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Updated Dec 31, 2024

In This Section
This section contains the following topics:
Topic
Topic Name
1
2
3
4
5
6

1.  General Information About Institutionalized, Incompetent Veterans

Introduction
This topic contains general information about institutionalized, incompetent Veterans, including

Change Date
January 8, 2020

X.ii.6.F.1.a. Notifying the Fiduciary Hub When a Veteran Is Admitted to a Medical Institution or Transferred to Another Institution
Following receipt of notice that an incompetent Veteran has been admitted to a medical institution or transferred from one medical institution to another, forward the notice to the fiduciary hub of jurisdiction.
Note:  Veterans Service Centers (VSCs) and pension management centers (PMCs) are responsible for making any adjustments to an incompetent Veteran’s award that is necessitated by admission to a private or Department of Veterans Affairs (VA) institution.
References:  For information on

X.ii.6.F.1.b. Rating of Incompetency Subsequent to Admission to a Medical Institution
If a Veteran is rated incompetent subsequent to admission to a medical institution, request any information, reports, or summaries that may be required as a result of the Veteran’s incompetency.
Note:  Request information from a VA medical center (VAMC) via the Compensation and Pension Records Interchange (CAPRI).
Reference:  For information on using CAPRI, see the CAPRI User Guide.

2.  Award Adjustments After a Veteran Transfers to Contract Nursing Home Care Under 38 U.S.C. 1720

Introduction
This topic contains information on award adjustments after a Veteran transfers to contract nursing home care under 38 U.S.C. 1720, including

Change Date
January 8, 2020

X.ii.6.F.2.a. Applicability of 38 U.S.C. 1720 for Nursing Home Care
VA may provide for the cost of private or public nursing home care under 38 U.S.C. 1720 for a
  • service member that
    • has been furnished care in an Armed Forces hospital, and
    • will become a Veteran on discharge from the Armed Forces hospital, or
  • Veteran that
    • has been furnished VA hospital care, or
    • is directly admitted to a nursing home if the nursing home care is for a service-connected disability.

X.ii.6.F.2.b. Awards Subject to Reduction Under 38 CFR 3.551 and 3.552
The award of a Veteran who is transferred or directly admitted to a facility for care at VA expense is subject to adjustment under
  • 38 CFR 3.551, if the Veteran is receiving pension, and
  • 38 CFR 3.552, if the Veteran is receiving additional benefits based on the need of the aid and attendance (A&A) of another person.
Note:  38 CFR 3.552(b)(2) requires discontinuance of the A&A allowance if the Veteran is
  • receiving disability compensation, and
  • hospitalized at the expense of the U.S. Government.
References:  For more information about

X.ii.6.F.2.c. Handling Notification From a VAMC of a Change in a Veteran’s Competency
If there is a change in a Veteran’s competency, the VAMC of jurisdiction will furnish a hospital summary to the appropriate regional office (RO) upon the Veteran’s transfer to a nursing home.  VSCs and PMCs must follow the steps in the table below following receipt of the hospital summary.
Step
Action
1
Forward the summary provided by the VAMC to the rating activity for a determination as to
  • the competency status of the Veteran, and
  • whether or not the Veteran may be entitled to either
    • the A&A allowance, or
    • housebound benefits.
2
If the rating activity determines the Veteran is
  • competent, go to Step 3, or
  • incompetent, go to Step 4.
3
  • Follow the procedures in M21-1, Part X, Subpart ii, 6.D.6.a if
    • VA has not appointed the Veteran a fiduciary, or
    • VA has not appointed the Veteran a fiduciary, but there is a court-appointed fiduciary.
  • Disregard the remaining step in this table.
4
If VA has not yet appointed a fiduciary, then
Note:  If a fiduciary is already appointed to the Veteran, send a copy of the hospital summary to the fiduciary hub with geographical jurisdiction over the VAMC.

X.ii.6.F.2.d. Handling Notification of a Veteran’s Release or Termination of Care at VA Expense
The transferring VAMC authorizes and administratively controls nursing home care and notifies the appropriate RO of the Veteran’s release from the contract nursing home or when care at VA expense is terminated.
Following receipt of such notification
  • make any adjustment in the Veteran’s award that is necessitated by the release
  • continue the award to the Director of the VAMC if a different fiduciary has not yet been appointed, and
  • send the fiduciary hub of geographical jurisdiction a copy of the notice of release.

