POMS Reference

GN 03920: Administering Representatives Fees Provisions

TN 20 (02-15)

A. Introduction to excess representative fee payments

Excess representative fee payments are incorrect or erroneous fee payments that exceed the amount due. Excess fee payments can be the result of processing errors, adjustments, and revised determinations. Although we usually request a refund from the representative when we discover an excess fee payment, it is not necessary or administratively practical to request refunds in every situation.

We treat an excess fee payment to a representative differently than overpayments as defined in section 204 of the Social Security Act, because:

  • Waiver and appeal rights do not apply to excess fee payments made to representatives.

  • We refer representatives who fail to refund excess fees to the Office of the General Counsel (OGC) for possible sanctions.

B. When we will not pursue recovery for an excess fee payment

When a fee payment error results in no monetary loss to the claimant and the monetary loss to SSA is less than or equal to the user fee, we generally will not pursue recovery from the representative. For additional information regarding the user fee, see GN 03920.019. The following are examples of when we will not pursue recovery:

1. We paid a fee to a representative who is ineligible for direct payment

We will not pursue recovery if, through administrative error, we directly paid a fee to a representative who is ineligible for direct payment (i.e. a revoked, withdrawn, or sanctioned representative, or a representative who is not an attorney or an eligible for direct pay non-attorney (EDPNA)) when:

  • the representative has not intentionally misrepresented his or her eligibility for direct payment;

  • we withheld the authorized fee from the claimant’s past due benefits;

  • we paid the representative no more than the authorized fee;

  • the claimant did not protest our withholding or paying the authorized fee;

  • the representative did not protest our paying the authorized fee, less the applicable user fee per GN 03920.019; and

  • the incorrect fee payment does not adversely affect any other representative.

NOTE: Revoked, withdrawn, or sanctioned representatives may only petition for a fee for services they provided prior to their discharge. For additional information regarding fees for sanctioned representatives see GN 03970.060A.

2. We paid a fee to a representative who is eligible for direct payment, but who waived direct payment on the case

We will not pursue recovery if, through administrative error, we withheld from the claimant’s past-due benefits and directly paid an authorized fee to an eligible attorney or EDPNA who did not waive the fee, but only waived his or her right to direct fee payment for a particular claim, when:

  • we withheld the authorized fee from the claimant’s past due benefits;

  • we paid the representative no more than the authorized fee;

  • the claimant did not protest our withholding or paying the authorized fee; and

  • the representative did not protest our paying the authorized fee, less the applicable user fee per GN 03920.019.

3. We paid an authorized fee that exceeded the required 25% of past-due benefits withholding limit

We will not pursue recovery if, through administrative error, we directly paid an authorized fee to a representative in excess of the 25% direct-pay limit, when:

  • we withheld the authorized fee from the claimant’s past due benefits;

  • although we paid more than 25% of the past-due benefits, we paid the representative no more than the authorized fee; and

  • the claimant did not protest our withholding and paying that portion of the authorized fee in excess of 25% of the past-due benefits.

4. We paid the total amount authorized under an approved fee agreement but did not distribute the payments equally among the appointed representatives who signed the fee agreement

We will not pursue recovery if, through administrative error, we directly paid different fee amounts to two or more appointed representatives who signed an approved fee agreement when:

  • we withheld the authorized fee from the claimant’s past due benefits;

  • although unequally, we paid the representatives no more than the authorized fee; and

  • the representatives did not protest our unequal distribution of the authorized fee.

5. We paid a fee to a representative who is eligible for and requested direct payment, but for whom we failed to deduct the correct user fee

We will not pursue recovery if, through administrative error, we directly paid an authorized fee to a representative without having withheld the applicable user fee, per GN 03920.019.

NOTE: Do not pursue collection of the user fee unless the representative is due an additional fee payment related to the same claim or issue. For example, if we fail to deduct the user fee from the number holder’s portion of the fee, we may subsequently collect the user fee from the pending auxiliary portion of the fee.

C. When we will pursue recovery of an excess fee payment

1. We paid a fee in excess of the authorized fee amount

  • If the fee we withheld and paid exceeds the authorized fee, refund the excess fee withholding to the claimant.

