In fully automated claims with complete notice coding, the system:

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  Calculates the fee under the fee agreement process, if the decision maker approved the fee agreement;

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  Withholds up to 25 percent of past-due benefits towards direct payment when the representative is eligible for and did not waive direct payment;

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  Prepares the award notice advising the claimant and representative of the determination on the fee agreement and, if the decision maker approved the agreement, the amount of the authorized fee;

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  Calculates the assessment based on the direct payment amount (see GN 03920.019, Assessment on Representatives Who Receive Direct Payment); and

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  Deducts the assessment and pays the balance to a representative who is eligible for and has not waived direct payment, or to an eligible entity when there is a valid assignment, if the payment can be made when the claimant's award is processed.

In claims with incomplete notice coding, the system:

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  Withholds 25 percent of past-due benefits towards direct payment when the representative is eligible for and has not waived direct payment; and

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  Produces an alert (see MSOM MS 03509.009).

The claims specialist (CS) or other appropriate technician will take the following actions:

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  If the representative is a non-attorney and information is received that indicates a change in the representative's direct payment eligibility, follow the procedures in GN 03940.020E.1. below to verify eligibility and record the results.

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  Identify and complete the necessary paragraphs for the award notice, advise the parties of the fee agreement determination, and advise the parties of the right to request administrative review of the determination. If the decision maker approved the fee agreement, also advise the parties of the fee authorized under the fee agreement and of the right to request administrative review of the authorized fee amount.

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  Access the Special Message screen through MONET (or MACADE) and select standard special message 52. Process standard special message 52 to the MBR. Special message 52 will display: "APPOINTED REPRESENTATIVE(S) INVOLVED – SEE RASR, APPREP, AND APPFEE DATA LINES FOR ADDITIONAL INFORMATION."

Follow general claims processing instructions when processing non-MCS or MCS exclusion claims, and take the following additional actions:

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  If the representative is a non-attorney and information is received that indicates a change in the representative's direct payment eligibility, follow the procedures below in GN 03940.020E.1. to verify eligibility and record the results.

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  Ensure that the notice language refers to the fee agreement process, advises the parties of the fee agreement determination, and advises the parties of the right to request administrative review of the determination. If the decision maker approved the fee agreement, also advise the parties of the fee authorized under the fee agreement and of the right to request administrative review of the authorized fee amount.

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  Withhold the authorized fee amount (or 25 percent of past-due benefits if the authorized fee amount is not known) if the representative did not waive a fee and is eligible for direct payment. Also, see the note in GN 03940.007A.

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  Deduct any funds the representative holds in escrow from the authorized amount if the escrow amount is known.

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  Certify direct payment of the authorized fee less the previously deducted escrow funds and the assessment to the representative who is eligible for direct payment or the entity if there is a valid assignment, and release any remaining past-due benefits to the claimant and any auxiliary beneficiaries, unless the claimant filed concurrently for Title II and Title XVI benefits and windfall offset is still pending.

Approve or disapprove the fee agreement, as explained in GN 03940.001D.

If the fee agreement is approved, determine if a non-attorney is eligible for direct fee payment by checking RASR. See GN 03920.018, Direct Payment for Non-Attorney Representatives, for detailed information. Record the results on the MCS DW01 screen as follows:

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  ISSUE – EDPNA (stands for “eligible for direct payment non-attorney").

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  REC – Input date of verification.

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  REMARKS – Based on results of checking the list, type “Elgble for Direct Pymnt” (or “EDP”), “Not elgble for direct pymnt” (or “NEDP”), or “Not on list.”

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  If the non-attorney representative is eligible for direct payment, the NOT2 screen should show “Eligible for Direct Pay Non-Attorney.” If the non-attorney representative is not eligible for direct payment at the time the claim is being processed, verify that the Appointed Representative type on the NOT2 screen shows “2,” “non-attorney”. See GN 03920.016B. for the requirements for a representative to be eligible for direct payment. See GN 03920.016C. for policy on direct payment to representatives, or to entities if there is a valid assignment.

If the non-attorney states they are eligible for direct payment but our records show they are not eligible, advise the representative that we cannot make direct payment. Model language to use in these situations follows:

You advised your client, (beneficiary's name), and indicated on the Form SSA-1696 (Claimant's Appointment of a Representative) that you are eligible for direct payment. Under Titles II and XVI of the Social Security Act, certain non-attorney representatives have the option to have approved fees withheld and paid directly from a claimant's past-due benefits. However, [select the conclusion that describes the status]

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  you do not meet all the qualifications to be eligible for direct payment; or

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  you did not meet all the qualifications to be eligible for direct payment until after we effectuated the favorable decision on your client's claim; or

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  you failed to maintain your eligibility for direct payment.

We will not make direct payment of a fee in this case. Accordingly, we will not pay any authorized fee directly to you. You must look to the claimant for payment of the fee authorized in this case.

If a representative has validly assigned direct payment of their authorized fee to an entity as set forth in GN 03920.021, determine if that entity is eligible to receive direct payment of fees by querying RASR to ensure that the entity has registered and has not been placed on the Ineligible for Direct Payment Entity list.

Follow the instructions in MS 03509.009 for MCS claims processing, and GN 03940.020D.1 or GN 03940.020D.2., as appropriate.

Release remaining withheld funds, if any, to any beneficiaries unless the claimant filed concurrently for Title II and Title XVI benefits and windfall offset is still pending.

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  Enter the remark “Fee Agreement Case” and the name and address of the representative, or if there is a valid assignment the entity's name and address on the A101 BCRN screen;

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  Follow the procedures above in GN 03940.020E.1. that pertain to a non-attorney representative and eligibility for direct payment;

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  Withhold 25 percent of past-due benefits, up to the specified dollar amount of the fee cap indicated in GN 03940.003B.3., if the representative is eligible for direct payment; and

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  Designate the fee agreement paragraphs for the notice.