Sorry for the mess!

The site is undergoing a massive update. All the content on the site still works but things just might look a little messy and disorganized. Most of the upgrades will probably be don by the end of the month. Thank you for your understanding!

Updated Aug 21, 2024

In This Section

  
This section contains the following topics:
 
Topic
Topic Name
1
2
3
 

 

1.  Legal Framework for Fees

 
 

Introduction

  
This topic contains information on the legal framework for fees earned by an agent or attorney, including

Change Date

   August 21, 2024

8.A.1.a. Regulatory Criteria for Payment of Fees

  
Agents or attorneys may charge claimants fees for representation for review of decisions under 38 C.F.R. § 3.2500(a) after an agency of original jurisdiction (AOJ) has issued notice of an initial decision on a claim, if the agent or attorney has complied with regulatory power of attorney (POA) and fee agreement requirements.
 
Example:  A regional office (RO) issued an initial decision on February 20, 2019, denying service connection for a right knee disability.  The Veteran properly appointed an attorney, who timely-submitted a completed direct-pay fee agreement and filed a request for higher-level review (HLR) on March 10, 2019.  The HLR resulted in a grant of service connection, resulting in payment of compensation to the Veteran.  Fees would be payable.
 
Important:
  • Fees may be payable, even if the agent or attorney who signed the fee agreement is no longer the current representative.
  • In claims for survivor benefits such as Dependency and Indemnity Compensation or accrued benefits (even if there has been a substitution), there must be a fee agreement and POA between the agent or attorney and the survivor.
  • When a surviving spouse files a fee agreement that is associated with a claim for accrued benefits, the month of death benefit is subject to the fee agreement.
References:  For more information on

8.A.1.b.  Requirements for a Valid Fee Agreement

  
To be valid, fee agreements must 
  • be written
  • be signed by the claimant and the representative, and
  • contain the
    • name of the Veteran (or the claimant or appellant if not the Veteran)
    • name of any disinterested third-party payer and the relationship between that individual and the represented individual
    • Department of Veterans Affairs (VA) file number or Veteran’s Social Security number (SSN), and
    • specific terms under which the amount to be paid for the services of the agent or attorney will be determined.
Notes: 
  • Fee agreements involving disinterested third parties must include or be accompanied by the certification listed in 38 CFR 14.636(d)(2)(iii).
  • Apply the principles outlined in the sub-bullets below when the fee agreement contains the specific terms of the representation, and the names and signatures of the parties, but does not include the VA file number or SSN.
    • If the AAFC can reasonably identify the Veteran/claimant – notwithstanding the lack of a VA file number or SSN on the fee agreement – and an award has not yet been released to the claimant, accept the fee agreement as valid.
    • If, after all past-due benefits have been released to the claimant, VA discovers that there was a fee agreement that had not been associated with the claims folder, the agent’s or attorney’s failure to comply with the requirement of including the file number or SSN on the fee agreement would be a valid basis for a subsequent decision denying fees.
Reference:  For more information on the requirements for fee agreements, see 38 CFR 14.636(g).

8.A.1.c.  Definition of Direct Pay Fee Agreement

  
A direct pay fee agreement is one in which the representative’s fee is paid by VA from the award of past-due benefits to the claimant or beneficiary. 
 
References:  For more information on

8.A.1.d.  Additional Requirements for Direct Pay Fee Agreements

  
In addition to the requirements applicable to fee agreements generally, direct-pay fee agreements must
  • clearly state that VA is to pay the agent or attorney directly out of awarded past-due benefits
  • specify a fee amount that is presumptively reasonable, and
  • be timely filed.  
A direct pay fee agreement will only be honored where the amount of the fee is contingent on a claim being resolved favorably to the claimant, meaning any or all of the relief sought is granted.   
 
Important:  A non-recurring payment to the claimant is not a pre-requisite to payment of fees under a direct pay fee agreement.  The court, in Rosinski v. Wilkie, 32 Vet.App. 264 (2020), held that VA’s obligation to pay fees, and calculation of the fees owed, under a direct pay fee agreement are determined by the award’s evaluation and an effective date, even if a retroactive monetary amount will not be paid to the claimant because of another legal provision. 
 
References:  For more information on

8.A.1.e.  Fee Amount Permitted for Direct Payment of Fees

  
VA will only directly pay fees when the total fee payable (excluding expenses) is not greater than 20 percent of the total amount of past-due benefits. This fee amount is considered presumptively reasonable. 
 
If the fee agreement specifies a total fee payable greater than 20 percent, the agent or attorney is responsible for collecting fees without assistance from VA. 
 