  • Request that the representative refund the excess fee payment to us. The excess fee payment is a debt the representative owes to SSA, not to the claimant. To calculate the fee payment error see GN 03920.051D.4 in this section.

2. We paid a fee when no past-due benefits were available for fee withholding

If we paid an authorized fee but there were no past-due benefits available for fee withholding:

  • Request that the representative refund the erroneous fee payment to us.

  • Inform the claimant and the representative that payment and collection of the fee is a matter between them.

NOTE: Follow GN 03920.055 if we should have but failed to withhold past-due benefits for direct fee payment.

3. The claimant protested the fee withholding for the payments listed in GN 03920.051B.1 through GN 03920.051B.3

If the claimant objects to the erroneous fee withholding used to pay the representative, explain to the claimant that he or she would still owe the amount to the representative. If the claimant continues to protest the fee withholding:

  • Refund the erroneous fee withholding to the claimant and request that the representative refund the fee payment to us. The erroneous fee payment is a debt the representative owes to SSA, not to the claimant.

  • Inform the claimant and the representative that payment of the refunded authorized fee is now a matter between them.

NOTE: If the protest is for the amount paid in excess of 25% of past-due benefits as indicated in GN 03920.051B.3 in this section, only refund to the claimant and request from the representative the amount that exceeded 25% of past-due benefits.

4. The representative protested the fee payments listed in GN 03920.051B.1 and GN 03920.051B.2

If the representative protests the direct fee payment, or the withholding of the user fee:

  • Notify the representative that he or she must refund the erroneously paid fee to us before attempting to collect from the claimant any amount due. This situation should not result in a possible sanctions referral. We will document the representative’s protest and if the representative refunds the fee payment, follow the next two bullets.

  • Once we have received the refund from the representative, add the amount received (refunded) and the user fee (if any was applied), and pay the total to the claimant. NOTE: Do not pay the claimant more than we erroneously withheld.

  • Inform the claimant and the representative that payment of any authorized fee balance is now a matter between them.

5. The representative(s) protested the fee payments in GN 03920.051B.4

If any of the affected representatives object to the unequal distribution of the authorized fee:

  • Send corrected fee authorization notices specifying the individual fee amounts.

  • Pay the representatives who received less than their portions of the authorized fee the difference between their correct fee portions and the amounts we already paid them, adjusting for the user fee.

  • Notify the representatives who received more than their portions of the authorized fee that they must refund the excess payments to us.

6. The representative intentionally misrepresented himself or herself as eligible for direct payment

If the representative intentionally misrepresented his or her direct payment eligibility, request that the representative refund the fee to us. Refund to the claimant the erroneously withheld fee, (the refund includes the withheld user fee). Document the case per GN 03920.051D in this section, and refer the matter to OGC for possible sanctions per the instructions in GN 03970.017.

7. We issued duplicate fee payments

Request that the representative refund the excess fee payment to us.

8. We revised the authorized fee to a lower amount based on administrative review per GN 03950.000 or GN 03960.000

When we have already paid a fee directly, and then determine a lower fee amount based on administrative review, request that the representative refund the excess fee to us. Use the revised fee amount after applying the appropriate user fee to determine the representative’s excess fee payment. Pay the claimant the difference between the prior fee withholding and the revised fee amount (prior to the user fee withholding).

9. We reduced the fee because we discovered that we made a processing error or input coding error affecting the past-due benefit computation

Notify the claimant and the representative when we reduce a previously determined past-due benefit amount and authorized fee, as indicated in GN 03920.040. Use the revised authorized fee when calculating an overpayment to the claimant. Use the revised fee amount after applying the appropriate user fee to determine the representative’s excess fee payment. Request that the representative refund the excess fee payment to us. For more information on adjustments to past-due benefits and fee withholding, see GN 03920.040.

10. We paid a fee to a representative who was not appointed to the claim

Request a refund from the incorrectly paid representative. The incorrectly paid representative owes the debt to SSA, not to the appointed representative or to the claimant. Pay the fee to the appointed representative, if he or she qualifies for direct fee payment. If there is no appointed representative eligible for direct payment, or the appointed representative has waived the fee or direct payment, refund the withheld fee to the claimant.

