TN 13 (02-05)

A. Policy - Purpose

SSA uses title II past-due benefits that result from a claim(s) or post entitlement (PE) action(s) to do the following:

• Calculate the 25 percent amount of title II past-due benefits to withhold for direct payment of a representative's fee, when the representative is eligible for direct fee payment, whether SSA will authorize a fee for administrative proceedings under the fee petition or fee agreement process. (See GN 03920.017, Payment of Representative’s Fee.)

• Authorize a fee under the fee agreement process for services a representative provided in proceedings before SSA in connection with the title II claim.

• Calculate the 25 percent amount of title II past-due benefits to withhold for direct payment of an attorney's fee in a court case. For the definition of past-due benefits in court cases, see GN 03920.060B.

B. Policy – Title II Past-Due Benefits

1. Definition

Past-due benefits that result from a fully favorable SSA determination or decision (hereafter “decision”) are the amount of the monthly benefits credited (MBC) for all beneficiary(ies) under title II of the Act that have accumulated because of a favorable administrative determination or decision, up to but not including the month SSA effectuates the primary beneficiary's decision. Therefore, in fully favorable decisions, the end date of the past-due benefits period is the month before the month SSA effectuates the decision. (See GN 03920.030D., Policy -Month of Effectuation.)

If SSA issues a decision that pertains to more than one title II claim (e.g., disability insurance benefits and disabled widow's insurance benefits), and those claims are not effectuated in the same month, the past-due benefits period will be different for each of those claims. This is because the past-due benefits period will end the month before the month SSA effectuates the determination on each claim.

To determine the past-due benefits period in partially favorable decisions see GN 03920.030B.2.

Refer to GN 03920.030B.4. for what past-due benefits include.

A title II SSI windfall offset does not affect the past-due benefits calculation (i.e., SSA does not adjust title II past-due benefits for receipt of SSI payments for the same period).

NOTE: The terms “past-due benefits” and “past-due benefits payable” are not interchangeable. See GN 03920.032, Title II Past-Due Benefits Payable.

For the definition of title XVI past-due benefits that result from a favorable SSA determination or decision, see GN 03920.031. For the definition of past-due benefits in court cases, see GN 03920.060B.

2. Partially Favorable Decisions

When calculating past-due benefits based on a partially favorable decision, SSA uses the beginning and ending dates shown in the partially favorable decision. In later onset date cases, the past-due benefits period begins with the month of entitlement shown in the favorable decision, up to but not including the month SSA effectuates the decision. The past-due benefits period will remain the same unless SSA issues a subsequent decision that changes the dates of entitlement.

a. Decision More Favorable on Appeal

If on appeal SSA makes a more favorable decision, SSA will use the past-due benefits that flow from the more favorable decision to recalculate past-due benefits for the entire period of entitlement and, in a fee agreement case, determine the representative's additional fee, if any.

NOTE: If on appeal to a Federal court, the court issues a decision more favorable than the administrative decision, SSA will use the past-due benefits that flow from the more favorable court decision to recalculate past-due benefits to withhold for direct payment of an attorney's fee in the court case. (See GN 03920.060B. for policy on past-due benefits in a court case.)

Additional benefits include those now payable based on the additional periods of entitlement (e.g., earlier date of entitlement (DOE) or continuation from a closed period of disability). The additional benefits would also include increases or adjustments to the benefit amount for months within the original entitlement period through the month prior to effectuation of the more favorable decision.

EXAMPLE 1: Partially favorable reconsideration determination effectuated in 4/05 with a DOE of 6/03. The past-due benefits period is from 6/03 to 03/05. SSA approved the fee agreement between the claimant and the representative who is eligible for direct payment.

• Past-due benefits based on reconsideration determination:

  6/03 – 11/03	@ $715.00 X 6	= $4,290.00
  12/03 – 11/04	@ $730.00 X 12	= $8,760.00
  12/04 –3/05	@ $739.00 X 4	= $2,956.00
  TOTAL		= $16,006.00
  25% withholding amount		= $4,001.50

  An Administrative Law Judge (ALJ) issues a more favorable decision which is effectuated in 11/05 with a DOE of 1/02. Additional benefits are due for 1/02 to 5/03, and increased benefits for 6/03 to 10/05.

