What this means
m21-5:8.B.1 explains process for possible direct payment of fees. In plain terms, the official guidance says the table below describes the process to follow for the possible direct payment of fees. Agent and Attorney Fee Coordinators (AAFCs) should reference M21-5, Chapter 8, Section B.2.a to determine when a fee deduction is required. It also addresses the table below describes additional procedures to complete a Pending Fiduciary Withholding Calculator in conjunction with the guidance outlined in M21-5, Chapter 8, Section B, 1.a for the possible direct payment of fees when there is a proposal of incompetency.
How this may help with a claim
Use m21-5:8.B.1 to audit how VA handled process for possible direct payment of fees. Start with the decision date, the issue being reviewed, and the evidence VA was allowed to consider, then compare the record with this rule: The table below describes the process to follow for the possible direct payment of fees. Agent and Attorney Fee Coordinators (AAFCs) should reference M21-5, Chapter 8, Section B.2.a to determine when a fee deduction is required. The table below describes additional procedures to complete a Pending Fiduciary Withholding Calculator in conjunction with the guidance outlined in M21-5, Chapter 8, Section B, 1.a for the possible direct payment of fees when there is a proposal of incompetency. Cite the exact document and page when raising a factual or procedural error, and use the review rights in the actual notice for any deadline.
What to review in your file
- Check the file against this official condition: direct payment of fees when incompetency is proposed.
- Confirm that the record or notice addresses this source point: The table below describes the process to follow for the possible direct payment of fees. Agent and Attorney Fee Coordinators (AAFCs) should reference M21-5, Chapter 8, Section B.2.a to determine when a fee deduction is required.
- Document how this stated step or exception applies: Stage — Who Is Responsible — Description — Reference; 1 — AAFC (Initial reviewer) — In VBMS-A, enters all necessary award decisions (ex:
Important limits
m21-5:8.B.1 explains VA guidance for process for possible direct payment of fees; it does not guarantee an award or replace the statutes, regulations, binding decisions, and review instructions that control an individual claim. Conditions and exceptions still matter, including this source point: The table below describes the process to follow for the possible direct payment of fees. Agent and Attorney Fee Coordinators (AAFCs) should reference M21-5, Chapter 8, Section B.2.a to determine when a fee deduction is required. Stage — Who Is Responsible — Description — Reference; 1 — AAFC (Initial reviewer) — In VBMS-A, enters all necessary award decisions (ex:
Search terms when useful
Phrases that may help when searching your claim file or this library.
- Process for Possible Direct Payment of Fees
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- 8.B.1.a. Process Possible Direct
Original VA guidance
The official VA text of this section
1. Process for Considering Direct Payment of Fees
Introduction
This topic contains information on the process for considering direct payment of fees, including
- process for possible direct payment of fees, and
- direct payment of fees when incompetency is proposed.
Change Date
February 5, 2026
8.B.1.a. Process for Possible Direct Payment of Fees
The table below describes the process to follow for the possible direct payment of fees. Agent and Attorney Fee Coordinators (AAFCs) should reference M21-5, Chapter 8, Section B.2.a to determine when a fee deduction is required.
Scroll sideways to see the full table.
| Stage | Who Is Responsible | Description | Reference |
|---|---|---|---|
| 1 | AAFC (Initial reviewer) | In VBMS-A, enters all necessary award decisions (ex: dependency, offsets, basic eligibility) prior to navigating to the "Agent/Attorney Fee" tab Calculates the amount of fees using the VBMS-A Automated Fee Calculator found in the "Agent/Attorney Fee" tab, unless there is an exception. See M21-5, Chapter 8, Section B, 2.a-b Enter the "Fee Percentage" Enter the "Calculate Through Date" (Date of Decision) If there is no assessment fee, uncheck "Apply Assessment Fee" box Click "Calculate Agent/Attrny Fee" Completes the manual Agent/Attorney Fee Calculator and ensures the automated VBMS-A Automated Fee Calculator amounts match If there is a discrepancy greater than one cent, use the override functionality Generates the award as specified in M21-1, Part VI, Subpart i, 1.A.2.c Adds the "Attorney Fee" tracked item with a three-day suspense, and routes the award to an AAFC authorizer, making the Agent/Attorney Fee Calculator available for review. | M21-5, Chapter 8, Section A, 2.c, and M21-5, Chapter 8, Section B, 2.b - g |
| 2 | AAFC (Authorizer) | Verifies the "Fee Percentage," "Calculate Through Date," and "Apply Assessment Fee" fields have been correctly entered in VBMS-A. Verifies accuracy of the Agent/Attorney Fee Calculator. If correct, the processing moves on to Stage 3. If incorrect, uses the deferral functionality in VBMS to return for correction. | M21-5, Chapter 8, Section A, 2.c, and M21-5, Chapter 8, Section B, 2.f. |
