Effective Dates: 12/06/2024 - Present Previous | Next

TN 58 (12-24)

GN 03920.051 Excess Fee Payments Made to Representatives and Entities

A. Introduction to excess representative fee payments made to a representative and entities

Excess fee payments are fee payments made to a representative or an entity that exceed the authorized fee amount. Excess fee payments can be the result of processing errors, adjustments, or revised fee authorizations.

An excess fee payment is a debt owed to us, not to the claimant; remittance of the fee must be made to us. If the relevant instructions in GN 03920.051B in this section direct us to issue a refund to the claimant, the technician refunds to the claimant any funds erroneously withheld or paid. For information on issuing the refund, see SM 01901.005 and SM 01901.015 for Title XVI claims and SM 00848.330 for Title II claims.

Payments made by claimants to a representative above the fee amount we authorize are not excess fee payments. These payments are potentially fee violations and must be referred to the Office of the General Counsel (OGC) for further investigation. For more information on fee violations, see GN 03970.010D and GN 03970.017.

NOTE 1: The claimant is not due a refund if we did not withhold past-due benefits for the fee payment. Also, the claimant may not be due a refund if the revised past-due benefits and fee resulted in an overpayment to the claimant.

If a representative has assigned direct payment of their authorized fee to an entity, and the conditions for honoring that assignment continue to be met at the time we certify direct payment of the fee, we directly pay the authorized fee to the designated entity. If an excess fee payment is made to an entity, the entity is responsible for repaying this debt to us.

NOTE 2: If a representative assigned direct payment of their authorized fee to an entity but we incorrectly issued the payment to the representative, we will not treat the payment as an excess fee or take any action to correct the error. The representative and the entity are responsible for resolving the misdirected payment between themselves.

For more information on the process of recovering excess fee payments made to representatives or entities, see GN 03920.052.

IMPORTANT: An excess fee payment to a representative or an entity is not an overpayment of benefits, as defined in section 204(a) of the Social Security Act and 1631(b)(1)(A). Therefore, waiver and appeal rights do not apply to our determination that an excess fee payment has been made to a representative or entity. We refer representatives who fail to refund excess fees to the Office of the General Counsel (OGC) for possible sanctions. We refer entities who fail to refund excess fees to the Ineligible for Direct Payment Entities (IDPE) coordinators.

For more information on sanction referrals for fee violations, see GN 03970.017.

For more information on the IDPE referral process for entities, see GN 03920.052C.6.

B. When we will pursue recovery of an excess fee payment

We will pursue recovery of an excess or incorrectly paid fee when:

1. We paid an amount above the authorized fee amount

We will recover an excess fee if the amount we directly paid a representative or entity exceeds the amount authorized. We refund the amount to the claimant, if appropriate, and will recover the excess amount from the representative or entity.

IMPORTANT: We do not delay the refund to the claimant while we wait for the representative or entity to refund the excess fee payment.

2. We directly paid a fee when the determination or decision did not result in past-due benefits

We would recover an excess fee if we directly paid a fee to a representative or entity when no past-due benefits were available (e.g., we paid a fee under the fee agreement process, but the case did not result in past-due benefits). Under these circumstances, we will:

  • •

    Request that the representative or entity refund the excess fee payment to us;

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    Establish an overpayment on the claimant’s record for any past-due benefits calculated and awarded; and

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    Inform the claimant and the representative(s) that because there are no past-due benefits payment of the authorized fee(s) is a matter between them.

NOTE: If we erroneously failed to withhold past-due benefits for direct fee payment in a case where past-due benefits were available, follow the instructions in GN 03920.055.

3. The claimant protested after we erroneously withheld past-due benefits to directly pay a fee

a. Representative received the fee

We will recover an excess fee if we erroneously withhold past-due benefits for the purposes of directly paying a representative’s authorized fee, the claimant has objected to the amount withheld or direct payment of the fee, and:

  • •

    The representative was not eligible for direct payment GN 03920.051.C.1.; or

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    The representative waived direct payment of the fee GN 03920.051.C.2.

We will explain to the claimant that they will continue to owe the authorized fee amount to the representative.

If the claimant continues to protest the fee withholding, we will:

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    Inform the claimant and the representative that payment of the authorized fee is now a matter between them; and

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    Refund the excess fee payment to the claimant and pursue recovery of the excess amount paid to the representative. The erroneous fee payment is a debt the representative owes to us, not to the claimant.