• Additional Past-Due Benefits for new period of entitlement based on ALJ decision:

  1/02 – 11/02	@ $718.00 X 11	= $7,898.00
  12/02 – 5/03	@ $739.00 X 6	= $4,434.00
  TOTAL ADDITIONAL BENEFITS		= $12,332.00

• Increased benefits for original entitlement period to 10/05 based on ALJ decision:

  6/03 – 11/03	($739.00 - $715.00) X 6	= $144.00
  12/03 – 11/04	($754.00 - $730.00) X 12	= $288.00
  12/04 – 10/05	($764.00 - $739.00) X 11	= $275.00
  TOTAL INCREASE		$707.00

• Total Past-Due Benefits for the entire period of entitlement:

  Total past-due benefits	= $16,006.00
  Total additional benefits	= $12,332.00
  Total increased benefits	= $ 707.00
  GRAND TOTAL	$29,045.00

• Withholding amount for latest decision:

  Grand Total	=$29,045.00
  25 percent of grand total	= $7,261.25
  Previously W/H amount	= $4,001.50
  NEW AMOUNT SSA CAN WITHHOLD	$3,259.75 (See NOTE)

• Additional authorized fee amount in fee agreement case:

  Maximum fee based on approved fee agreement (See GN 03940.003.B.3. for the applicable specified dollar amount)	= $5,300.00
  Previously authorized amount	= $4,001.50
  ADDITIONAL WITHHOLDING AND AUTHORIZED FEE	$1,298.50

NOTE: Relative to Examples 1 and 2, if the representative had not filed a fee agreement, waived his/her fee or waived direct payment of the fee, SSA would withhold the full 25 percent from the claimant's past-due benefits when effectuating the ALJ's decision, pending authorization of the fee based on a fee petition.

EXAMPLE 2: Partially favorable reconsideration determination effectuated in 8/02 with a DOE of 10/01. The past-due benefits period is from 10/01 to 7/02.

• Past-due benefits based on reconsideration determination:

  10/01– 11/01	@ $1,533.00 X 2	= $3,066.00
  12/01 – 7/02	@ $1,570.00 X 8	= $12,560.00
  TOTAL		= $15,626.00
  25% withholding amount		= $3,906.50

  An ALJ issues a more favorable decision finding an onset date of 02/06/00. The decision is effectuated in 07/03 with a DOE of 8/00. Additional benefits are due for 8/00 – 9/01.

• Additional Past-due Benefits for new period of entitlement: based on ALJ decision

  8/00 – 11/00	@ $1,461.00 X 4	= $5,844.00
  12/00 – 9/01	@ $1,480.00 X 10	= $14,800.00
  TOTAL ADDITIONAL BENEFITS		= $20,644.00

• Decreased benefits for original entitlement period to 6/03 due to decrease in PIA after ALJ decision:

  10/01– 11/01	($1,480.00 - $1,533.00) X 2	= -$106.00
  12/01 – 07/02	($1,516.00 - $1,570.00 X 8	= -$432.00
  08/02– 11/02	($1,516.00- $1,570.00) X 4	= -$216.00
  12/02 – 6/03	($1,568.70 - $1,625.00) X 7	= -$394.10
  TOTAL DECREASE		= -$1,148.10

  NOTE: Based on the 8/00 MOE, in 8/02 the claimant began paying supplementary medical insurance (SMI) premiums. The MBC beginning with 8/02 reflects the SMI premium amount: $54 for 2002 and $58.70 for 2003.

• Total Past-Due Benefits for the entire period of entitlement:

  Total past-due benefits	= $15,626.00
  Total additional benefits	= $20,644.00
  Total decreased benefits	= -$1,148.10
  GRAND TOTAL	$35,121.90

• Maximum withholding amount for latest decision:

  Grand Total	= $35,121.90
  25 percent of grand total	= $8,780.48
  Previously W/H and paid amount	= $3,906.50
  New amount SSA can withhold	= $4,873.98

• Additional actual withholding and authorized fee amount in fee agreement case:

  Maximum fee (See GN 03940.003B.3. for the applicable specified dollar amount)	= $5,300.00
  Previously W/H amount	= $3,906.50
  ADDITIONAL WITHHOLDING AND AUTHORIZED FEE	$1,393.50

  EXAMPLE 3: The Disability Determination Services (DDS) issues a determination finding the claimant entitled to a closed period of disability from 11/00 to 04/02.

• Past-due benefits based on initial DDS determination:

  11/00	@ $615.00 X 1	= $615.00
  12/00 – 11/01	@ $630.00 X 12	= $7,560.00
  12/01 – 4/02	@ $639.00 X 5	= $3,195.00
  TOTAL PAST-DUE		$11,370.00
  		$ 2,842.50

  An ALJ issues a more favorable decision finding that the claimant continues to be disabled. The decision is effectuated in 11/02. Because the ALJ found a continuance of the claimant's disability benefits, the past-due benefits period now extends through 10/02, the month before the month of effectuation.

