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.