If the claimant withdraws the protest after the explanation, refer to GN 03920.051C.1.-C.2. to determine whether we will continue to pursue recovery of the excess payment.

b. Entity received the fee

We will recover an excess fee if we erroneously withhold past-due benefits for the purposes of directly paying a representative’s authorized fee to an entity, the claimant has objected to the amount withheld or direct payment of the fee, and:

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    The representative was not eligible for direct payment GN 03920.051.C.1.;

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    The representative waived direct payment of the fee GN 03920.051.C.2.; or

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    The entity was not eligible for direct payment at the time we certified payment.

We will explain to the claimant that, if they wish to continue protesting, we will refund the excess fee payment to them, but they will owe the authorized fee amount to the representative and that payment of the authorized fee will be a matter between the claimant and the representative.

If the claimant continues to protest the fee withholding, we will:

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    Inform the claimant and the representative that payment of the authorized fee is now a matter between them; and

  • •

    Refund the excess fee payment to the claimant and pursue recovery of the excess amount paid to the entity. The erroneous fee payment is a debt the entity owes to us, not to the claimant.

If the claimant withdraws the protest after the explanation, refer to GN 03920.051C.1.-C.2. to determine whether we will continue to pursue recovery of the excess payment.

4. The claimant protested after we directly paid an authorized fee that exceeded 25% of past-due benefits

We will recover an excess fee if we authorize a fee that exceeded the 25 percent withholding limit and:

  • •

    We withheld the authorized fee from the claimant’s past-due benefits;

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    We paid the representative or entity no more than the authorized fee; and

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    The claimant has protested the withholding of the past-due benefits or direct payment of the authorized fee in excess of 25 percent of past-due benefits to the representative or entity.

We will explain to the claimant that, if they wish to continue protesting, we will refund the amount of the authorized fee we paid that exceeded 25 percent of past-due-benefits. However, we will also explain that the fee authorization itself is still in effect, that the amount of the fee we refund will be owed to the representative, and that payment of the remainder of the authorized fee will be a matter between the claimant and the representative.

If the claimant withdraws the protest after the explanation, follow instructions below in GN 03920.051C.3. If the claimant continues to protest the fee withholding, we will:

  • •

    Refund the excess fee payment to the claimant and pursue recovery from the representative or entity. The excess fee payment is a debt owed to SSA, not to the claimant.

  • •

    Inform the claimant and the representative that payment of the authorized fee is now a matter between them.

NOTE: The excess fee payment refers to the portion of the fee that exceeds 25 percent of past-due benefits, which is the amount to be refunded by the representative or entity in the event of a claimant’s protest. Although the excess fee payment refunded by the representative or entity is an authorized fee, the amount we can directly pay is limited to 25 percent of the past due benefits. The claimant is still responsible for paying the remaining portion to the representative.

5. A representative protests an unequally distributed fee payment under the fee agreement process

We will recover an excess fee if we unequally distributed shares of a fee under the fee agreement process and any of the affected representatives objects to the payments as described GN 03920.051C.4. In this situation, we will:

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    If errors are identified in the fee authorization notices, send corrected fee authorization notices specifying the individual fee amounts;

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    Pay the representatives or entities who received less than their respective portions of the authorized fee the difference between their correct fee portions and the amounts we already paid them, adjusting for any increase in their portion of the user fee; and

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    Notify the representatives or entities who received more than their portions of the authorized fee that they must refund the excess portion of their fee payment (adjusting for a decrease in their portion of the user fee). Inform representatives that failure to return the excess portion could result in a referral for sanctions. Inform entities that failure to return the excess portion could result in a referral for placement on the IDPE list.

6. The representative misrepresented their eligibility for direct payment

We will recover an excess fee if there is indication that the representative misrepresented their eligibility for direct payment and the factors listed in 03920.051C1 in this section do not apply. We will:

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    Require that the representative or entity refund the fee to us;

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    Refund the erroneously withheld fee to the claimant (including a refund of the user fee);

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    Document the situation as instructed in GN 03920.051D;

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    Refer the matter to OGC for possible sanctions, as explained in GN 03970.017; and

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    Inform the claimant and the representative that payment of any authorized fee balance is a matter between them.