• Additional past-due benefits for new period of entitlement based on ALJ decision:

  5/02 - 10/02	@ $639.00 X 6	= $3,834.00
  TOTAL ADDITIONAL BENEFITS		$3,834.00

• Total past-due benefits for the entire period of entitlement:

  Total past-due benefits	= $11,370.00
  Total additional benefits	= $3,834.00
  GRAND TOTAL	$ 15,204.00

• Withholding amount for latest decision:

  Grand Total	= $15,204.00
  25 percent of grand total	= $ 3,801.00
  Previously W/H amount	= $ 2,842.50
  NEW W/H AMOUNT	$ 958.50

• · Additional authorized fee amount in fee agreement case:

  Lesser of *$5,300 or 25% of past-due benefits (*See GN 03940.003B.3. for the applicable specified dollar amount)	= $3,801.00
  Previously authorized amount	= $2,842.50
  ADDITIONAL AUTHORIZED FEE	$ 958.50

  NOTE: In a fee agreement case, if SSA issues a more favorable decision, SSA has already authorized a fee equal to the applicable specified dollar amount (see GN 03940.003B.), and the representative did not request administrative review of the fee, the fee amount is settled. If the claimant becomes entitled to additional benefits as a result of the more favorable decision, SSA will not withhold additional past-due benefits for direct payment or issue further notification.

b. Decision Less Favorable on Appeal

If on appeal SSA makes a less favorable decision, SSA will use the past-due benefits that flow from the less favorable decision when recalculating the past-due benefits. Under the fee agreement process, this means that SSA may have to reduce the fee it previously authorized and, if so, the representative must refund the difference.

EXAMPLE: A partially favorable ALJ decision was effectuated in 1/04 with a DOE of 9/02. The past-due benefits period is from 9/02 to 12/03.

• Past-due benefits:

  9/02 – 11/02	@ $ 909.00 X 3	= $ 2,727.00
  12/02 – 11/03	@ $ 935.00 X 12	= $11,220.00
  12/03	@ $ 955.00 X 1	= $ 955.00
  TOTAL PAST-DUE BENEFITS		$14,902.00
  		$ 3,725.50

  The Appeals Council issues a less favorable decision that is effectuated in 6/05 with a DOE of 3/03. The new past-due benefits period is from 3/03 to 5/05.

• Reduction in past-due benefits due to non-entitlement months:

  9/02 – 11/02	@ $909.00 X 3	= $2,727.00
  12/02 - 2/03	@ $935.00 X 3	= $2,805.00
  TOTAL REDUCTION DUE TO NON-ENTITLEMENT MONTHS		$5,532.00

• Decrease in past-due benefits due to change in MBC:

  3/03 - 11/03	@ $935.00 -$900.00	= $35.00 X 9	= $315.00
  12/03 - 11/04	@ $955.00 -$918.00	= $37.00 X 12	= $444.00
  12/04 - 5/05	@ $967.00 -$929.00	= $38.00 X 6	= $228.00
  TOTAL DECREASE IN BENEFITS DUE TO CHANGE IN MBC			$987.00

• Past-due benefits for the new period of entitlement:

  Original past-due benefits	$14,902.00
  Less Reduction Non-Entitlement months and new MBC ($5,532 + $987 = $6,519)	$ 6,519.00
  NEW PAST-DUE BENEFITS AMOUNT	$ 8,383.00
  NEW 25% WITHHOLDING AMOUNT	$ 2,095.75

• · Recalculation of fee in fee agreement case

  Previous withholding amount and authorized fee	$3,725.50
  New 25% withholding amount and authorized fee	$2,095.75
  EXCESS FEE INITIALLY AUTHORIZED TO REPRESENTATIVE AMOUNT OVERPAID TO REPRESENTATIVE (Excess authorized fee less the user fee: $1,629.75 X 6.3% = $102.68) +$2,095.75 X 6.3% - $75 = $ 56.99 (User fee cap of $79 applies because authorization occurs after September 1, 2004.) $159.71	$1,629.75 $1,470.04
  (See GN 03920.019, Assessment on Representatives Who Receive Direct Payment.)

NOTE: Refer to GN 03970.025, Direct Payment Errors, for guidance in preparing a letter to the representative to request refund of the excess fee.

3. Multiple SSNs Involved

If a representative's efforts on behalf of a claimant and/or an affected auxiliary beneficiary(ies) result in entitlement to benefits under more than one Social Security number (SSN), or an increase in benefits, the processing center (PC) will use the additional benefits to calculate the past-due benefits amount.

Refer to GN 03940.040B. for notice and routing instructions on dual entitlement claims with an approved fee agreement.

a. Entitlement Due to Representative's Efforts

If a representative's efforts on behalf of a claimant and/or an affected auxiliary beneficiary(ies) result in entitlement (includes those technically entitled) to benefits under more than one SSN (e.g., dual and simultaneous entitlement), the PC will use the combined family maximum and those benefits the claimant and/or an affected auxiliary beneficiary(ies) receive to calculate the past-due benefits amount.

b. Increased Benefits Due to Representative's Efforts

If a representative's efforts cause the benefits of the claimant and/or anyone else actually or technically entitled on the record to increase, the PC will use the extra benefits in its past-due benefits calculation. If the representative's efforts cause an increase in the family maximum that is combined on another beneficiary's record, the PC will use the extra benefits to calculate the past-due benefits amount.

