Under the fee agreement process, when SSA approves a fee agreement, SSA uses an eligible individual’s and the otherwise unrepresented eligible spouse’s Title XVI past-due benefits to calculate:

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  A fee for services a representative provided in pursuing the eligible individual's benefit rights in proceedings before SSA. (GN 03920.031 defines title XVI past-due benefits.)

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  The amount of benefits to withhold for direct payment to the representative when

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    SSA effectuates the favorable administrative determination or decision on or after February 28, 2005; and

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    SSA determines that the representative is eligible for direct payment before the date SSA effectuates the favorable determination or decision in a title XVI only claim, or in concurrent Titles II and XVI claims, before the date SSA effectuates the decision on the first claim processed.

  See GN 03920.017, Payment of Representative’s Fee, for the definition of “representative eligible to receive direct fee payment” and policy on direct payment to representatives in title XVI cases.

The Act requires a distinction between the "past-due benefits" amount for authorizing the fee under the fee agreement and the "past-due benefits payable" amount for notice purposes. The terms are not interchangeable.

The first check SSA sends to a claimant may include payment(s) for months after the month of effectuation and may include benefits or payments excluded from the definition of past-due benefits (see GN 03940.007B.). In these situations, the "past-due benefits" amount for calculating the fee under the fee agreement will differ from the "past-due benefits payable" amount (i.e., the amount of the retroactive payment the claimant receives).

The following priority of payment order applies in title XVI claims, and the title XVI portion of concurrent titles II and XVI claims, when there are past-due benefits and direct payment of a representative’s fee:

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  SSA reimburses the State if interim assistance reimbursement (IAR) is involved.

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  SSA pays the representative’s fee, to the extent that the withheld past-due benefits permit, if the claimant’s appointed representative is eligible for direct payment and he/she has not waived a fee or direct payment. In concurrent titles II and XVI claims, SSA calculates the 25 percent amount available for possible direct payment after determining the amount of title XVI past-due benefits had the title II benefits been paid timely. (See GN 02610.053, How to Process Title II Offset Cases When an Attorney Fee Is Involved – Action to Apply Offset.)

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  If there is an outstanding prior overpayment, SSA recovers the overpayment to the extent possible.

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  SSA pays any remaining past-due benefits to the claimant.

See GN 03920.033 for policy on title XVI past-due benefits payable in specific situations and an example. Also, see SI 02101.001, SSI Underpayment Definitions and General Rules; SI 02101.002, SSI Underpayment Due – Individual Alive; and SI 02101.003, SSI Underpayment Due – Individual Deceased – General.