Effective Dates: 5/15/2023 - Present

Identification Number:
GN 02610 TN 32
Intended Audience:See Transmittal Sheet
Originating Office:ORDP OISP
Title:GN 02610.053 - Title II/Title XVI (Windfall) Offset
Type:POMS Full Transmittals
Program:All Programs
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM

Part GN – General

Chapter 026 – Posteligibility

Subchapter 10 – Title II/Title XVI (Windfall) Offset

Transmittal No. 32, 05/15/2023

Audience

PSC: BA, CA, CCRE, CS, ICDS, IES, ILPDS, IPDS, ISRA, PETE, RECONR, SCPS, SPIKE, TSA, TST;
OCO-OEIO: BIES, BTE, CR, CTE, FCR, PETL, RECONR;
OCO-ODO: BTE, CR, CST, CTE, CTE TE, PETE, PETL;
FO/TSC: CS, CS TII, CS TXVI, CSR, CTE, DRT, DT, FR, OA, OS, RR, TA, TSC-CSR;

Originating Component

OISP

Effective Date

Upon Receipt

Background

Windfall offset is a complex workload that requires collaboration between payment center and field office staff. We are updating our offset policies to clarify procedures, and better communicate each component’s responsibilities. This POMS section has been reformatted and provides additional details on PC responsibilities in offset cases that have representative fees.

Summary of Changes

GN 02610.053 How To Process Title II Offset Cases When a Representative Fee Is Involved - Action to Apply Offset (Second Day Action In The PC) Taken On Or After July 1, 1991

There are significant revisions throughout the section and most of the content was reorganized.

GN 02610.053 How To Process Title II Offset Cases When a Representative Fee Is Involved - Action to Apply Offset Taken On Or After July 1, 1991 (Second Day Action In The PC)

A. Policy

1. General

Effective July 1, 1991, the Omnibus Budget Reconciliation Act of 1990 (OBRA 1990) requires us to calculate the amount of a representative's fee based on the total amount of past-due Title II benefits from a favorable award prior to reducing the total Title II past-due benefit amount for windfall offset.

Additionally, if the representative requests and is eligible for direct payment, we must withhold 25 percent of the past-due benefits from the total past-due Title II benefits prior to reducing the Title II past-due benefits for windfall offset. This ensures the representative can receive their fee. Occasionally, we may even need to reduce the total windfall offset amount to ensure there are sufficient funds available from the total past-due Title II benefits for the representative's fee.

These rules apply to cases with fee agreements and fee petitions. See GN 03940.000 and GN 03940.050 for an explanation of representative fee agreements and amounts. See GN 03930.001 and GN 03930.010 for an explanation of fee petitions and amounts.

 

2. How Representative Fees Affect Offset Computations

Title II benefits are counted as income on a Title XVI record. When determining Title XVI payment amounts, including payment amounts in an offset period, the Title XVI systems must count Title II benefits as income.

However, under Title XVI income counting rules, certain legal expenses, such as approved or authorized fees, are not counted as income. For the field office (FO) to properly compute the Title XVI payment amounts, FO technicians must subtract the total amount of approved or authorized fees from the payment computations. This is true regardless of whether we directly pay the representative, or the representative collects the fee from the claimant, and it also applies to any out-of-pocket expenses that are not part of the approved or authorized fee, but are paid by, or billed to, the claimant. Generally, the system will account for the fees when computing payment amounts. In some cases, such as when the representative files a fee petition months after the case was approved or when the number holder (NH) signs a fee agreement and there are potential auxiliaries on the record, the payment center (PC) will need to provide the fee information to the FO on the e4345, or a high priority (HP) modernized development worksheet (MDW), if the e4345 is not necessary, so the FO can take manual action to update the Title XVI record. The PC may also receive a request to update the offset amount from the FO if the FO is notified of additional out-of-pocket expenses that are not part of the fee, but are paid by, or billed to, the claimant

When computing Title XVI payment amounts in an offset period, the total offset amount must be equal to or less than the total past-due Title II benefits minus the representative's fee. If the total offset amount computed by the system is more than the total past-due Title II benefits minus the representative's fee, the PC must send a request to the FO through the SSA-e4345 application to recalculate the offset amount. The FO will reduce the offset amount until the offset amount is equal to the total past-due Title II benefits minus the representative's fee. The FO will communicate the updated offset amount to the PC through the SSA-e4345 application. The PC will then update the offset amount on the master beneficiary record (MBR) (i.e.complete the second day action).

