Funds in a trust or escrow account have no effect on the amount SSA withholds (i.e.,
SSA will withhold 25 percent of title II and/or title XVI past-due benefits when the
representative is eligible for direct fee payment). See GN 03920.017C., Direct Payment to Representatives – Title II Cases; GN 03920.017D., Direct Payment to Representatives – Title XVI Cases; GN 03920.030, Representative's Fee – Title II Past-Due Benefits; and GN 03920.031, Representative’s Fee - Title XVI Past-Due Benefits,
Funds in a trust or escrow account may reduce the amount of direct payment a representative
receives from a claimant's past-due benefits. This occurs when the sum of 25 percent
of past-due benefits withheld and the funds in the trust or escrow account exceeds
the authorized fee (GN 03930.060D. describes the procedure).
EXAMPLE: The authorized fee is $2,500, the withheld amount is $3,500, and the escrow account
is $1,000. SSA must release $2,000 to the claimant and directly pay the attorney $1,425.00
[the balance of the attorney's authorized fee, $1,500, less the “user fee” (see GN 03920.019, Assessment on Representatives Who Receive Direct Payment)], because $1,500 plus
the amount in escrow, $1,000, equals the authorized fee. GN 03920.017E.1. and GN 03920.017E.2. provide procedures for calculating the direct payment amount when the representative’s
fee is authorized through the fee petition process and there are funds in an escrow
account.