SSA - POMS: GN 03920.055 - Failure to Withhold Past-due Benefits for Direct Payment

A. Failure to withhold past-due benefits

As a result of administrative error, we sometimes fail to directly pay a fee to an eligible representative or court attorney if we:

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did not withhold past-due benefits;
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did not withhold the correct amount of past-due benefits; or
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inadvertently released withheld past due benefits to the claimant.

When we fail to correctly withhold past-due benefits for direct payment of fees we authorize or the court awards, the office with jurisdiction over the fee payment (i.e., the processing center (PC) or field office (FO)) must notify the claimant, the representative, and when applicable, the court attorney about the failure to withhold (FTW).

After we notify the parties about the FTW, we will advise the representative, and when applicable, the court attorney requesting direct payment to attempt to collect the authorized or court-awarded fee from the claimant first. If a registered representative or court attorney tells us that collecting the fee from the claimant was unsuccessful, technicians must refer to the instructions in GN 03920.055E.

IMPORTANT: These instructions do not apply when there are no past-due benefits for reasons unrelated to an administrative error (e.g., the decision did not generate past-due benefits, or previously available funds were used to satisfy a separate debt during cross-title recovery). For more information on Overpayment Recovery by Benefit Adjustment, see GN 02210.001.

B. Fee agreement cases

1. Decision maker approved the fee agreement

a.

If the decision maker approved the fee agreement, but a technician who is authorizing the fee discovers that we failed to withhold past-due benefits or failed to withhold the correct amount of past-due benefits necessary to directly pay the authorized fee, the technician must use the appropriate notice system to issue a manual notice to the claimant and provide copies to all parties to the fee authorization using dictated language in NL 00703.812. In addition to the dictated language in NL 00703.812, technicians should include administrative review rights, if they were not included in an earlier notice.
b.

If the case is a concurrent claim for benefits, the technician who discovers the FTW must contact the office with jurisdiction over the other portion of the claim (e.g., the PC technician effectuating Title II must contact the FO that adjudicated the Title XVI portion) to determine if that office also failed to withhold.

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If the other office did withhold past-due benefits, the technicians must take the appropriate actions to pay as much of the authorized fee as possible from these funds.
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If the other office also failed to withhold past-due benefits or failed to withhold enough past-due benefits, each technician (i.e., for both titles) must send the failure to withhold notice following the instructions in GN 03920.055B.1.a.

For more information on fee agreement notices, see GN 03940.008.

For more information on the administrative review process under the fee agreement process, see GN 03960.001.

2. Decision maker never made a decision on the fee agreement

If a PC or FO technician discovers that we have not made a decision on a fee agreement, refer the case to the appropriate decision maker, as outlined in GN 03940.002.

When the decision maker issues the fee agreement decision, follow the steps in GN 03920.055B.1.

C. Fee petition cases

1. Fee petition never received or not yet decided

In a potential FTW situation, if a representative has indicated the intent to charge and receive direct payment of a fee, but we have not received a fee petition, or we have received a fee petition that has not yet been adjudicated, do not take action until an initial authorization is made. The technician in the office with jurisdiction over the payment must set a diary. For more information on diaries for receipt of fee petitions and fee authorizations, see GN 03930.045.

In addition, for claims decided by the Office of Hearings Operations (OHO), send an email notification about the potential FTW to the designated hearing office fee contact, using the OHO Fee Contacts List. For claims decided by the Appeals Council, send the email notification to the Office of Appellate Operations (OAO) Attorney Fee Branch at ^DCARO OAO ATTY FEE BR.

When the diary expires, but a representative has not yet submitted a fee petition and there is no court involvement, the technician must follow the instructions in GN 03930.090. If there is court involvement, the technician must follow the instructions in GN 03930.091. Ensure that FTW information is included in any notifications sent to OHO or OAO fee contacts.

NOTE: Technicians with access to OHO systems (i.e., CPMS, HACPS) should check these systems in addition to eView for pending fee petitions.

2. Fee petition was approved but no funds were withheld

In some cases, the fee authorizer who completes the authorization notice (e.g., Form SSA-1560A, Authorization to Charge and Collect a Fee) is aware of the FTW and will check the box indicating that “We did not withhold past-due benefits to pay your fee.” PC technicians who receive the authorization should review the notice to determine if this box is selected.

