SSA - POMS: GN 03920.050 - Releasing Withheld Funds for Representatives’ Fees

A. Releasing withheld funds after we pay the authorized fee or a court-awarded fee

When the processing center (PC) or field office (FO) processes a fee we authorize or a court awards, they will:

•

pay representatives or court attorneys who are eligible to receive direct payment the amount of the fee available for payment, minus the user fee; and
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release any excess past-due benefits (PDBs) to the claimant or other parties following agency priority rules, except in cases involving an unresolved (or possible) dual fee (i.e., administrative fees and court-awarded fees), a request for administrative review, overpayment recovery or any pending development that precludes the release of payment. For a description of a dual fee, see GN 03920.060A.4.

Representatives who are ineligible for direct payment must collect their fees directly from the claimant.

B. Releasing withheld funds when there is no fee authorized or awarded or no eligibility for direct payment

The PC or FO technicians will release any withheld PDBs to the claimant or other parties if all appointed representatives and court attorneys (if applicable):

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did not request that we authorize a fee (or request that the court award a fee), and we issued the 20-day closeout letters as described in GN 03930.090 (for non-court cases) or GN 03930.091(for court cases);
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waived the fee or direct payment of the fee; or
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are ineligible for direct payment.

NOTE: Technicians must routinely verify whether a request for administrative review is pending before releasing any withheld PDBs to the claimant. A revised fee determination resulting from the review may change the amount of the authorized fee and may affect the amount of past-due benefits available for release.

C. Direct payment of fees

We withhold up to 25 percent of the PDBs from the claimant’s and any auxiliary beneficiary’s or Title XVI eligible spouse’s past-due benefits for direct payment of fees. In a Title XVI claim, reimburse the state agency for any Interim Assistance Reimbursement (IAR) before releasing the authorized fee to a representative. For Title XVI claims involving an IAR agreement, refer to GN 03920.033B.2.b. and SI 02101.001B.6.

For more information on the calculation of PDBs for representative fees in concurrent claims, see GN 03920.031B.2.

In the fee petition process, although the authorized fee may exceed 25 percent of the total past-due benefits, we only withhold and directly pay up to 25 percent of PDBs.

Under some circumstances, technicians may charge the claimant an overpayment to directly pay an authorized or court-awarded fee. This may result in payments that exceed 25 percent of the claimant’s PDBs.

D. The "user fee" or "assessment" for direct fee payments

When we directly pay a fee, the law requires that we charge an assessment or “user fee” to the representative to defray administrative costs. This applies to payments for both Title II and Title XVI claims. Representatives and court attorneys cannot charge or collect this assessment (user fee) from the claimant.

For further information on direct payment, refer to GN 03920.016.

For further information on the assessment, refer to GN 03920.019.

For more information on processing payments, refer to the Single Payment System instructions.

E. Calculating the fee shares and the user fee

This section explains how to apportion the withheld past-due benefits and user fee and how to release withheld fees when there are multiple representatives or, when applicable, court attorneys.

1. Fee authorized under the fee petition process

Under the fee petition process, each representative must individually petition to be authorized a fee. Pay each individual representative the fee we authorize to them, minus the user fee. If the total authorized fee exceeds the withheld amount, the PC for Title II fees and the FO for Title XVI fees apportion the withheld amount among the eligible representatives.

The chart in this section shows how to apportion the withheld past-due benefits when more than one representative is eligible for direct payment under the fee petition process. In the example, a claim approved in 2024 has total past-due benefits of $10,000. A fee of $5,400 is approved for representative Smith, and a fee of $3,500 is approved for representative Jones. Use the chart “How to apportion withheld past-due benefits” to determine the amount each representative is eligible to receive by direct payment.

