Fee Appeals

4. Releasing Funds and Appeals of Fee Determinations

Introduction

This topic contains information on releasing funds and appeals of eligibility determinations, including

• fee appeals
• prohibitions on releasing funds and appeal rights
• releasing funds when a fee decision is not disputed
• avoiding duplication of payments when releasing claimant's fee portion
• releasing funds
• when an assessment is required
• when an assessment is not required
• taking action if the claimant dies before the decision is promulgated, and
• mandatory use of the Fee Release Memorandum.

Change Date

February 5, 2026

8.B. 4.a. Fee Appeals

Any party (defined as the claimant/appellant, or any agent or attorney who represented the claimant or appellant in the case) may file an appeal to the Board from a Fee Allocation Notice. Bases may include that

• the case for which a fee is being sought was not decided on a qualifying review from an initial decision
• an agent or attorney disagrees on a decision noting ineligibility for direct payment of fees
• the claimant did not sign a VA Form 21-22a authorizing representation from the agent or attorney seeking a fee, or
• the claimant did not sign a written agreement to pay an agent/attorney fee from past-due benefits.

Parties may also submit a request for a reasonableness review to OGC if they disagree with the default allocation of fees described on the Fee Allocation Notice.

Important: Appeals from Fee Allocation Notices are considered contested. A party to a contested claim must file an appeal directly to the Board within 60 days of the date of the decision notice. Fee Allocation Notices attach the VA Form 20-0998, Your Right to Seek Review of Our Decision, which provides information on how to appeal to the Board and time limits for appeals of contested claims.

References: For more information on

• contested claims and appeals, see M21-1, Part VI, Subpart iii, 3
• reasonableness reviews, see M21-5, Chapter 8, Section B, 5
• organizational responsibility for handling appeals from direct pay fee determinations, see M21-5, Chapter 8, Section A, 2.a, and
• historical guidance on appeals prior to February 19, 2019, see the historical M21-1, Part I, 3.C attachment Historical_M21-1I_3_SecC_4-28-17.docx.

8.B.4.b. Prohibitions on Releasing Funds and Appeal Rights

Regardless of whether the decision on fees is an award or denial of direct payment of fees, do not release funds until a 65-day appeal period beginning on the date of the Fee Allocation Notice has expired with no dispute of fees. If a fee dispute was received, do not release fees until a decision is issued by either the Board or OGC.

Important: VA does not honor requests to expedite payment of fees, even when the claimant and/or the agent or attorney have waived the right to appeal.

References: For more information on releasing funds when a fee determination

• has been disputed, see M21-5, Chapter 8, Section B, 4.c, and
• has not been appealed, see M21-5, Chapter 8, Section B, 4.e.

8.B.4.c. Releasing Funds When the Fee Decision Is Not Disputed

The AAFC will check the eFolder and Caseflow (or VACOLS for legacy appeals) 65 days after the issuance of the Fee Allocation Notice to determine if an appeal was filed at the Board, an OGC Fee Review Request Received memo has been uploaded to the eFolder, or the claimant has submitted a statement which can be construed as a reasonableness review request. Where the Fee Allocation Notice was not appealed and a reasonableness review request is not of record, funds will be released as provided in either M21-5, Chapter 8, Section B, 4.e or f, depending on whether or not an assessment is required in the case.

As specified in M21-4, Appendix B, EP 400 should be pending and must be cleared when funds are released. Pursuant to M21-5, Chapter 8, Section A, 2.c, this is a duty of the AAFC.

If fees have been previously released prior to final adjudication and an EP 400 is not pending, refer to the actions provided in M21-5, Chapter 8, Section B, 6.c.

8.B.4.d. Avoiding Duplication of Payments When Releasing Claimant's Fee Portion

The prohibition against duplication of payments in 38 U.S.C. § 5304 still applies when the claimant is eligible to receive a portion of withheld fees. This may be due to the fee being split in claims without a continuous agent or attorney eligible for direct payment of fees, direct payment of fees being denied but a fee withholding being required due to a grant of individual unemployability or clear and unmistakable error, or a representative waiving fees after a Fee Allocation Notice has already been issued. AAFCs must determine whether fees were fully withheld from a net retroactive payment before releasing fees to the claimant. Any portion of the fee made available with VA funds that would be released to the claimant must instead be returned to appropriations.

In cases where there is no continuous agent or attorney eligible for direct payment of fees and the claim is a partial or complete Rosinski, the fee allocation calculator will inform AAFCs how much to release to the claimant and how much should be returned to appropriations, based on the net effect of the award as of generation. However, a new fee allocation calculator will be required if an AEW award was processed before fees are released. Follow the below guidance to determine if a new fee allocation calculator is required.

Scroll sideways to see the full table.

Reference: For more information on AEW processing with attorney fees, see M21-5, Chapter 8, Section B, 6.e.

8.B.4.e. Releasing Funds When an Assessment Is Required

The table below describes the process for releasing funds for agent or attorney fees when an assessment is required.

Except as provided by M21-5, Chapter 8, Section B, 4.f, the finance activity will withhold an assessment from payment to the agent or attorney prior to releasing the fees when fees are awarded to an accredited agent or attorney.

Scroll sideways to see the full table.

Important:

• The memorandum must include the name of the AAFC who prepared it.
• The finance activity will not release funds without a memorandum from the AAFC.

Notes:

• 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 the fee agreement, including on a reviewed or appealed “downstream” issue. Example: If the original issue was entitlement to SC, downstream issues would include a subsequent review request or appeal on the effective date of the grant and/or evaluation of the disability.
• Only one assessment of up to $100 is to be charged and deducted even if fees must be paid multiple times for different transactions (e.g., dependency, AEW) if the past-due benefits are based on the same rating.

8.B.4.f. Releasing Funds When an Assessment Is Not Required

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

Scroll sideways to see the full table.

Important:

• The memorandum must include the name of the AAFC who prepared it.
• The finance activity will not release funds without a memorandum from the AAFC.

8.B.4.g. Taking Action if the Claimant Dies Before the 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 a portion of the award has been made available for payment of fees), the AAFC will

• calculate the amount of fees
• request transactions to make funds available for fees, and
• prepare a Fee Allocation Notice.

Important: The AAFC must establish an EP 400 prior to calculating the amount of fees.

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 XI, Subpart ii, 3.

8.B.4.h. Mandatory Use of the Fee Release Memorandum

AAFCs must use the Fee Release Memorandum in all cases when VBMS-A is used to enter the agent/attorney fee deduction.

AAFCs will continue to use local station/legacy practices to release fees previously processed by finance prior to July 25, 2022.