3.  Awards to Dependents of Incompetent Veterans

Introduction
This topic contains information on awards to dependents of incompetent Veterans, including

Change Date
January 8, 2020

X.ii.6.F.3.a. Apportionment to Dependents of Non-Institutionalized, Incompetent Veterans
If VA grants a claim for apportionment of an incompetent Veteran’s benefits, but VA has not yet appointed the Veteran a fiduciary, 38 CFR 3.452 allows for payment of the apportionment without waiting for the appointment of a fiduciary.
An initial action to suspend payments pending appointment of a fiduciary does not prohibit the payment of apportionments that are otherwise proper and equitable.
If an apportionment is made prior to appointing a fiduciary, furnish the fiduciary hub of jurisdiction with a copy of the apportionee award and a request for expedited appointment.
Reference:  For information about claims for apportionment of a Veteran’s benefits, see M21-1, Part VII, Subpart iii, 1.A.

X.ii.6.F.3.b.  Awards to Dependents of Institutionalized, Incompetent Veterans
Generally, the full monthly rate otherwise payable, less the reduced rate paid to the institution, may be apportioned to the dependent(s) of an institutionalized, incompetent Veteran.
The table below provides references to blocks within this topic that describe the action to take when an incompetent Veteran that is entitled to pension
  • is receiving institutional care by the U.S. or a political subdivision thereof, and
  • has a spouse, child, or dependent parent who is not being adequately provided for by an award to a fiduciary.
For information on the apportionment of …
See …
Veterans Pension when the Veteran is incompetent and institutionalized
Veterans Pension to an estranged spouse
pension to a dependent parent

X.ii.6.F.3.c. Apportioning Veterans Pension When the Veteran Is Incompetent and Institutionalized
When an award of Veterans Pension is being made to a VA or non-VA institution, apply the provisions of 38 CFR 3.454(a), limiting the payment to no more than $25.00.  ROs may apportion the balance to the Veteran’s spouse and/or child(ren).
Note:  Follow the instructions in M21-1, Part X, Subpart ii, 6.F.3.e, if the Veteran has a dependent parent but neither a spouse nor child.

X.ii.6.F.3.d.  Award Adjustments for an Incompetent Veteran With an Estranged Spouse
If an incompetent, married Veteran, who is receiving Veterans Pension at the rate payable for a Veteran with no dependents because the Veteran and their spouse are estranged, is institutionalized at VA expense, reduce the Veteran’s award under 38 CFR 3.551 on the basis of the Veteran’s
  • estrangement from their spouse, or
  • failure to reasonably contribute to the support of their spouse.
If the Veteran’s spouse submits a claim for an apportionment and meets the criteria set forth in 38 CFR 3.452(c), apportion to the estranged spouse the difference between the rate payable to
  • an institutionalized Veteran, and
  • a Veteran with a spouse.
Reference:  For information on apportioning benefits to an estranged spouse when consideration of the spouse’s income would result in a reduction in the Veteran’s pension rate, see M21-1, Part IX, Subpart iii, 1.F.2.n.

X.ii.6.F.3.e.  Apportioning an Award of Pension to a Dependent Parent
38 CFR 3.454 allows for the apportionment of an incompetent Veteran’s pension to a dependent parent under the provisions of 38 CFR 3.451 when the Veteran
  • is institutionalized by the U.S. or any political subdivision thereof, and
  • has neither a spouse nor child.
38 CFR 3.451 dictates the amount of the apportionment, which is limited to the amount of benefits that remain after VA pays $25.00 (monthly, for the use of the Veteran) to the director of the VAMC or the chief officer of the non-VA facility.
If the case involves an incompetent Veteran whose pension is subject to reduction under 38 CFR 3.551, the amount of the apportionment must not exceed the institutional rate.
Reference:  For information on apportioning benefits to the parent of a competent Veteran, see M21-1, Part VII, Subpart iii, 1.A.1.

4.  Handling Funds in PFOP Accounts

Introduction
This topic contains instructions for handling funds in PFOP accounts, including

Change Date
January 8, 2020

X.ii.6.F.4.a.  Types of PFOP Accounts
There are two types of Personal Funds of Patients (PFOP) accounts, as outlined in the table below.
Veteran Status
Explanation/Description
hospitalized in a VAMC
On August 31, 1950, all balances in Funds Due Incompetent Beneficiaries (FDIB) accounts that represented compensation or pension accruing on or after August 8, 1946, were transferred to the Directors of the VAMCs in which the Veterans were hospitalized for credit to PFOP accounts.  VAMC Directors are responsible for maintaining these accounts.
  • committed/confined to a non-VA institution, or
  • whereabouts are unknown
On April 30, 1951, money that accrued on or after August 8, 1946,
  • was transferred from FDIB to PFOP accounts under RO control, and
  • is now maintained and controlled by the Hines Information Technology Center (ITC) for cases in which
    • the Veteran is confined or committed to a non-VA institution, or
    • the whereabouts of the Veteran are unknown.
Note:  August 8, 1946, was the date of passage of Public Law 662, 79th Congress.

