TN 17 (03-05)

GN 03940.020 Title II - PC Processing of Fee Agreements on Initial Level Claims

A. Procedure - Unfavorable Decision

Take no action under the fee agreement process for unfavorably decided claims. (But see GN 03940.003A.1. concerning concurrent titles II and XVI claims.)

B. Procedure - Favorable Decision - General

Take actions based on whether a claim is District Office Final Authorization (DOFA) or non-DOFA, whether processing is fully or partially automated, and whether the decision maker approved or disapproved the fee agreement.

NOTE: Although the instructions below refer to specific positions, because operating procedures differ among processing centers (PCs), each may designate the position(s) responsible for completing the following actions.

C. Process

These instructions apply to claims the field office (FO) has forwarded to the PC, following GN 03940.015A.2.

1. DOFA Award – Modernized Claim System (MCS)/Single Payment System (SPS) Complete Notice

In fully automated claims with complete notice coding, the system:

  • calculates the fee under the fee agreement process, if the decision maker approved the fee agreement;

  • withholds up to 25 percent of past-due benefits towards direct payment when the representative is eligible for and did not waive direct payment;

  • prepares the award notice advising the claimant and representative of the determination on the fee agreement and, if the decision maker approved the agreement, the amount of the authorized fee;

  • calculates the assessment based on the direct payment amount (see GN 03920.019, Assessment on Representatives Who Receive Direct Payment); and

  • deducts the assessment and pays the balance to a representative who is eligible for and has not waived direct payment, if the payment can be made when the claimant's award is processed.

2. DOFA Award - MCS Incomplete Notice

In claims with incomplete notice coding, the system:

  • withholds 25 percent of past-due benefits towards direct payment when the representative is eligible for and has not waived direct payment; and

  • produces an alert (see MSOM MCS 009.009 ).

D. Procedure - DOFA Award

Apply these procedures to claims the field office (FO) has forwarded to the PC following GN 03940.015A.

1. MCS Earnings Computation (EC) Award with a Notice Alert

If you are a PC Check Claims and Recovery Examiner (CCRE), claims authorizer (CA), or claims technical examiner (CTE), take the following actions:

  • If the representative is a non-attorney and information is received that indicates a change in his/her direct payment eligibility, follow the procedures in GN 03940.020E.1. to verify the eligibility and record the results.

  • Identify and complete the necessary paragraphs for the award notice, advising the parties of the decision on the fee agreement. If the decision maker disapproved the fee agreement, advise the parties of the right to request administrative review of the disapproval determination. If the decision maker approved the fee agreement, advise the parties of the fee authorized under the fee agreement and of the right to request administrative review of the authorized fee amount.

  • Annotate the Master Beneficiary Record (MBR) Special Message field with the representative's name and address (list all representatives and identify the principle representative), fee agreement case, the amount of past-due benefits withheld for direct payment, the withholding period, and the authorized fee.

2. A101/Web 101 Award

There is little systems support for processing non-MCS or MCS exclusion claims. Follow general claims processing instructions and take the following additional actions:

  • If the representative is a non-attorney and information is received that indicates a change in his/her direct payment eligibility, follow the procedures in GN 03940.020E.1. to verify the eligibility and record the results.

  • Ensure that the notice language refers to the fee agreement process, advising the parties of the decision on the fee agreement. If the decision maker disapproved the fee agreement, advise the parties of the right to request administrative review of the disapproval determination. If the decision maker approved the fee agreement, advise the parties of the fee authorized under the fee agreement and of the right to request administrative review of the authorized fee amount.

  • Withhold the authorized fee amount (or 25 percent past-due benefits, if the authorized fee amount is not known) if the representative is eligible for direct payment. Also, see the NOTE at GN 03940.007A.

  • Deduct any funds the representative holds in escrow from the authorized amount, if the escrow amount is known.

  • Certify direct payment of the authorized fee less escrow funds and the assessment to the representative who is eligible for direct payment, and release any remaining past-due benefits to the claimant and any auxiliary(ies) unless the claimant filed concurrently for title II and title XVI benefits and windfall offset is still pending.

E. Procedure - NON-DOFA Award

These instructions apply to claims favorably decided by a PC decision maker.

1. MCS EC Award

  • Approve or disapprove the fee agreement, as explained in GN 03940.001D.

  • Determine if a non-attorney is eligible for direct fee payment by checking the list at http://policynet.ba.ssa.gov/repository/other/nonattorney.html. See GN 03920.018 Direct Payment for Non-Attorney Representatives, for detailed information. Record the results on the MCS DW01 screen as follows:

    • ISSUE – EDPNA (stands for “eligible direct payment non-attorney)

      REC – Input date of verification

      REMARKS – Based on results of checking the list, type “Elgble for Direct Pymnt” (or “EDP”), “Not elgble for direct pymnt” (or “NEDP”), or “Not on list.”

