--- title: "Part X, Subpart ii, Chapter 6, Section D Processing Awards to Incompetent Beneficiaries" document: "M-21-1" section: "Part X, Subpart ii, Chapter 6, Section D" canonical: "https://veteranai.co/va-regulations/m21-1/x.ii.6.d-processing-awards-to-incompetent-beneficiaries" source: "https://www.knowva.ebenefits.va.gov/system/templates/selfservice/va_ssnew/help/customer/locale/en-US/portal/554400000001018/content/554400000177977/M21-1-Part-X-Subpart-ii-Chapter-6-Section-D-Processing-Awards-to-Incompetent-Beneficiaries" updated: "2026-09-07T14:37:54.463812Z" --- May 24, 2018 ### X.ii.6.D.1.a. Indicating Incompetency When Scheduling a Physical Examination When requesting an examination of an incompetent Veteran, * indicate in the COMMENTS section of the examination request that the Veterans Benefits Administration has determined the Veteran is incompetent, and * provide (in the same section) the name and address of the Veteran’s fiduciary. **Reference:** For more information on inputting examination requests, see [M21-1, Part IV, Subpart i, 2.A.9 and 10](). ### X.ii.6.D.1.b. Actions to Take When an Incompetent Veteran Fails to Report for a Routine Future Examination If an incompetent Veteran fails to report for a routine future examination, send * a notice of proposed adverse action to the Veteran before reducing or suspending benefits * a letter to the fiduciary explaining * that the Veteran failed to report for a Department of Veterans Affairs (VA) examination * why the examination was necessary * that the Veteran may notify VA of willingness to report for the examination and VA will reschedule it, and * that failure to report for the examination could result in a reduction or discontinuation of benefits, and * an e-mail to the fiduciary hub (hub) of jurisdiction that * explains the Veteran has failed to report for an examination, and * requests assistance in determining whether the Veteran is willing to report for the examination. **Reference:** For more information on processing a Veteran’s failure to report for an examination, see [M21-1, Part IV, Subpart ii, 2.B.1](). ### X.ii.6.D.1.c. Admission of an Incompetent Veteran to an Institution for Medical Care For information on handling cases in which an incompetent Veteran is admitted for medical care to a VA or non-VA institution, see [M21-1, Part X, Subpart ii, 6.F](). ### X.ii.6.D.1.d. Claims From Claimants Whom VA Has Determined Are Incompetent VA must process claims it receives from a claimant whom VA has determined is incompetent, even if VA has appointed the claimant a fiduciary. A VA determination of incompetency under [38 CFR 3.353]() constitutes a decision regarding the claimant’s ability to manage their own affairs, including disbursement of funds. It does **_not_** preclude such a claimant from prosecuting a claim for benefits.**Reference:** For more information on the process for determining whether a beneficiary is competent, see [M21-1, Part X, Subpart ii, 6.A.3](). ## 2. Processing Incompetency Determinations and Authorizing Awards When a Beneficiary’s Competency Is at Issue This topic contains information on processing incompetency determinations and authorizing awards when a beneficiary’s competency is at issue, including * sources of competency and incompetency determinations * processing medical evidence of incompetency that does not involve a judicial determination * claimants who become entitled to benefits before the rating activity makes a final determination regarding competency * actions the authorization activity takes following receipt of a recommendation for payment from a hub * processing * a court appointment of a fiduciary without a judicial determination of incompetency * a court decree of incompetency or court appointment of a fiduciary by reason of incompetency * a judicial determination of incompetency, and * evidence that a child beneficiary is permanently incapable of self-support, and * authorizing an award for a beneficiary found competent by court decree. March 4, 2026 ### X.ii.6.D.2.a. Sources of Competency and Incompetency Determinations Competency and incompetency determinations may be made by * VA rating decision * court decree, or * both a VA rating decision and court decree. **Notes:** * As explained in the remaining blocks of this topic, the