In a favorably decided Title II claim with a representative eligible for direct payment, we will:

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  deduct the user fee from the amount of the representative's authorized fee. See GN 03920.030B for information on the representative’s fee from Title II past-due benefits amount;

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  pay the representative the remainder (i.e., the authorized fee minus the user fee);

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  explain the user fee and the representative’s fee to the claimant in the notice of award and fee determination notice;

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  recover any outstanding prior overpayment(s) on the claimant’s record; and

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  We release any excess withheld funds to a claimant and an affected auxiliary beneficiary or eligible spouse, if any, unless it is a:

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    concurrent Title II and Title XVI case in which offset has not yet occurred;

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    case with Federal court involvement, or

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      case with a pending request for administrative review that was timely filed.

In a favorably decided Title XVI claim with a representative eligible for direct payment, we will:

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  deduct the user fee from the amount of the representative's authorized fee. For information on the representative’s fee from Title XVI past-due benefits amount, see GN 03920.031B;

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  pay the representative the remainder (i.e., the authorized fee minus the user fee);

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  explain the user fee and the representative's fee to the claimant in the notice of award and fee determination notice;

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  recover any outstanding prior overpayment on the claimant's record; and

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  release excess withheld funds, if any, to the claimant and his or her eligible spouse, if we included the spouse's benefits in calculating the past-due benefits for fee purposes.

We release any excess withheld funds to a claimant and an affected auxiliary beneficiary or eligible spouse, if any, unless it is a:

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  concurrent Title II and Title XVI case when offset has not yet occurred;

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  case with Federal court involvement, or

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  case with a pending request for administrative review that was timely filed.

In dual entitlement claims, we will authorize a representative’s fee only for their efforts on behalf of a claimant and an affected auxiliary beneficiary in a Title II claim or spouse in a Title XVI couple’s claim that result in entitlement to benefits or an increase in entitlement for benefits.

In Title II dual entitlement claims, the user fee cap applies to all authorized fees, which we calculate based on the total past-due benefits amount on all earnings records. In these claims, we will deduct the user fee from the first fee we pay to the representative. If we deduct a user fee less than the cap from the first fee payment, we will deduct 6.3 percent of the direct payment amount or the amount of the user fee cap remaining, whichever is lower, from the additional authorized fee due to the representative.

In concurrent Title II and Title XVI claims, we will deduct the user fee from the fee we pay to the representative from the Title II past-due benefits. If we deduct a user fee less than the cap, we will deduct 6.3 percent of the direct payment amount or the amount of the user fee cap remaining, whichever is lower, from the additional authorized fee due to the representative from the Title XVI past-due benefits.

See GN 03920.001C for the definition of “dual entitlement and concurrent claims." For information on representative fees when there are multiple records involved in Title II claims, see GN 03920.030A.3. For information on calculating past-due benefits in a Title XVI couple’s claim see, GN 03920.031A.1.

If a representative established a trust or escrow account and notified us of the amount in that account before we make direct payment, we will first subtract the escrow amount from the authorized fee amount; then calculate the user fee based on the remaining authorized fee amount that we will directly pay to the representative.

For more information on representative's fees and trust or escrow accounts, see GN 03920.025.

We will apply the user fee cap in effect at the time of payment of the fee (i.e., the fee payment date) to the representative(s). See GN 03920.001D for the definition of “fee payment date.”

The current flat-rate user fee amount, effective December 1, 2022, is $113.00.

The flat-rate user fee amount was $104.00 effective December 1, 2021.

The flat-rate user fee amount was $98.00 effective December 1, 2020.

The flat rate user fee amount was $97.00 effective December 1, 2019.

The flat rate user fee amount was $95.00 effective December 1, 2018.

When we calculate the user fee, we round that amount to the nearest penny. See GN 03920.016A.3 for information on our rounding policy.

Representatives cannot either directly or indirectly charge the user fee to the claimant or obtain reimbursement of the user fee from the claimant for services provided at the administrative or Federal court levels. For information on the prohibition of representatives being reimbursed user fees from claimants, see Section 206(d)(4)

If the representative attempts to charge or obtain reimbursement for the user fee, refer the matter to OGC as a possible fee violation as explained in GN 03970.017B (field office) or GN 03970.017C (payment center).

Under the fee agreement process, do not consider individual services performed by each representative when authorizing the representatives’ fees. Instead, apply the user fee in equal shares to each representative eligible for and seeking direct payment without regard to their affiliation. We deduct the user fee in equal proportion to the share of the authorized fee paid to those representatives eligible for and seeking direct payment.