3. Representative fees when auxiliaries are involved

When the number holder and their representative have signed a fee agreement and there is at least one auxiliary beneficiary present on the record, consult GN 03940.035 to determine if fees should be withheld from any Title II past-due benefits due as a result of the auxiliary beneficiary's claim.

4. Communicating the fee amount to the FO

When the claim is awarded, if the representative did not file a fee agreement and did not waive the right to a fee, the representative can file a fee petition later. In these cases, the FO will complete the initial offset without the fee information. See SI 02006.204 for FO processing of unknown or unresolved Representative fees.

If the representative files a fee petition at a later time, the PC must communicate the fee amount to the FO through a HP MDW, see GN 03930.080C. The FO will then update the Title XVI record with the new fee information and attempt to trigger an automated update to the Title XVI record. If the FO cannot automate the update to the Title XVI record, (i.e. Start Date or couples case) the FO will communicate the updated offset information to the PC through the SSA-e4345 application.

NOTE: Inform the FO of any approved or authorized fee as quickly as possible. Any changes to the windfall offset information due to an authorized or approved fee must be applied to the Title XVI record within 120 days of the date the fee was authorized or approved. If any changes are made to the fee amount after the SSA-1560A is sent to the FO, the PC should send a HP MDW to the FO to inform them of the additional change (e.g., one or more auxiliary claims not filed with the NH.)

B. Procedure

1. General

If the initial offset does not process the PC will send a request to the FO for an offset computation through the SSA-e4345 application following the instructions in the e-4345 application PC User Guide. The PC will inform the FO that a fee agreement or fee petition was filed and approved. and provide the FO the amount of the fee in the SSA-e4345 application. If the fee is unknown or unresolved (AUX pending, fee petition etc.) enter .01 on the e4345 and explain in the remarks the reason the fee is unknown or unresolved.

The FO will adjust the Title II income for the fee amount and use the adjusted amount on the Title XVI record accordingly. See GN 03940.050 for fee amounts in concurrent Title II/Title XVI claims with fee agreements. See GN 03930.001 and GN 03930.010 for fee amounts in concurrent Title II/Title XVI claims with fee petition.

If the FO recognizes the need for a manual computation because there is a 5W diary on the supplmental security record (SSR), the FO technician will query the MBR. If there is a WIN of L or an entry in the LPDD field, or if there is a representative’s name and address present on the SSR, the FO will check for the HP MDW the PC must send for updates to representative fee information for claims involving auxiliaries or when a fee petition is involved.

If the fee amount is unknown, the FO will compute the initial offset using all the retroactive Title II benefits per SI 026006.204. The FO will code the fee status on the supplemental security record (SSR) as, "unknown or unresolved," when computing the initial offset. After the fee authorization is received, the PC will inform the FO of the total amount of the fees withheld from all related Title II claims, including auxiliary claims if applicable. The FO will adjust the title XVI payments according to SI 02006.200, SI 02006.202, and SI 02006.203.

2. Applying Title XVI Offset

When Title XVI offset applies, the FO will process the case following GN 02610.041 and SM 01320.040. In fee agreement cases where the entire fee amount is known at the time of effectuation, the FO will adjust the Title II income for the fee amount when it applies the offset per SI 02006.200B.2. and GN 03940.050.

3. Applying Title II Offset — Fee Petition Cases

a. The PC will take the following actions in fee petition cases:

STEP ACTION

1

Calculate the amount to be withheld from the Title II prior month accrual (PMA) in anticipation of direct payment to the representative according to GN 03920.030.