procedure for handling a VA rating decision of competency/incompetency differs from the procedure for handling a court decree of competency/incompetency. * VA is **_not_** required to recognize a court-appointed fiduciary for purposes associated with the payment of VA benefits. **Reference:** For more information on incompetency determinations, see * [M21-1, Part X, Subpart ii, 6.A](), and * [38 CFR 3.353](). ### X.ii.6.D.2.b. Processing Medical Evidence of Incompetency That Does Not Involve a Judicial Determination Follow the steps in the table below after receiving medical evidence that * indicates a beneficiary may be incompetent, per [38 CFR 3.353](), but * does **_not_** involve a judicial determination of incompetency. | ** Step**| **Action** 1| Establish an appropriate rating end product (EP) if one is not currently pending. 2| Refer the evidence to the rating activity for a determination as to the beneficiary’s competency. **Note:** If the medical evidence is not adequate for rating purposes, undertake development to obtain additional evidence before referring the case to the rating activity. **Reference:** For more information on processing evidence of a child’s permanent incapacity for self-support, see [M21-1, Part X, Subpart ii, 6.B.1 and 2](). 3| If, after reviewing the evidence, the rating activity determines the beneficiary is * still competent, * annotate the evidence to show it was reviewed but warranted no formal action * clear the EP (unless other rating-related issues are still pending), and * disregard the remaining steps in this table, or * incompetent, the rating activity will prepare a rating decision that proposes a rating of incompetency. Go to the next step after the rating activity refers the decision for promulgation. **Note:** If the beneficiary has an electronic claims folder (eFolder), enter annotations in the SUBJECT field of the evidence’s document properties, according to the instructions in * [M21-1, Part II, Subpart ii, 2.A.1.e](), and * the _Veterans Benefits Management System (VBMS) Core User Guide_. 4| Promulgate the rating EP and send the proposed incompetency letter._**Reference**_ : For more information on the proposed incompetency letter, see M21-1, Part X, Subpart ii, 6.D.3.a. 5| Authorize the rating EP. **Note:** If the proposed incompetency letter was _not_ previously sent, the letter must be sent to the beneficiary at this time. 6| Did the system automatically establish EP 590, _Due Process for Incompetency_? * If _yes_ , go to the next step. * If _no_ , * manually establish the EP, and * go to the next step. **Note:** National Work Queue (NWQ) will transfer the EP 590 automatically to the hub of jurisdiction the following day. **Reference:** For more information on the date of claim for an EP 590, _Due Process for Incompetency_ , see [M21-4, Appendix B, 2](). 7| Authorization will create and finalize the proposed incompetency letter (if applicable) under the EP 590. **Important:** The proper due process tracked item must be added to the EP 590 by authorization _regardless_ of the due process letter-type used. 8| Ensure the decision notice (if applicable) and the proposed incompetency letter is/are associated with the claims folder. **Important:** Process an award or award adjustment according to the instructions in M21-1, Part X, Subpart ii, 6.D.2.c if, at any point during the process described in the table above, a beneficiary becomes entitled to * an original award of benefits * a reinstatement of benefits, or * an increase in benefits. **Note:** If, during the due process period (the 60-day period that follows the date of the notice of the proposed rating of incompetency), VA receives * evidence regarding the beneficiary’s competency, follow the process described in M21-1, Part X, Subpart ii, 6.D.3.c, or * a request for a hearing, follow the instructions in M21-1, Part X, Subpart ii, 6.D.3.e. _**Reference**_ : For more information on handling requests for competency determinations _without_ medical or a judicial determination regarding a beneficiary’s competency, see [M21-1, Part X, Subpart ii, 6.A.1.f](). ### X.ii.6.D.2.c. Claimants Who Become Entitled to Benefits Before the Rating Activity Makes a Final Determination Regarding Competency Use the table below to determine the actions to take if, at