7. We issued duplicate fee payments

a. Duplicate payment issued to a representative

We will recover an excess fee if we issue a duplicate payment to a representative. In this circumstance, we will:

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    Inform the representative that we issued a duplicate fee payment;

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    Request that the representative refund the excess fee payment to us; and

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    Document the situation as instructed in GN 03920.051B.2.

b. Duplicate payment issued to an entity

We will recover an excess fee if we issue a duplicate payment to an entity. In this circumstance we will:

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    Inform the entity’s POC that we issued a duplicate fee payment;

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    Request that the entity refund the excess fee payment to us; and

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    Document the situation as instructed in GN 03920.052B.

For more information involving recovery of excess fees paid to an entity, see GN 03920.052C.

8. We reduced the authorized fee on administrative review

We will recover an excess fee if we directly pay an authorized fee to a representative or entity, but the amount of the fee is later reduced following administrative review. Under this circumstance, we will:

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    Confirm that the parties were notified of the administrative review determination. If not, contact the decision maker and inform them of the issue. (see GN 03950.040 and GN 03960.070).

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    Notify the parties (and entity, if applicable) of the issue;

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    Use the revised fee amount and appropriate user fee to determine the representative’s excess fee payment;

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    Require that the representative or entity refund the excess fee payment to us; and

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    Pay the claimant the difference between the prior fee amount and the revised fee amount (before the user fee withholding).

For more information on the administrative review process, see GN 03950.000 Fee Petitions and GN 03960.000 Fee Agreements.

9. We reduced the authorized fee after discovering that the original fee was authorized based on an incorrect computation of past-due benefits

We will recover an excess fee if we reduce a representative’s authorized fee after discovering that, due to a processing or input coding error, we incorrectly calculated the claimant’s past-due benefits. Under this circumstance, we will:

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    Notify the claimant and representative (and entity, if applicable) that we have reduced the past-due benefit amount and authorized fee;

  • •

    Use the revised authorized fee amount to calculate the overpayment to the claimant;

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    Use the revised authorized fee amount to determine the excess fee payment to the representative or entity (after applying the appropriate user fee); and

  • •

    Request that the representative or entity, if applicable, refund the excess fee payment to us.

For more information on adjustments to the past-due benefits amount, see GN 03920.040.

10. We authorized a fee to a representative who was not appointed to the claim or who was appointed but waived the right to charge and collect a fee

a. The representative received the fee

We will recover an excess fee if we pay it to a representative who was never appointed to the claim or who was appointed but waived the right to a fee. Under these circumstances, we will:

  • •

    Require the representative to refund the fee (the representative owes the debt to us and not to any other appointed representative(s) or to the claimant); and

  • •

    Pay the fee to any appointed representative(s) who is eligible for direct payment and requested it. If there is no appointed representative who requested and is eligible for direct payment, release the funds to the claimant.

For more information on Direct Payment Errors, see GN 03970.025.

IMPORTANT: We do not delay the release of a payment to another eligible representative or the claimant while awaiting the refund of the excess payment.

b. An entity received the fee

We will recover an excess fee directly paid to an entity if the fee was authorized to a representative who was never appointed to the claim or who was appointed but waived the right to a fee. Under these circumstances, we will

  • •

    Require that the entity refund the fee (the entity owes the debt to us and not to any other appointed representative(s) or to the claimant); and

  • •

    Pay the fee to any appointed representative(s) to whom we authorized a fee and who is eligible for and requested direct payment. If there is no appointed representative who requested and is eligible for direct payment, release the funds to the claimant.

IMPORTANT: We do not delay the release of a payment to an eligible representative or the claimant while awaiting the refund of the excess payment.

11. We issued an incorrect fee notice and the claimant paid or may pay an excess fee to the representative

We will recover an excess fee if:

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    We did not directly pay a fee;

  • •

    We issued a notice authorizing an incorrect fee amount; and

  • •

    The claimant paid or may pay a representative an excess fee based on the notice.

In this situation, we will notify the claimant and the representative of:

  • •

    The corrected fee amount, and

  • •

    The amount the representative must refund to the claimant if the claimant already paid the fee.

For processing instructions, see GN 03920.052B.

C. When we will not pursue recovery for an excess fee payment

Although we generally require representatives to refund excess fees, in some situations it is not administratively practical to request a refund. When a fee payment error results in no monetary loss to the claimant and the monetary loss to us is negligible (e.g., less than or equal to the user fee), we will not pursue recovery from the representative. For additional information regarding the user fee, see GN 03920.019.

IMPORTANT: This subsection is not intended to set a minimum amount for recovery of an excess fee. Nothing in this subsection will prevent recovery in cases where the user fee was misapplied in a series of cases for a representative even if the error equals the user fee, e.g., a class action suit where we deducted a lower or incorrect user fee across many or all cases, even if individual errors are less than or equal to the user fee.

