diff --git a/backend/package-lock.json b/backend/package-lock.json
index f9eff01a..cf022b30 100644
--- a/backend/package-lock.json
+++ b/backend/package-lock.json
@@ -5710,9 +5710,9 @@
       "license": "MIT"
     },
     "node_modules/effect": {
-      "version": "3.18.4",
-      "resolved": "https://registry.npmjs.org/effect/-/effect-3.18.4.tgz",
-      "integrity": "sha512-b1LXQJLe9D11wfnOKAk3PKxuqYshQ0Heez+y5pnkd3jLj1yx9QhM72zZ9uUrOQyNvrs2GZZd/3maL0ZV18YuDA==",
+      "version": "3.21.0",
+      "resolved": "https://registry.npmjs.org/effect/-/effect-3.21.0.tgz",
+      "integrity": "sha512-PPN80qRokCd1f015IANNhrwOnLO7GrrMQfk4/lnZRE/8j7UPWrNNjPV0uBrZutI/nHzernbW+J0hdqQysHiSnQ==",
       "devOptional": true,
       "license": "MIT",
       "dependencies": {
@@ -6392,9 +6392,9 @@
       }
     },
     "node_modules/fast-xml-parser": {
-      "version": "5.5.6",
-      "resolved": "https://registry.npmjs.org/fast-xml-parser/-/fast-xml-parser-5.5.6.tgz",
-      "integrity": "sha512-3+fdZyBRVg29n4rXP0joHthhcHdPUHaIC16cuyyd1iLsuaO6Vea36MPrxgAzbZna8lhvZeRL8Bc9GP56/J9xEw==",
+      "version": "5.5.9",
+      "resolved": "https://registry.npmjs.org/fast-xml-parser/-/fast-xml-parser-5.5.9.tgz",
+      "integrity": "sha512-jldvxr1MC6rtiZKgrFnDSvT8xuH+eJqxqOBThUVjYrxssYTo1avZLGql5l0a0BAERR01CadYzZ83kVEkbyDg+g==",
       "funding": [
         {
           "type": "github",
@@ -6404,8 +6404,8 @@
       "license": "MIT",
       "dependencies": {
         "fast-xml-builder": "^1.1.4",
-        "path-expression-matcher": "^1.1.3",
-        "strnum": "^2.1.2"
+        "path-expression-matcher": "^1.2.0",
+        "strnum": "^2.2.2"
       },
       "bin": {
         "fxparser": "src/cli/cli.js"
@@ -6586,9 +6586,9 @@
       }
     },
     "node_modules/flatted": {
-      "version": "3.4.1",
-      "resolved": "https://registry.npmjs.org/flatted/-/flatted-3.4.1.tgz",
-      "integrity": "sha512-IxfVbRFVlV8V/yRaGzk0UVIcsKKHMSfYw66T/u4nTwlWteQePsxe//LjudR1AMX4tZW3WFCh3Zqa/sjlqpbURQ==",
+      "version": "3.4.2",
+      "resolved": "https://registry.npmjs.org/flatted/-/flatted-3.4.2.tgz",
+      "integrity": "sha512-PjDse7RzhcPkIJwy5t7KPWQSZ9cAbzQXcafsetQoD7sOJRQlGikNbx7yZp2OotDnJyrDcbyRq3Ttb18iYOqkxA==",
       "dev": true,
       "license": "ISC"
     },
@@ -8964,9 +8964,9 @@
       }
     },
     "node_modules/path-expression-matcher": {
-      "version": "1.1.3",
-      "resolved": "https://registry.npmjs.org/path-expression-matcher/-/path-expression-matcher-1.1.3.tgz",
-      "integrity": "sha512-qdVgY8KXmVdJZRSS1JdEPOKPdTiEK/pi0RkcT2sw1RhXxohdujUlJFPuS1TSkevZ9vzd3ZlL7ULl1MHGTApKzQ==",
+      "version": "1.2.0",
+      "resolved": "https://registry.npmjs.org/path-expression-matcher/-/path-expression-matcher-1.2.0.tgz",
+      "integrity": "sha512-DwmPWeFn+tq7TiyJ2CxezCAirXjFxvaiD03npak3cRjlP9+OjTmSy1EpIrEbh+l6JgUundniloMLDQ/6VTdhLQ==",
       "funding": [
         {
           "type": "github",
@@ -10437,9 +10437,9 @@
       }
     },
     "node_modules/strnum": {
-      "version": "2.2.0",
-      "resolved": "https://registry.npmjs.org/strnum/-/strnum-2.2.0.tgz",