11. The claimant paid or may pay an excess fee to the representative

When the claimant has paid or may pay a representative too much based on a notice from us, we must notify the claimant and the representative of:

  • the corrected fee amount, and

  • the amount the representative must refund to the claimant if payment has been received.

See GN 03920.051D.9, in this section, for processing instructions.

D. Procedure for pursuing recovery of excess representative fee payments

  1. Document the incorrect fee payment on a report of contact or RPOC/DROC screen. We will use the documentation for any necessary noncompliance referral. Provide the following information on the report of contact:

    • representative(s) involved (identify representative(s) and date(s) of appointment);

    • fee process involved (fee petition or fee agreement);

    • past-due benefit period and amount (include amounts for claimant and any affected auxiliaries);

    • date of fee authorization (for fee agreements use date of fee setting notice);

    • date fee authorization amended or reversed by decision maker or person with fee setting authority;

      NOTE: Before requesting a refund of an incorrect fee payment, verify that the decision maker or person with fee setting authority sent the correct fee authorization or rescission notice. We must notify both the claimant and the representative of the correct fee.

    • explanation of the incorrect fee payment; and

    • indication of whether we correctly paid the claimant and any affected auxiliaries.

  2. Notify the claimant and representative if we are correcting the authorized fee from our previous notice. For a fee petition case, the decision maker sends a corrected or revised fee authorization notice. For a fee agreement case, the processing center PC (title II) or field office FO (title XVI) sends the revised fee amount and includes the fee authorization language specified in GN 03940.008B.

  3. Refund any erroneously withheld benefits to the claimant. For information on refunding the excess fee withholding, see SM 01901.005 and SM 01901.015 for title XVI claims and SM 00848.330 for title II claims.

    NOTE: The claimant is not due a refund if we did not withhold the past-due benefits for the fee payment. Also, the claimant may not be due a refund if the revised past-due benefits and fee resulted in an overpayment to the claimant.

  4. If we revised the fee authorization amount, recalculate or adjust for the required user fee. The amount of the fee payment error equals the difference between the amount paid and the amount due after withholding the appropriate user fee. If no payment was due, the fee payment error equals the amount paid.

  5. Notify the representative of the amount he or she must refund to SSA within 30 days. For sample language see GN 03920.051F in this section or GN 03970.025.

  6. Annotate the incorrect fee payment or debt owed to SSA in the Debt Management System (DMS) for T2 claims, per SM 00610.772B.7. Manually control debts for T16 claims and debts owed to claimants, see GN 03920.051D.8 in this section. See GN 03920.051D.9 in this section for information on debts owed to the claimant.

  7. Annotate a special message or remark regarding the incorrect payment to the Master Beneficiary Record (MBR) or Supplemental Security Income Record (SSR). For more information regarding special messages and remarks, see SM 00510.075 for T2 and SM 01301.841 for T16.

  8. Establish a 45-day diary to follow-up on the refund request. PCs may establish an ATFEE EXCESS diary through the Processing Center Action Control System (PCACS). For additional information on establishing PCACS diaries, see MS PCACS 009.002. FOs may establish an issue on the DW01 screen in MSSICS or on the MDW screen. For additional information on establishing FO follow-ups, see MS MSSICS 022.004 and MS MDW 001.002.

  9. If the claimant paid the representative too much, notify both the representative and the claimant of the amount the representative must refund to the claimant within 30 days. Instruct the claimant to contact us if the representative does not refund the excess payment. Document the excess fee payment as described in GN 03920.051D.1, GN 03920.051D.2, GN 03920.051D.7, and GN 03920.051D.8 in this section. Do not annotate this type of incorrect fee payment to DMS, since we did not pay the representative.

E. Follow-up actions for resolution of an excess fee payment and possible referral to OGC for a sanctions investigation

  1. If the representative refunds the incorrect fee payment:

    • Verify receipt (and clearance) of remittance. See the references below for remittance and returned fee payment processing instructions.

    • Document recovery of the representative’s debt in the claimant’s electronic or paper file. If the FO or PC received the remittance but Mid-Atlantic Program Service Center (MATPSC) Remittance and Accounting Unit (RAU) has not processed it, document the pending status of the remittance.