any point during the process described in M21-1, Part X, Subpart ii, 6.D.2.b, the rating activity determines a claimant is entitled to an original award of benefits, a reinstatement of benefits, or increased benefits. **Exception:** Under certain circumstances, which should be rare, **_not_** taking the action described in the table below might be in the beneficiary’s best interest. If, for example, the evidence of record shows the beneficiary has a history of giving away all income or spending it on frivolous activities on the same day it is received, it may be in the beneficiary’s best interest to withhold benefits until the * rating activity determines the beneficiary is competent, or * hub of jurisdiction assigns the beneficiary a fiduciary. **Important:** In all cases, withhold all **_retroactive_** benefits due the beneficiary until the rating activity makes a final decision regarding the beneficiary’s competency. If the rating activity ultimately decides the beneficiary is * _competent_ , release all benefits that were withheld while deciding whether the beneficiary was competent, or * _incompetent_ , withhold the retroactive benefits until the hub of jurisdiction assigns the beneficiary a fiduciary. | ** If the rating activity determined the Veteran is entitled to ...**| **Then ...** * an original award of benefits, or * a reinstatement of benefits | generate an award, **_without_** waiting for resolution of the competency issue, that withholds benefits until the first day of the current month. increased benefits| process an award adjustment, **_without_** waiting for resolution of the competency issue, that withholds the increase in benefits until the date shown in the LAST PAID DATE field on the AWARD INFORMATION tab in Share. _**Note**_ : Prior to award promulgation, the authorization activity must be mindful of the [_Cutoff Dates to Change C &P Payment Method_]() to prevent paying a retroactive benefit. ### X.ii.6.D.2.d. Actions the Authorization Activity Takes Following Receipt of a Recommendation for Payment From a Hub When a hub makes a recommendation for payment, its own authorization activity typically processes the recommendation. When the hub’s authorization activity is unable to process such a recommendation, the hub refers the recommendation to a regional office (RO) for processing.Use the table below to determine the actions ROs must take after receiving a recommendation for payment from a hub.| **If the hub …**| **Then the RO must …** * concurs with the rating of incompetency * determines that appointment of a fiduciary is appropriate, and * certifies the appointment of a fiduciary by sending [_VA Form 21P-555,_ _Certificate of Legal Capacity to Receive and Disburse Benefits, and Fee Authorization_](), to the RO | release any withheld benefits to the fiduciary in accordance with * instructions from the hub, and * the procedures set forth in [M21-1, Part X, Subpart ii, 6.E.2.b](). **Notes:** * If, in addition to releasing withheld benefits, the RO adjusted the beneficiary’s award, it must also * furnish the certifying hub a copy of the award document, and * notify the beneficiary’s fiduciary of the award adjustment and review rights with regard to it, per [M21-1, Part X, Subpart ii, 3.B.4](). * There is no requirement to notify the beneficiary’s fiduciary **_unless_** the RO adjusted the beneficiary’s award. * concludes the beneficiary is competent to manage the funds payable, and * furnishes the RO with certification of supervised direct pay (SDP) on [_VA Form 21P-555_]() * authorize the SDP award in accordance with the * instructions from the hub, and * procedures set forth in [M21-1, Part X, Subpart ii, 6.E.2.b]() and M21-1, Part X, Subpart ii, 6.D.5, and * refer the following to its rating activity: * a statement of the finding of competency by the hub, and * all evidence upon which the hub based its conclusion. **Result:** The rating activity must reassess the issue of competency, per [38 CFR 3.353](). If the rating activity decides the beneficiary * is _competent_ , the RO must * release any withheld benefits directly to the beneficiary * furnish the certifying hub a copy of the award document, and * notify the beneficiary of the final determination and review rights, per [M21-1, Part VI, Subpart i, 1.B](), or * remains _incompetent_ , the RO must * continue the SDP, and * notify the hub of the rating decision. **Reference:** For more information on the evidentiary requirements for determining whether an incompetent beneficiary has regained competency, see [M21-1, Part X, Subpart ii, 6.A.4.d](). **Note:** If the award of the beneficiary referenced in the table above * requires adjustment, the RO makes the adjustment under the pending EP 290, or * does **_not_** require adjustment, the RO clears the pending EP 290. ### X.ii.6.D.2.e. Processing a Court Appointment of a Fiduciary Without a Judicial Determination of Incompetency Do _not_ consider a court appointment of a fiduciary as evidence of incompetence requiring rating action **_unless_** it is also accompanied by either * a judicial determination of incompetency, such as a court order or decree, or * medical evidence. ### X.ii.6.D.2.f. Processing a Court Decree of Incompetency or Court Appointment of a Fiduciary by Reason of Incompetency If VA receives a court decree of incompetency or a court appointment of a fiduciary by reason of a beneficiary’s incompetency, it is _unnecessary_ to * prepare a _proposed_ rating of incompetency, or * provide notice of proposed adverse action in the matter of incompetency. **Important:** If VA receives a**_judicial determination_ **that a beneficiary is incompetent, follow the instructions in M21-1, Part X, Subpart ii, 6.D.2.g.**References:** For more information on the * responsibilities of the rating activity following receipt of a court decree of incompetency, see [M21-1, Part X, Subpart ii, 6.A.5](), and * distribution of court documents referenced in this block, see [M21-1, Part X, Subpart ii, 6.E.2.a](). ### X.ii.6.D.2.g. Processing a Judicial Determination of Incompetency Judicial findings of a court with regard to the competency of a beneficiary are **_not_** binding on the rating activity. Follow the steps in the table below after receiving a judicial determination of incompetency regarding a beneficiary.| **Step**| **Who Is Responsible**| **Action** 1| RO| If the beneficiary has been admitted to a hospital for treatment or observation, request medical records from the hospital that would be useful in evaluating the beneficiary's competency. 2| RO| Complete a final rating decision regarding the beneficiary’s competency. 3| RO| Use the table below to determine how to process the rating decision referenced in Step 2.| **If the rating activity determined the beneficiary is ...**| **Then ...** competent| * complete any pending award actions * send a decision notice to the beneficiary, and * clear the pending EP 020 (or other associated rating EP). incompetent| * complete any pending award actions, withholding any _retroactive_ benefits until the hub of jurisdiction assigns the beneficiary a fiduciary * send the beneficiary contemporaneous notice * clear the pending EP 020 (or other associated rating EP) * ensure the judicial documents are associated with the claims folder * establish an EP 290, _FID-Fiduciary Adjustment_ , which NWQ will route to the hub of jurisdiction, and * notify the hub of jurisdiction using * [ _VA Form 21-592_ _, Request for Appointment of a Fiduciary, Custodian or Guardian_](), if the form was not already provided to the hub, or * a memorandum or letter, if [_VA Form 21-592_]() was previously provided to the hub. 4| RO| Pending certification of a fiduciary or other instructions from the hub, continue any existing * apportionments, and * payments VA is making to the beneficiary. **Reference:** For more information on handling a court’s appointment of more than one fiduciary, see [M21-1, Part X, Subpart ii, 6.E.1.b](). 