-      "integrity": "sha512-Y7Bj8XyJxnPAORMZj/xltsfo55uOiyHcU2tnAVzHUnSJR/KsEX+9RoDeXEnsXtl/CX4fAcrt64gZ13aGaWPeBg==",
+      "version": "2.2.2",
+      "resolved": "https://registry.npmjs.org/strnum/-/strnum-2.2.2.tgz",
+      "integrity": "sha512-DnR90I+jtXNSTXWdwrEy9FakW7UX+qUZg28gj5fk2vxxl7uS/3bpI4fjFYVmdK9etptYBPNkpahuQnEwhwECqA==",
       "funding": [
         {
           "type": "github",
diff --git a/backend/package.json b/backend/package.json
index 7c462f5a..4743cd17 100644
--- a/backend/package.json
+++ b/backend/package.json
@@ -101,6 +101,7 @@
     "@angular-devkit/core": {
       "ajv": "8.18.0"
     },
-    "lodash": "4.17.23"
+    "lodash": "4.17.23",
+    "effect": "^3.20.0"
   }
 }
diff --git a/backend/src/sync/eligibility/eligibility.config.ts b/backend/src/sync/eligibility/eligibility.config.ts
index b4b21957..76a6614d 100644
--- a/backend/src/sync/eligibility/eligibility.config.ts
+++ b/backend/src/sync/eligibility/eligibility.config.ts
@@ -28,6 +28,7 @@ export const ELIGIBILITY_CONFIG = {
     'MAINTENANCE PAYMENT',
     'FIXED RATE',
     'VARIABLE RATE',
+    'VAR RATE',
   ] as readonly string[],
   ELIGIBLE_ORDER_STATUSES: ['CLOSED', 'PROCESSED'] as readonly string[],
   MIN_ORDER_AMOUNT: 1549.2,
diff --git a/backend/src/sync/eligibility/eligibility.queries.ts b/backend/src/sync/eligibility/eligibility.queries.ts
index 4c84c75a..a61e68da 100644
--- a/backend/src/sync/eligibility/eligibility.queries.ts
+++ b/backend/src/sync/eligibility/eligibility.queries.ts
@@ -108,12 +108,12 @@ const CHANGED_CONTACTS_CTE = `
  *  - changed_contacts (incremental only): contacts with recently changed data
  *  - eligible_cases: all case rows from staging (filtered by change detection in incremental mode)
  *  - latest_legal_auth: most recent legal authority per person (DISTINCT ON X_CONTACT_NUM)
- *  - icm_placements_agg: active/interrupted ICM placements grouped by contact
+ *  - icm_placements_agg: active/interrupted/ended/closed ICM placements grouped by contact
  *  - icm_orders_agg: ICM orders grouped by contact (via placement -> agreement)
  *  - icm_agreements_agg: ICM agreements grouped by contact (via placement)
  *  - mis_payments_agg: MIS payments grouped by contact (via contract -> placement -> PERSON_ID_MIS)
  *  - mis_contracts_agg: MIS contracts grouped by contact (via placement -> PERSON_ID_MIS)
- *  - mis_placements_agg: active/interrupted/ended MIS placements grouped by contact (via PERSON_ID_MIS)
+ *  - mis_placements_agg: active/interrupted/ended/closed MIS placements grouped by contact (via PERSON_ID_MIS)
  *
  * Join keys:
  *  - ICM data joins on CONTACT_ROW_ID (table-to-table), aggregated by X_CONTACT_NUM (person)
@@ -190,7 +190,7 @@ export function buildLoadContactProfilesSql(
         )) AS data
       FROM stg_icm_placements icm_plc
       INNER JOIN eligible_cases ON eligible_cases.ROW_ID = icm_plc.CASE_ROW_ID
-      WHERE UPPER(TRIM(icm_plc.X_STATUS)) IN ('ACTIVE', 'INTERRUPTED')
+      WHERE UPPER(TRIM(icm_plc.X_STATUS)) IN ('ACTIVE', 'INTERRUPTED', 'ENDED', 'CLOSED')
       GROUP BY eligible_cases.X_CONTACT_NUM
     ),
 