We do not deduct the user fee for representatives who waive direct payment of their fee, who are ineligible for direct fee payment, or who waive their fee. For information on a representative’s waiver of a fee or direct payment of a fee, see GN 03920.020

Specifically, field office (FO) or payment center (PC) staff will carry out the following steps:

Under the fee petition process, when we authorize fees at the same time for multiple representatives, pay the fee we authorize minus a proportional amount of the user fee to each of the representative(s) eligible for direct payment when we issued the favorable determination or decision. If the authorized fee exceeds the withheld amount, the PC for Title II claims and the FO for Title XVI claims must apportion (i.e., prorate) the withheld amount among the eligible representatives in proportion to the fee authorized for each representative and prorate the user fee accordingly.

Under the fee petition process, when we authorize fees at different times for multiple representatives, prorate the user fee as explained in GN 03930.066D.2.b.

EXAMPLE: Barbara filed a Title II only claim and appointed two representatives, Diana Smith and Nancy Jones. At the hearing level, the administrative law judge (ALJ) issued a fully favorable decision, resulting in past-due benefits of $22,400. After receiving the favorable decision, Diana and Nancy each submitted a fee petition to the ALJ. Diana requested $7,500 for her fees and Nancy requested $6,500. The ALJ reviewed their fee petitions and authorized $3,540 for Diana and $2,360 for Nancy.

In Title II cases and Title XVI couple’s cases, the user fee cap applies to the total fee we pay to the primary claimant’s representative from past-due benefits withheld from the primary claimant and any affected auxiliary beneficiary or Title XVI eligible spouse who is not independently represented. To the extent possible, we pay the authorized fee to this representative from the primary claimant's withheld past-due benefits and deduct the user fee from that payment.

If we deduct a user fee of less than the cap from the fee payable based on the primary claimant's past-due benefits, we will deduct 6.3 percent of the direct payment amount or the amount of the cap remaining, whichever is lower, from any fee we pay from the affected auxiliary beneficiary’s or eligible spouse's past-due benefits. We will deduct a user fee from each successive fee payment until the total user fee we have collected equals the cap in effect on the date of the payment.

EXAMPLE 1: Stacy filed a concurrent Title II and Title XVI claim. Stacy appointed Robert as her representative. At the reconsideration level, we issue a favorable determination. At the same time, we process the claim for Stacy’s child, who lives in the same household as Stacy and who was not independently represented. Robert timely submits a fee petition requesting $7,000. We evaluate Robert’s fee petition and approve $4,000.

EXAMPLE 2: Chris files a Title II only claim. Chris appoints Matt as his representative. Chris and Matt sign a fee agreement. At the hearing level, the ALJ issues a favorable decision, resulting in $3,200 in past-due benefits for Chris. The ALJ reviews and approves the fee agreement.

We subsequently process the claims for Chris’ two children, who live in separate households and who were not independently represented. Each of Chris’ children is due $400 in past-due benefits.

EXAMPLE 3: Rachel filed a Title XVI only claim. At the hearing level, the ALJ issued a favorable decision and approved the fee agreement between Rachel and Adam, her representative, who is eligible for direct payment. Because of Rachel’s Title XVI eligibility, her unrepresented husband, Mike, who had been receiving Title II and Title XVI benefits for several years, receives an additional Title XVI retroactive payment.

If the affected auxiliary beneficiary in a Title II case or eligible spouse in a Title XVI couple’s case is independently represented, we will apply separate user fee caps to:

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  the fee we pay to the primary claimant's representative(s) and the fee we pay to the affected auxiliary beneficiary's representative(s); or

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  the fee we pay to the representative of each spouse in the Title XVI couple’s case.

The user fee deducted from the fee we pay to the primary claimant's representative(s) does not affect the user fee we deduct from the fee we pay to the affected auxiliary beneficiary's representative(s) or vice versa.

The user fee deducted from the fee we pay to the representative of one spouse in the Title XVI couple’s case does not affect the user fee we deduct from the fee we pay to the representative of the other spouse in the Title XVI couple’ case.

At the initial and reconsideration levels, we use appropriate notice language to explain the user fee.

1. a. 