The total fee payable includes the fee to be paid by VA from past-due benefits and any fee the claimant will pay the agent/attorney directly. 
 
Example:  If the fee agreement provides that VA will pay a 20-percent fee to the agent or attorney out of past-due benefits and the claimant will pay direct to the agent or attorney an additional 5-percent fee, the total fee payable is 25 percent of the total amount of past-due benefits awarded. As a result, the fee agreement would not qualify for direct payment. 
 
Notes: 
  • In a case involving a required offset or reduction, as discussed in M21-5, Chapter 8, Section B, 2.e, an agreed fee of 20 percent or less of the past-due benefit awarded is not unreasonable because the calculated fee will amount to more than 20 percent of the reduced non-recurrent amount payable (if any) to the claimant from the award at that time. 
  • Expenses are not payable directly to the agent or attorney out of past-due benefits.
  • If a non-direct pay fee agreement (agreement specifies payment is to be made directly by the Veteran, not by VA, out of past due benefits) is received, an invalid fee agreement letter is not required.
References:  For more information on

8.A.1.f. When a Direct Pay Fee Agreement Must Be Filed

  
A fee agreement generally must be filed with the AOJ within 30 days of when it is signed.  However, if a fee agreement is successfully associated with the file prior to authorization of the award, the fact that the fee agreement was not filed within 30 days of execution would not be a basis for denying fees to an agent/attorney who would otherwise be entitled.
 
Important:  
  • VA applies the postmark rule of 38 CFR 20.110 to determine when the fee agreement is received.
  • A fee agreement is fully executed once it is signed by both parties (the agent/attorney and the claimant/beneficiary). Measure the 30-day period from the date of the final signature applied to the document.
  • Unless there is reason to question the authenticity of the fee agreement, the policy described in the above paragraph allows ROs to accept a fee agreement outside of the 30-day timeliness provision so long as the agent/attorney on the fee agreement is still the current representative.
  • It is appropriate to request further evidence or verification from a claimant if there is substantial reason to challenge the submission due to lack of timeliness.
References:  For more information on

8.A.1.g.  Determining the Work on Which a Fee Can Be Charged – Scope of Case or Claim

  
An agent or attorney earns fees for work within the scope of the representation (consistent with the appointment and detailed in the fee agreement), pursuing an available adjudicative review option to obtain a favorable result on an issue or issues that are within the scope of the case or claim. 
 
The case or claim consists of only those issues
  • on which notification was provided in the AOJ’s initial decision, and
  • for which a review option was properly elected.
Note:  Administrative debt collection proceedings and proceedings involving requests for waiver of indebtedness are considered proceedings involving Veterans’ benefits before VA.
 
References:  For more information on

8.A.1.h.  Fees for Representation Involving Supplemental Claims 

  
The U.S. Court of Appeals for the Federal Circuit in Military-Veterans Advocacy v. Secretary of Veterans Affairs, 7 F.4th 1110 (Fed. Cir.  2021) invalidated 38 CFR § 14.636(c)(1)(i)  as inconsistent with the text of the Appeals Modernization Act of 2017 (AMA). The court held that once VA has initially adjudicated an issue, fees may be charged for work on later claims involving that issue without the requirement of a new initial decision, regardless of the date of any prior initial decision. As a result, agent/attorney fee eligibility now applies to all supplemental claims. This ruling applies to fee decisions on underlying claims processed under the AMA on or after July 30, 2021.
 
Example: Rating decision dated April 2, 2014, with notification letter dated April 4, 2014, denied service connection for hearing loss. VA received a supplemental claim on August 3, 2022, with new and relevant evidence, a valid fee agreement, and complete VA Form 21-22a. Rating decision dated November 5, 2022, with notification letter dated November 6, 2022, granted service connection for hearing loss.
 
Analysis: Fees are due even though the initial decision was prior to the AMA effective date. A summary of the case decision notice is required.

8.A.1.i.  Fees for Representation Involving Claims for Increase

  
For fee purposes, an initial decision on a claim includes an initial decision on a claim for increase in rate of a benefit. For a claim to be subject to fees, it must be pursued through one of the AMA decision review lanes (supplemental claim, higher-level review, or direct appeal to the Board).
 
