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 § 849.303(a);

(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 payee's criminal history.

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 annuitant's 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 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 in paragraphs (a) through (d) of this section 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.

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.

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 applicant's 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 § 849.303(d) or (e).

(d) Determine if the applicant has previously served as a representative payee and if any previous appointments as representative payee were revoked or terminated due to misuse.

(a) If the agency determines that the annuitant requires a representative payee due to mental incompetence or other legal disability or is physically or mentally unable to manage or direct the management of his or her annuity payments, the agency will issue a written decision to the annuitant. The decision will include a statement of the findings and determinations; specifically, the individual or organization named as the representative payee, and an explanation of the right to appeal the decision under §§ 831.110 and 841.307 of this chapter. If the annuitant appeals the decision, the agency will continue to make direct payments to the annuitant until the due process rights have been exhausted.

(b) A decision by the agency to not select an individual or organization as a representative payee is not subject to the due process procedures described in 5 U.S.C. 8347(d) and 8461(e).