   In a Title II claim when there is one representative appointed, MCS automatically includes the language of ATY016 and completes the fill-ins in the Title II notice. See NL 00720.050 for information on the language of ATY016. In a Title II claim when there are multiple representatives appointed, MCS does not automatically include the language of ATY065 and complete the fill-ins in the Title II notice. The technician should request an incomplete notice and adjust the notice to include the language of ATY065 and any other required paragraphs. See MS 03508.004E for more information on the ATY01 code and NL 00720.050 for information on the language of ATY065. If a Title II claim involves a previous user fee, we process that Title II claim through Manual Adjustment Credit and Award Process (MADCAP). See GN 03920.019G.2 for information on manual processing and notice adjustments.

2. b. 

   In a Title XVI claim when there is one representative appointed, MSSICS/SSR automatically includes FEE047, FEE048 or FEE049 language, as appropriate, and completes the fill-ins in the Title XVI notice. See GN 03940.085K for more information on language of FEE047, FEE048, and FEE049 and refer to the Language Development Facility for more details on the Title XVI notice language. In a Title XVI claim when there is more than one representative appointed, generate a manual Title XVI fee notice through the Document Processing System (DPS). See GN 03940.070 for information on manual fee agreement notices for Title XVI claims

In MADCAP or SSI manually processed fee actions, request the appropriate user fee explanation paragraph from those listed. See NL 00720.050 for the MADCAP paragraphs and GN 03940.085K for SSI or DPS paragraphs.

If we receive a telephone or written inquiry concerning the user fee or the amount of the user fee, the office that receives the inquiry will respond to it, if possible.

The following sample language may assist in responding to inquiries on the user fee policy or the percentage applied:

Whenever we certify a fee for services for payment to a representative from a claimant's past-due benefits, sections 206(d) and 1631(d)(2)(A) of the Social Security Act require us to impose an assessment on that payment. The purpose of the assessment is to recover costs of determining and certifying or paying fees to representatives from the past-due benefits of claimants. The Act further requires that the amount of the assessment shall be equal to the lesser of:

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  the product obtained by multiplying the amount of the representative's fee that would be required to be so certified or paid before the application of the assessment, by the percentage rate the Commissioner determines (currently 6.3 percent) or

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  the current flat-rate cap.

If the inquiry requires any other action or response, the office that received the initial inquiry will provide a response, if possible. For instance, if the FO receives an inquiry about the computation of the user fee in a Title XVI case, it will provide a response. However, if the FO receives an inquiry about the computation of the user fee in a Title II case, the FO will forward the inquiry to the PC and the PC will take any necessary corrective actions and provide a response.

The representative or claimant may not request administrative review of the requirement that we charge a user fee.

However, the representative or claimant may allege that we incorrectly calculated the user fee amount when seeking administrative review of the authorized fee amount. For example, the representative may allege that he or she was charged a user fee that exceeded the user fee cap. The procedures for requesting administrative review are explained in GN 03950.010 (under the fee petition process) or GN 03960.010 (under the fee agreement process)

After we have evaluated the request for administrative review, we will issue a notice of our final decision about the representative’s authorized fee amount.

We consider any fee amount collected above the authorized fee amount or without our authorization to be an excess fee that would result in a possible fee violation if the representative fails to refund it. See GN 03920.051 for information on excess fee payments and GN 03970.025 for information on FO and PC actions on direct payment error fee violations.

SPS processing of user fees differs depending on the Payment Identification Code (PIC) cluster. The two clusters are:

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  PICs of A, D, E, and W, which are associated with the individual who is the primary claimant or number holder; and

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  PICs of B and C, which are generally associated with an affected auxiliary beneficiary.

The key difference between the two clusters is whether SPS considers paid user fee amounts already on the SPS database when calculating the user fee. See GN 03940.053B for information on processing the user fee in SPS.

In most situations, SPS automates user fee calculations and deductions. However, there are situations in which the technician has to manually override SPS automation.

Some situations require manual intervention to override SPS' automated user fee calculation and deduction.

In most Title XVI only and concurrent Title II and XVI fee agreement cases with a single representative, SPS automates user fee calculations and deductions. SPS receives the authorized fee and user fee information from the Supplemental Security Record (SSR).

However, there are situations in which the technician has to manually override SPS’ automation.

The following Title XVI direct fee payment situations require manual intervention to override SPS-calculated user fees:

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  the claimant has multiple representatives,

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  a spouse's benefits are included in the claimant's past-due benefits calculation in an approved fee agreement case, or

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  the fee is based on a fee petition.

See SM 00834.410 for information on manual processing of the representative fee and SM 00834.415 for processing of the payment action screen in SPS.