TN 8 (02-05)

GN 03930.070 Title II - Prorating Excess Past-Due Benefits Withheld for Payment to the Auxiliary Beneficiary(ies)

A. Policy – Effective with the Implementation of Title II Redesign Release 3

Effective with the implementation of the Title 2 Redesign Release 3 (T2R3) on June 21, 2004, in fee petition cases, the primary claimant pays the authorized fee from his/her withheld past-due benefits to the maximum extent possible. Then, if two or more auxiliaries are involved and a portion, but not all, of their withheld past-due benefits are used to pay all or part of the remainder of the authorized fee directly to the representative, under the circumstances listed below, the benefit authorizer (BA) or benefit technical examiner (BTE) prorates the excess past-due benefits withheld from the auxiliary beneficiaries. The proration is based on each auxiliary beneficiary's proportionate share of the difference between the total fee and the amount withheld from the primary claimant’s past-due benefits.

SSA prorates the excess if:

  • SSA certifies direct payment of all or part of the representative's fee;

  • there is no need to continue withholding (e.g., for administrative review, or for possible direct payment of a fee a Federal court authorizes under § 206(b) of the Social Security Act) and the authorized fee was more than the amount SSA withheld from the primary claimant’s past-due benefits;

  • SSA must release the funds remaining to two or more auxiliary beneficiaries; and

  • all auxiliaries do not live in the same household.

NOTE: SSA does not prorate the excess withholding when all auxiliary beneficiaries live in one household.

B. Procedure – Effective with the Implementation of T2R3

Effective June 21, 2004, follow steps 1-9 to determine how to release the excess past-due benefits withheld. In the example shown, the authorized fee is $9,732; 25 percent of the primary claimant’s past-due benefits is $7,288, and HB is working.

Step

Action

 

Example

1

Add the amount(s) of past-due benefits withheld from each auxiliary beneficiary.

  $ 860.

+2,784.

$3,644

HB’s withholding

HC1’s withholding

Sum of withholding from auxiliaries (HB & HC1)

2

Determine the direct payment amount not satisfied by the primary claimant’s withheld past-due benefits (i.e., determine the fee amount the auxiliaries will pay).

$9,732.
- 7,288.

$2,444

Authorized fee

Primary claimant’s withholding

Fee amount auxiliaries to pay

3

Determine the auxiliaries’ excess withholding: difference between the amount withheld from the auxiliary beneficiaries (from Step 1) and the direct payment amount the auxiliaries to pay (from Step 2).

$3,644

- 2,444

$1,200

Amount withheld HB & HC1

Amount HB & HC1 to pay

Excess withholding

4

Find each auxiliary beneficiary's percentage of the total past-due benefits withheld from auxiliaries: divide the amount of past-due benefits withheld from each beneficiary by the total past-due benefits withheld from all auxiliaries (from Step 1). Carry your result to four decimal places, and do not round.

$ 860
$3,644
 
$ 2,784   

$ 3,644
 

= .2360 for HB
 
 
= .7639 for HC1
 
 
.

5

Determine the approximate refund amounts: multiply the total excess withheld from all auxiliaries (from Step 3) by each beneficiary's withholding percentage (from Step 4). Repeat for each beneficiary.

$ 1,200 23.60% = $283.20 for HB
 

$ 1,200  76.39% = $916.68 for HC1  

6

Add the approximate refunds

amounts (from Step 5).

$ 283.20

+ 916.68

$1,199.88

HB

HC1

Sum

7

From the excess withheld (from Step 3),

subtract the sum from Step 6.

$ 1,200.00

- 1,199.88

 $     .12

Excess

Sum

Remainder

8

Add any remainder (from Step 7) to the approximate refund amount (from Step 5) of the first auxiliary in alphabetical order based on the beneficiary identification codes (e.g., B; if no B, then C1; etc.).

$ 283.20
+ .12
$283.32

HB's approx. refund
Remainder
HB's actual refund

9

The sum of the resulting refund amounts will equal excess withheld from all auxiliaries.

$ 283.32

+916.68

$1,200.00

HB’s actual refund

HC1’s actual refund

Total excess refund

C. POLICY – prior to the implementation of T2R3

Prior to the implementation of T2R3 on June 21, 2004, in fee petition cases, the benefit authorizer (BA) or benefit technical examiner (BTE) prorated the excess past-due benefits withheld (based on each beneficiary's proportionate share of the total) if:

  • SSA certified direct payment of all or part of the attorney representative's fee;

  • there was no need to continue withholding (e.g., for administrative review, or for possible direct payment of a fee a Federal court authorizes under § 206(b) of the Social Security Act);

  • SSA had to release the funds remaining to the claimant, and one or more auxiliary beneficiaries; and

  • there was more than one family unit. As GN 03920.050F. explains, the BA/BTE did not prorate when all beneficiaries live in one household.

NOTE: Prior to February 28, 2005, SSA made direct fee payment only to attorneys.

D. Procedure – Prior to the Implementation of T2R3

Prior to June 21, 2004, Steps 1-8 were followed to determine how to release the excess past-due benefits withheld. In the example shown, HB2 was working.

Step

Action

 

Example

1

List and add the amount(s)

of past-due benefits withheld

from each beneficiary.

$ 7,288

   860.

+2,784.

$10,932.

HA’s withholding

HB’s withholding

HC1’s withholding

Total withheld

2

Determine the excess withheld:

From total withheld, subtract the amount to certify for direct payment to attorney.

$10,932.

- 9,732.

$1,200.

Total withheld

Direct payment before assessment deducted

Excess withheld

3

Find each beneficiary's percentage of the total: divide the amount of past-due benefits withheld from each beneficiary by the total past-due benefits withheld from the family (Step 1). Carry the result to four decimal places, and do not round.

$ 7,288

$ 10,932
 
$ 860
$10,932
 
$ 2,784
$10,932

= .6666 for HA
 
 
= .0786 for HB
 
 
= .2546 for HC1

4

Determine the approximate refund amounts: multiply the excess withheld (from Step 2) by each beneficiary's percentage (from Step 3). Repeat for each beneficiary.

$ 1,200 66.66% = $799.92 for HA

$ 1,200  7.86% = $94.32 for HB
 
$ 1,200 25.46% = $305.52 for HC1

 

5

Add the approximate refund amounts (from Step 4).

$ 799.92

94.32

+ 305.52

$1,199.76

HA

HB

HC1

Sum

6

From the excess withheld (from Step 2), subtract the sum (from Step 5).

$ 1,200.00

- 1,199.76

 $     .24

Excess withheld

Sum

Remainder

7

Add any remainder to the approximate refund amount (from Step 4) of the first auxiliary in alphabetical order based on the beneficiary identification codes (e.g., B; if no B, then C1; etc.).

$ 94.32
 
+ .24
$ 94.56

HB's approximate refund
Remainder
HB's actual refund

8

The sum of the resulting refund

Amounts will equal the excess

withheld.

$ 799.92

94.56

+ 305.52

$1,200.00

HA’s actual refund

HB’s actual refund

HC1’s actual refund
Total excess refund


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0203930070
GN 03930.070 - Title II - Prorating Excess Past-Due Benefits Withheld for Payment to the Auxiliary Beneficiary(ies) - 08/25/2017
Batch run: 08/25/2017
Rev:08/25/2017