TN 9 (05-16)
GN 03930.032 Direct Payment to the Appointed Representative Under the Fee Petition process for Title XVI and Certain Title II Concurrent Cases and Windfall Offset Calculation
A. Introduction for releasing past-due benefits
For fee petitions, the processing center (PC) or the Office of Disability Adjudication and Review (ODAR) authorizes the representative’s fee and notifies the claimant and representative of the authorized fee amount and the right to administrative review of the fee.
The PC analyst (e.g., reconsideration reviewer, senior claims processing specialist, or claims technical examiner (CTE)), Administrative Law Judge (ALJ), or ODAR’s Attorney Fee Branch (AFB) sends the fee authorization to the field office (FO) instructing the claims representative (CR) for each title, or technical expert (TE) to release the past-due benefits.
B. FO procedures for releasing past-due benefits
After receiving the fee authorization from the PC or ODAR, the CR reviews the authorization and the claim for issues that might preclude or delay payment of the authorized fee. For examples of these issues (e.g., another representative petitions for a fee, or a party requests administrative review) see GN 03930.060C. In concurrent claim situations, if the CR identifies an issue that precludes direct payment from the Title II withheld benefits, the CR notifies the PC of the issue. If the representative is eligible for direct payment and there is no issue, the CR must release the fee and past-due benefits payments per GN 03930.032B.1. and GN 03930.032B.2. in this subsection.
NOTE: If a court case or a court fee is pending, technicians must not recover any overpayment or release any remaining past-due benefits to the claimant until we process the court fee. For additional information about releasing withheld past-due benefits to the claimant see GN 03930.060 and SI 02101.002A.
1. Direct payment of the authorized fee in Title XVI only claims
Under the fee petition process, all Title XVI representative fee payments are manual. Take the following actions when the authorized fee is for a Title XVI only claim:
Issue the representative an automated one-time payment (A-OTP) in the amount of the authorized fee (up to a maximum of 25 percent of the past due benefits) less the assessment and the amount that another source paid (e.g., EAJA, trust or escrow account) if applicable. If you have questions about processing the one-time payment, see SM 01901.950 and for instructions on processing the fee assessment see GN 03930.033.
NOTE: The Title XVI system forwards the record of the fee payment and fee assessment (user fee) to the Single Payment System (SPS).
For examples of releasing the past-due benefits for direct payment of the authorized fee and to the claimant, see GN 03930.060D.1. through GN 03930.060D.4.
Prepare and send the appropriate manual fee notice to the representative and claimant using the Document Processing System (DPS). For Model Fee notice language, see GN 03930.170.
Close out the fee petition issue on the Modernized Supplemental Security Income Claims System (MSSICS) DW01, or the Modernized Development Worksheet for non-MSSICS as appropriate.
Remove the U TAC or bypass if the UPV code in the Supplemental Security Record (SSR) is set to A or B. (For specific instructions on inputting the UTAC, refer to GN 03930.030 or Underpayment Processing per MSOM BUSSR 004.018). This action automatically recovers any applicable overpayment, releases the balance of withheld funds, if any, to the claimant, and sends notices to the claimant and the representative. Also, consider the following situations before releasing the underpayment to the claimant:
If you are processing a case that involves an overpayment balance, ensure that the overpayment decision posts to the SSR. If it does not, post it. For instructions on posting overpayment decisions, see MSOM BUSSR 004.001.
If you are processing a case that involves an installment payment, manually calculate the installment payment amount, pay the next installment if due, and send manual notice of the actions to the claimant and representative. For additional information about installment payments, see SI 02101.020.
If you are processing a case that involves a dedicated account, see Past-Due Benefits Payable – Individual Alive Under Age 18 with Representative Payee – Dedicated Account Required see SI 02101.010.
Large underpayment diaries
For instructions on resolving large underpayment diaries, refer to How to Resolve a U2 Diary to Release Underpayments of $5,000.00 or More per SM 01311.661, and How to Resolve a U1 Diary per SM 01311.669.