Example 1: In January 2018, the Veteran was granted service connection for depression (under appeal) and assigned a 30 percent evaluation. The Veteran was represented by an attorney and a valid direct-pay fee agreement was of record. As such, fees were paid on the appeal. Two years later, the Veteran submits an initial claim for increase on VA Form 21-526EZ. The RO issues a rating decision increasing the Veteran’s evaluation for depression to 50 percent. Although the Veteran continues to be represented by the attorney, fees are not warranted on the increase of the previously appealed issue. The Veteran’s claim for increase filed on VA Form 21-526EZ is considered an initial claim for purposes of determining fee eligibility.
 
Example 2: An initial rating decision granted service connection for a right knee condition at 10 percent on February 20, 2019. The Veteran properly appointed an attorney, who timely submitted a completed direct-pay fee agreement and filed a claim for increase on a VA Form 21-526EZ for the right knee on March 10, 2019. The evaluation was confirmed and continued on a rating decision dated May 5, 2019. On April 10, 2020, a supplemental claim was received on VA Form 20-0995 for the right knee condition. A rating decision dated May 15, 2020, granted an increased evaluation from 10 percent to 20 percent. Fees are payable on the supplemental claim.

8.A.1.j.  Fees for Representation Involving Requests to Revise Based on Clear and Unmistakable Error (CUE)

  
Prior to November 14, 2023, a fee can be earned for representation provided on:
  • a claimant’s request to revise a prior decision on the basis of CUE as long as notice of the decision being challenged based on CUE was issued on or after February 19, 2019, or
  • a claimant’s request to revise a prior decision on the basis of CUE where notice of the decision being challenged based on CUE was issued before February 19, 2019, as long as a legacy Notice of Disagreement (NOD) was filed with respect to the challenged decision on or after June 20, 2007.
 Effective November 14, 2023, in accordance with Held v. McDonough, 37 Vet. App. 28 (2023), the Court found 38 C.F.R. 14.636(c)(2)(ii) to be invalid. Therefore, a fee can be earned for representation provided on a claimant’s request to revise a prior decision based on CUE.
Notes: 
  • In all cases, regulatory POA requirements and fee agreement requirements must be satisfied.
  • If VA identifies and corrects an error by calling a CUE that was not initiated by the claimant or representative, but was instead found while conducting a separate review, and it is not under adjudication of a prior qualifying review, fees are not payable regarding the CUE issue and a decision to deny fees is required.
Example 1: The Veteran files an HLR on January 1, 2023 for service connection for migraines. While reviewing the file, the DRO discovers a CUE for the effective date of VA’s grant of PTSD. The grant of PTSD addressed by the CUE was completed in a rating decision dated June 10, 2021, at which time the current attorney did not represent the Veteran. Because PTSD is not the issue currently under review, nor is it under final adjudication of a prior qualifying review, fees are not due on the EP 930 that is established for the correction.
 
Example 2: The Veteran files a supplamental claim on October 18, 2022 for an evaluation of depressive disorder. Rating decision dated February 1, 2023 granted a 100 percent evaluation from June 1, 2022, at which time the Veteran was represented by the same attorney. On April 1, 2023, an EP 930 was established after VA discovered that the effective date was incorrect. A rating decision was completed under the EP 930 on April 30, 2023, which corrected the effective date to February 1, 2022. Although this was not claimant initiated, the depressive disorder was still under final adjudication and therefore the representative is entitled to fees.
 
Reference:  For more information on fees in cases involving CUE, see

8.A.1.k.  Fees for Representation Involving Dependency Claims

  
For fee purposes, when fees are not inherently due based on the dependency claim being pursued under one of the AMA review lanes, the AAFC must review the facts of the case to determine whether the current entitlement to dependency (or earlier effective date for previously established dependents) is the result of a qualifying review.
 
If entitlement to dependency (or earlier effective date for previously established dependents) arose based on the grant of benefits from a qualifying review and was received within a year of the notification of the grant of benefits, then fees are warranted. If the entitlement was based upon an event (marriage, birth, etc.) or natural progression of an already established dependent (minor child to school child) and was not the result of the grant benefits from a qualifying review, then fees are not warranted.
 
Example 1: A decision on a supplemental claim, dated June 14, 2021, increased the Veteran’s overall combined percentage from 20 percent to 40 percent. On August 1, 2021, VA received a VA Form 21-686c for a spouse and two children. Additional dependency benefit for the spouse and children was granted based on the effective date of the supplemental claim. Fees are warranted for the grant of dependency because the entitlement to the additional dependency benefit was the result of the supplemental claim.
 
