Effective Dates: 05/10/2023 - Present Previous | Next

TN 82 (05-23)

GN 00502.030 Developing Lay Evidence of Capability

A. Policy for lay evidence of capability

Lay evidence of capability helps you understand how the beneficiary has been managing any benefits and other funds that have been available to them to meet daily needs (food, shelter, clothing, and medical care). Lay evidence gives you insight into a beneficiary's ability to manage or direct the management of their Social Security benefits.

Absent evidence of legal incompetence, per GN 00502.023, lay evidence must be developed and considered in every capability determination; there are no exceptions, even if medical evidence (GN 00502.040) of incapability is in file.

The examples in this section are not the only sources of lay evidence. Any other means of obtaining evidence that indicates the beneficiary's ability to manage or direct the management of benefits is acceptable.

CAUTION: Do not suspend or delay benefits while developing capability unless the beneficiary fits the specific criteria in GN 00504.105 and GN 00504.110. Determine if you must pay benefits directly to the beneficiary while resolving the capability issue by following GN 00504.105 and GN 00504.110.

1. What are some examples of lay evidence?

Some common examples of lay evidence include:

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    your observations (during a face-to-face interview) of the beneficiary's behavior, reasoning ability, how they function with others;

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    how effectively they pursue the claim;

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    a statement made by the beneficiary that they are capable or incapable of managing their benefits;

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    documentation or reports that the beneficiary has been unable to meet their basic needs in the past, despite available income;

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    signed statements from, or contacts with, third-party sources with direct knowledge of facts or circumstances regarding the beneficiary’s daily living (e.g., beneficiary's relatives, custodian, close friends, neighbors, landlord, representatives of community groups, social workers, therapists, clergy, and adult protective services workers) that describe the beneficiary's ability to manage benefits and meet daily needs;

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    the representative payee (payee) applicant's answer to question 2 on the SSA-11-BK Request to be Selected as Payee as it relates to capability (see GN 00502.115) or the similar question on the electronic Representative Payee System (eRPS) Capability screen (MS 07409.017);

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    in disability cases, the beneficiary’s answer to question 17 on the Form SSA-3373-BK Function Report-Adult– Ability to handle money;

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    a court order that does not establish legal incompetence as described in GN 00502.023. For additional guidance on using a court order as lay evidence see GN 00502.030E;

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    a DDS opinion of capability, per GN 00502.040A.8; and

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    an Administrative Law Judge's (ALJ) opinion regarding the claimant's capability when capability is not specifically set before the ALJ to decide, per GN 00502.060B.3.

REMEMBER: The beneficiary is probably capable if they can tell you the amount of money received monthly, the source of the money, the amount of rent/mortgage, or the amount spent on groceries. The beneficiary is also capable if they can direct someone else to manage their benefits.

2. How much lay evidence do I need to make a determination?

You need as much lay evidence as necessary to have a clear understanding of the beneficiary's ability to manage or direct the management of their Social Security benefits. This will vary from case to case.

B. Obtaining beneficiary lay evidence

You must complete a lay evidence interview with the beneficiary, unless the beneficiary's disability prevents them from understanding and participating in an interview. A face-to-face interview with the beneficiary is the best source for lay evidence of capability because it gives you the opportunity to observe the beneficiary's behavior, ability to reason, ability to function with others, and effectiveness with which they pursue the claim. The face-to-face interview with the beneficiary is an invaluable tool for determining capability, see GN 00502.030A.1. If a face-to-face interview is not practical, an interview can be done over the phone. Document the phone conversation with an eRPS Report of Contact, per MS 07416.002. Your findings from the beneficiary interview will be part of your capability determination and documented, per GN 00502.065.

1. Ask the following questions to gain an understanding of the beneficiary's ability to manage or direct the management of their benefits:

a. Financial management

Evidence of real-world financial performance is the most reliable basis for making a capability determination. The answers to the following questions demonstrate the beneficiary’s self-awareness and ability to address current needs, understanding of the value of money, independence, self-sufficiency, and ability to handle problems:

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    What are the most important things you spend money on?

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    What bills do you pay each month?

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    When you live on your own, what bills do you pay (rent/utilities/food/transportation)?

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    Do you pay your bills or does someone else pay them for you?

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    Do you ever forget to pay some bills?