@@ -339,7 +339,7 @@ export function buildLoadContactProfilesSql(
       FROM stg_mis_placements mis_plc
       INNER JOIN eligible_cases
         ON mis_plc.person_id_mis = eligible_cases.PERSON_ID_MIS
-      WHERE UPPER(TRIM(mis_plc.status)) IN ('ACTIVE', 'INTERRUPTED', 'ENDED')
+      WHERE UPPER(TRIM(mis_plc.status)) IN ('ACTIVE', 'INTERRUPTED', 'ENDED', 'CLOSED')
       GROUP BY eligible_cases.X_CONTACT_NUM
     )
 
diff --git a/backend/src/sync/eligibility/rules/steps/step6-order-payment-check.spec.ts b/backend/src/sync/eligibility/rules/steps/step6-order-payment-check.spec.ts
index c273eaa1..953d2a0b 100644
--- a/backend/src/sync/eligibility/rules/steps/step6-order-payment-check.spec.ts
+++ b/backend/src/sync/eligibility/rules/steps/step6-order-payment-check.spec.ts
@@ -1,6 +1,6 @@
 import { describe, expect, it } from 'vitest'
 import { ContactProfile, OrderRecord } from '../../eligibility.types'
-import { makeContact, makeOrder as makeBaseOrder } from '../../test-helpers'
+import { makeOrder as makeBaseOrder, makeContact } from '../../test-helpers'
 import { EligibilityContext } from '../rule.interface'
 import { step6_OrderPaymentCheck } from './step6-order-payment-check'
 
@@ -90,12 +90,16 @@ describe('step6_OrderPaymentCheck', () => {
     expect(result!.step).toBe(7)
   })
 
-  it('should accept MIS order types (Fixed Rate, Variable Rate)', () => {
-    const ctx = makeCtx({
+  it('should accept MIS order types (Fixed Rate, Variable Rate, Var Rate)', () => {
+    const fixedRate = makeCtx({
       orders: [makeOrder({ orderType: 'Fixed Rate', source: 'MIS' })],
     })
-    const result = step6_OrderPaymentCheck.evaluate(ctx)
-    expect(result!.step).toBe(7)
+    expect(step6_OrderPaymentCheck.evaluate(fixedRate)!.step).toBe(7)
+
+    const varRate = makeCtx({
+      orders: [makeOrder({ orderType: 'Var Rate', source: 'MIS' })],
+    })
+    expect(step6_OrderPaymentCheck.evaluate(varRate)!.step).toBe(7)
   })
 
   it('should handle variant casing and whitespace in order type and status', () => {
@@ -115,7 +119,6 @@ describe('step6_OrderPaymentCheck', () => {
   })
 