Example 2: A Veteran currently rated at 40 percent receives an increase to an overall combined percentage of 60 percent with a retroactive effective date of January 3, 2018, based on a higher-level review decision dated March 13, 2022. On May 5, 2022, VA receives a VA Form 21-686c for the birth of a new child. The minor child was added to the Veteran’s award effective April 1, 2022, based on the date of birth of March 29, 2022. Fees are not warranted for the grant of dependency because the entitlement to benefits (or earlier effective date) was not the result of the higher-level review.

8.A.1.l  Historical Fee Eligibility Requirements

  
Under the law prior to February 19, 2019, representation for a fee was only permitted in legacy appeal cases. 
  • An agent or attorney could charge a fee after an AOJ issued a decision on a claim and a legacy NOD was filed with respect to that decision on or after June 20, 2007. 
  • In cases where a legacy NOD was filed on or before June 19, 2007, the agent or attorney could charge fees for services only when there was a final decision promulgated by the Board of Veterans’ Appeals (Board) with respect to the issue or issues involved in the legacy appeal, and the agent or attorney was retained not later than one year after the Board decision was promulgated. 

2.  Fee Cases – Roles, Routing, and Responsibilities

 
 

Introduction

  

Change Date

  
 January 27, 2023

8.A.2.a.  Organizational Responsibility for Direct Pay Fee Adjudication

  
The AOJ that processes the award is responsible for adjudicating whether an agent/attorney is eligible for direct payment of fees.
 
The Board adjudicates appeals on fee eligibility determinations.
 
References:  For more information on

8.A.2.b.  Agent and Attorney Fee Coordinator (AAFC) Role and Associated Duties

  
The Agent and Attorney Fee Coordinator (AAFC) serves as the liaison between the AOJ and accredited attorneys and agents.  Duties of the AAFC include, but are not limited to,
  • checking
  • contacting the agent or attorney in cases where there are deficiencies, problems or ambiguities involving accreditation, appointment, or the fee agreement
  • performing system updates as appropriate, including
    • ensuring the appropriate representative’s POA code is assigned
    • attaching attorney fee flashes
    • entering special issues, and
    • taking action with respect to end products (EPs)
  • making determinations related to direct payment of fees, including
    • the amount of past-due benefits (if any)
    • the amount needed for potential direct payment of fees, and
    • if the agent or attorney is eligible for payment of fees, and
  • facilitating the process of direct payment of fees, as applicable, by
    • requesting the finance activity to perform financial transactions to make funds available for potential payment of fees
    • reviewing the preparation of the claimant’s award
    • authorizing a fee eligibility decision and providing notice to the claimant and attorney/agent
    • monitoring whether or not a fee determination is appealed, and if so, when the appeal is closed, and
    • requesting release of amounts as specified in the direct pay fee agreement.
References:  For more information on

8.A.2.c.  Support Services Division (SSD) Responsibilities

  
The finance activity at the RO is part of the Support Services Division (SSD).  When requested by the AAFC, the finance activity is responsible for entering finance transactions to
  • make funds available for payment of fees, and
  • release fees minus an assessment.
The AAFC and finance activity must communicate in writing and tracked according to station policy (email via SSD mailbox, SharePoint site, etc.).
 
References:  For more information on

8.A.2.d.  Using Flashes in Fee Cases

  
When a claims processor is performing intake based on receipt of a fee agreement, the claims processor will contact the AAFC and add the Potential Attorney Fee flash to the corporate record so that the AAFC can perform duties specified in M21-5, Chapter 8, Section A, 2.b, including but not limited to, checking accreditation, checking the documents for sufficiency, and contacting the agent or attorney in cases where there are deficiencies, problems or ambiguities. The table below describes the necessary flashes to apply based on the validity of the fee agreement.
 
If review of the fee agreement shows…
Then…
the document is valid
  • the AAFC must remove the Potential Attorney Fee flash from the corporate record and apply the Private Attorney – Fees Payable flash.
  • the Private Attorney – Fees Payable flash must remain until the fee agreement is withdrawn (entitlement to future fees are waived) by the representative or otherwise no longer requires making funds available for possible payment of fees (no possibility of payment, i.e., full grant of benefits for which the agent/attorney provided representation).
the document is invalid
  • the AAFC must complete the actions outlined in M21-5, Chapter 8, Section A, 3.d.
  • once all necessary actions are completed, the AAFC will add a permanent note to the eFolder explaining the specific deficiency in the fee agreement and remove the Potential Attorney Fee flash from the corporate record.

 

 
References:  For more information on
 
 

3.  Processing Agent/Attorney Appointments and Fee Agreements

 
 

Introduction

  
This topic contains information on processing agent or attorney appointments and fee agreements, including 

Change Date

  
 August 21, 2024

8.A.3.a.  