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    If you forgot to pay a bill, what did you do about it? How did you find out about it?

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    Do you have any problems with making change?

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    Do you go to the bank? If yes, how often?

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    Do you have a bank account? If yes:

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      Is it a checking or savings account?

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      Is there anyone else named on any of your bank accounts?

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      How often do you get a statement from the bank? What do you do with the statement? Do you read and understand it?

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      Do you handle online banking transactions? If not, does someone else handle your online banking transactions?

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      Do you write checks? If not, does someone else write checks from your account for you?

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      Did you ever write a check for insufficient funds ("bounced" a check) or been charged a fee for an overdrawn account? If so, how often has this happened? Why do you think this happened? What did you do when it happened?

b. Shelter

The following questions provide essential information in determining the beneficiary’s ability to meet basic daily needs, stability in living arrangements, and existing support network:

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    In what type of housing do you live?

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    How long have you lived there?

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    If less than one year, where did you live before this residence?

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    Do you live alone? If not, who lives with you?

c. Food

The quality and nutritional value of food could be a significant clue regarding the beneficiary’s ability to meet basic daily needs. Assistance in these tasks could be significant regarding support network and independence:

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    How many meals per day do you usually eat?

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    What kind of food do you usually eat?

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    Do you go to the store to buy groceries? If not, does anyone else buy groceries for you? Who?

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    Do you decide what groceries you need to buy? If not, who decides?

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    If you go to the store to buy groceries, how do you get there?

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    What would you do if you ran out of food before your check comes?

d. Medical

The following questions could provide essential information regarding the beneficiary's ability to meet basic medical needs:

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    Do you see a doctor? If so, where do you go and how often? If not, why not?

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    Do you take medication? If yes, do you need help remembering when and how much to take?

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    How do you pay the doctor's bill or pay for medicine, which includes supplying the medical insurance to the doctor if medical insurance covers the entire bill? If you don't pay this yourself, who pays the doctor bill for you?

e. Support network

The following questions attempt to provide insight into the beneficiary's existing family, friends, acquaintances, or social service workers whom the beneficiary can count on to help:

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    Do you have any relatives who live nearby?

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    Do you have any friends or other people you can trust?

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    Do your friends or relatives help you in any way? Do you ask your friends or relatives for help when you need it?

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    Is there a community center or other group that helps you or teaches you how to budget your money and pay bills each month?

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    Do your friends or family help you figure out how to manage your benefits and other funds? If so, who?

f. Questions to evaluate a beneficiary’s thought process

The following questions could provide insight into the beneficiary's thought processes, ability to reason, or value system, and could give clues regarding a beneficiary's vulnerability to predators:

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    What things besides food do you shop for each month?

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    Do friends or family borrow money from you and not pay you back?

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    Do people borrow things you own and not give them back?

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    Have you ever lived with people that did not pay their share of the rent or other expenses?

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    If, in the last year, you lived with friends or family, did they charge you for the rent? If yes, how much?

NOTE: When the beneficiary has limited English proficiency (LEP), see Language Assistance Required GN 00203.011.

C. Obtaining third-party lay evidence

You must develop lay evidence in the form of statements from third-party sources with direct knowledge of facts or circumstances regarding how the beneficiary manages finances to meet their basic needs. Sources of such information include the beneficiary’s custodian, relatives, social workers, therapists, clergy, representatives of community service groups, adult protective services workers, friends, neighbors, and landlords. You must obtain lay evidence from a third-party source other than the payee applicant. While it is preferable you obtain a signed statement from the third-party, do not delay a capability determination merely to obtain a signature. If you obtain a signed statement from a third-party, you must store it by following GN 00502.030D.

You must use Form SSA-788 (Statement of Care and Responsibility for Beneficiary) if you contact the beneficiary's custodian and the custodian is different from the payee applicant. Scan the completed SSA-788 into the Non-Disability Repository for Evidentiary Documents (NDRed) under the beneficiary's claim number using the Evidence Portal (EP) or into eView under the Beneficiary's Own Account Number (BOAN).

If there is no third-party source besides the payee applicant, document your attempts of obtaining a name of a third-party on the Make Note (Beneficiary Details) screen in eRPS - MS 07415.002 or your unsuccessful attempt(s) to contact a third-party using the same process as described in GN 00502.030C.2

1. Ask the third-party the following questions to obtain specific information about the beneficiary's financial performance:

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    Do you have direct knowledge of how the beneficiary manages finances to meet basic needs? NOTE: The third-party must have direct knowledge of the beneficiary’s real world financial performance to provide a statement.

