TN 50 (12-24)

GN 03940.037 Title II - Field Office (FO) and Processing Center (PC) Processing of Fee Agreements on Claims Involving Mental Capability - General

A. Policy

When we issue a decision favorable to the claimant, we will approve a fee agreement that meets the statutory requirements of the Social Security (the Act) and is not otherwise excepted, even if the claimant's mental capability (i.e., the claimant's ability to manage their funds) is at issue. Refer to GN 00502.020 for information on determining capacity. Refer to GN 03940.003 for fee agreement statutory requirements and exceptions. 

However, we defer authorizing a fee until we resolve the capability issue and, if appropriate, until we select a representative payee for the claimant. This deferral allows us to keep a substantial number of fee agreements in the fee agreement process but protects a potentially incapable claimant's right to request administrative review of a fee by sending notice of the fee amount and of the right to request administrative review to the claimant's representative payee.

We assign high priority to claims requiring a determination of mental capability and the selection of a representative payee. Generally these issues will have been decided when we issue the notice of favorable decision; therefore, this policy should not unduly delay the fee authorization.

B. Procedure

1. FO Actions

a. Mental Capability Development or Payee Selection Incomplete

If the issues of mental capability or payee development are pending when you effectuate the favorable decision and you are paying the claimant current benefits directly pending resolution of the capability issue or representative payee selection, take the following actions:

  • Approve the fee agreement, assuming it meets the statutory requirements of the Act and is not otherwise excepted (see MS 03509.009 for coding instructions);

EXCEPTION: For claims decided at the hearing or Appeals Council review level, code the decision on the fee agreement made by the administrative law judge (ALJ) or administrative appeals judge (AAJ). You are not the decision maker at these levels.

  • Document your determination on a Form SSA-553, "Special Determination" or other PC or FO prescribed form;

  • Withhold the lesser of 25 percent of past-due benefits or the current statutory fee cap (see GN 03920.006) when the representative is eligible for and did not waive direct payment or when there is an eligible entity with a valid assignment as per GN 03920.021. Withhold 25 percent of past-due benefits if there is Federal court involvement;

  • Prepare an incomplete notice using a neutral language paragraph (i.e., language that advises the parties you are deferring a fee authorization) (see GN 03940.075 for paragraphs);

  • Annotate the development worksheet and send a modernized development worksheet (MDW) instructing the PC to authorize a fee after we resolve the issue of mental capability or payee selection (see MS 03508.004 for coding instructions).

b. Mental Capability Development or Payee Selection Complete

If you have resolved the issue of mental capability and representative payee selection, if appropriate, by the time you effectuate the favorable decision, follow the general case processing instructions in MS 03509.009 NOT2; MS 03508.004, Development Worksheet (DW01), and MS 03514.006, BCF/Remarks/Notice (BCRN). Ensure that you take the following actions:

  • Approve the fee agreement if it meets the statutory requirements of the Act and is not otherwise excepted;

EXCEPTION: For claims decided at the hearing or Appeals Council levels, code the decision on the fee agreement made by the ALJ or AAJ. You are not the decision maker at these levels.

  • Document your determination on a Form SSA-553 or other prescribed form; and

  • Withhold the lesser of 25 percent of past-due benefits or the current statutory fee cap (see GN 03920.006) when the representative has not waived a fee and is eligible for direct payment or there is an eligible entity with a valid assignment. If there is Federal court involvement, withhold 25 percent of past-due benefits.

If you resolve the issue of mental capability and, if appropriate, select a representative payee for the claimant after effectuating the favorable decision (see GN 03940.037B.1.a.), when forwarding the completed development to the PC, re-alert the PC by paperless or MDW that they must authorize a fee and advise the parties (i.e., the claimant if capable or, if incapable, the claimant's representative payee) and the representative.

2. PC Actions

a. Mental Capability Development or Payee Selection Incomplete

When the FO forwards a favorable decision in accordance with GN 03940.037B.1.a., take the following actions:

  • Establish a diary (the same diary as you establish for capability/payee selection process); and

  • Send a notice advising the parties of the determination on the fee agreement. If the FO decision maker approved the fee agreement, include neutral language regarding the fee (see GN 03940.075 for paragraphs).

NOTE: If there is a valid assignment of direct payment to an entity, the entity’s point of contact (POC) may need to review fee-related information to resolve fee-related issues. However, do not send a copy of the award notice or other protected information (e.g. claimant’s information) to the entity's POC unless it is the minimum amount necessary for the POC to review it to resolve fee-related issues. For information that is not relevant or necessary to resolve fee-related issues, only disclose it if the claimant has expressly consented in writing on a Form SSA-3288 or other written consent that meets the requirements of GN 03305.003

b. Mental Capability Development or Payee Selection Complete

When you receive the completed capability development (i.e., the determination finding the claimant is capable or incapable and representative payee selection), take the following actions:

  • Authorize a fee under the terms of the fee agreement process (e.g., 25 percent of the past-due benefits, not to exceed the specified dollar amount of the fee cap indicated in GN 03940.003B.3. or the flat fee specified in the agreement);

  • Send a notice advising the parties (i.e., the claimant if capable, or if incapable, the claimant's representative payee), and the representative of the authorized fee and of the right to request administrative review;

  • Notify the decision maker by email of the fee authorization if the decision maker requested to be notified; and

  • If the representative is eligible for direct payment and has not waived a fee or direct payment, or if there is an entity with a valid assignment, certify direct payment to the representative or to the eligible entity, and release any remaining past-due benefits to the claimant, or the claimant's representative payee, and any auxiliary beneficiary unless there is Federal court involvement and potential court fees have not been resolved.

C. Reference

For representative payee selection, see GN 00500.000.

 


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GN 03940.037 - Title II - Field Office (FO) and Processing Center (PC) Processing of Fee Agreements on Claims Involving Mental Capability - General - 12/09/2024
Batch run: 12/10/2024
Rev:12/09/2024