      If the non-attorney representative is eligible for direct payment, code the Authorized Representative Type on the NOT2 screen as “1,” “attorney.” If the non-attorney representative is shown on the list as not eligible for direct payment at the time the claim is processed, or is not listed, ensure that the Authorized Representative type on the NOT2 screen is coded “2,” “non-attorney.” Show “REP FOR” in the address line.

      See GN 03920.017B. for the definitions of “representative eligible for direct fee payment” and representative ineligible for direct fee payment” and GN 03920.017C. for policy on direct payment to representatives in title II cases.

  • If the non-attorney states he/she is eligible for direct payment but he/she is not eligible, advise the representative that SSA cannot make direct payment. Model language to use in these situations follows:

    You advised your client, (Beneficiary's name), and indicated on the appointment of representative that you are eligible for direct payment. Under titles II and XVI of the Social Security Act, certain non-attorney representatives have the option to have an approved representatives' fees withheld and paid directly from a claimant's past-due benefits. However, [Select the conclusion that describes the status]

    • you do not meet all the qualifications to be eligible for direct payment. or

    • you did not meet all the qualifications to be eligible for direct payment until after we effectuated the favorable decision on your client's claim or

    • you failed to maintain your eligibility for direct payment.

    The law does not permit us to make direct payment of a fee in this case. Accordingly, SSA is not withholding (claimant's name)'s past-due benefits for fee payment purposes and will not pay any authorized fee directly to you. You must look to the claimant for payment of the fee authorized in this case.

  • Follow the instructions for MCS claims processing in MSOM MCS 009.009 , and GN 03940.020D.1 or GN 03940.020D.2., as appropriate.

    NOTE 1: Effective with the implementation of Title 2 Redesign Release 3 on June 21, 2004, MCS withholds the lesser of 25 percent of past-due benefits or the bulleted specified dollar amount of the fee cap indicated in GN 03940.003A.3. if the representative is eligible for direct payment and has not waived direct payment or waived a fee, rather than 25 percent of past-due benefits.

    NOTE 2: The SPS will (1) calculate the assessment based on the fee amount SSA authorizes the representative who is eligible for direct payment to charge and (2) pay the authorized fee, less the assessment, to a representative who is eligible for and has not waived direct payment, if SSA certifies the representative's fee payment when the claimant's award is processed.

  • Release remaining withheld funds, if any, to the beneficiary(ies) unless the claimant filed concurrently for title II and title XVI benefits and windfall offset is still pending, or a court case is pending.

2. A101/EF101 Award

  • enter the remark “Fee Agreement Case” and the representative's name and address on the A101 BCRN Screen;

  • follow the procedures in GN 03940.020E.1. that pertain to a non-attorney representative and eligibility for direct payment;

  • withhold 25 percent of past-due benefits, up to the specified dollar amount of the fee cap indicated in GN 03940.003A.3., if the representative is eligible for direct payment; and

  • designate the fee agreement paragraphs for the notice.

F. Procedure - DOFA Award - No Fee Agreement Determination

If the claims representative (CR) neither approved nor disapproved the fee agreement and you are the CA, CTE or Senior Claims Processing Specialist (SCPS):

  • verify with the FO that there was no undocumented reason for not approving the fee agreement;

  • approve or disapprove the fee agreement, as explained in GN 03940.001D.;

  • if the fee agreement is approved and the representative is a non-attorney, check the DW01 for the EDPNA ISSUE to determine if the FO verified the representative's direct payment eligibility. If not, follow the procedures in GN 03940.020E.1.; and

  • follow the procedures for fee authorization, notice preparation, and withholding of past-due benefits (if applicable) in GN 03940.020D.1. or GN 03940.020D.2., as appropriate.

Do not return the fee agreement to the FO.

G. Procedure - Fee Agreement Approved Incorrectly

If you believe the CR incorrectly approved the fee agreement because it either does not meet the requirements of the Act (GN 03940.003A.) or an exception to the fee agreement process applies (GN 03940.003B.), take the following actions:

  • Process the claim to payment.

  • Withhold 25 percent of past-due benefits if the representative is eligible for direct payment.

  • Request an incomplete notice, using “neutral” language paragraphs regarding the representative's fee (see GN 03940.075 for paragraphs).

  • Refer the claim to a reviewing official (the “reviewer” defined in GN 03960.001D.12.) for a determination on the fee agreement. If the reviewing official agrees that the CR incorrectly approved the fee agreement, the reviewing official will disapprove the fee agreement.

  • If the reviewing official disapproves the fee agreement, prepare and issue a notice advising the claimant and representative of the disapproval.

NOTE: In claims at the initial or reconsideration lev