If the fee authorization notice does not include the FTW language, either because the decision maker did not know about it or neglected to check the box on the Form SSA-1560A, and there is no written equivalent present, the office with jurisdiction over the fee payment (i.e., the PC for Title II cases and the FO for Title XVI cases) must send a notice to the claimant and a copy to all parties to the fee authorization using the language in NL 00703.812 once the fee petition has been authorized. For concurrent claims, the PC technician must:

• Ensure that a copy of the Notice of Award is sent to the claimant; and

• When applicable, send a copy to the auxiliary beneficiary or spouse and the principal representative.

Field office (FO) technicians handling the Title XVI portion must issue a fee notice to the claimant, the eligible spouse, and all parties to the fee authorization.

NOTE: Technicians must manually issue all FTW notices for Title XVI cases, using the notice language in NL 00703.812 and adjusting the information as needed when notifying the recipient or the spouse in a couple’s case. Technicians must ensure that each spouse receives information for their respective case, as well as an individual fee setting notice that pertains solely to the spouse's respective portion of the authorized fee. For more information on Fee Agreements - SSI Couples Cases, see GN 03940.052.

D. Federal court cases

If there is court involvement and, due to administrative error, we failed to withhold, withheld the incorrect amount, or prematurely released any past-due benefits we withheld, technicians handling the court case, must contact the Office of General Counsel by email using the contact information in GN 03930.180 to notify them about the FTW, provide the past-due benefits information and seek guidance for processing instructions, if OGC has not been previously informed.

Once we receive the court order from the Federal court, review the court order and send the FTW letter (E3812 code for AURORA) to the claimant and a copy to the court attorney as explained in NL 00703.812. Technicians must adjust the language in the letter as necessary to reflect the specific circumstances of their case.

When we have not received a fee order from a Federal court, or for more information on fees in court cases, refer to GN 03920.060 for processing instructions.

For assistance with verifying court case information, technicians must contact the appropriate OGC Program Litigation Division using the contact information in GN 03930.180.

NOTE: As stated in GN 03920.055A, a lack of past-due benefits for reasons unrelated to administrative error does not constitute a failure to withhold. If we do not have enough withheld past-due benefits to directly pay some or all of the fee for reasons other than administrative error, technicians must notify the claimant and the court attorney that payment of any unpaid portion of the fee is an issue between them.

E. The representative or court attorney is unable to collect the fee from the claimant

If, due to administrative error, we failed to withhold any past-due benefits for fee payment, withheld the incorrect amount, or prematurely released any past-due benefits we withheld, the representatives and/or court attorneys first need to look to the claimant for the payment of the fee. If the representative or court attorney reports to us that they attempted to collect the fee from the claimant in good faith but were unsuccessful, technicians in the office with jurisdiction over the fee payment will take the following steps:

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Document any communication regarding the inability to collect the fee (written or oral) and the amount of the overpayment that will be assessed to recover the fee on an ROC (SSA-5002) in the claims file. For Title ll claims that are archived, technicians will add a special message to the Master Beneficiary Record (MBR).
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Pay the representative or court attorney the fee amount that we should have paid from the claimant's past-due benefits, subject to the 25% maximum, minus the “user fee.” For information about the user fee for direct fee payments, see GN 03920.019.
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Post an overpayment to the claimant’s record for the amount paid to the representative or court attorney, including the "user fee" in the overpayment.

If the claimant is deceased technicians will refer to instructions GN 03920.055F.

For information on determining a Title II overpayment amount, see GN 02201.003.

For information on cross-program recovery of Supplemental Security Income (SSI) overpayments from monthly Title II benefits, see SI 02220.020.

IMPORTANT: If we properly paid a representative's fee, the representative subsequently files an untimely request for administrative review, and we have properly released or otherwise paid out all remaining withheld past-due benefits, we assume no responsibility for payment of an increased fee amount authorized on administrative review (GN 03950.045.) However, in concurrent Title II and Title XVI claims, the PC technicians still communicate the Title II fee amount to the FO using the Modernized Development Worksheet (MDW) or a Processing Center Action Control Systems request (PCACS request).

For more information on Notifying Field Office of Authorized Fees in Concurrent Claims Situations, see GN 03930.080C.

F. Failure to withhold when the claimant is deceased

We cannot post an overpayment to a deceased claimant’s record. Therefore, in the event the claimant is deceased at the time we discover we inadvertently failed to withhold sufficient past-due benefits to pay all or part of an authorized or court-awarded fee, the technician with jurisdiction over the fee payment must inform the representative or court attorney that we cannot pay the fee. The representative or court attorney must resolve the collection of the fee directly with the claimant’s estate.

Social Security

Program Operations Manual System (POMS)

GN 03920.055 Failure to Withhold Past-due Benefits for Direct Payment