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).