Effective Dates: 12/18/2024 - Present Previous | Next

TN 35 (12-24)

GN 03930.066 Title II - Fee Petitions – Processing the Assessment

A. Introduction

We are required to charge an assessment, also called a “user fee,” when directly paying fees from past-due benefits. The Social Security Protection Act of 2004 (SSPA) amended section 206(d)(2)(A) of the Social Security Act by:

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    Capping the assessment at a flat-rate dollar amount or 6.3% of the fee payment, whichever is lower, effective September 1, 2004; and

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

The current flat-rate assessment amount is $120.00, effective December 1, 2024.

Refer to GN 03920.019, Assessment on Representatives Who Receive Direct Payment, for assessment policy. For information about the assignment of direct payment of fees to an entity, see GN 03920.021.

B. Overview

The Single Payment System (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 in the SPS database when calculating the assessment.

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    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 in the SPS database.

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

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    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 in 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. Decision

By decision, we mean an initial or reconsideration determination, a decision made by an attorney advisor or administrative law judge at the hearing level, or a decision made by an administrative appeals judge at the Appeals Council.

2. Fee Payment Date

By the fee payment date (i.e., the date we “make payment” or “pay 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 our 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 or electronic funds transfer (EFT).

3. 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 SPS payments that could not be automated.

D. Process – Fee Authorized Based on Fee Petition

1. General

When the claims specialist (CS) or processing center (PC) technician effectuates a Title II decision that may involve direct payment of authorized fees, the CS or technician ensures that we withhold from past-due benefits (see GN 03930.035). After the fee is authorized, the benefit authorizer (BA), benefit technical examiner (BTE), or post entitlement technical expert (PETE) completes the SPS Attorney Fee Payment Screen (APAY) to make direct payment of the authorized fee to the appropriate recipient(s) (see GN 03930.065). When the technician inputs the authorized fee amount, SPS will calculate the assessment.

2. Fee Payments to Two or More Representatives or Entities

When more than one representative files a fee petition and requests direct payment or assigns direct payment to an entity, SPS processing differs depending on the order in which we authorize the fees.

a. We Pay the Authorized Fees Simultaneously

If the authorized fees are the same amount for each representative, SPS will divide 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.

NOTE: If one or more of the representatives validly assign direct payment of their fee to the same entity, the entity's payment will be reduced by the sum of the user fees that would otherwise have been assessed to their affiliated representatives. If all representatives have assigned direct payment of their fees to the same entity, the entity's payment would be reduced by the full user fee, up to the current user fee cap.

b. We Pay the Authorized Fees at Different Times

When we make the first fee payment, SPS correctly determines the assessment to be the lesser of 6.3% of the fee amount or the flat-rate cap based on the annual cost of living adjustment. When processing a subsequent fee authorization, it becomes necessary to:

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    Use the SPS Online (manual) process.

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

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    Prorate the assessment, as described in the example below, based on the total fees paid to each representative, including representatives who validly assigned direct payment of their authorized fee to an entity.

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    Deduct the prorated assessment from the fee being processed.

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    Initiate payment action on the second fee.

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    Refund to the representative or validly assigned entity who received the first direct payment the difference between the amount the representative was assessed and the recalculated assessment.

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    Send a notice to the representative paid first and, if the fee was paid to an entity, a copy to the entity's point of contact (see GN 03920.021), 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.”

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    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: We 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 2024, we authorized Representative A to charge and collect $1,600, and paid Representative A $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 we pay 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, following 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 Representative B)

    We will refund the excess assessment to Representative A.

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

    		 ​

E. Procedure – Field Office Actions

CSs are not responsible for authorizing fees under the fee petition process or releasing Title II fee payments (see POMS GN 03930.035).

However, on a Title II case, the CS 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, including representatives who validly assigned direct payment of their authorized fee per GN 03920.021, and:

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    The representatives are authorized fees in different amounts, or

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    We pay the authorized fees at different times.

In addition, if either of these situations arises in a Title XVI case, the CS is responsible for processing those actions in accordance with policy.

F. Procedure – PC Actions

The BA, BTE, PETE, or fee reviewer, or other designated PC position certifies direct payment to the representative, or entity if there is a valid assignment per GN 03920.021, after we authorize a fee for administrative-level services based on a fee petition, or to the court attorney after the court authorizes a fee. In addition to following the procedures in GN 03930.060, the BA, BTE, or PETE must ensure that we collect the correct assessment amount and provide 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, including those who assigned direct payment of their administrative fee, and we authorized each the same fee amount.

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

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

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    Provide the variable fill-in information.

2. Override SPS Assessment Calculation

For more information to determine when you must override the automated assessment calculation and deduction, refer to GN 03930.066D.

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

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

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    Manually calculate the correct assessment.

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    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 00842.016).

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    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 Attorney Fee Payment (APAY) screen.)

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    On the APAY screen, if multiple representatives are involved, enter the number of representatives; the “Number of Attorneys on the SSN” field will not be pre-filled. (The completed APAY screen leads to the Payment Action (PACT) screen.)

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    On the PACT screen, override the calculated assessment in the “User Fee” field (9-M) with the manually calculated assessment; select Payment Action 1, Issue Check.

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    Return to SPPT screen. The SPPT screen appearance indicates that the fee will be paid that evening.

Refer to MS 05701.001 and SM 00834.000 for guidance on using SPS.

If you have prorated and reduced the assessment deducted from a previously paid fee because you are paying an additional fee to another representative or entity with a valid assignment after an authorization based on a fee petition or to a court attorney after a court award, take the following additional actions:

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    Authorize a check or EFT in the amount of the assessment reduction to be issued to the representative who received the previous fee payment or authorize an EFT in the amount of the assessment reduction to be issued to the entity with a valid assignment.

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    Update PHUS to correct the assessment for the previous payment.

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    Send an explanatory notice to the representative who received the previous payment. Refer to GN 03930.066D.2.b. for sample language.

 

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0203930066
GN 03930.066 - Title II - Fee Petitions – Processing the Assessment - 12/18/2024
Batch run: 12/18/2024
Rev:12/18/2024