| 3 | AAFC (Authorizer) | Uploads the calculator to the eFolder, including the names of the preparer and approver review the award information screen to determine if there is an existing debt to the United States Government takes and uploads a screenshot of all applicable current award lines from the “Award Information” screen determines allocation of fees if there is no continuous agent or attorney eligible for direct payment of fees, prepares the fee allocation calculator and uploads it to the eFolder prepares a Fee Allocation Notice to explain VA's decision on eligibility for, and allocation of, dire performs a one-time clear of EP 290, with date the fee decision notice is generated as the date of claim ensures decision notice to the claimant and representative are released establishes an End Product (EP) 400 for control as specified in M21-4, Appendix B with date the decision notice is generated as the date of claim, and establish “Attorney Fee” tracked item to the EP 400, updating the suspense to reflect 65 days from the date on the fee decision notice. Note: If the EP 400 above is the result of an HLR Return (DTA error or DoO), add the Appeal Issue Intertwined special issue. | M21-5, Chapter 8, Section A, 2.c, M21-5, Chapter 8, Section B, 2.f, and M21-5, Chapter 8, Section B, 3.e. |
| 4 | AAFC | When the 65-day period expires, reviews if any fee dispute has been received and follows the appropriate procedures to adjust suspense and await decision from the Board or OGC. If VA has received an appeal on VA Form 10182, Decision Review Request: Board Appeal (Notice of Disagreement) close the previously established "Attorney Fee" tracked item which was controlling the 65-day suspense period add a new "Attorney Fee" tracked item indicating "Board appeal pending" with a new 65-day suspense period, and continue adjusting suspense every 65 days until a decision is issued by the Board. If VA has received an OGC Fee Review Request Received memorandum, follow the procedures in M21-5, Chapter 8, Section B, 5.e. If VA has received a statement which can be construed as a reasonableness review request and no OGC Fee Review Request Received memorandum has been uploaded, first follow the procedures in M21-5, Chapter 8, Section B, 5.c then the procedures in M21-5, Chapter 8, Section B, 5.e. Important: If no fee dispute has been received, move to stage 6. | M21-5, Chapter 8, Section B, 5.g M21-5, Chapter 8, Section B, 5.c M21-5, Chapter 8, Section B, 5.e |
| 5 | OGC/Board/U.S. Court of Appeals for Veterans Claims (CAVC) | Determines the issue of entitlement to direct payment fees or reasonableness of fees. | M21-5, Chapter 8, Section B, 4 M21-5, Chapter 8, Section B, 5 |
| 6 | AAFC | After a decision is issued by the Board or OGC, or if no fee dispute is received, then immediately after the 65-day period has expired, determines if a new fee allocation calculator is required due to the processing of an Audit Error Worksheet (AEW) award on a partial or complete Rosinski claim prepares and sends Fee Release Memorandum instructing finance activity to release funds as allocated in either the Board decision OGC decision, or Fee Allocation Notice uploads the memo to the eFolder, and establishes "Attorney Fee Release" tracked item to the EP 400 with a 10-day suspense. | M21-5, Chapter 8, Section A, 2.c M21-5, Chapter 8, Section B, 4 M21-5, Chapter 8, Section B, 2.g, and M21-5, Chapter 8, Section B, 4.d. |
| 7 | finance activity | Releases funds and uploads verification to the eFolder that funds have been released. | M21-5, Chapter 8, Section B, 4. |
| 8 | AAFC | Clears EP 400. | M21-5, Chapter 8, Section A, 2.c and M21-5, Chapter 8, Section B, 4. |
8.B.1.b. Direct Payment of Fees When Incompetency is Proposed
The table below describes additional procedures to complete a Pending Fiduciary Withholding Calculator in conjunction with the guidance outlined in M21-5, Chapter 8, Section B, 1.a for the possible direct payment of fees when there is a proposal of incompetency.
Scroll sideways to see the full table.
| Stage | Who Is Responsible | Description |
|---|---|---|
| 1 | AAFC (Initial reviewer) | After completing the Agent/Attorney Fee Calculator and the VBMS-A Automated Fee Calculator, calculates the amount of retroactive funds to be withheld using the Pending Fiduciary Withholding Calculator, and enters individual withholding lines for “pending appointment of fiduciary” on the “Other Adjustments” tab in VBMS-A. Important: The net effect on the award must reflect the exact amount of fees due to the agent/attorney. |
| 2 | AAFC (Authorizer) | Verifies the accuracy of "Fee Percentage," "Calculate Through Date," and "Apply Assessment Fee" fields in the VBMS-A Automated Fee Calculator. Verifies the accuracy of the Pending Fiduciary Withholding Calculator and ensures the "pending appointment of fiduciary" withholding lines were entered correctly. Verifies the net effect matches the "Agent/Attorney Fee" deduction amount in VBMS-A. If correct, the processing moves on to Stage 3. If incorrect, uses the deferral functionality in VBMS to return for correction. |
| 3 | AAFC (Authorizer) | Uploads the Pending Fiduciary Withholding Calculator to the eFolder and continues processing the case by following the guidance outlined in M21-5, Chapter 8, Section B, 1.a. |
Important:
- Do not hold agent/attorney fees approved for direct payment under the Fee Allocation Notice until a fiduciary is appointed, as this could result in considerable delay of payment to the agent/attorney.
- The calculators referred to in the table above are evidentiary and must be included in the claims folder.
- Authorization and payment of the remaining past-due amount (funds not made available for direct fee payment) in a case of an incompetent claimant must follow the guidance in M21-1, Part X, Subpart ii, 6.D.2.
Reference: For more information on general authorization information on incompetency and fiduciary cases, see M21-1, Part X, Subpart ii, 6.C.