TN 17 (03-05)
GN 03940.035 FO and PC Processing of Fee Agreements on Delayed Auxiliary Claims
When authorizing fees under the fee agreement process, the fee agreement signed by the primary claimant is binding on the auxiliary beneficiary(ies), unless an auxiliary has appointed his/her own representative. GN 03920.030B. and GN 03920.035B. discuss past-due benefits of and withholding from an auxiliary beneficiary.
Prior to the implementation of Title 2 Redesign Release 3 (T2R3) on June 21, 2004, SSA prorated the fee between or among the claimant and the auxiliary beneficiary(ies) when one or more of the auxiliaries resided in a household separate from the claimant's.
However, effective with the implementation of the T2R3, the primary claimant pays the authorized fee from his/her withheld past-due benefits to the maximum extent possible. SSA prorates the difference, if any, between the maximum fee payable based on the approved fee agreement and the amount the primary claimant pays, between or among all auxiliary beneficiaries, independent of the household status (i.e., single or multiple family unit), based on each auxiliary's past-due benefits amount. SSA will prorate the fee amount between or among the auxiliary(ies) who benefited from the representative's services and who were not independently represented.
EXAMPLE: After the implementation of T2R3, if the approved fee agreement provides for the specified dollar amount of the fee cap indicated in GN 03940.003A.3, and 25 percent of the primary claimant's past-due benefits equals or exceeds the specified dollar amount of the fee cap, there is no withholding from auxiliary beneficiaries for fee payment.
If one or more auxiliary claims are pending when you process the primary claimant's award (and after the implementation of T2R3, the claimant's past-due benefits do not yield the maximum fee based on the approved fee agreement), you generally do not know the total past-due benefits. However, do not delay action on the fee agreement pending adjudication of the delayed auxiliary claim(s). These claims require special handling because the actions are not automated fully.
1. Preliminary Fee Calculation
Process the fee agreement based on the known past-due benefits at the time of the award.
Calculate the fee amount using the primary claimant's and any non-delayed auxiliary beneficiary's(ies') past-due benefits amount(s) (see GN 03940.020).
Record the fee amount in the claim(s) file.
Review the EDPNA ISSUE on the DW01 or MDW screen to determine if a non-attorney representative is eligible for direct fee payment. (See GN 03940.020E.1. for guidance in interpreting the entry.)
Enter information via the NOT2 screen in Modernized Claim System (MCS) for initial claims or the Benefit Continuity Factor (BCF) of AF in MACADE for initial claims and post-entitlement actions. This data passes to the attorney fee data line of the Master Beneficiary Record (MBR).
Annotate to the MBR Special Message field that an additional fee may be authorized when the auxiliary claim(s) is adjudicated (see MSOM T2PE 007.008 .).
Prepare a notice with the appropriate fee agreement paragraphs. Replace the fee agreement amount paragraph, as the case requires. These are the MADCAP and MCS paragraphs for delayed auxiliary claims:
L25 (ATYR20): Fee amount title II claim only - NH only – delayed auxiliary claim(s) pending or expected - NH's award notice
L26 (ATYR22): Fee amount title II claim - only NH and non-delayed auxiliary beneficiary(ies) - delayed auxiliary claim(s) pending or expected - NH's award notice
L27 (ATYR24): Fee amount concurrent title II and title XVI claims offset information pending – NH only – delayed auxiliary claims pending or expected - NH's award notice
L28 (ATYR26): Fee amount concurrent title II and title XVI claims - offset information pending - NH and non-delayed auxiliary beneficiary(ies) - delayed auxiliary claims pending or expected - NH's award notice
(Refer to NL 00725.005 for MCS paragraphs. Also refer to GN 03940.080, Fee Agreement Process – Title II – Delayed Auxiliary Claim(s) Paragraphs.)
Send the notice(s) to the claimant, any non-delayed auxiliary beneficiary(ies), and a copy to the representative. Also send an e-mail message to the Office of Hearings and Appeals (ODAR) decision maker to notify the decision maker of the authorized fee amount, if the decision maker requested to be notified.
NOTE: To request the notification for the purpose of possibly requesting administrative review, the ODAR decision maker will flag the claim and provide an e-mail address to which to send the notification.
Withhold 25 percent of past-due benefits or the amount of the authorized fee, if known, when the representative is eligible for direct payment.
Certify direct payment to the representative who is eligible for direct payment if no one has requested administrative review (or once SSA completes the review if one was requested).
2. Subsequent Fee Calculation(s)
After SSA subsequently adjudicates the auxiliary claim(s), take the following actions:
Authorize a fee based on the auxiliary's(ies') past-due benefits. However, to ensure SSA does not authorize a fee in excess of the statutory maximum indicated in GN 03940.003A.3 (or any lower maximum fee specified in the fee agreement) consider the fee amount already authorized based on the primary claimant's and any non-delayed beneficiary's(ies') title II past-due benefits. Also, as stated in GN 03940.015C., in concurrent cases check to ensure that a title XVI fee amount was not inadvertently authorized early (i.e., before the entire title II fee amount was known). If a title XVI fee amount was inadvertently authorized early, consider that amount as well in determining how much has been authorized toward the statutory maximum indicated in GN 03940.003A.3 (or any lower maximum fee specified in the fee agreement). (The amount of the title XVI fee is recorded in the T16$ field on the AUTH segment of the Supplemental Security Record (SSR). If direct payment was made, the title XVI amount passes to the Single Payment System (SPS).)
Refer to GN 03920.035 for withholding and proration policy and procedures.
When the representative is eligible for direct payment and the amount withheld from primary claimant's past-due title II and, in concurrent cases, title XVI benefits was less than the maximum fee amount provided in the approved fee agreement, withhold 25 percent of the auxiliary's(ies') past-due benefits towards direct payment or the amount of the authorized fee, if known.
Prepare a notice with the appropriate fee agreement paragraphs.
Send the notice to the auxiliary beneficiary(ies) and a copy to the representative. Also send an e-mail message about the fee authorization to the ODAR decision maker, if the claim is so flagged.
If the representative is eligible for direct payment and has not waived a fee or direct payment, certify direct payment to the representative if no one has requested administrative review (or once SSA completes the review, if one was requested).
If all auxiliary beneficiaries are not members of the same household, adjust any non-delayed auxiliary beneficiary's(ies') benefits based on the proration of the fee amount.
Disburse any remaining past-due benefits withheld to the claimant and auxiliary(ies). If the beneficiaries are not members of the same household, follow the steps in GN 03930.070B. to determine how to release the remaining past-due benefits.
Notify the primary claimant and all auxiliary beneficiary(ies) of your proration action.
NOTE: Posting information to the MBR automates the title XVI procedure. The system will generate an alert to the FO if there is a problem with the interface between the MBR and the title XVI system.