TN 34 (11-22)

GN 03920.019 User Fee on Representatives Who Receive Direct Payment

A. User fee on direct fee payment to representatives

Sections 206(d) and 1631(d)(2) of the Social Security Act (Act) require us to charge an assessment or “user fee” to recover administrative costs associated with direct payment of fees authorized under the fee agreement and fee petition processes to eligible attorney and non-attorney representatives. This user fee applies whenever we certify for payment an administrative or court-awarded fee from the claimant’s past-due benefits.

Specifically, section 206(d)(2)(A):

  • caps the user fee at a flat-rate dollar amount or 6.3 percent of the fee payment, whichever is lower, effective September 1, 2004; and

  • adjusts the flat-rate dollar amount based on annual cost-of-living adjustments rounded down to the next lower $1 beginning December 1, 2006.

B. How we collect the user fee on direct fee payment

We collect the user fee by withholding it from the authorized fee amount we pay the from a claimant’s past-due benefits. The representative must be eligible for direct payment.

We collect the user fee when:

  • we pay fees directly to a representative (attorney and non-attorney) from Title II or Title XVI benefits under both the fee agreement and fee petition processes; or

  • we pay a court-awarded fee directly to a court attorney from Title II or Title XVI past-due benefits.

In concurrent Title II and Title XVI claims, the user fee cap applies to the total fee that we pay directly to the representative from a combination of withheld Title II and Title XVI benefits.

EXAMPLE: The claimant filed concurrent Title II and Title XVI claims and received a favorable decision on both. Based on an approved fee agreement, we authorized the fee payable to the eligible representative from the claimant's withheld Title II past-due benefits. We then deducted the maximum user fee from that amount and directly paid the representative the remaining amount. We subsequently authorized and paid an additional fee to the representative based on the claimant's Title XVI past-due benefits. However, because we had previously deducted the maximum user fee, we do not deduct any additional user fee from the amount payable to the representative from the Title XVI withheld past-due benefits.

1. Title II claims

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

  • 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;

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

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

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

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

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

    • case with Federal court involvement, or

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

2. Title XVI claims

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

  • 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;

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

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

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

  • 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:

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

  • case with Federal court involvement, or

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

3. Dual entitlement and concurrent claims

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.

4. Trust or escrow accounts

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.

5. User fee cap in effect

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.

6. Rounding when calculating the user fee

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.

7. Representatives cannot charge the user fee to the claimant

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).

C. User fees and direct payment of authorized fees to multiple representatives

When a claimant appoints more than one representative eligible for direct payment and we directly pay the fees, the representatives each pay a portion of the user fee. We deduct the user fee in proportion to the share of the authorized fee we pay to each representative.

1. Representative fees authorized under the fee agreement process

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:

a. Review if all of the following conditions apply:

  1. 1. 

    The claimant appoints multiple representatives;

  2. 2. 

    All representatives, who have not waived their fees, signed a single fee agreement regardless of whether the representatives work for the same entity, for different entities, or for themselves; and

  3. 3. 

    We correctly approved the fee agreement as explained in GN 03940.003.

NOTE 1: If there is not a single fee agreement signed by all representatives, who have not waived their fees, disapprove the fee agreement and request that each representative submit a fee petition.

NOTE 2: In a fee agreement case, we will make direct payment when we have completed all development and the fee under the approved fee agreement can be set.

b. If all the conditions in (a) apply and we approve the fee agreement, calculate a total fee amount as follows:

  1. 1. 

    Divide the total authorized fee amount by the number of representatives who signed a single fee agreement and did not waive their fee (this includes representatives not entitled to direct payment);

  2. 2. 

    Calculate an equal portion of the user fee (as calculated based on an approved fee agreement) to each representative who is eligible for and seeks direct payment;

  3. 3. 

    Directly pay to each representative eligible for direct payment his or her share of the authorized fee minus the proportional amount of the user fee; and

  4. 4. 

    Release any remaining shares authorized to representatives who are not eligible for direct payment to the claimant.