2

Subtract the amount from step 1 from the total amount of the retroactive Title II benefits.

3

Compare the windfall offset amount (WOA) from the automated offset computation to the results of step 2.

If the WOA is greater than the results of step 2, proceed to step 4.

If the WOA is less than the results of step 2:

  • •

    Complete the actions listed in GN 02610.041B, then return to this step.

  • •

    Send the notice in NL 00703.813.

    • –

      Always include paragraph 3816D.

    • –

      Add the appropriate offset language to the notice following NL 00703.813B.

    • –

      Add the appropriate attorney fee language to the notice following NL 00703.813B.

  • •

    Diary for receipt of the fee petition request per GN 03930.035E.

  • •

    When the fee petition request is received and authorized, proceed to step 5.
4 If the WOA is greater than the results of step 2:
  • •

    Send the notice in NL 00703.813.

  • •

    Diary the case for receipt of the fee petition request per GN 03930.035E.

  • •

    When the fee petition request is received and authorized, proceed to step 5 below.

5

Take the following action when the fee authorization is received:

  • •

    Upload a copy of the SSA-1560A, Authorization to Charge and Collect a Fee into eView (or Evidence portal for non-disability cases) using the appropriate barcode)

  • •

    Subtract the authorized fee (up to a maximum of 25 percent of the past-due benefits) from the retroactive Title II benefits to determine how much we can directly pay the representative(s).

  • •

    Pay the amount we can directly pay to the representative(s).

  • •

    Follow step 6 below.

6
  • •

    Subtract the total authorized fee from the retroactive Title II benefits.

  • •

    Compare the WOA to the remainder of the retroactive Title II benefits.

    • –

      If the WOA is less than the remainder of the retroactive Title II benefits, follow step 7 below.

    • –

      If the WOA is greater than the remainder of the retroactive Title II benefits, follow the PC User Guide for the SSA-e4345 application to send an e4345 to the FO for your case (make sure to include the updated fee amount in this e-4345). The FO will need to perform a new offset computation considering the representative’s fee. Follow step 8 below once the FO has returned the e4345 with the updated windfall offset data.

Note: 

The FO must know the full amount of the authorized fees to properly calculate any changes, which may include fees payable as a result of auxiliary claims, see GN 03940.035.

7
  • •

    Process the offset action and subtract any SSI collectible overpayment (see SI 02220.021).

  • •

    Forward a copy of the fee authorization to the FO to process the adjustment of the Title II income. The FO must determine if any fee can be paid from Title XVI retroactive benefits.

  • •

    See GN 03940.050 for fee agreements and GN 03930.032B.2.c for fee petitions.

  • •

    Send the notice in NL 00703.813

    • –

      Include paragraph 3816D.

    • –

      Add the appropriate offset language to the notice following NL 00703.813B.

    • –

      Add the appropriate attorney fee language to the notice following NL 00703.813B.

Note: 

If the fee amount is later amended, such as if a second representative files a fee petition after we have already adjusted the record for one representative's fee, or if an auxiliary is later awarded and the fee agreement the NH signed applies to an auxiliary application which leads to additional fees, you will need to return to step 5 in this chart and repeat the process.

8

Once the FO has returned the e4345 with the updated windfall offset data:

  • •

    Complete the offset action by subtracting the new offset amount furnished by the FO from the retroactive Title II benefits.

  • •

    Subtract any SSI collectible overpayment (see SI 02220.021).

  • •

    Send the notice in NL 00703.813.

    • –

      Do not include paragraph 3816D.

    • –

      Add the appropriate offset language to the notice following NL 00703.813B.

    • –

      Add the appropriate attorney fee language to the notice following NL 00703.813B.

Note: 

If the fee amount is later amended, such as if a second representative files a fee petition after we have already adjusted the record for one representative's fee, you will need to return to step 5 in this chart and repeat the process.

