimant requests review for reasonableness, or the claimant does not want to pay the attorney or agent. Important: The examples in this list are not exclusive. For example, a document styled as a NOD in response to a RO decision finding an attorney or agent eligible for fees may also state, or be reasonable read as stating, that the claimant desires a reasonableness review. References: For more information on required referral for reasonableness review in cases involving multiple attorneys or agents, see M21-1, Part I, 3.C.6.d, and the RO process for referrals for reasonableness review, see M21-1, Part I, 3.C.6.f. d. Referral Required by Fee Eligibility for Multiple An RO eligibility determination under M21-1, Part I, 3.C.4 finding two or more attorneys /agents eligible for payment of fees must be referred to OGC for a reasonableness review regardless of whether the claimant submits any statement implicating reasonableness of fees.
Change Date July 31, 2015 a. When to Consider Failure to Withhold Past Due Benefits Consider the guidance in this topic when direct payment of fees is at issue as provided in Part I, 3.C.1.g, and VA has awarded and released past due benefits to the claimant (see Part I, 3.C.2.a, stage 9), but no portion of the claimant’s benefit was actually withheld for direct payment of attorney fees b. Failure to Withhold Benefits VA’s failure to withhold a portion of the claimant’s past due benefits for possible direct payment of fees does not relieve VA of its obligation to pay an attorney or agent the fees to which he or she is otherwise entitled. See , 14 Vet. App. 154 (2000), which overruled the second holding of . c. Initial Action When Failure to Withhold Benefits Is Discovered When the evidence makes out the showing specified in M21-1, Part I, 3.C.7.a, immediately contact the claimant and attempt to recover the amount requested as direct payment of fees (20 percent or less). Compute the direct-pay fee amount (20 percent or less) based upon the amount of past due benefits through the date of the decision. d. Action to Take if Claimant Returns the Funds If the claimant returns the funds, follow the normal procedures for making a direct-pay fee eligibility determination per M21-1, Part I, 3.C.4, and releasing the funds to the attorney or agent and appeals per M21-1, Part I, 3.C.5.