If the claimant’s representative is an attorney, or (beginning February 28, 2005)
a non-attorney representative eligible for direct payment and has not waived a fee
or waived direct payment, SSA withholds 25 percent of a claimant's title II past-due
benefits for possible direct payment of:
all or part of a representative's authorized fee for administrative proceedings, and,
all or part of an attorney’s authorized fee for court proceedings.
(See GN 03920.017C, Direct Payment to Representatives – Title II Cases, GN 03920.030, Representative’s Fee – Title II Past-Due Benefits, and GN 03920.060B.3., Past-Due Benefits Withheld).
NOTE: If a Federal court awards a fee in addition to the fee, if any, SSA authorizes for
proceedings at the administrative level, SSA withholds a maximum of 25 percent of
past-due benefits for payment of fees, whether authorized by SSA, a court, or both.
SSA also may withhold 25 percent of an affected auxiliary beneficiary's(ies') past-due
benefits for possible direct payment of all or part of the primary claimant's representative's
authorized fee for administrative proceedings and an attorney’s authorized fee for
court proceedings (for rationale see Social Security Ruling 68-61c).
If the auxiliary beneficiary is individually represented, see GN 03920.035B., Policy - Withholding From Auxiliary Beneficiary.
SSA withholds 25 percent of a claimant's past-due benefits under these circumstances:
a party has filed a request for administrative review, or
the Federal court issued a decision and the attorney has not waived his/her fee.
If all proofs are present; there is no court involvement and no request for administrative
review; and there is no concurrent title XVI claim, or there is a concurrent title
XVI claim but 25 percent of the claimant's and auxiliary beneficiaries past-due benefits
equals or exceeds the specified dollar amount (see GN 03940.003B.3.):
For fee agreement cases processed via the Manual Adjustment Credit and Award Data
Entry (MACADE) system, the benefit authorizer (BA) or benefit technical examiner (BTE)
withholds only the authorized fee amount.
For fee agreement cases processed via the Modernized Claim System (MCS), commencing
with the implementation of the Title 2 Redesign Release 3 (T2R3) on June 21, 2004,
the system withholds only the authorized fee amount.
NOTE: Prior to the implementation of T2R3, MCS withheld a full 25 percent of past-due
benefits for fee agreement cases.
NOTE: Prior to February 28, 2005, there was no withholding provision for any non-attorney
representative. The non-attorney representative looked to the claimant to pay the