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Veterans Law

What A VA Incompetency Proposal Means – And How to Fight It

Lisa Ioannilli

July 10, 2018

Updated: November 20, 2023

VA incompetency proposal

A VA incompetency proposal is issued by VA in the event that a veteran is deemed to be incompetent to handle their VA disability benefits on their own. Under 38 C.F.R. 3.353, VA defines someone who is mentally incompetent as “one who because of injury or disease lacks the mental capacity to contract or to manage his or her own affairs, including disbursement of funds without limitation.” A veteran can be incompetent due to mental disability, advanced age, or physical infirmity.


What Happens When a Veteran is Found Incompetent?

If VA issues a final decision that a veteran is incompetent, there are several important consequences for the veteran.

First, VA will require that the veteran either choose a fiduciary, or be appointed one by VA. A fiduciary is a person who will manage the veteran’s funds, including any retroactive award granted to the veteran and their monthly VA disability check. Veterans can request that a friend or family member be appointed as their fiduciary, and VA will review that request. If the veteran does not request a fiduciary, VA will appoint one for them.

The second consequence has to do with the ownership of firearms. Under the Brady Handgun Violence Prevention Act, VA reports the names of veterans who have been found incompetent to the Federal Bureau of Investigation (FBI) which adds the names to the National Instant Criminal Background Check System. This “prohibits [veterans] from purchasing, possessing, receiving or transporting a firearm or ammunition.”


When Does VA Propose Someone Incompetent?

VA raters, usually at local VA regional offices, have the authority to determine if a veteran is incompetent. A finding of incompetency must be supported by medical evidence or a court ruling.

Often, VA will rely on the results of a Compensation and Pension examination (C&P) to propose a veteran incompetent. VA examiners may note somewhere in an exam that the veteran is irresponsible with his money, or may not be mentally or physically able to manage their own funds.

However, an important thing to note is that if there is any reasonable doubt that the veteran is competent, “doubt will be resolved in favor of competency.” This means that if there is a balance of positive and negative evidence as to the veteran’s competency, the veteran is supposed to be deemed competent.


VA Incompetency Proposal Due Process – What VA Can and Cannot Do

If VA finds grounds to propose a veteran to be incompetent, they will notify the veteran of the proposal and their options for how to disagree with the finding, if they do disagree. Veterans are given the opportunity to have a hearing regarding the proposal, at which they can make their case for why they disagree with VA’s finding. If a veteran does request a hearing, VA is not allowed to issue a final decision on incompetency until after the hearing has been held.

Upon receiving a proposal of incompetency, a veteran has 60 days to submit evidence against the proposal. This is covered more in the next section.

However, VA does not have to send notice of a finding of incompetency if the veteran has been deemed incompetent by a court, or if a guardian has been appointed for the veteran based on a court finding of incompetency.


How Can a Veteran Argue Against a VA Incompetency Proposal

As mentioned above, veterans have 60 days from the date of the proposal to submit evidence against the finding. There are several useful types of evidence to show VA that you are competent:

  • Evidence that you pay your bills on time (notice of on-time mortgage, rent, or car payments can also be useful)
  • A letter from your treating doctor stating that you are mentally and/or physically competent to manage your own finances
  • Lay statements from yourself, family, or friends explaining that you are financially responsible
  • Bank statements

If the proposal becomes final in final decision from VA, veterans can appeal if they disagree with the finding.

About the Author

Bio photo of Lisa Ioannilli

Lisa joined CCK in March 2012. Lisa is a Senior Attorney focusing on representing disabled veterans in claims pending before the U.S. Department of Veterans Affairs and the United States Court of Appeals for Veterans Claims.

See more about Lisa