Payment of attorney or agent fees (U. S. Department of Veteran Affairs)

5. Releasing Funds Withheld for Fees and Appeals of Eligibility Determinations

Introduction

This topic contains information on releasing funds and appeals of eligibility determinations, including fee eligibility appeals who handles appeals of fee eligibility prohibitions on releasing funds and appeal rights releasing withheld funds in appealed fee decisions when the fee decision is not appealed when an assessment is required, and when an assessment is not required taking action if the claimant dies before the decision is promulgated

Change Date

July 31, 2015

a. Fee Eligibility Appeals

A claimant may initiate an appeal from the RO eligibility determination that fees are payable from withheld past due benefits by submitting a NOD stating the bases for the appeal. These may include that: a NOD was not filed on the case for which a fee is being sought the claimant did not sign a VA form 21-22a authorizing representation from the attorney or agent seeking a fee, or the claimant did not sign a written agreement to pay an attorney/agent fee from past due benefits Important: Appeals from fee eligibility decisions are considered contested. Therefore the attorney or agent and the claimant have 60 days to file an NOD after the date of the decision notice accompanying the fee eligibility decision, and 30 days to file a substantive appeal after the date of the statement of the case. References: For more information on contested claims and appeals, see M21-1, Part III, Subpart vi, 6, and 38 U.S.C. 7105A reasonableness reviews, see M21-1, Part I, 3.C.6. NODs, see M21-1, Part I, 5.B, and substantive appeals, see M21-1, Part I, 5.E

b. Who Handles Appeals of Fee Eligibility

Appeals of direct-pay fee decisions are to be filed with the Regional Office. They are handled as traditional appeals by RO AAFCs or VSRs who have expertise in direct-pay fee matters. There is no right to DRO or de novo review. The intent of 38 CFR 3.2600 is not to make the DRO procedure applicable to appeals from AOJ decisions regarding eligibility for fees in direct-pay fee situations.

c. Prohibition on Releasing Funds and Appeal Rights

Regardless of whether the decision on eligibility to fees is an award or denial of fees, do not release funds withheld for attorney or agent fees until the appeal period has expired, or an initiated appeal is finally decided. Important: VA does not honor requests to expedite payment of fees, even when the claimant and/or the attorney or agent have waived the right to appeal.

d. Releasing Funds Withheld in Appealed Fee Decisions

When a fee eligibility decision is appealed release the amount withheld for fees after the Statement of the Case was issued and the period for filing a substantive appeal has lapsed, or the appeal was perfected and completed with no further appeal possible. Notes: If BVA or CAVC made the final appellate decision, check with BVA and the OGC, Staff Group (SG) VII, which litigates claims before the CAVC, to make sure the claim is not still on appeal. If the Federal Circuit decided the case, or the appeal was in connection with a reasonableness determination, check with OGC SG II to find out whether the case has been finally adjudicated. In any appeal where the final appellate decision was made by BVA or the courts, release funds to the claimant or attorney/agent in accordance with the decision made on fee eligibility.

e. Releasing Withheld Funds When the Fee Decision Is Not Appealed

Where the direct pay fee decision is not appealed, the action to take regarding release of funds depends on the date of the NOD for which services were provided. Refer to the following table for guidance.

If the NOD for which services were provided was received ...	Then ...
on or before June 19, 2007,	release funds to the claimant or the accredited attorney according to the fee eligibility decision as provided in this topic.
on or after June 20, 2007	release funds to the claimant or to the accredited attorney according to the fee eligibility decision as provided in this topic, and where eligibility to fees was established and an attorney fee was calculated as provided in M21-1,Part I, 3.C.4.o, follow the guidance in M21-1, Part I, 3.C.5.f.

f. Releasing Funds Withheld When an Assessment Is Required

The finance activity will withhold an assessment from payment to the attorney or agent prior to releasing the fees when the NOD was received on or after June 20, 2007, and fees are awarded to an accredited attorney or agent. The table below describes the process for releasing funds withheld for attorney or agent fees when an assessment is required.

Stage	Who is Responsible	Description
1	AAFC	Computes the assessment up to 5 percent of the fee amount, not to exceed $100.00 at the time the eligibility decision is prepared as provided in M21-1, Part I, 3.C.4.o.
2	AAFC	Writes a memorandum or sends an e-mail to the finance activity that asks the finance activity to withhold the assessment (sets out the amount of the assessment), and release attorney or agent fees, and contains the amount of the assessment name and address of the person to whom the fees should go.
3	Finance activity	Ensures that all amounts due equal the amount in the RO suspense accounts.
4	Finance activity	Verifies the AAFC’s computations, and transfers the assessment amount into the General Fund Receipt account 36 3220.
5	Finance activity	Pays the balance due the agent or attorney based on current procedures.

Note: VA can deduct an assessment fee of up to 5 percent of the past due benefit payment, up to $100, each time fees are paid under 38 CFR 14.636(h). An assessment is required each time an award action is taken on an issue under fee agreement, including on a “downstream” issue. (Example: If the original issue was entitlement to service connection, downstream issues would include the effective date of the grant and/or evaluation of the disability.)

e. Releasing Funds Withheld When an Assessment Is Not Required

The table below describes the process for releasing funds withheld for attorney fees when an assessment is not required for cases in which the NOD was received on or before June 19, 2007.

Stage	Who Is Responsible	Description
1	AAFC	Writes and signs a memorandum or sends an e-mail to the finance activity that asks the finance activity to release the attorney fees, and provides the name and address of the person to whom the fees should go.
2	Finance activity	Releases funds. Note: The finance activity should not release funds unless the RO AAFC has signed the memorandum.

f. If the Claimant Dies Before the Rating Decision Is Promulgated

If the claimant dies after the rating decision is signed and dated by the decision-maker, but before the decision is promulgated (in other words, before the 20 percent or less has been withheld) compute the amount of fees withhold the fees, and make a fee eligibility decision. Important: Take the same action if, in a claim on remand from BVA, the claimant dies after service connection is granted by the AOJ. Where the disability percentage and effective date were assigned by the AOJ, this would leave only clerical tasks to be completed before the rating decision was issued. Note: If there is no accrued claimant, then the balance of the past-due benefits (80 percent) is not released, but is kept in VA’s entitlement fund. Reference: For more information on accrued benefits, see M21-1, Part VIII.