TN 46 (01-17)

A. Policy for determining capability

Unless judged legally incompetent, we presume an adult beneficiary is capable of managing or directing the management of benefits. However, if you have information that the beneficiary has a mental or physical impairment that prevents him or her from managing or directing the management of benefits, develop capability.

1. When must I develop for evidence of capability?

When direct payment is prohibited based on legal evidence, you do not need to develop capability.

If you suspect or receive a lead that the beneficiary has a mental or physical condition that prevents him or her from managing or directing someone else to manage benefits, you must make a capability determination.

Consider the following when assessing the need for capability development:

• Does the individual have difficulty answering questions, getting the evidence or information necessary to pursue the claim, or understanding explanations and reporting instructions?

• If yes, do you think this difficulty indicates the beneficiary cannot manage or direct the management of benefits?

Do not assume you need capability development solely based on the disability diagnosis (see GN 00502.040, question 4). Develop capability only if there is an indication that the beneficiary cannot manage or direct the management of his or her benefits.

CAUTION: Do not delay or suspend benefits while developing capability, unless noted in the exceptions to immediate payment, per GN 00504.105 Direct payment to Incapable Beneficiaries When Further Payee Development is Needed.

2. What if a beneficiary is mentally impaired?

If the beneficiary has a mental impairment, develop the capability issue only if there is an indication that the beneficiary lacks the ability to reason properly, appears disoriented, demonstrates seriously impaired judgment, or is unable to communicate with others. If the beneficiary can direct someone else to manage his or her benefits, you must find him or her capable.

3. What if a beneficiary is physically impaired?

If the beneficiary has a physical impairment, develop the capability issue only if the beneficiary's impairment prevents him or her from managing or directing someone else to manage his or her benefits and is dependent on others to meet his or her daily needs. If the beneficiary can direct someone else to manage his or her benefits, you must find him or her capable, unless a voluntary conservatorship is in effect. (See GN 00502.139A.5.) For beneficiaries residing outside the United States, see GN 00505.012.

4. What if a beneficiary has a substance abuse problem?

Capability development for individuals with a substance abuse condition follows the same rules as other beneficiaries.

The Social Security Administration (SSA) does not prohibit direct payment to an individual who suffers from a substance abuse condition and you should make direct payment if appropriate.

Substance abuse is often an indication that a beneficiary needs help managing benefits. If a substance abuse condition exists, consider whether the beneficiary is incapable of managing or directing someone else to manage his or her benefits.

5. What if a beneficiary exercises “self-direction”?

“Self-direction” refers to a service delivery system whereby families, elderly beneficiaries or beneficiaries with disabilities have high levels of direct involvement, control and choice in identifying, accessing, and managing the services they obtain to meet their personal assistance and other health related needs. If a beneficiary participates in a “self-direction” model such as CMS's (Center for Medicare & Medicaid Services) Independence Plus programs and Medicaid Self Directed Services, you may assume that he or she is capable and must be paid benefits directly.

B. Procedure - Types of evidence used for capability determinations

The evidence provided to SSA must be the basis of your determination of whether to pay a beneficiary directly or through a payee. Whenever there is a question regarding a beneficiary's ability to manage or direct the management of benefits, it is important to be thorough in your development and documentation of the evidence used for capability determinations.

What are the types of evidence used for capability determinations?

You should consider anything that helps you understand the beneficiary's ability to manage benefits as evidence of capability. There are three types of evidence used for a capability determination:

• Legal evidence, is required where there is an allegation that the beneficiary is legally incompetent, per GN 00502.023.

• Lay evidence (nonmedical and nonlegal evidence), in the absence of legal evidence, you must obtain lay evidence in all cases, per GN 00502.030.

• Medical evidence, which indicates the beneficiary cannot manage or direct someone else to manage his or her benefits, you must obtain (if available), per GN 00502.040.

If legal evidence establishes that the beneficiary is incompetent to manage or direct someone else to manage his or her benefits, the beneficiary must receive benefits through a payee and no other development is necessary. Otherwise, you must make a capability determination based on lay and medical evidence.

C. Procedure - Written documentation required

Whenever you or someone raises the question of a beneficiary’s capability, you must make a capability determination and properly document your determination; including whether you find representative payment or direct payment appropriate, per GN 00502.065.