TN 8 (02-05)

GN 03930.066 Title II - Fee Petitions – Processing the Assessment

A. Introduction

SSA is required to charge an assessment, also called a “user fee” or “service charge,” to an attorney or non-attorney who receives his or her fee via direct payment from SSA. The Social Security Protection Act of 2004 (SSPA) amended section 206(d)(2)(A) of the Social Security Act by:

  • Capping the assessment at $75 or 6.3% of the fee payment, whichever is lower, effective September 1, 2004; and

  • Adjusting the flat-rate cap based on annual cost-of-living adjustments rounded down to the next lower $1.

Refer to GN 03920.019, Assessment on Representatives Who Receive Direct Payment, for assessment policy.

B. Overview

Effective September 1, 2004, SPS processing of the assessment differs depending on the Payment Identification Code (PIC) cluster. The key difference between the two clusters is whether SPS considers paid assessment amounts already on the SPS database when calculating the assessment.

  • PICs of A, D, E, and W generally are associated with the person who is the primary claimant for purposes of representation (i.e., the person who appointed the representative or on whose behalf the representative was appointed). For these PICs, SPS does not consider paid assessment amounts already on the SPS database.

    EXAMPLE: SSA is paying the fee based on a new period of disability, and an assessment amount is on the database. SPS will disregard the previous assessment payment and correctly calculate the assessment.

  • PICs of B and C generally are associated with an auxiliary beneficiary for purposes of representation. For these PICs, SPS considers paid assessment amounts already on the SPS database.

Most actions are automated because of these defaults, but manual processing will be required in some cases. For example, a child (PIC C) may in fact be the primary claimant (i.e., the person who appointed the representative or on whose behalf the representative was appointed). In this situation, SPS may not process the assessment correctly on its own. Refer to GN 03920.019M.2., which identifies manual processing situations.

C. Definitions

In this section, the following definitions apply:

1. SPS Online or Online

When we refer to SPS Online or Online, we are referring to the online input screens used to establish or update Single Payment System (SPS) payments that could not be automated.

2. Fee Payment Date

By the fee payment date (i.e., the date SSA “makes payment” or “pays all or part of the authorized fee”), we mean the date that the SPS sets the payment in PAID status. When fee payment is initiated through the Modernized Claims System (MCS) or the Manual Adjustment Credit and Award Processes (MADCAP), the payment date (i.e., the date on which the payment is set in PAID status) is the day after the input action is processed. When fee payment is issued Online (manually) and set to PAID, the payment date is the day that payment is set in PAID status. Because SSA personnel must input information instructing the system to make the direct payment, the payment date is not the date of the notice generated in connection with the fee payment. Nor is it the date the Department of the Treasury issues the actual check.

3. Decision

By decision, we mean an initial or reconsidered determination or a decision made by an Administrative Law Judge or the Appeals Council.

D. Process – Fee Authorized Based on Fee Petition

1. General

When the claims representative (CR) or PC technician effectuates a title II decision involving a representative eligible for direct payment, who has not waived direct payment and who may petition to obtain SSA's authorization to charge a fee for his or her services, the CR or technician ensures that SSA withholds from past-due benefits for possible direct payment. (Refer to GN 03930.035, Adjudicating Title II Claims Involving Representatives Who May Petition – Overview.) After the fee is authorized, the benefit authorizer (BA) or benefit technical examiner (BTE) completes the SPS Attorney Fee Payment Screen (APAY) to make direct payment of the representative's fee. (Refer to GN 03930.065, Mode of Payment to a Representative.) When the technician inputs the authorized fee amount, SPS will calculate the assessment.

2. Fee Payments to Two or More Representatives

When more than one representative files a fee petition and requests direct payment, SPS processing differs depending on the order in which SSA authorizes the fees.

a. SSA Pays the Authorized Fees Simultaneously

If the authorized fees are the same amount for each representative, SPS will calculate the assessment equally between or among the representatives receiving direct payment.

If the authorized fees are not the same amount for each representative, SPS will not calculate the assessment correctly. The technician in the PC must override the SPS-calculated assessment, recalculate the assessment to prorate it based on each representative's percentage of the total fee (see the example in GN 03930.066D.2.b.), and input into SPS the correct amount to deduct.

b. SSA Pays the Authorized Fees at Different Times

When SSA makes the first fee payment after August 31, 2004, SPS correctly determines the assessment to be the lesser of 6.3% of the fee payable from past-due benefits or the flat rate cap based on the annual cost of living adjustment. When processing a subsequent fee authorization at a later date, it becomes necessary to:

  • Use the SPS Online (manual) process.

  • Override the SPS-calculated assessment for the subsequent fee payment.

  • Prorate the assessment, as described in the example below, based on the total fees paid to each representative.

