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Federal Register / Vol. 86, No. 43 / Monday, March 8, 2021 / Proposed Rules incompetent or under other legal disability; or c If payments are due to an annuitant when the annuitant is physically or mentally incapable of managing or directing the management of his or her benefit.
849.202 Payment of annuity while finding a suitable representative payee.

a Annuity payments will be made directly to the annuitant or survivor annuitant while a suitable representative payee is located, unless the agency determines that direct payment would cause substantial harm to the individual.
b Substantial harm exists if both of the following conditions exist:
1 Direct payment of benefits can be expected to cause serious physical or mental injury to the individual; and 2 The potential effect of the injury outweighs the effect of having no income to meet the basic needs of the individual.
c If the agency determines that direct payment of benefits would cause substantial harm to the annuitant, annuity payments may be deferred in the case of initial entitlement to benefits or suspended in the case of existing entitlement to benefits until such time as a representative payee is appointed.
d Annuity payments will commence or resume as soon as practicable and will include all retroactive payments due to be paid.

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849.203 Information considered in determining whether to appoint a representative payee.

In determining whether to appoint a representative payee, the agency will consider the following information:
a Evidence of legal guardianship or other court determinations. Evidence of the appointment of a legal guardian or other person legally vested with the care of the individual or estate of an incompetent or a minor shall be a certified copy of the courts determination.
b Medical evidence. The agency will use medical evidence to help determine whether an annuitant is capable of managing or directing the management of benefit payments. For example, a statement by a physician or other medical professional, based upon his or her recent examination of the annuitant and his or her knowledge of the annuitants present condition, will be used in the agencys determination, if it includes information concerning the nature of the annuitants illness or disability, the annuitants chances for recovery and the opinion of the
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physician or other medical professional as to whether the annuitant is able to manage or direct the management of benefit payments.
c Other evidence. The agency may also require statements of relatives, friends, or other people in a position to know and observe the annuitant, which contain information helpful to the agency in deciding whether the annuitant is able to manage or direct the management of benefit payments.
Subpart CSelection of a Representative Payee 849.301 Information considered in selecting a representative payee.

The goal in selecting a payee is to select the person, organization, or institution that will best serve the interest of the annuitant. In making the selection, the agency considers a The age of the representative payee applicant. An individual must be over the age of 18 to serve as a representative payee, except as listed in 849.303a;
b The relationship of the person, organization, or institution to the annuitant;
c Legal authority, in the form of conservatorship or guardianship, that the person, organization or institution has to act on behalf of the annuitant;
d The amount of concern that the person or organization shows in the annuitant;
e Whether the potential payee has custody of the annuitant;
f Whether the potential payee is in a position to know of and look after the needs of the annuitant;
g Whether the representative payee applicant is currently serving, or has previously served, as a representative payee for other annuitants; and h The potential representative payees criminal history.
849.302 Order of preference in selecting a representative payee.

As a guide in selecting a representative payee, categories of preferred payees are set out in paragraphs a through e of this section. The primary concern of the agency is to select the payee who will best serve the annuitants interest. The preferences, in descending order of importance, are:
a A legal conservator, guardian, spouse, or other relative who has custody or guardianship of the annuitant or who demonstrates strong concern for the personal welfare of the annuitant;
b A friend or neighbor who has custody or guardianship of the annuitant or demonstrates strong
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concern for the personal welfare of the annuitant;
c A public or nonprofit agency or institution having custody or guardianship of the annuitant;
d A private institution operated for profit and licensed under State law, which has custody or guardianship of the annuitant; and e Persons other than those listed above who are qualified to carry out the responsibilities of a representative payee and who are able and willing to serve as a payee for an annuitant; e.g., members of community groups or organizations who volunteer to serve as representative payee for an annuitant.
849.303 Individuals who may not serve as a representative payee.

A representative payee applicant may not serve as a representative payee if he or she:
a Is under the age of 18, unless he or she is the custodial parent of the minor child applying for or receiving the annuity;
b Is found by a court to be incompetent or receives benefits under title II or title XVI of the Social Security Act through a representative payee or receives a retirement annuity pursuant to CSRS or FERS through a representative payee;
c Has previously served as a representative payee and has been found by a court of competent jurisdiction to have misused benefits;
d Has been convicted of a violation of:
1 5 U.S.C. 8345a or 8466a;
2 Section 208 or 1632 of the Social Security Act 42 U.S.C. 408, 1383a; or 3 38 U.S.C 6101; or e Has been convicted of an offense resulting in imprisonment for more than one year. The agency may make exception to the prohibition in this paragraph e if the nature of the conviction is such that selection of the applicant poses no risk to the annuitant and the exception is in the best interest of the annuitant.
849.304
payee.

Selecting a representative
Before selecting an individual or organization to serve as a representative payee, the agency will conduct an investigation. The investigation will:
a Require the applicant to submit documented proof of identity.
b Verify the applicants social security number.
c Conduct a background check on the applicant to determine if the applicant has been convicted of any crimes as defined in 849.303d or e.
d Determine if the applicant has previously served as a representative
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