X.ii.6.F.4.b.  Award Action on the Two Types of PFOP Accounts
Because there are two types of PFOP accounts, a distinction must be made in taking award action.  The distinctions for award action on each type of account are listed below:
  • An award should never include an allotment when it is an award to the Director of a VAMC.  Fiduciary hubs award the total amount payable to the Director, VAMC, for the Veteran’s account.  The Director will deposit all money not immediately required for the Veteran’s needs into the PFOP account under the Director’s control.
  • Money is not placed into a PFOP account under the control of the Hines ITC unless an adjustment is made to the Veteran’s award that allots a definite sum to the PFOP account.  This is done only when a Veteran is institutionalized in a non-VA institution.

X.ii.6.F.4.c. Use of Funds for Necessary Comforts and Desires by VAMCs and Non-VA Institutions
Use the table below to determine how funds from PFOP accounts needed for the comforts and desires of a Veteran are obtained by
  • the Director of a VAMC, or
  • a non-VA institution.
If funds from a PFOP account for the comforts and desires of a Veteran are needed by a …
Then …
Director of a VAMC
the Director may use funds in the PFOP account at their VAMC.
non-VA institution
funds are released on the basis of a memorandum from a fiduciary hub authorizing partial or full release of money on deposit.
Notes:
  • Take award action to release funds as provided in M21-1, Part X, Subpart ii, 6.F.6.g.
  • Computer processing of the amended award generates a notice to the Hines ITC Accounting Section.  At the request of the accounting section, the fiduciary hub authorizes the release or transfer of the money on deposit in the PFOP account.

X.ii.6.F.4.d.  Payment of Funds in a PFOP Account as Accrued Benefits Upon the Death of a Veteran
For information on the payment of funds in a PFOP account as accrued benefits upon the death of a Veteran, see M21-1, Part XI, Subpart ii, 3.E.6-9.

5.  Processing Notice That an Incompetent Veteran’s Status Has Changed to Non-Bed Care

Introduction
This topic contains instructions for processing notice that an incompetent Veteran’s status has changed to non-bed care, including

Change Date
January 8, 2020

X.ii.6.F.5.a.  Definition:  Non-Bed Care
Non-bed care is a temporary release from a hospital to determine
  • the Veteran’s ability to make a satisfactory adjustment outside the hospital, and
  • whether the Veteran should be discharged from or returned to the hospital, based on their ability to make that adjustment.
Note:  Release on furlough by non-VA institutions is synonymous with release to non-bed care status.

X.ii.6.F.5.b.  Receiving and Forwarding Notice of Non-Bed Care
When an RO requests a notice of discharge from a VAMC, the VAMC responds by notifying the RO of the Veteran’s departure on, or return from, a period of non-bed care of 30 days or more.
Follow the instructions in the table below after receiving the notice referenced in the preceding paragraph.
If the Veteran …
Then forward the report to the fiduciary hub having jurisdiction over …
has a fiduciary
the Veteran’s fiduciary.
does not have a fiduciary
the geographical area in which the VAMC is located.

X.ii.6.F.5.c.  Continuing Awards While on Non-Bed Care
Continue payments to a Veteran on non-bed care, as Veterans have the right under 38 CFR 13.30(b)(1) to receive direct monthly benefit payments until VA appoints a fiduciary.

X.ii.6.F.5.d.  Adjustments for Release to Non-Bed Care or Absences of 30 Days or More
Use the table below to determine how to make various adjustments to awards for
  • release to non-bed care, or
  • an authorized absence of 30 days or more.
If …
Then …
notice showing release to non-bed care or authorized absence of 30 days or more is received
  • pay the full amount on the basis of the last rating decision, effective the date of departure, and
  • discontinue any allotment for PFOP, subject to the prior approval of the fiduciary hub, when required.
  • notice showing release to non-bed care or authorized absence of 30 days or more is received, and
  • the total award amount is being paid
    • to the Director of a VAMC, or
    • by apportionment between the institution and dependents
take no action unless the facts show
  • the Veteran’s or apportionee’s situation has changed, and
  • a new apportionment decision should be made.
  • notice showing release to non-bed care or authorized absence of 30 days or more is received
  • funds in excess of the Veteran’s monthly entitlement are required, and
  • entitlement has been terminated
provide funds from PFOP accounts in accordance with M21-1, Part X, Subpart ii, 6.F.4.c.

X.ii.6.F.5.e.  Extension of Non-Bed Care
If the original period of non-bed care or authorized absence is extended, make no further adjustment of an apportionment or the Veteran’s award pending expiration of the extension.
The chief officer of the corresponding medical institution must carefully review each case in which there is an extension to ascertain if any special circumstances exist that
  • relate to the safeguarding of the interests of the Veteran and their dependents, or
  • may indicate continuance of the existing payments is not justifiable.
If the facts warrant it, the chief officer will submit appropriate recommendations to the RO as to any action or adjustment considered advisable.