NOTE: Follow the special notice procedures in NL 01001.010 if the notice will be sent to a claimant, beneficiary, or representative payee who has selected special notice options alleging blindness or visual impairment.

b. The FO will take the following actions in fee petition cases:

When the FO receives a copy of the SSA-1560A from the PC and the offset has been applied, follow SI 02006.210 to adjust the Title II income for the approved representative fee and pay any SSI underpayment.

If the PC sent a e4345, complete the form with the updated Title XVI information following the instructions in the FO User Guide for the e4345 application. Then, send the updated form back to the PC using the e4345 application.

4. Applying Title II Offset — Fee Agreement Cases — No Auxiliaries

Either the FO or the PC will have taken action to process the Title II award and sent a notice to the beneficiary and representative to allow them time to file a protest of the fee determination. (See GN 03940.001 for an explanation of the fee agreement process.)

a. The PC will take the following action when the protest period expires and no protest is received:

Note: 

For cases where a protest has been received see GN 03960.001

STEP ACTION

1

Subtract the approved Title II fee amount from the retroactive Title II benefits. See GN 03930.050 through GN 03930.065 for general information on direct payment to the representative.

2

If the WOA is less than the remainder of the retroactive Title II benefits from step 1:

  • •

    Complete the offset action according to GN 02610.041B.

  • •

    Subtract any SSI collectible overpayment (see SI 02220.021).

  • •

    Send the notice in NL 00703.813.

    • –

      Include paragraph 3816D if no SSI overpayment is deducted.

    • –

      If there is a collectible overpayment deducted, use the notice in NL 00703.183.

    • –

      Add the appropriate offset language from the notice in NL 00703.813, following NL 00703.813B.

    • –

      Use the appropriate attorney fee language in NL 00703.813B.

3

If the WOA is greater than the remainder of the retroactive Title II benefits from step 1:

  • •

    Follow the PC User Guide for the SSA-e4345 application to send an e4345 to the FO for your case. The FO will need to perform a new offset computation considering the representative’s fee.

  • •

    Once the FO has returned the e4345 with the new offset amount, complete the offset action by subtracting the new offset amount furnished by the FO from the retroactive Title II benefits.

  • •

    Subtract any SSI collectible overpayment - see SI 02220.021.

  • •

    Send the notice in NL 00703.813.

    • –

      Do not include paragraph 3816D.

    • –

      Add the appropriate offset language to the notice following NL 00703.813B.

    • –

      Add the appropriate attorney fee language to the notice following NL 00703.813B.

b. The FO will take the following actions in fee agreement cases depending on the comparisons done in the PC:

  • •

    Compute a new offset amount if the automated WOA is greater than the retroactive Title II benefits minus the authorized representative fees.

  • •

    Adjust the Title II income for SSI purposes according to SI 02006.210 after the offset has been applied and the PC forwards a copy of the Title II award notice containing the authorized fee amount according to GN 03940.050. The notice will also explain that we recouped the collectible SSI overpayment.

C. References

  • •

    GN 03930.065, Title II- Mode of Payment to a Representative from Past Due Benefits

  • •

    GN 03930.080, Notifying Field Offices of Authorized Fees in Concurrent Claims Situations

  • •

    GN 03940.001, Fee Agreement Process Overview

  • •

    GN 03940.050, Title XVI - Field Office Processing of Fee Agreements on Favorably Decided Concurrent Title II and Title XVI Claims.

  • •

    NL 00703.183, Cross Program Recovery Notices.

  • •

    NL 00703.813, Notice to Beneficiary in Concurrent Title II and Title XVI Case Where We Applied Title II Offset and there is a Fee Petition or Fee Agreement

  • •

    SI 02006.210B Field Office Representative Fee Adjustment Procedures Summary and Worksheets

  • •

    SI 02006.204 Field Office Processing Instructions for Concurrent Cases Involving Unknown or Unresolved Represen

  • •

    SI 02220.021, Cross Program Recovery of SSI Overpayments in Title II Underpayments

D. Helpful Links

 

GN 02610 TN 32 - GN 02610.053 - Title II/Title XVI (Windfall) Offset - 5/15/2023