    NOTE: Continue to withhold the remaining past-due benefits (including any shares authorized to representatives who are not eligible for direct payment) if there is Federal court involvement.

c. Change in conditions after calculating and paying fee shares

If any of the conditions described in GN 03920.019C.1.a change after our calculations or payment of the authorized fee (e.g., the fee agreement approval is rescinded by a reviewing officer after a timely request for administrative review of the fee agreement approval or the PC protests an incorrectly approved fee agreement as explained in GN 03940.025B.5):

  • notify the representatives that their fee shares based on the incorrectly approved fee agreement are no longer the authorized fee;

  • request the representatives to submit fee petitions;

  • evaluate the fee petitions, review the Payment History Update System (PHUS) record or the Single Payment System (SPS) to determine the fee shares already paid to the representatives, and then authorize reasonable fees based on the representatives’ services;

  • request refunds of any excess fee amounts from the representatives if the initially authorized fee shares are higher than the reasonable fee amounts authorized based on the fee petitions. For more information on requesting a refund of excess fees, see GN 03920.052; and

  • refund the user fee as appropriate. For information on situations requiring manual intervention in SPS to calculate the user fee see, GN 03920.019I.2 and GN 03920.019J.2.

d. Examples of calculating the fee shares

EXAMPLE 1: Jennifer appointed three representatives: Adam, Barbara, and Chris from the same entity. Chris waived his right to a fee and Adam and Barbara signed and submitted a single fee agreement. Adam and Barbara are eligible for direct payment. Pay one-half of the total authorized fee minus one-half of the user fee each to Adam and Barbara.

EXAMPLE 2: Jennifer appointed Alice, Brad, and Carrie. Alice, Brad, and Carrie signed a single fee agreement; however, Alice and Brad also waived their rights to a fee. Pay Carrie the entire fee we authorized under the fee agreement after deducting the full user fee.

EXAMPLE 3: In the same scenario as Example 2, Carrie is a non-attorney representative who is ineligible for direct payment. Authorize the full fee to Carrie. Do not deduct any user fee from Carrie's fee and release all the past-due benefits to Jennifer because Carrie is not eligible for direct payment. Carrie must collect the authorized fee from Jennifer.

EXAMPLE 4: In the same scenario as Example 3, all representatives waived their right to a fee. Release all past-due benefits to Jennifer.

2. Representative fees authorized under the fee petition process

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.

Step

Action

Amount

1

List and add the amount(s) authorized for each representative. Deduct amounts each representative holds in an escrow or trust account from his or her individual fee.

The result equals the authorized fees not held in escrow or trust account.

$3,540 - $0 (Diana)

+

$2,360 - $0 (Nancy)

= $5,900

2

Divide the amount of each representative's authorized fee not held in escrow or trust by the total authorized fee from Step 1 and round to the nearest dollar to find each representative's percentage of the total authorized fee not held in escrow or trust.

$3,540/$5,900 = 0.60 (60% for Diana)

$2,360/$5,900 = 0.40 (40% for Nancy)

3

List Barbara’s total withheld past-due benefits (PDB) amount (25% of $22,400).

$5,600

4

Determine each representative's share of the withheld amount by multiplying the withheld amount (from Step 3) by each representative's percentage (from Step 2).

$5,600 x 0.60 = $3,360 for Diana

$5,600 x 0.40 = $2,240 for Nancy

5

Add each representative's share of the withheld amount (from Step 4) to ensure that it corresponds to the withheld past-due benefits amount (from Step 3).

$3,360 for Diana

+

$2,240 for Nancy

= $5,600

6

Calculate each representative’s share of the user fee and subtract it from each representative's share of the withheld amount.

In this example, we capped the user fee at $97.00. See GN 03920.019B.5 for information the user fee cap in effect at the time of the fee payment

$5,600 x 0.63 > $98.00. Therefore, the user fee is $97.00.

$97 x 0.60 = $58.20 for Diana's share of the user fee.

$97 x 0.40 = $38.80 for Nancy's share of the user fee.

7

Release the remaining share of the withheld amount minus the user fee (from Step 6) to each representative.

$3,360 - $58.20 = $3,301.80 to Diana.

$2,240 - $38.80 = $2,201.20 to Nancy.

8

Determine the remaining authorized fee each representative must collect from Barbara by deducting each representative’s share of the withheld amount (Step 4) from their authorized fee not held in escrow or trust (Step 1).

$3,540 - $3,360 = $180 is the remaining authorized fee amount that Diana must collect from Barbara.

$2,360 - $2,240 = $120 is the remaining authorized fee amount that Nancy must collect from Barbara.

D. Fees paid for an affected auxiliary beneficiary in a Title II case or an eligible spouse in a Title XVI couple's case

How we apply the user fee cap depends on whether an affected auxiliary beneficiary in a Title II case or an eligible spouse in a Title XVI couple's case is independently represented.

1. Title II affected auxiliary beneficiary or Title XVI spouse not independently represented

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.

Description

Amount

1. Amount of Stacy’s past-due benefits

$12,000

2. Amount of Stacy’s child’s past-due benefits

$6,000

3. Total amount of Stacy’s and her child’s past-due benefits we withheld for direct payment of Robert’s fee:

  • 25% of Stacy’s past-due benefits: $3,000 plus

  • 25% of Stacy’s child’s past-due benefits: $1,500.