How to apportion withheld past-due benefits

Step	Action	Example
1	List and add the authorized fee amount(s) for each representative to determine the total authorized fee. Total Authorized Fee	$5,400 for Smith + $3,500 for Jones $8,900
2	Calculate 25 percent of the PDB amount. This represents the total amount of PDBs that we withhold for direct payment.	PDBs $10,000 x 25% = $2,500
3	Divide each representative’s full individual authorized fee by the total authorized fee (from Step 1) to find each representative's percentage of the total authorized fee. NOTE: If the result of the calculation is not a whole number, round to the nearest whole percent.	$5,400/$8,900 = 61% for Smith $3,500/$8,900 = 39% for Jones
4	Determine each representative's share of the withheld amount by multiplying the withheld amount (from Step 2) by each representative's percentage (from Step 3). Repeat for each representative.	$2,500 X 61% = $1,525 for Smith $2,500 X 39% = $975 for Jones
5	Add each representative's share of the withheld amount (from Step 5) to ensure that it corresponds to the total amount (25%) withheld for direct payment (from Step 2). NOTE: This is done to ensure accuracy in the calculations.	$1,525 for Smith +$975 for Jones = $2,500
6	Determine the applicable user fee amount by multiplying 6.3% by the withheld amount. Compare this to the user fee cap in effect at the time of payment and use the lesser of the two amounts. The user fee cap is $120 as of December 1, 2024. For more information about the user fee cap, see GN 03920.019. Calculate each representative’s portion of the total user fee by multiplying each representative’s percentage (from Step 3) by the applicable user fee.	$2,500 X 6.3% = $157.50 $157.50>$120; therefore, the user fee is $120, which will be apportioned among the reps eligible to receive direct payment. $120 X 61% = $73.20 user fee for Smith $120 X 39% = $46.80 user fee for Jones
7	Deduct each representative’s portion of the user fee from their share of the withheld amount (from step 5) and release the appropriate remaining amount to each representative.	$1,525-$73.20 = $1,451.80 for Smith $975-$46.80 = $928.20 for Jones $1,451.80 released to Smith $928.20 released to Jones
8	Determine the remaining amount of the authorized fee each representative must collect from the claimant. Subtract each representative’s share of the withheld amount (from Step 4) from their authorized fee (from Step 1). NOTE: Each representative must look to the claimant for payment of the portion of the authorized fee that we could not pay from the claimant's withheld PDB amount.	$ 5,400-$1,525.00 = $3,875.00 $3,875 is the remaining authorized fee owed to Smith that must be collected from the claimant. $3,500-$975.00 = $2,525.00 $2,525.00 is the remaining authorized fee owed to Jones that must be collected from the claimant.

IMPORTANT: Technicians who receive subsequent fee petition(s) after a fee has been authorized will continue to use the chart “How to apportion withheld past-due benefits” in GN 03920.050E.1. to prorate the user fee based on the total number of representatives who submitted fee petition(s).

2. Fee authorized under the fee agreement process

Under the fee agreement process, split the authorized fee in equal shares to each representative without regard to his or her services. For example, if the claimant appointed two representatives, apportion half of the total fee authorized under the fee agreement to each representative. However, if a representative waived his or her fee, do not consider that representative in our fee calculations and do not apportion him or her a share of the authorized fee. For example, if there are two representatives and one waived his or her fee, pay the entire fee to the representative who did not waive his or her fee.

NOTE: When a third party entity (as defined in GN 03920.010A.3) will pay the fee for one or more representatives who waive their right to receive a fee from the claimant and any unrepresented auxiliary beneficiaries or spouse and all of the conditions in GN 03920.010B.2 are met, do not consider the representative(s) who waived their fee in the fee calculation.

a. Confirm the fee agreement was correctly approved as prescribed in GN 03940.003.

b. If the fee agreement was correctly approved, apportion the total fee amount as follows:

1.

Divide the total authorized fee amount by the number of representatives who signed a single fee agreement, and who did not waive their fee;
2.

Directly pay the apportioned fee amount to each representative eligible for direct payment (to determine direct payment eligibility, see GN 03920.016); for guidance on proration of the user fee, see GN 03920.019C; and
3.

Release any shares authorized to representatives who are not eligible for direct payment to the claimant, unless there is court involvement. (GN 03920.060)

NOTE: Do not withhold any PDBs when all representatives waive their fee and there is not court involvement. Release all PDBs to the claimant.

c. Fee agreement incorrectly approved

If, after we calculate or pay the fee, we determine that the fee agreement was incorrectly approved and the situation no longer meets the conditions in GN 03940.003:

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Follow instructions as outlined in GN 03940.020G (for Title II cases at the Initial level and Reconsideration level) or GN 03940.025 (for Title II claims at the Hearing or Appeals Council level of review);
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Check e-view to determine whether the initial fee determination included language informing the parties of their right to request administrative review. If the notice did not include this information, the current notice must include a statement advising the parties that they have the right to request administrative review of the determination approving or disapproving the fee agreement within 15 days of receiving the notice (GN 03940.008);
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Request fee petitions from the representative(s); and
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Request a refund of any shares we paid, if applicable, following the instructions in GN 03920.051.

Representatives who did not waive their fee and who wish to receive a fee must either sign on a single fee agreement (to receive equal shares), or each representative must submit a fee petition.

NOTE 1: Consider former representatives (i.e., those who have withdrawn or been revoked) in our calculations if they signed the fee agreement and did not waive their fee. Apportion and directly pay withdrawn or revoked representatives the appropriate shares of the authorized fee. If the fee was authorized before December 9, 2024, technicians will refer to the instructions in GN 03920.016B.6.

NOTE 2: If a representative has been sanctioned, confirm that the favorable decision was issued prior to the effective date of the suspension or disqualification. See GN 03940.003D.5. and GN 03970.060. If so, and the fee agreement has been correctly approved, apportion the sanctioned representative the appropriate share of the authorized fee but do not directly pay it. A sanctioned representative may not receive direct payment of the authorized fee and must collect his or her authorized fee directly from the claimant (GN 03920.016B).

d. Examples

EXAMPLE 1: The claimant appointed three representatives, A, B, and C. Representative C waived the right to a fee, and representatives A and B signed and submitted a single fee agreement. Split the entire fee authorized between A and B (who are eligible for direct payment) and pay equal shares of the total fee we authorize to each representative.