5| hub authorization activity| Following receipt of certification * process the payee certification from the [_VA Form 21P-555_](), and * forward a copy of the completed [_VA Form 21P-555_]() to the Insurance Service. **Reference:** For more information on the actions an RO’s authorization activity must take following receipt of a recommendation for payment from a hub, see M21-1, Part X, Subpart ii, 6.D.2.d. _**References**_ : For more information on * processing a judicial determination of incompetency for a child who has been found permanently incapable of self-support by rating decision, see [M21-1, Part X, Subpart ii, 6.A.5.b]() * processing evidence that a child beneficiary is permanently incapable of self-support, see M21-1, Part X, Subpart ii, 6.D.2.h, and * action required for a payee found incompetent by court decree or court appointment of a fiduciary, see [M21-1, Part X, Subpart ii, 6.A.5.c](). ### X.ii.6.D.2.h. Processing Evidence That a Child Beneficiary Is Permanently Incapable of Self-Support Following receipt of evidence indicating a child beneficiary is permanently incapable of self-support, refer the case to the rating activity for a decision as to whether or not the child * was incapable of self-support prior to age 18 * remains incapable of self-support on a permanent basis, and * is unable to manage their own financial affairs. **Note:** A child may be unable to support themself and still be considered competent to handle their financial affairs. **References:** For more information on * the actions the authorization activity takes following receipt of a recommendation for payment from a hub, see M21-1, Part X, Subpart ii, 6.D.2.d * processing evidence of a child’s permanent incapacity for self-support and incompetency, see [M21-1, Part X, Subpart ii, 6.B.1 and 2](), and * considering the competency of a child who is incapable of self-support, see [M21-1, Part X, Subpart ii, 6.A.2.c](). ### X.ii.6.D.2.i. Authorizing an Award for a Beneficiary Found Competent by Court Decree If a beneficiary previously held incompetent * by a court decree _only_ , (**_not_** by rating decision) is subsequently found competent by a court decree * initiate direct payment to the beneficiary after a hub certifies the corresponding court proceedings were regular and proper in all respects * annotate the REMARKS section of the amended award to reflect the facts surrounding the restoration of competency, and * e-mail a copy of the award to the hub that supervises the beneficiary’s fiduciary, or * by a court decree **_and_** by VA rating decision, is subsequently found competent by court decree * take the necessary development action * refer the court decree and any evidence that accompanied it to the rating activity, and * do **_not_** initiate direct payment to the beneficiary without approval from the hub. **Notes:** * When a beneficiary was previously held incompetent by a court decree _**and**_ by a VA rating decision, the rating activity must prepare a new rating. If the rating activity confirms and continues incompetency, the rating decision must include a notation of the court’s declaration. * If the beneficiary is a child who is incapable of self-support by reason of mental defect, the rating activity must make a new determination as to whether the child remains entitled to VA benefits. Do not defer award action pending this referral to the rating activity. **Reference:** For more information on awards to incompetent Veterans who are institutionalized for medical care, see [M21-1, Part X, Subpart ii, 6.F.1](). ## 3. Due Process Requirements for Incompetency Determinations This topic contains information on due process requirements for incompetency determinations, including * elements of a notice of a proposed rating of incompetency * notifying a beneficiary who is under the age of majority * handling evidence VA receives during the due process period * responding to a beneficiary’s request for a hearing * processing a beneficiary’s request for a hearing * conducting a hearing prior to a final determination * processing a waiver of due process concerning a proposed rating of incompetency * proposals on which a beneficiary takes no action, and * processing a legacy notice of disagreement (NOD) that VA receives after issuing notice of a final rating of incompetency. March 4, 2026 ### X.ii.6.D.3.a. Elements of a Notice of a Proposed Rating of Incompetency Notice of a proposed rating of incompetency must include * a copy of the proposed rating decision or a short summary of the facts and evidence of record that supports the finding of incompetency * an explanation of the effect that a finding of incompetency has on the payment of VA benefits * a statement of the beneficiary’s right to * submit evidence to show why the proposed action should not be taken * request a personal hearing to present evidence, and * have representation during the hearing, and * an indication that