[Federal Register Volume 60, Number 86 (Thursday, May 4, 1995)]
[Proposed Rules]
[Pages 22016-22017]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10936]



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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AH10


Determinations of Incompetency and Competency

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its 
adjudication regulations concerning determinations of mental 
incompetency to make clear that only rating boards are authorized to 
make determinations of incompetency.

DATES: Comments must be received on or before July 3, 1995.

ADDRESSES: Mail written comments to: Director, Office of Regulations 
Management (02D), Department of Veterans Affairs, 810 Vermont Avenue, 
NW., Washington, DC 20420, or hand-deliver written comments to: Office 
of Regulations Management, Room 1176, 801 Eye Street, NW., Washington, 
DC 20001. Comments should indicate that they are in response to ``RIN 
2900-AH10.'' All written comments received will be available for public 
inspection in the Office of Regulations Management, Room 1176, 801 Eye 
Street, NW., Washington, DC 20001, between the hours of 8:00 a.m. and 
4:30 p.m., Monday through Friday (except holidays).

FOR FURTHER INFORMATION CONTACT: Paul Trowbridge, Consultant, 
Regulations Staff, Compensation and Pension Service, Veterans Benefits 
Administration, 810 Vermont Avenue, NW., Washington, DC 20420, 
telephone (202) 273-7210.

SUPPLEMENTARY INFORMATION: Regulations at 38 CFR 3.353 govern VA 
determinations of competency and incompetency. 38 CFR 3.353(a) defines 
a mentally incompetent person as one who lacks the mental capacity to 
manage his or her own affairs, including disbursement of funds without 
limitation. 38 CFR 3.353(b) was intended to authorize rating boards to 
make determinations of competency and incompetency for VA purposes 
without involvement of a Veterans Services Officer (VSO).
    In a recent decision (Coleman v. Brown, No. 90-966) the United 
States Court of Veterans Appeals interpreted Sec. 3.353(b) as requiring 
VSO participation prior to determination of the issue of incompetency. 
Although the VSO was meant to play an integral role in developing 
evidence relating to the veteran's ability to handle his or her 
affairs, the intent of the regulation was to give rating boards sole 
responsibility for incompetency determinations without the VSO 
participating in the decision. See 38 CFR 3.104(a). Although it was 
intended that evidence produced by the VSO could lead to later 
reconsideration of the incompetency determination, it was not intended 
that the VSO's concurrence be a condition precedent to rating a 
beneficiary incompetent. The VSO's investigation was meant merely to 
provide an additional safeguard which could lead to later review. 
[[Page 22017]] 
    The proposed amendment provides that the rating board has sole 
authority to determine the competency of beneficiaries, but that if the 
VSO develops new information bearing on the issue of the beneficiary's 
competency, the rating board will consider that evidence together with 
all other evidence of record to determine whether the prior 
determination of incompetency should remain in effect. Paragraph (b)(2) 
provides that the Adjudication Officer will authorize disbursement to 
an incompetent beneficiary as directed by the VSO (e.g., supervised 
direct payment, payment to a fiduciary, or payment to the beneficiary's 
spouse). Additional nonsubstantive changes would be made in the wording 
and format of Sec. 3.353(b) for the sake of clarity.
    The Secretary hereby certifies that these regulatory amendments 
would not have a significant economic impact on a substantial number of 
small entities as they are defined in the Regulatory Flexibility Act 
(RFA), 5 U.S.C. 601-612. The amendments would not directly affect any 
small entities. Only VA beneficiaries would be directly affected. 
Therefore, pursuant to 5 U.S.C. 605(b), these amendments are exempt 
from the initial and final regulatory flexibility analysis requirements 
of section 603 and 604.

    The Catalog of Federal Domestic Assistance program numbers are 
64.104, 64.105, 64.109 and 64.110.

List of Subjects in 38 CFR Part 3

    Administrative practice and procedure, Claims, Health care, 
Individuals with disabilities, Pensions, Veterans.

    Approved: April 11, 1995.
Jesse Brown,
Secretary of Veterans Affairs.

    For the reasons set forth in the preamble, 38 CFR Part 3 is amended 
to read as follows:

PART 3--ADJUDICATION

Subpart A--Pension, Compensation, and Dependency and Indemnity 
Compensation

    1. The authority citation for part 3, subpart A continues to read 
as follows:

    Authority: 38 U.S.C. 501(a), unless otherwise noted.

    2. Section 3.353 is amended by revising paragraph (b) to read as 
follows:


Sec. 3.353  Determinations of incompetency and competency.

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    (b) Authority. (1) Rating agencies have sole authority to make 
official determinations of competency and incompetency for the purpose 
of existing laws, Department of Veterans Affairs regulations and 
Department of Veterans Affairs instructions. Such determinations are 
final and binding on field stations for purposes of: insurance (38 
U.S.C. 1922), the discontinuance and payment of amounts withheld 
because of an estate in excess of $1,500 (Sec. 3.557(b)), and, subject 
to Sec. 13.56 of this chapter, disbursement of benefits.
    (2) Where the beneficiary is rated incompetent, the Adjudication 
Officer will inform the Veterans Services Officer of jurisdiction of 
that fact. The Veterans Services Officer will develop information as to 
the beneficiary's social, economic and industrial adjustment and 
appoint (or recommend appointment of) a fiduciary as provided in 
Sec. 13.55 of this chapter, select a method of disbursing payment as 
provided in Sec. 13.56 of this chapter, or in the case of a married 
beneficiary, appoint the beneficiary's spouse to receive payments as 
provided in Sec. 13.57 of this chapter. The Adjudication Officer will 
authorize disbursement of the benefit in the manner selected by the 
Veterans Services Officer.
    (3) If in the course of fulfilling the responsibilities assigned in 
paragraph (b)(2) the Veterans Services Officer 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 Sec. 3.327(a) if necessary to properly evaluate the 
beneficiary's mental capacity to contract or manage his or her own 
affairs.
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[FR Doc. 95-10936 Filed 5-3-95; 8:45 am]
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