EXAMPLE 2: The claimant appointed four representatives, A, B, C, and D. Representatives B, C, and D waived their right to a fee, and representative A submitted a signed fee agreement. Pay representative A the entire fee we authorize.

EXAMPLE 3: The claimant appointed three representatives, X, Y, and Z. Representatives Y and Z signed a single fee agreement. Representative X signed their own fee agreement. None of the representatives waived the fee. Disapprove both fee agreements and ask all representatives to file fee petitions.

EXAMPLE 4: The claimant appointed three representatives, A, B, and C. All representatives signed a single fee agreement. Representatives A and B waived their rights to a fee. In this instance, we must pay representative C the entire fee amount. However, in the same scenario, if representatives A and B waived their right to a fee but representative C is a non-attorney ineligible for direct payment, we must authorize the full fee to representative C and release all the past-due benefits to the claimant. Because representative C is not eligible for direct payment, they must collect their fee directly from the claimant.

EXAMPLE 5: In the same scenario as Example 4, all representatives waived their right to a fee. Release all past-due benefits to the claimant.

3. Assignment of direct payment to an affiliated entity

If a representative who is eligible for direct payment properly assigned direct payment of the fee to an eligible entity, we will pay the representative's share to the entity. For entity eligibility requirements, see GN 03920.016B.2.

In a case with multiple representatives, if all representatives who signed the same fee agreement assigned direct payment to the same entity, we will pay the entire fee to that entity. If some or all representatives who signed the same fee agreement assigned direct payment to different entities, or if some representatives assigned direct payment to an entity and others did not, follow the steps in GN 03920.050E.2 to apportion the fee. Directly pay each representative’s share to the appropriate party (i.e., to the appropriate entity if there is a valid assignment and to the representative if there is no assignment). For more information on assignment, refer to GN 03920.021.

4. Fees awarded by the court

When a court awards fees to multiple attorneys, we directly pay court-awarded fees minus the applicable user fees to attorneys who are eligible for direct payment and properly registered, as described in GN 03920.060E. If the court awards different amounts to each court attorney, technicians will follow the proration steps in GN 03920.050E.1. to calculate and properly apportion the user fee for the court-awarded fee among the court attorneys. If the court awards the same amount to each court attorney or does not apportion the fee among multiple court attorneys, follow the instructions in GN 03920.050E.2.

5. Dual fees are authorized

For a description of dual fees, refer to GN 03920.060A.4.

The Act requires direct payment of administrative fees, and allows for direct payment of court awarded fees, when past-due benefits are available. Generally, direct payment of administrative fees takes priority over direct payment of court-awarded fees. However, technicians must not delay payment of court-awarded fees. For more information on the order of fee priority, see GN 03920.016B.3.b.

If we receive the administrative fee authorizations and the court award simultaneously, technicians must pay the administrative fee to the fullest extent possible first, then pay the court-awarded fee from any remaining withheld funds.

F. Releasing excess withheld funds to the claimant and auxiliary beneficiaries in Title II claims

If there are funds remaining after the PC certifies direct payment of the representative's fee and any court-awarded fee from Title II PDBs, the PC releases the excess funds to the claimant and any auxiliary beneficiaries.

1. When to prorate excess funds

Whether and how we prorate excess funds depends on whether the primary claimant and any auxiliary beneficiaries live in the same or different households.

a. Primary claimant lives with auxiliary beneficiaries

Do not prorate the excess funds if the primary claimant lives in the same household with all auxiliary beneficiaries entitled on the record.

b. Primary claimant does not live with auxiliary beneficiaries

Prorate the excess funds if the primary claimant does not live in the same household with all auxiliary beneficiaries entitled on the record.

For proration procedures, see GN 03930.070.

2. Dual fee authorization cases

In dual fee authorization cases, the PC technicians must ensure that whenever possible they certify direct payment of both the administrative and the court-awarded fees (up to 25 percent of past-due benefits) before they release any remaining past-due benefits to the claimant and any auxiliary beneficiaries. For additional information regarding court-awarded fees, see GN 03920.016B.3 and GN 03920.060.

G. Releasing excess withheld funds to the claimant and eligible spouse in Title XVI claims

The FO releases the remaining withheld past-due benefits to the claimant and the eligible spouse after the FO reimburses any interim assistance reimbursement (IAR) payments, pays the representative's fee and any court-awarded fee from past-due Title XVI benefits, and recovers any outstanding overpayments.

For additional information on calculating Title XVI past-due benefits payable, see GN 03920.033B.

For information on the effect overpayments have on past-due benefits, see GN 03920.031D.

For recovery of a Title XVI overpayment from retroactive Title II benefits after we applied windfall offset to the Title II retroactive benefits, see SI 02220.021.

Social Security

Program Operations Manual System (POMS)

GN 03920.050 Releasing Withheld Funds for Representatives’ Fees