the beneficiary has 60 days to respond to the notice. **Notes:** * Do **_not_** include Federal tax information in the notice. * If a beneficiary requests a hearing at **_any_** time _before_ VA makes a final decision regarding the beneficiary’s competency, VA will wait to make a final decision until after it holds the hearing. ### X.ii.6.D.3.b. Notifying a Beneficiary Who Is Under the Age of Majority If VA is making payments to the custodian of a beneficiary who is under the age of majority, and a decision regarding the child’s competency is needed when the child reaches the age of majority, send notice of a proposed rating of incompetency to * the current fiduciary that a hub has certified to receive payments for the child, or * a custodian that is recognized as a parent under [38 U.S.C. 5502(a)](). **References:** For more information on * a list of the age of majority by State or territory, see [M21-1, Part X, Subpart ii, 6.E.3.c](), and * incompetency determinations, see * [M21-1, Part X, Subpart ii, 6.A](), and * [38 CFR 3.353](). ### X.ii.6.D.3.c. Handling Evidence VA Receives During the Due Process Period The hub will review the evidence VA receives within 60 days of the date of the notice referenced in M21-1, Part X, Subpart ii, 6.D.3.a, and complete the final rating decision, unless one of the exceptions in [FPM, Part I, 1.A.2.b]() applies. **Exception:** Follow the process outlined in M21-1, Part X, Subpart ii, 6.D.3.e, if VA receives evidence regarding a beneficiary’s competency in connection with a hearing the beneficiary requested. ### X.ii.6.D.3.d. Responding to a Beneficiary’s Request for a Hearing If a beneficiary requests a personal hearing, advise the beneficiary that * witnesses may be brought to the hearing * witness testimony will be included in the record * they may be represented by an * accredited representative of a Veterans organization or other service organization recognized by the VA at no charge, or * attorney the beneficiary has appointed, and VA has recognized * VA furnishes the hearing room, provides hearing officials, and prepares the transcript or summary of the proceedings, and * VA cannot pay any other expenses associated with the hearing. **Note:** If the beneficiary expresses a desire for representation but has not yet designated a representative, help the beneficiary designate a representative by furnishing the appropriate form from among those listed in [M21-1, Part I, Subpart i, 2.A.2.c]().**References:** For more information on * hearings, see [M21-1, Part X, Subpart v, 1.D](), and * a beneficiary’s appointment and VA’s recognition of an attorney, see [M21-1, Part I, Subpart i, 2.A.2](). ### X.ii.6.D.3.e. Processing a Beneficiary’s Request for a Hearing The hub will process hearing requests VA receives between the date of the notice referenced in M21-1, Part X, Subpart ii, 6.D.3.a, and the date VA makes a final decision regarding the beneficiary’s competency, unless one of the exceptions in [FPM, Part I, 1.A.2.b]() applies. The table below describes the RO of jurisdiction's (ROJ’s) process for handling a beneficiary’s request for a hearing when one of the exceptions in [FPM, Part I, 1.A.2.b]() applies.| **Stage**| **Description** 1| The ROJ follows the instructions in [M21-1, Part II, Subpart iii, 3.A.2.a](), for establishing control of the hearing request. 2| The ROJ schedules and holds a hearing according to the instructions in M21-1, Part X, Subpart ii, 6.D.3.f. 3| The ROJ’s rating activity makes a final determination regarding the beneficiary’s competency. 4| The ROJ takes the actions described in the table below.| **If the rating activity determines the beneficiary is ...**| **Then the authorization activity ...** competent| * promulgates the final rating decision * completes any necessary award actions * sends a decision notice to the beneficiary, and * ensures all documentation is associated with the claims folder. incompetent| * promulgates the final rating decision * completes any necessary award actions * sends a decision notice to the beneficiary * completes and uploads [_VA Form 21-592_]() into the beneficiary’s eFolder, and * establishes an EP 290, FID-Fiduciary Adjustment, which NWQ will route to the hub of jurisdiction. 