The FO must determine fees based on the net amount of the beneficiary's total monthly payments including past-due benefits, installment payments, and restitution payments. Do not include the amount of Medicare premiums or other deductions (including overpayment recoveries) when determining the fee amount.

If a fee increase is applicable, the representative payee may collect the fee increase amount from the check payable for January.

The fee should be the lesser of 10% percent of the monthly benefit amount (MBA), or as follows:

We notify organizations and the beneficiaries they serve of the fee changes in late November of the previous year. Some payees and beneficiaries may not receive a notice. If the payee requests a copy of the notice, provide a manual notice to the payee and/or beneficiary by preparing a notice using the instructions in NL 00703.774.

The payee’s voluntary decision to not collect a fee does not affect their organization’s FFS status.

Regardless of the length of time or amount of the erroneous fees charged, the payee must refund the excess amounts to the beneficiary immediately upon discovery.

The payee must furnish proof to the FO that the payee refunded the amount in question to the beneficiary(ies). The beneficiary can, in the form of a canceled check or a receipt, sign proof that the payee returned the excess fees.

FO’s should monitor these payees closely. Documentation of the erroneous charges and refund action must be kept in the paper precedent file and recorded in the eRPS. If unable to resolve the excess fees, the FO should initiate development for a new payee and investigate and develop for possible misuse of benefits.

EXCEPTION: A FFS organization may collect a fee of more than the prescribed monthly amount when a retroactive payment is made for a prior period of nonpayment or incorrect payment and the organization:

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  is a FFS payee approved to collect a fee for the months for which payment is made,

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  provided payee services in the months for which payment is made as defined in GN 00502.113A, and

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  is payee of record when the retroactive payment is received.

In November 2014, a disabled individual who meets the DDA condition receives both Social Security and SSI each month. The combined checks total $460. The maximum fee a FFS payee authorized to collect in this case could charge is $46 (10 percent) per month since the beneficiary meets the DAA condition. If the same beneficiary did not meet the DAA condition, the maximum fee the FFS payee could charge would be $40 each month.

A county mental health association was a FFS payee for a beneficiary who has a DAA condition; the disability benefits were terminated effective January 2014. Staff members of the association assisted the beneficiary in processing an appeal on the termination. They also visited them at least monthly to ensure that their county assistance payments were used for their basic needs. In March 2014, the beneficiary’s benefits were reinstated and they received retroactive payments for January 2014 through March 2014. We issued the benefits to the county mental health association, which continued to perform as a FFS payee. The association is permitted to charge the beneficiary up to 10% of the monthly benefits, up to a maximum fee amount of $77 for each month covered in the retroactive payments.

An organization is payee for an SSI beneficiary. SSA authorized the organization to collect a fee beginning 07/01/02. The beneficiary is paid $100 each month for 07/14 through 10/14. The organization can collect up to $10 (10%) from the payment for each month. However, it declined to collect the fee to allow the beneficiary to meet their immediate living expenses. In 11/14, the FO determined the monthly rate beginning 07/14 should have been $130 and the beneficiary receives a check for $120 representing back payments owed. Since the organization, based on the new payment amount, is authorized to collect up to $13 (10% of $130) for each month from 07/14 through 10/14, it may withhold up to $52 ($13 for each of the months from 07/14 to 10/14) from the retroactive check and $13 from the current check received in 11/14.