$4,500

4. Amount we authorized after evaluating Robert's fee petition

$4,000

5. Amount we pay Robert after we deduct the full user fee of $97.00 from 25% of Stacy’s past-due benefits ($3,000)

$2,903

6. Remaining amount of the authorized fee we pay Robert from Stacy’s child’s past-due benefits. We do not collect an additional user fee.

$1,000

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.

Description

Amount

1. Amount of Chris’ past-due benefits

$3,200

2. Amount of Chris’ past-due benefits we withhold for direct payment of Matt’s fee (25% of $3,200)

$800

3. Amount of the user fee (6.3% of $800)

NOTE: As noted in GN 03920.019A, we cap the user fee at a flat-rate dollar amount or 6.3 percent of the fee payment, whichever is lower, effective September 1, 2004

$50.40

4. Amount we directly pay Matt from Chris’ withheld past-due benefits ($800 - $50.40)

$749.60

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.

Description

Amount

5. Amount of each child’s past-due benefits we withhold for direct payment of Matt’s fee (25% of $400)

$100

6. Amount when we deduct 6.3% of the direct payment amount (6.3% of $100)

$6.30

7. Amount we directly pay Matt from each child ($100 - $6.30)

$93.70

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.

Description

Amount

1. Amount of the couple’s past-due benefits resulting from Rachel’s Title XVI eligibility

$2,176

2. Amount of the couple’s past-due benefits we withheld for direct payment of Adam’s fee (25% of $2,176)

$544

3. Amount when we deduct 6.3% of the direct payment amount (6.3% of $544)

$34.27

4. Amount we directly pay Adam ($544 - $34.27)

$509.73

2. Title II affected auxiliary beneficiary or Title XVI eligible spouse is represented independently

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:

  • 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

  • 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.

E. Additional fee paid based on a more favorable decision on the same or a prior application

We will apply the user fee cap in effect at the time of payment to the total fee we pay to the representative(s) when:

  • we make an initial fee payment to a representative based on an approved fee agreement;

  • we later issue a more favorable determination or decision on the same application or a determination or decision on a prior application more favorable than that issued on the subsequent application; and

  • the more favorable determination or decision results in additional past-due benefits to the claimant and an additional fee for the representative.

We will not deduct an additional user fee from the fee paid as a result of the more favorable determination or decision if the maximum user fee has not changed. If we initially deduct less than the maximum user fee or if the maximum user fee increases, we will deduct 6.3 percent of the direct payment amount or the amount of the current user fee cap remaining, whichever is lower, from the subsequent fee payment.

This situation should not arise in a fee petition case because the representative requests approval of a fee only after his or her representational services have ended. See GN 03930.020C.7 for information on when to file a fee petition.

NOTE: We apply the policy in GN 03920.019C when the pending claim, matter, or issue involves multiple representatives.

F. User fees in dual fee authorization cases

The Act requires us to apply the user fee whenever we certify for payment an administrative or court-awarded fee from the claimant’s past-due benefits.

In dual fee authorization cases, we will charge a separate user fee (i.e., 6.3 percent of the direct payment amount or the user fee cap in effect at the time of the payment, whichever is less) when we certify direct payment of the authorized fee amount at the administrative level and the court-awarded fee at the Federal court level.

IMPORTANT: We will directly pay authorized fees only to court attorneys who are registered for direct payment as explained in GN 03920.060C.

G. What language should be in notices to claimants and representatives about user fees

We include an explanation of the user fee in the notice of awards and fee determination notices.

1. Modernized Claims System (MCS) or Modernized Supplemental Security Income Claims System (MSSICS)/Supplemental Security Income Record (SSR) Processed Actions – Explanation of user fees

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

User Fee Situation

UTI
MCS

UTI
SSI Notice

No previous user fee, we pay one representative.

ATY016

FEE047

Subsequent payment, we previously assessed less than the current user fee cap.

(To determine the amount of the previous user fee for the fill-ins on a manual notice, obtain a Single Payment System (SPS) or PHUS query.)

FEE048

We previously assessed the maximum user fee.

(To verify that the full user fee cap was previously deducted, obtain an SPS or PHUS query.)

FEE049

2. MADCAP or SSI Manually Processed Actions – Explanation of user fees.

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.

User Fee Situation

UTI
MADCAP

UTI
DPS

No previous user fee, we pay one representative

ATY016

FEE047

Subsequent payment, we previously assessed less than the current user fee cap.

(To determine the amount of the previous user fee for the fill-ins, obtain an SPS or PHUS query.)