5| If the rating activity determined the beneficiary is incompetent, the hub of jurisdiction * appoints a fiduciary, and * releases any retroactive benefits due the beneficiary, if appropriate. **References:** For more information on * the jurisdiction for * individual hubs, see [M21-1, Part X, Subpart ii, 6.C.1.d](), and * competency determinations, see [M21-1, Part X, Subpart ii, 6.A.1.a]() * where to hold a hearing, see [M21-1, Part X, Subpart v, 1.D.1.m](), and * processing a legacy notice of disagreement (NOD) that VA receives after notifying a beneficiary of a final rating of incompetency, see M21-1, Part X, Subpart ii, 6.D.3.i. ### X.ii.6.D.3.f. Conducting a Hearing Prior to a Final Determination Designated hearing officials conduct hearings in accordance with the instructions in [M21-1, Part X, Subpart v, 1.D.4]().Due to the nature of the hearings referenced in this section, hearing officials must be flexible in allowing a beneficiary’s next of kin (or any other person of the beneficiary’s choosing) to participate in the hearing on the beneficiary’s behalf or to assist the beneficiary during the hearing. ### X.ii.6.D.3.g. Processing a Waiver of Due Process Concerning a Proposed Rating of Incompetency If VA receives a waiver of due process concerning a proposed rating of incompetency * associate the waiver with the beneficiary’s claims folder * close the tracked item used for the due process period under the corresponding EP * notify the hub of jurisdiction by sending an e-mail with the subject line _Due Process Waived- Incompetency Proposal_ , and * include the following information in the body of the e-mail: * the beneficiary’s name and claim number, and * the date VA received the waiver. **Notes:** * VA may accept a beneficiary’s waiver of due process by telephone or written notice from the beneficiary or their authorized representative. * The hub will maintain jurisdiction of the pending EP 590. **Reference:** For more information on the jurisdiction of individual hubs, see [M21-1, Part X, Subpart ii, 6.C.1.d](). ### X.ii.6.D.3.h. Proposals on Which a Beneficiary Takes No Action If a beneficiary does not respond to notice of a proposed rating of incompetency within 65 days of the date of the notice, the hub of jurisdiction makes a final decision regarding the beneficiary’s competency based on the evidence of record. ### X.ii.6.D.3.i. Processing a Legacy NOD That VA Receives After Issuing Notice of a Final Rating of Incompetency The ROJ handles all legacy appeals of incompetency determinations. If VA receives a legacy NOD after issuing notice of a final rating of incompetency, the ROJ must * prepare a statement of the case (SOC) * attach [_VA Form 9, Appeal to Board of Veterans’ Appeals_](), to the SOC, and * send the SOC to the * beneficiary, or fiduciary, if applicable, and * beneficiary’s representative. **Important:** When preparing the SOC, carefully consider whether the inclusion of certain information could be detrimental to the beneficiary’s state of mind. A decision to exclude information on this basis must be supported by a physician’s opinion and advice concerning the appropriate way to communicate the information to the beneficiary. **Note:** Hubs are responsible for handling all legacy appeals, supplemental claims, and higher-level reviews regarding the selection of a fiduciary. **References:** For more information on * issuing an SOC, see [M21-5, Chapter 7, Section D.3](), and * releasing information that may be detrimental to a beneficiary’s state of mind, see [M21-5, Chapter 7, Section D.1.e](). ## 4. SDP This topic contains information on SDP, including * authorization of SDP by a hub * confirmation of SDP status following a loss of entitlement * hub responsibilities following the authorization of SDP, and * processing and controlling an SDP award. May 10, 2019 ### X.ii.6.D.4.a. Authorization of SDP by a Hub Under [38 CFR 13.110](), a hub may authorize SDP to * Veterans rated incompetent, or * any other adult beneficiary for whom appointment of a fiduciary has been requested based on a VA rating or judicial determination of incompetency. If the hub concludes that such method of payment is consistent with the beneficiary’s capacity and affords a reasonable protection of the beneficiary’s interests, the hub indicates its authorization of SDP on [_VA Form 21P-555_](). ### X.ii.6.D.4.b. Confirmation