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:

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  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.

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

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  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;

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  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);

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  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).

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:

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  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.

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

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  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.

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

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

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  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).

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:

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  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);

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  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;

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

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  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.