    • After MATPSC RAU processes the remittance for T2 claims, the remittance may require manual DMS and Payment History Update System (PHUS) annotation if an automated interface does not occur.

    • After MATPSC RAU processes the remittance for T16 claims, clear any manual controls for the representative’s debt.

    See Also:

    SM 00610.291 Completion of SSA-124-U3 for Misrouted Remittances

    SM 00610.296 Allegation of Remittance

    SM 01311.634 How to Resolve a B4 Diary

    GN 02403.006 Processing Remittances Received in the Field Office (FO)

    GN 02405.010 How to Process Unendorsed Title II Returned Benefit Checks Received in the FO (Including Unendorsed Claimant Representative/Attorney Fee Checks)

    GN 02405.100 How to Process Unendorsed Title XVI Returned Checks in the FO (Including Unendorsed Claimant Representative/Attorney Fee Checks)

    MS DMS 003.008 Verif/Corr of FO Remittances (RFOV)

    MS DMS 003.003 PC Remittance Input (REMI)

  2. If the representative does not refund the full incorrect fee payment, or if the representative intentionally misrepresented his or her direct payment eligibility:

    • Refer the case to OGC for a possible sanctions investigation, per instructions in GN 03970.017 or GN 03970.025.

    • Annotate the representative’s response on the previously prepared report of contact.

    • Forward the updated report of contact to OGC. Include copy of incorrect fee check(s) or proof of direct deposit with the referral.

F. Sample notices for requesting refund of an incorrect fee payment

Use the following sample language to request refund of an excessive fee payment or an erroneous payment to an incorrect representative. See additional sample notices in GN 03970.025C.

NOTE: Before requesting a refund of an incorrect fee payment, verify that the decision maker or person with fee setting authority sent the correct fee authorization or rescission notice.

1. Sample notice for change in fee amount

Dear [Representative’s Name]:

     

This letter concerns the fee payment you received for your services on behalf of [Claimant’s Full Name].

     

As the representative of [Claimant’s Full Name] in his claim for [Type of Benefit] benefits, you received a fee of [Amount Paid] for your services. Your correct authorized fee is [Authorized Fee]. After deducting the required assessment, we find that you received [Excess Dollar Amount] more than your authorized fee.

    

As a result, you owe the Social Security Administration [Excess Dollar Amount Owed to SSA]. Please refund this amount within 30 days from the date of this notice. Make your refund payable to the “Social Security Administration.” Include the claimant’s full name and full Social Security Number (SSN) on your refund. Mail your refund using the enclosed envelope to:

[FO or PC Return Address]

If you fail to refund this amount, we may refer the matter to the Office of the General Counsel as a potential violation of our fee collection rules in 20 CFR 404.1740(c) and 20 CFR 416.1540(c). A violation may warrant proceedings to suspend or disqualify you from practicing before SSA under 20 CFR 404.1745 and 20 CFR 416.1545.

       

Social Security Administration

    

Enclosures:

Self-addressed, unfranked return envelope

2. Sample notice for payment to an incorrect representative

    

Dear [Representative’s name]:

     

This letter concerns the fee payment you received on behalf of [Claimant’s Full Name].

    

A review of our records indicates that you were not the appointed representative for [Claimant’s Full Name], and the payment you received was in error. You received [Amount Paid].

     

As a result, you owe the Social Security Administration [Amount Owed to SSA]. Please refund this amount within 30 days from the date of this notice. Make your refund payable to the “Social Security Administration.” Include the claimant’s full name and full Social Security Number (SSN) on your refund. Mail your refund using the enclosed envelope to:

    

[FO or PC Return Address]

    

If you fail to refund this amount, we may refer the matter to the Office of the General Counsel as a potential violation of our fee collection rules in 20 CFR 404.1740(c) and 20 CFR 416.1540(c). A violation may warrant proceedings to suspend or disqualify you from practicing before SSA under rules 20 CFR 404.1745 and 20 CFR 416.1545.

    

Social Security Administration

    

Enclosures:

Self-addressed, unfranked return envelope