2. Concurrent Claims Fee Adjustment of Countable Retroactive Title II Windfall Offset
When a claim is a concurrent Title II and Title XVI, you must make a windfall-offset computation. In concurrent cases for fee petitions, you may need to compute the windfall offset computation twice, when a PC adjudicates a Title II claim, but we have not yet authorized the representative’s fee. The first windfall offset computation (prior to receiving the fee authorization document) allows the PC to release the Title II past-due benefits avoiding further delay. For more information on windfall offset, refer to SM 03045.910 and SM 00815.001. The FO does the second computation when it receives the fee authorization document from the PC or ODAR. The second computation accounts for the representative’s fee as an expense of obtaining income.
a. Fee adjustment of TII countable retroactive income when the authorized fee is known
If you have the fee authorization from the PC or ODAR:
Complete the windfall offset.
Deduct the entire authorized fee from the retroactive Title II benefits beginning with the earliest months the Title II retroactive benefits are payable. We make no distinction between services performed for Title II or Title XVI. We use the total fee to adjust the Title II income.
NOTE: Under the fee petition process, the authorized fee may exceed the amount that we withheld and directly paid to the representative (the law only allows us to withhold 25 percent of the past-due benefits). For instructions on deducting authorized fees from retroactive Title II income, see SI 02006.200 and SI 02006.202. For instructions regarding expenses of obtaining income, see SI 00830.100.
b. No fee adjustment of TII countable retroactive income when the authorized fee is unknown
If the authorized fee has not been set yet:
Authorized fee is unknown
Complete the windfall offset to avoid an unnecessary delay in release of any retroactive Title II benefits. For instructions on Concurrent and Title II Only Authorized Representative Processing, see MSOM BUSSR 002.016.
Fee authorization received from the PC or ODAR after windfall offset is completed
Re-compute the windfall offset computation. Deduct the entire authorized fee from the retroactive Title II benefits beginning with the earliest months the Title II retroactive benefits are payable. If the fee authorizer designated part of the fee to the Title XVI claim specifically, do not use it to decrease the Title II income.
c. Direct payment of the authorized fee on concurrent Title II and Title XVI claims
When processing direct payments of authorized fees for concurrent claims, follow these steps:
Determine the portion of the authorized fee that we paid from Title II past-due benefits.
Query the Single Payment System (SPS) to determine the amount of the fee paid to the representative from the claimant's (and the claimant's auxiliaries) past-due benefits and the amount of the assessment collected from the direct fee payment. For instructions on obtaining an SPS query, see MSOM SPECPAYSYS 001.003.
Usually, in fee petition cases, the fee authorizer sets one fee for the representative’s services in connection with both Title II and Title XVI claims and does not designate a portion of that fee for one of the two claims. However, if the fee authorizer designates part of the authorized fee to services provided in connection with the Title XVI claim, pay that part of the fee from the withheld Title XVI past-due benefits per GN 03930.032B.1. in this subsection.
Pay directly the Title XVI portion of the fee.
Query the SPS to determine if the payment to the representative from the Title II past-due benefits was less than the authorized fee. Issue an A-OTP to the representative with the lesser of the balance of the authorized fee or the amount withheld less the assessment (if applicable). If we paid the entire fee from the Title II past-due benefits, release the Title XVI past-due benefits following the instructions in GN 03920.032B.1. in this subsection.
C. Additional references
SI 02101.001 SSI Underpayment Definitions and General Rules
SI 00830.100 Expenses of Obtaining Income
SI 02006.000 Windfall Offset Effect on Title XVI Payments
SM 01320.000 Automated Windfall Offset
MSOM BUSSR 002.012 Direct SSR Authorized Representative/Fee
MSOM BUSSR 002.013 Direct SSR Authorized Representative (UATH)
MSOM BUSSR 002.014 Representative Fee Update Data (UFEE)
MSOM BUSSR 002.015 TXVI Only Authorized Representative Processing