ATY066

FEE048

H. Answering inquiries and resolving disputes regarding user fees

1. Answering inquiries regarding user fees

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:

  • 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

  • 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.

2. Resolving disputes regarding user fees

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.

I. Processing user fees on fee agreements in Title II cases

1. SPS processing of user fees in Title II cases

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

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

  • 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.

2. Situations requiring a manual override of the automated user fee

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

a. Coding in our systems to initiate manual intervention

To initiate manual intervention in our systems and hold payment processing:

  • in MCS cases, code an Issue value of "ATY03" on the Development Worksheet (DW01) screen. See SM 00834.100; and

  • in MADCAP cases, code "03," in the MACADE Attorney Payment Indicator field on the ATTY/REP/ALJ NAME AND ADDRESS (ATT) screen. See SM 00834.200 and MS 03508.004.

When a previous user fee is a factor in the current fee action, an SPS or PHUS query will show the user fee deducted when we made the earlier fee payment.

b. Title II direct fee payment situations requiring manual intervention

The following Title II direct fee payment situations require manual intervention to override the SPS-calculated user fee amount:

  1. 1. 

    We paid a fee for affected auxiliary beneficiary (PIC B or C) who appointed his or her own representative – direct payment previously made on the same social security number in fee agreement or fee petition cases

    Without manual intervention, SPS will consider and adjust for the user fee(s) collected in connection with the previous payment on PIC A, D, E, or W and any payments on PICs B and C. However, our policy is to apply a separate user fee cap to the fee we pay from the past-due benefits of an independently represented affected auxiliary beneficiary without regard to any other user fee deductions. See GN 03920.019D.2 for information on representative fees paid for an independently represented affected auxiliary beneficiary in a Title II case.

    Therefore, the PC technician must override the SPS default user fee action and deduct 6.3 percent of the fee amount payable or the user fee cap, whichever is lower, from the fee payment made to that affected auxiliary beneficiary’s representative.

  2. 2. 

    We paid a fee on PIC A, D, E, or W and later make an additional fee payment resulting from a more favorable decision on the same or a prior application in fee agreement cases

    Without manual intervention, SPS will apply the user fee cap again because when the PIC is A, D, E, or W, it does not consider and adjust for paid user fee amounts already on the SPS database. However, if we authorize to a representative an additional fee amount based on a more favorable determination or decision at the administrative level, deduct from the current fee payment no more than the difference, if any, between the user fee cap and the user fee previously collected. See GN 03920.019E for information on additional fees paid based on a more favorable determination or decision on the same or prior application.

    Therefore, the PC technician must override the SPS-calculated user fee and input the correct user fee amount before making the subsequent fee payment. If we made the first fee payment and then process an additional fee payment resulting from a more favorable determination or decision, SPS will correctly determine the user fee to be the lesser of 6.3 percent or user fee cap.

  3. 3. 

    We paid a fee and later make an additional fee payment resulting from dual or simultaneous entitlement in fee agreement or fee petition cases

    Without manual intervention, SPS will apply the user fee cap again. However, our policy is to deduct from the additional fee payment no more than the difference, if any, between the user fee cap and the user fee previously collected. See GN 03920.019B.3 for information on calculating representative fee payments when there are dual entitlement and concurrent claims.

    Therefore, the PC technician must override the SPS-calculated user fee to make sure the user fee deducted from the amount payable to the representative on both claims does not exceed the cap amount.

  4. 4. 

    We paid a fee and later pay to a second representative a fee authorized based on a fee petition in fee petition cases

    Manual intervention is necessary to prorate the user fee when there are two or more representatives in a fee petition case because SPS will not prorate it. This is necessary when we either make direct payment at the same time but in unequal amounts or make direct payment at different times. See GN 03930.066D.2.b for information on SPS processing of fee payments to two or more representatives who file fee petitions.

  5. 5. 

    We directly paid a Title XVI fee to a representative and that payment is posted to the SPS database

    In these situations, we will create an exception for any subsequent action to pay representative fees from Title II benefits.

    Therefore, the PC technician must manually determine the authorized fee amount payable and the correct user fee. SPS does not consider any payments made under Title XVI and will not be able to determine the correct authorized fee and user fee amounts under Title II. The Title XVI fee payments directly paid to a representative do not show up on the PHUS or the Master Beneficiary Record (MBR).

J. Processing user fees on fee agreements in Title XVI cases

1. Processing user fees in Title XVI cases

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.

2. Title XVI direct fee payment situations requiring manual intervention

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

  • the claimant has multiple representatives,

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

  • 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.

 


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0203920019
GN 03920.019 - User Fee on Representatives Who Receive Direct Payment - 11/30/2022
Batch run: 11/30/2022
Rev:11/30/2022