  • Deduct the prorated assessment from the fee being processed.

  • Initiate payment action on the second fee.

  • Refund to the representative who received the first direct payment the difference between the amount he or she was assessed and the recalculated assessment.

  • Send a notice to the representative paid first, containing the information included in the following sample language:

    “Previously we paid you a fee of $(amount of payment made to representative after deduction of assessment). As required by law, we reduced the fee payment amount by a service charge of $(amount of assessment), which was the lower of 6.3% of the fee we paid or (the applicable assessment cap).

    Later, we authorized and paid a fee on the same claim to another representative. When 6.3% of the combined payments exceeds (the applicable assessment cap), we divide the (the applicable assessment cap), service charge based on the percentage of the individual fee amounts. Therefore, we have recalculated the service charge you must pay and are refunding $(amount of excess assessment) to you.”

  • Refer the case to the appropriate technician to correct the assessment for the first direct payment on the Payment History Update System (PHUS) record.

    EXAMPLE: SSA withheld $5,200 from the claimant's past-due benefits. Two representatives who are eligible for direct payment filed fee petitions requesting authorization to charge and collect fees for their services. In February 2007, SSA authorized Representative A to charge and collect $1,600, and paid him $1,523 after deducting the $77 assessment. Later, Representative B filed a fee petition and was authorized to charge and collect $3,100. Because $77 is less than 6.3% of $4,700 ($1,600 + $3,100), the cap applies and must be prorated between the two representatives in proportion to the fee amount SSA pays to each.

     

    Representative A

    Representative B

    Percent of total fee

    $1,600/$4,700 = .340425

    (Generally, we do not round intermediate calculations. However, it is not necessary to carry the results of this step beyond six decimal places. Disregard digits beyond six decimal places.)

    $3,100/$4,700 = .659574

    Assessment amount

    $77 X .340425 = $26.212 or $26.21 (Round to the nearest cent, per RS 00601.020B.)

    $77 X .659574 = $50.787 or $50.79

    Amount of direct payment

    $1,600 – 26.21 = $1,573.79 (Recalculated)

    $3,100 – 50.79 = $3,049.21 (Paid to Attorney B)

    SSA will refund the excess assessment to Representative A.

    $77.00 – 26.21 = $50.79 (Refund paid to Attorney A)

     

E. Procedure – FO Actions

CRs are not responsible for authorizing fees under the fee petition process or releasing title II fee payments. (Refer to POMS GN 03930.035, Adjudicating Title II Claims Involving Representatives Who May Petition – Overview.)

However, on a title II case, the CR must add a special message to the MBR to alert the PC to the need to modify the fee notice or take a manual action related to the calculation of the assessment when there are two or more representatives and:

  • the representatives are authorized fees in different amounts, or

  • SSA pays the authorized fees at different times.

In addition, if either of these situations arises in a title XVI case, the CR is responsible for processing those actions in accordance with the guidance.

F. Procedure – PC Actions

The BA, BTE, fee reviewer, or other designated PC position certifies direct payment to the representative after SSA authorizes a fee for administrative-level services based on a fee petition or to the attorney after the court authorizes a fee. In addition to following the procedures in GN 03930.060, Releasing Past-Due Benefits Withheld for Possible Direct Payment to Representative, the BA or BTE must ensure that SSA collects the correct assessment amount and provides notice.

As explained in GN 03930.066D, some situations require manual input to override the SPS automated assessment calculation and deduction.

1. Notices

SPS calculates and deducts the assessment correctly in fee petition or court authorized fee cases when:

There is one representative and one fee payment.

There are multiple representatives; SSA paid one (or more) fees before September 1, 2004; and after August 31, 2004, you are processing another fee payment on PIC A, D, E, or W.

In these situations, as the PC technician, you must:

  • identify the appropriate assessment paragraph to be included in the fee payment notice that goes to the claimant and the representative (refer to the notice chart in GN 03920.019K.); and

  • provide the variable fill-in information.

2. Override SPS Assessment Calculation

Refer to GN 03930.066D. to determine the situations in which you must override the automated assessment calculation and deduction.

To override the SPS-calculated assessment, take the following MADCAP/SPS Online (manual) actions:

  • Refer to the SPS or PHUS query, as necessary, to determine whether there has been a previous assessment.

  • Manually calculate the correct assessment.

  • For MADCAP actions ONLY, input code “03” (standard assessment does not apply) in the MACADE Attorney Payment Indicator field on the ATT screen to put a hold on the fee payment (see SM 00834.200).

  • The next day, access the SPS Payment Transaction Menu (SPPT) and in the Choose Option field, select 2 – update, to update a previously established representative fee record in payment held status. (This takes you to the