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    What is your relationship with the beneficiary (e.g., parent, spouse, other relative, friend, social worker, therapist, clergy, other)?

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    How long have you known the beneficiary? (The longer the time of acquaintance, the more information the source may have.)

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    How often do you meet or see the beneficiary (daily, weekly, monthly, quarterly, yearly)? (The more frequent meeting, the more knowledge the source has of the beneficiary.)

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    Based on your interaction with and observation of the beneficiary, do they have general knowledge of what is happening to their money (e.g. the amount they receive monthly, what bills are being paid such as rent, utilities, and food, and whether the remainder is saved)?

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    Is the beneficiary able to handle a checking/savings account? (Are you aware of any bounced checks issued by the beneficiary or recurring bank fees for overdrawing the account? If yes, why do you think it happened and what did the beneficiary do about it?)

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    Is the beneficiary able to pay bills on time? (Do they have sufficient understanding of the concept of time in order to pay bills promptly? Are you aware of any occasion a utility company cut off their utilities due to non-payment? Did they ever receive an eviction notice?)

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    Based on your observation of the beneficiary, can they successfully manage money to meet basic needs (such as food, shelter, and clothing)? Can you describe how the beneficiary is meeting daily needs?

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    Can the beneficiary direct someone else in the management of their benefits? Do you know who (if anyone) is helping or would be ideal to help the beneficiary in managing benefits?

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    Do you have any other comments or concerns about the beneficiary’s financial performance or financial management capability?

2. Documenting the third-party and their detailed statement:

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    Case established in eRPS

    A payee application is taken or will be taken, whether the application is denied or approved or there is an established beneficiary’s case in eRPS:

    On the Beneficiary Details page, using the “Add Report of Contact” link, complete the “Report of Contact Details” screen. In the “Subject” section write “CAPABILITY-THIRD-PARTY STATEMENT” before adding your details in the “Report” section (see MS 07416.002).

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    Case not established in eRPS

    Follow these procedures for all beneficiary cases not established in eRPS.

    EXAMPLE: The state Disability Determination Services (DDS) suggested there may be a possibility the beneficiary needs a payee. However, you do capability development and determine the beneficiary is capable (therefore, there is no new payee application) or the payee does not have an SSN and the beneficiary has no established case in eRPS:

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      Title II or Concurrent--Complete the “Report of Contact (RPOC)” screen in Modernized Claims System (MCS). In the “Report” section, write “CAPABILITY-THIRD-PARTY STATEMENT” before adding your details (see MS MCS 008.007).

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      Title XVI--Complete the “Report of Contact page in the Consolidated Claims Experience (CCE).. In the “Report ” section, write “CAPABILITY-THIRD-PARTY STATEMENT” before adding your details (see, MS 07416.002).

If you are unable to establish a Report of Contact in the system, use the paper Form SSA-5002 (Report of Contact) for your documentation and scan into NDRed under the beneficiary's claim number using the Evidence Portal (EP) or into eView under the BOAN (Retention of Paper Material, see GN 00301.322).

IMPORTANT: DDS opinion is lay evidence of capability; it is NOT a determination on capability per GN 00502.040A.8.

D. If you obtain a signed statement from a third-party

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    Scan a copy of the court order into NDRed under the beneficiary's claim number using the Evidence Portal (EP) or into eView under the BOAN; and

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    Note in the “Report of Contact” in eRPS, MCS, or CCE that a third-party signed statement used in your capability determination, per GN 00502.065, is in NDRed or eView. This includes if you obtain the SSA-788 per GN 00502.030C.

E. Court order as lay evidence

If the court order does not establish legal incompetence as described in GN 00502.023, but provides insight into the beneficiary's ability or lack of ability to manage or direct the management of benefits, use the court order as lay evidence, along with the other evidence required in your capability determination (GN 00502.030 through GN 00502.050). Weigh the information in the court order along with all the other evidence in your capability determination.

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0200502030
GN 00502.030 - Developing Lay Evidence of Capability - 05/10/2023
Batch run: 10/21/2024
Rev:05/10/2023