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 them 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:

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

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  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. Develop capability only if there is an indication that the beneficiary cannot manage or direct the management of their 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.

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 their benefits, you must find them capable.

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

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 their benefits.

“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 they are capable and must be paid benefits directly.