We will not pursue recovery of an excess or incorrectly paid fee in the following situations:

1. We directly paid an authorized fee to a representative who is, or was at the time, ineligible for direct payment

We will not pursue recovery when we directly paid a fee to a representative who is, or was at the time we certified payment, ineligible for direct payment if:

  • •

    The representative has not intentionally misrepresented their eligibility for direct payment;

  • •

    We withheld the authorized fee from the claimant’s past-due benefits;

  • •

    We paid the representative no more than the authorized fee;

  • •

    The claimant did not protest the withholding of the past-due benefits or direct payment of the authorized fee to the representative;

  • •

    The claimant was physically and mentally capable of filing a timely protest but did not file a protest of the withholding of the past-due benefits or direct payment of the authorized fee to the representative;

  • •

    The representative did not protest the fee payment; and

  • •

    The incorrect fee payment does not adversely affect any other representative.

Technicians must ensure that the representative’s status is correctly coded in our systems to prevent similar administrative errors.

2. We paid an authorized fee to a representative who is eligible for direct payment but who waived direct payment on the case

We will not pursue recovery when we withheld from the claimant’s past-due benefits and directly paid an authorized fee to a representative who is (1) eligible and registered for direct payment and (2) did not waive the fee but waived their right to direct fee payment, if:

  • •

    We withheld the authorized fee from the claimant’s past-due benefits;

  • •

    We paid the representative no more than the authorized fee;

  • •

    The claimant did not protest the withholding of the past-due benefits or direct payment of the authorized fee to the representative;

  • •

    The claimant was physically and mentally capable of filing a timely protest but did not file a protest of the withholding of the past-due benefits or direct payment of the authorized fee to the representative;

  • •

    The representative did not protest the fee payment; and

  • •

    The incorrect fee payment does not adversely affect any other representative.

3. We paid an authorized fee that exceeded the 25% withholding limit

We will not pursue recovery when we directly paid an authorized fee to a representative that exceeded 25 percent of past-due benefits, if:

  • •

    We withheld the authorized fee from the claimant’s past-due benefits;

  • •

    We paid the representative no more than the authorized fee; and

  • •

    The claimant did not protest the withholding of the past-due benefits or direct payment of the authorized fee in excess of 25 percent of past-due benefits to the representative.

4. We did not distribute the payments equally among multiple appointed representatives who signed the fee agreement

We will not pursue recovery when we directly paid different fee amounts to two or more appointed representatives who signed a single, approved fee agreement, if:

  • •

    We withheld the authorized fee from the claimant’s past-due benefits;

  • •

    The total we paid the representatives did not exceed the authorized fee; and

  • •

    The representatives did not protest our unequal distribution of the authorized fee.

5. We deducted an incorrect user fee

We will not pursue recovery if we directly paid the authorized fee to a representative eligible for direct payment (or an entity, if the representative had assigned direct payment of the fee to it), but we did not deduct the correct user fee.

However, we will subsequently collect the user fee if, in the same claim, matter, or issue, an additional fee is authorized to a representative and directly paid to a representative (or entity) . For example, if we failed to deduct the user fee from the primary claimant’s portion of the representative’s fee, we will collect the user fee from the portion of the representative’s fee that may be due from an auxiliary beneficiary’s benefits.

If we revised the authorized fee amount, recalculate or adjust for the required user fee. The amount of the fee payment error equals the difference between the amount paid and the amount due after withholding the appropriate user fee. If no payment was due, the fee payment error equals the amount paid.

IMPORTANT: This subsection is not intended to set a minimum amount for recovery of an excess fee. Nothing in this subsection will prevent recovery in cases where the user fee was misapplied in a series of cases for a representative even if the error equals the user fee, e.g., a class action suit where we deducted a lower or incorrect user fee across many or all cases, even if individual errors are less than or equal to the user fee.

If we revised the fee authorization amount, technicians will recalculate or adjust for the required user fee. The amount of the fee payment error equals the difference between the amount paid and the amount due after withholding the appropriate user fee. If no payment was due, the fee payment error equals the amount paid.

Notify the representative of the amount they must refund to SSA within 30 days. For sample language, see GN 03970.025.

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GN 03920.051 - Excess Fee Payments Made to Representatives and Entities - 12/06/2024
Batch run: 12/06/2024
Rev:12/06/2024