of SDP Status Following a Loss of Entitlement If an incompetent beneficiary loses entitlement to benefits that VA had been paying directly to them based on a hub’s authorization of SDP, and VA later restores entitlement, do _not_ resume the payment of benefits directly to the beneficiary without concurrence from a hub.If necessary, request a current [_VA Form 21P-555_]() by * preparing [_VA Form 21-592_]() according to the instructions in [M21-1, Part X, Subpart ii, 6.C.1.c]() * uploading an electronic copy of the form into the beneficiary’s eFolder, and * notifying the hub of jurisdiction via e-mail that action is pending on the form. ### X.ii.6.D.4.c. Hub Responsibilities Following the Authorization of SDP After a hub authorizes SDP, it is responsible for * annotating the award document with the following notation: _VA Form 21P-555 _**[date]**_supervised direct payment_ , and * performing the following actions on the 601 CHANGE OF FIDUCIARY screen in Share if the beneficiary is a Veteran: * updating the PRINCIPLE GUARDIANSHIP FOLDER LOC screen, and * selecting the SUPERVISED DIRECT PAY radio button. ### X.ii.6.D.4.d. Processing and Controlling an SDP Award Follow the steps in the table below to process and control an SDP award.| **Step**| **Action** 1| Process an award that pays the beneficiary the _full_ monthly rate of benefits entitled but withholds all retroactive benefits VA owes the beneficiary. (Payment of less than the full monthly rate is prohibited.)If the beneficiary is an individual receiving benefits under an apportioned award, treat the difference between the monthly benefit VA withheld and the full amount to which the beneficiary is entitled as a withholding on the _primary beneficiary’s_ award.**Note:** Enter the withholding on the OTHER ADJUSTMENTS tab on the AWARD ADJUSTMENTS screen.**Reference:** For more information on processing withholdings, see the _VBMS-Awards User Guide_. 2| Establish a diary that will expire six months after the date of the SDP certification. 3| After the six-month period ends, ask the hub to furnish a certification for release of the withheld benefits to either * the beneficiary, or * a fiduciary. 4| Did the hub certify an extension of the period of time during which VA would continue to withhold payment of the retroactive benefits referenced in Step 1? * If _yes_ , go to the next step. * If _no_ , * release the withheld, retroactive benefits referenced in Step 1, and * disregard the remaining steps in this table. 5| Does the period of time referenced in Step 4 extend beyond the one-year time limit during which VA may withhold the retroactive benefits referenced in Step 1? * If _yes_ , * continue to withhold the retroactive benefits, and * go to the next step after the one-year time limit expires. * If _no_ , go to the Step 7. 6| Release the withheld, retroactive benefits referenced in Step 1 and disregard the remaining steps in this table. 7| Establish a diary that will expire 30 days before the end of the extended time period referenced in Step 4. 8| * After the extended time period referenced in Step 4 ends, ask the hub to furnish a certification for release of the withheld benefits to either * the beneficiary, or * a fiduciary. * Return to Step 4 after the hub responds to the request. **Reference:** For more information on establishing diaries, see the * _VBMS-Awards User Guide_ , and * _Share User Guide_. ## 5. Processing Rating Decisions That Conclude a Beneficiary VA Previously Rated as Incompetent Is Now Competent March 4, 2026 ### X.ii.6.D.5.a. Processing Rating Decisions That Conclude a Beneficiary VA Previously Rated Incompetent Is Now Competent Follow the steps in the table below to process rating decisions that conclude a beneficiary VA previously rated incompetent is now competent.| **Step**| **Action** 1| Promulgate the rating decision. 2| Notify the beneficiary of the rating decision. 3| Establish EP 290, _FID-Fiduciary Adjustment_ , and NWQ will route the case to the hub of jurisdiction.**Note:** The hub is responsible for making the necessary updates to Share using the CHANGE OF FIDUCIARY command to ensure all future payments are paid directly to the beneficiary.**Reference:** For more information on the jurisdiction of individual hubs, see [M21-1, Part X, Subpart ii, 6.C.1.d]().