Effective Dates: 03/30/2023 - Present Previous | Next

TN 79 (03-23)

GN 00502.060 Making a Capability Determination

A. Policy for making a capability determination

A determination that a beneficiary is incapable effectively takes away their right to decide how benefits are used. Therefore, you must carefully consider all evidence and use sound and reasoned judgment. When making a capability determination, give primary consideration to the beneficiary's best interests. Do not feel compelled to find a beneficiary incapable as a matter of convenience.

B. Guidance for making a capability determination

Besides the guidance in this section, you must also complete and document your capability determination by following GN 00502.065.

1. Who is responsible for making capability determinations?

Field Office technicians are responsible for making the final capability determination. For information on when a Workload Support Unit claims specialist may make a capability determination, see the NOTE in GN 00501.015A.1.

2. How do I make a capability determination?

Weigh all the evidence you have obtained (legal, lay, and medical) to make a capability determination. Consider the facts you have learned about the beneficiary, such as:

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    physical and mental health (including medical evidence of capability);

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    living situation (whether the beneficiary lives alone, whether any third party manages or helps the beneficiary manage financial or business affairs);

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    handling of any money now received (whether the beneficiary shows ability to make reasonable decisions about how to use money or if some third party must make those decisions); and

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    how beneficiary needs are being met (whether the beneficiary can obtain their own food, clothing and shelter or is dependent on others to supply those needs).

Based on the evidence, determine whether representative payment or direct payment would be in the beneficiary's best interests.

3. What if an Administrative Law Judge (ALJ) states in their decision that a beneficiary is incapable?

Unless capability is specifically set before the ALJ to decide, you are not bound to follow the ALJ's opinion and you must make the capability determination yourself. However, the ALJ's opinion regarding capability is lay evidence and you should evaluate it as such when making a capability determination.

4. What if the beneficiary is already entitled to benefits on another account?

Unless you have new evidence (including evidence revealed because of recent contact with the beneficiary) about the beneficiary's capability/incapability, assume the initial determination about the beneficiary's capability/incapability remains in effect for any other benefits to which the beneficiary becomes entitled.

Appoint one (i.e. the same) representative payee (payee) for all benefits to which the beneficiary is entitled (see GN 00502.183B.3).

REMEMBER: The electronic Representative Payee System (eRPS) permits you to take one payee application for all beneficiary entitlements via the Claimant Entitlement screen, see MS 07409.018.

5. How do lay evidence and medical evidence work together?

Lay evidence may support or disprove the medical evidence in a case. As the decision maker, you must carefully evaluate all lay and medical evidence when making a determination of the beneficiary's capability. Generally, lay and medical evidence will both lead you to a clear understanding of a beneficiary's ability to manage or direct the management of benefits. Sometimes, they may conflict. Nevertheless, you must evaluate both lay and medical evidence and make a capability determination based on the most convincing evidence. The following are examples of using lay evidence and medical evidence.

a. Significant medical evidence available

Mr. Green's doctor submitted a Form SSA-787 (Physician’s/Medical Officer’s Statement of Patient’s Capability to Manage Benefits) describing Mr. Green's condition and stating that Mr. Green is incapable.

Mr. Green's sibling, who is also their custodian, files a payee application. Mr. Green's sibling states that Mr. Green is unable to handle their own benefits because they do not know the value of money and frequently gives it away to strangers.

At the interview, Mr. Green does not seem to understand your questions and answers them incoherently.

In this case, lay evidence of capability would be your observations of Mr. Green's incoherent speech and his sibling's statement that Mr. Green is unable to handle their own benefits. Both the medical and lay evidence seem to agree that Mr. Green needs a payee.

b. Medical evidence is not convincing or not available

Mr. Brown's doctor submitted a Form SSA-787 stating that Mr. Brown is incapable. However, Mr. Brown filed their own application for benefits and, to your observations, seemed able to handle their own affairs. Therefore, the medical evidence is not consistent with the lay evidence (your observations). To clarify:

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    discuss the need for a payee with Mr. Brown and obtain their statement about how they are handling their own affairs;

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    obtain statements from friends, relatives or other knowledgeable sources about how Mr. Brown functions in society and how they handle money; and

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    obtain a statement from the caseworker at the neighborhood mental health clinic (which Mr. Brown says they visit twice a week) about how Mr. Brown is functioning in the community and how they handle their money.

c. Lay evidence outweighs medical evidence

Mr. Black's doctor submitted a Form SSA-787 stating that Mr. Black is incapable. At the interview, Mr. Black understands your questions and answers them coherently.

In response to questions about how Mr. Black has been managing their finances, they tell you that they belongto a center in his community that helps them. They are directly involved in setting up a budget, choosing the services they need and handling their money. They say the center is a place where they exercise control and authority over how their money is spent and how their bills are paid. You obtain a statement from the caseworker at the center that confirms Mr. Black's statements.

Since the medical evidence is not consistent with the lay evidence (your observations), and because Mr. Black is directing the management of their benefits, you find Mr. Black capable.

 

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0200502060
GN 00502.060 - Making a Capability Determination - 03/30/2023
Batch run: 03/30/2023
Rev:03/30/2023