   it('should check order effective start date is in previous month', () => {
-    // REF_DATE is Feb 2026, so previous month is Jan 2026
     const ctx = makeCtx({
       orders: [makeOrder({ effectiveStartDate: new Date('2025-12-15') })],
     })
@@ -169,4 +172,62 @@ describe('step6_OrderPaymentCheck', () => {
     const result = step6_OrderPaymentCheck.evaluate(ctx)
     expect(result!.step).toBe(8)
   })
+
+  describe('ICM precedence over MIS', () => {
+    it('should use ICM orders when ICM has prev-month orders, ignoring MIS', () => {
+      const ctx = makeCtx({
+        orders: [
+          makeOrder({ source: 'ICM', amount: 1000 }),
+          makeOrder({ source: 'MIS', amount: 1600 }),
+        ],
+      })
+      const result = step6_OrderPaymentCheck.evaluate(ctx)
+      expect(result!.step).toBe(8)
+    })
+
+    it('should fall back to MIS when no ICM orders in previous month', () => {
+      const ctx = makeCtx({
+        orders: [
+          makeOrder({ source: 'ICM', effectiveStartDate: new Date('2025-12-15') }),
+          makeOrder({ source: 'MIS', amount: 1600 }),
+        ],
+      })
+      const result = step6_OrderPaymentCheck.evaluate(ctx)
+      expect(result!.step).toBe(7)
+    })
+
+    it('should fall back to MIS when no ICM orders exist at all', () => {
+      const ctx = makeCtx({
+        orders: [makeOrder({ source: 'MIS', amount: 1600 })],
+      })
+      const result = step6_OrderPaymentCheck.evaluate(ctx)
+      expect(result!.step).toBe(7)
+    })
+
+    it('should only use prev-month ICM orders when mixed with non-prev-month ICM orders', () => {
+      const ctx = makeCtx({
+        orders: [
+          makeOrder({ source: 'ICM', effectiveStartDate: new Date('2025-12-15'), amount: 2000 }),
+          makeOrder({ source: 'ICM', amount: 1000 }),
+          makeOrder({ source: 'MIS', amount: 1600 }),
+        ],
+      })
+      const result = step6_OrderPaymentCheck.evaluate(ctx)
+      expect(result!.step).toBe(8)
+    })
+
+    it('should use ICM even when ICM fails and MIS would succeed', () => {
+      const ctx = makeCtx(
+        {
+          orders: [
+            makeOrder({ source: 'ICM', orderType: 'Invalid Type' }),
+            makeOrder({ source: 'MIS', amount: 2000 }),
+          ],
+        },
+        { hasNonPlacement: false },
+      )
+      const result = step6_OrderPaymentCheck.evaluate(ctx)
+      expect(result!.step).toBe(9)
+    })
+  })
 })
diff --git a/backend/src/sync/eligibility/rules/steps/step6-order-payment-check.ts b/backend/src/sync/eligibility/rules/steps/step6-order-payment-check.ts
index 1ae489c5..f1709327 100644
--- a/backend/src/sync/eligibility/rules/steps/step6-order-payment-check.ts
+++ b/backend/src/sync/eligibility/rules/steps/step6-order-payment-check.ts
@@ -9,12 +9,14 @@ import { step9_UpdateNotEligible } from './step9-update-not-eligible'
 /**
  * STEP 6: Order (ICM) / Payment (MIS) check
  *
- * From orders linked to valid placements via contractNumber (MIS) or agreementRowId (ICM):
- * 1. Filter to previous month orders only
- * 2. Check ALL orders against the 4 criteria (type, status, date, amount)
+ * ICM takes precedence over MIS (per FDD):
+ * 1. Link orders to eligible placements via contractNumber or agreementRowId
+ * 2. Check ICM orders for previous month first
+ * 3. Only fall back to MIS payments if no ICM orders found in previous month
+ * 4. Evaluate against 4 criteria (type, status, date, amount)
  *
  * Any order matches all 4 -> Step 7 (eligible)
- * Best match only fails on amount (or no order found) -> Step 8 (eligible_tbd)
+ * Best match only fails on amount -> Step 8 (eligible_tbd)
  * More than one criterion fails -> Step 8 if hasNonPlacement, Step 9 otherwise
  * No matching orders at all -> Step 8 (eligible_tbd)
  */
@@ -38,9 +40,18 @@ export const step6_OrderPaymentCheck: EligibilityRule = {
     }
 
     const prevMonth = getPreviousMonth(ctx.referenceDate)
-    const previousMonthOrders = matchingOrders.filter((order) =>
-      isInMonth(order.effectiveStartDate, prevMonth),
-    )
+
+    // ICM first: check ICM orders in previous month
+    const icmOrders = matchingOrders.filter((order) => order.source === 'ICM')
+    const icmPrevMonth = icmOrders.filter((order) => isInMonth(order.effectiveStartDate, prevMonth))
+
+    // Fall back to MIS only if no ICM orders in previous month
+    const previousMonthOrders =
+      icmPrevMonth.length > 0
+        ? icmPrevMonth
+        : matchingOrders
+            .filter((order) => order.source === 'MIS')
+            .filter((order) => isInMonth(order.effectiveStartDate, prevMonth))
 
     if (previousMonthOrders.length === 0) {
       return hasNonPlacement
diff --git a/frontend/package-lock.json b/frontend/package-lock.json
index 67622537..959294ef 100644
--- a/frontend/package-lock.json
+++ b/frontend/package-lock.json
@@ -6845,9 +6845,9 @@
       }
     },
     "node_modules/flatted": {
-      "version": "3.4.1",
-      "resolved": "https://registry.npmjs.org/flatted/-/flatted-3.4.1.tgz",
-      "integrity": "sha512-IxfVbRFVlV8V/yRaGzk0UVIcsKKHMSfYw66T/u4nTwlWteQePsxe//LjudR1AMX4tZW3WFCh3Zqa/sjlqpbURQ==",
+      "version": "3.4.2",
+      "resolved": "https://registry.npmjs.org/flatted/-/flatted-3.4.2.tgz",
+      "integrity": "sha512-PjDse7RzhcPkIJwy5t7KPWQSZ9cAbzQXcafsetQoD7sOJRQlGikNbx7yZp2OotDnJyrDcbyRq3Ttb18iYOqkxA==",
       "dev": true,
       "license": "ISC"
     },