6.  Discontinuing an Institutional Award (Established Prior to August 13, 2018) When a Veteran Is Discharged From a Hospital

Introduction
This topic contains information on discontinuing institutional awards and authorizing payment to a Veteran or fiduciary when a Veteran is discharged from a hospital, including

Change Date
January 8, 2020

X.ii.6.F.6.a.  Definition:  Institutional Award
An institutional award is an award fiduciary hubs made to the Director of a VAMC or the chief officer of a non-VA institution when an incompetent Veteran was institutionalized for treatment or care.
Fiduciary hubs stopped establishing institutional awards August 13, 2018.

X.ii.6.F.6.b.  Preventing the Interruption of Award Payments
Avoid interruption of payments when an incompetent Veteran in receipt of an institutional award is finally discharged from the hospital.
This requires close coordination between the medical institution and the RO.

X.ii.6.F.6.c.  Instructions for Discontinuing an Institutional Award
When a Veteran is discharged from a hospital, discontinue an institutional award effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share, per 38 CFR 3.558.
If another fiduciary has been appointed, discontinue the institutional award by amending the award to the fiduciary.  Make payment of all funds due the incompetent Veteran, including money on deposit in PFOP, to the fiduciary, if otherwise in order.
Note:  When an institutional award to the Director of a VAMC is discontinued, notify that Director of the action taken.
Reference:  For information concerning transfers to a nursing home, see M21-1, Part X, Subpart ii, 6.F.2.

X.ii.6.F.6.d.  Awaiting a Determination Regarding a Contemplated Discharge Date Before Requesting a Fiduciary
Due to the indefinite period during which non-bed care status may continue, and the possibility that competency may be regained, do not request the appointment of a fiduciary until a contemplated date of discharge has been determined.
When a Veteran without a fiduciary, for whom an institutional award has been authorized, is discharged from a VA hospital, the VAMC
  • advises the RO of an impending discharge, and
  • furnishes the RO an interim discharge summary.
Following submission of this report, the chief officer of the corresponding medical institution will retain the patient on non-bed care status until the necessary rating and guardianship procedures have been concluded.

X.ii.6.F.6.e.  Referring the Hospital Summary to the Rating Activity
Following receipt of a hospital summary indicating a medical opinion of regained competency, refer the summary to the rating activity for consideration.
Use the table below to determine the appropriate action to take based on the determination by the rating activity.
Reference:  For more information on evaluating competency, see M21-1, Part X, Subpart ii, 6.A.1.
If the rating activity makes a determination of …
Then …
competency
follow the instructions in M21-1, Part X, Subpart ii, 6.D.6.a.
incompetency
  • inform the fiduciary hub with geographical jurisdiction over the RO of the rating and impending discharge, and
  • request the appointment of a fiduciary using
Note:  The fiduciary hub will request a field examination to determine the need for a fiduciary.
References:  For more information on

X.ii.6.F.6.f.  Requesting a Field Examination and Possible Reconsideration by the Rating Activity
Following receipt of a copy of a hospital summary based on an impending discharge, along with the rating decision referenced in M21-1, Part X, Subpart ii, 6.F.6.e, a fiduciary hub may initiate a field examination to determine the need for appointment of another fiduciary.
The table below describes the process for
  • requesting a field examination, and
  • submitting an opinion for possible reconsideration by the rating activity.
Reference:  For more information on the field examination process, see the Fiduciary Program Manual.
Stage
Description
1
Following receipt of VA Form 21-592 requesting the appointment of a fiduciary, the fiduciary hub requests a field examination to determine
  • the need for appointment of a fiduciary, and
  • if necessary, the most appropriate type of fiduciary.
2
Based on the results of the field examination, the fiduciary hub concludes the Veteran is
  • incompetent and proceeds with the appointment of a fiduciary, or
  • competent to administer funds payable and refers the facts supporting that opinion to the RO of jurisdiction for further consideration by its rating activity.
3
The rating activity may
  • consider the facts and opinion the fiduciary hub submitted and determine whether they are sufficient to support a finding of competency
  • request further development, including an at-once examination or period of examination and observation, or
  • confirm the prior finding of incompetency.
Note:  The procedure for requesting an at-once examination through CAPRI is no different than the procedure for requesting any other type of examination. CAPRI does not have a specific option for at-once examinations.
4
The rating activity prepares a rating decision regarding the Veteran’s competency.
5
The authorization activity promulgates the rating decision.  If the rating activity determined the Veteran is now competent, the authorization activity also

X.ii.6.F.6.g.  Terminating PFOP Allotments
Discontinue an allotment for PFOP to release accumulated funds or to provide for direct payment of current benefits when
Authorize payments to the Veteran or fiduciary.
Discontinue the allotment effective
  • the date the allotment was first put into effect, when full release is in order, or
  • the first of the month following the month for which VA last paid benefits to the current fiduciary, when only the release of current benefits is in order.