Checking a VA Form 21-22a

  
Prior to reviewing a fee agreement, an AAFC must first review the VA Form 21-22a and
  • check the agent’s or attorney’s accreditation
  • check to ensure the form is properly completed and signed
  • check whether the claimant has elected to limit access to claims folder materials covered by 38 U.S.C. 7332, and
  • perform the system updates, including ensuring the appropriate flashes and POA code are assigned. 
If the VA Form 21-22a is incomplete and/or not signed, return the form to the claimant and the agent or attorney using the Form Incomplete Letter in VBMS.
 
The AAFC must also review the fee agreement and take action as specified in M21-5, Chapter 8, Section A, 3.c and d to notify the claimant and agent or attorney of the lack of appointment as well as any other deficiencies identified in the fee agreement.
 
Note: If the agent/attorney provides an updated and valid VA Form 21-22a before the claim is authorized, and the original fee agreement was otherwise valid, a new fee agreement is not required.
 
Important:  
  • An agent or attorney must be properly appointed prior to the decision being rendered to pursue entitlement to fees.
  • Unauthorized representation and solicitation of fees by unaccredited attorneys or agents are serious matters and should be reported to OGC. Indications of predatory practices, fraud, or otherwise unlawful acts by representatives may also be reported to the OIG Hotline.
 
References:  For more information on

8.A.3.b.  Checking Accreditation

  
If an agent or attorney is not listed on the OGC accreditation website, the AAFC must send the Attorney Not Acknowledged Letter found in the Letter Creator tool advising the 
  • agent/attorney that VA will not recognize the representation until accredited, and
  • claimant of the options to either
    • seek other representation, or
    • proceed without representation until the agent/attorney is accredited.
The AAFC must also review the fee agreement and take action as specified in M21-5, Chapter 8, Section A, 3.c and d to notify the claimant and agent or attorney of the lack of VA accreditation as well as any other deficiencies identified in the fee agreement.
 
Note:  If an agent or attorney was previously accredited and validly represented a claimant for a period of time but lost accreditation prior to the decision granting entitlement, the AAFC must withhold for fees for the entire period and complete a fee decision as specified in M21-5, Chapter 8, Section B, 5.e. The case must then be referred to OGC as a reasonableness review for the final determination for fees. 
 
References:  For more information on

8.A.3.c.  Checking a Fee Agreement

  
When a fee agreement is received, the AAFC must first check that the agent or attorney submitting the agreement has been duly appointed as the claimant’s representative.
 
If a fee agreement is submitted before the agent or attorney has been appointed as the claimant’s representative, take action as specified in M21-5, Chapter 8, Section A, 3.d.
 
If a fee agreement is submitted together with, or after, a VA Form 21-22a, the AAFC will determine whether the
Note:  A fee agreement must be signed by both the claimaint and the individual agent or attorney appointed as the representative of record on VA Form 21-22a.  A fee agreement may contain the name of a law firm and/or signature of an attorney/agent or support-staff assisting in the representation.  However, VA will only authorize fee payments to the individual agent or attorney appointed as the representative of record on VA Form 21-22a.
 
If a fee agreement is not acceptable, take actions as specified in M21-5, Chapter 8, Section A, 3.d.
 
References: For more information on

8.A.3.d.  Actions When a Fee Agreement Is Unacceptable

  
If review of the fee agreement under M21-5, Chapter 8, Section A, 3.c shows that a fee agreement was submitted by an agent or attorney who has not been properly appointed, advise the attorney/agent that 38 CFR 14.636(c) provides that a fee may not be charged unless POA requirements in 38 CFR 14.631 have been met.  38 CFR 14.631(a) requires a valid POA to be completed for an agent or attorney to provide representation before VA. 
 
Note:  Unauthorized representation and solicitation of fees by unaccredited attorneys or agents are serious matters and should be reported to OGC. Indications of predatory practices, fraud, or otherwise unlawful acts by representatives may also be reported to the OIG Hotline.
 
If review of the fee agreement under M21-5, Chapter 8, Section A, 3.c shows the document is invalid in that it does not meet some criterion specified in M21-5, Chapter 8, Section A, 1.b–f, return it to the agent or attorney with a letter
  • advising that fee agreement is not acceptable because it does not comply with 38 CFR 14.636,
  • explaining how it does not comply, and
  • add a permanent “Attorney Fee Review” note to the claims file documenting the basis for the invalid determination.
Use the Invalid Fee Agreement Letter in VBMS Letters UI, identifying the specific basis for deeming the fee agreement unacceptable.