EXAMPLE 1 - Increase Due to Representative's Efforts

Jim Smith became entitled to disability insurance benefits (DIB) with a DOE of 12/01. The claim was effectuated in 4/04. Jim has 3 children entitled on his record.

In 5/04, Mary Smith, Jim's wife, also became entitled to benefits on her own record. She used the services of an attorney. Mary's DOE is 5/02. The children's benefits are less on her record so they will continue to be paid on Jim's record. However, because the family maximum will be combined on Jim's record, the children are due additional past-due benefits. In its past-due benefits calculation, the PC will include the increased benefits due the children for 5/02 through the month before the month Mary's claim is effectuated.

NOTE: In a family maximum situation that involves children who are not entitled on both records, inclusion of benefits in the past-due benefits amount and withholding would only apply to the children who are entitled on the record of the represented claimant. In the example above, if one of Jim's children was not entitled on Mary's record, the PC would not include that child's benefits in the past-due benefits amounts and would not withhold from the additional benefits due that child, because that child is not Mary's beneficiary.

EXAMPLE 2 - Increase Not Due To Representative's Efforts

Bob Jones became entitled to DIB with a DOE of 12/01. The claim was effectuated in 4/04. Bob has three children who are entitled on his record. Bob has a lawyer and past-due benefits are withheld.

In 5/04, Jane Jones, the children's mother, also becomes entitled to benefits on her own record. Jane's DOE is 5/02. She did not use a representative. The children's benefits are less on Jane's record so they will continue to be paid on Bob's record. The children are due additional past-due benefits because of the combined family maximum. While the additional benefits from Jane's claim are within the past-due benefits period on Bob's record, they did not result from the work of Bob's lawyer. Therefore, the PC would not withhold additional past-due benefits.

4. What Past-Due Benefits Include

Past-due benefits include:

• Accumulated benefits and benefits from multiple SSNs described in GN 03920.030B.1., GN 03920.030B.2., and GN 03920.030B.3.

• Benefits that are now due to the claimant as a result of a determination that a deduction or termination event did not occur, that a penalty did not apply, or that recovery of an overpayment is waived.

• Critical Payment System (CPS) payments which SSA will withhold as a portion of the CPS payments when the claimant’s representative is eligible to receive direct fee payment and the representative either did not waive the fee or waived direct payment (unless paid under Public Law 100-647 - Interim Benefits - see SI 02007.001 and DI 42010.230).

• Benefits allotted to pay SMIB (Supplementary Medical Insurance Benefits).

Refer to GN 02410.215 if garnishment is an issue.

5. Effect of Overpayment on Past-Due Benefits

a. Current Overpayment

SSA will adjust past-due benefits by the amount of any overpayment that occurred between the date of entitlement, and

• for administratively decided cases, the month before the month SSA effectuates the favorable decision or determination; or

• for court cases, the month before the month of the court's judgment.

This applies even if multiple SSNs are involved (e.g., the claimant can be overpaid on one account and not on the other).

In a PE action, a current overpayment is an overpayment that occurs during the period encompassed by the issue for which the claimant was represented (see GN 03920.032B., Example 1).

SSA will adjust only the past-due benefits of the claimant or the auxiliary beneficiary(ies) who was overpaid. If an auxiliary beneficiary(ies) is currently overpaid, SSA will adjust only that auxiliary beneficiary's(ies') past-due benefits amount, not the claimant's past-due benefits or that of any other auxiliary beneficiary(ies).

b. Prior Overpayment

SSA will not adjust title II past-due benefits for overpayments arising during a period of time not adjudicated by the favorable determination or decision (see GN 03920.032B., Example 2).

C. Policy - Title II Benefits that are not Past-Due Benefits

Title II past-due benefits as defined in GN 03920.030B. do not include benefits that a claimant will not receive because of a suspension, deduction, or reduction event (e.g., work, no child-in-care, workers' compensation/public disability benefits (WC/PDB) payments, temporary MOET (month of entitlement), current overpayment.).

In addition, when calculating past-due benefits, SSA does not include the following:

• continuing benefits - benefits a claimant elects to continue to receive while the claim is under appeal; or

• interim benefits - benefits a claimant receives when an ALJ issues a favorable decision on the issue of disability, but the Commissioner has not issued the final decision within 110 days after the date of the ALJ's decision because the Appeals Council exercised its own motion review authority or reopened the ALJ's decision.

D. Policy - Month Of Effectuation

1. Initial or Amended Award

If the favorable decision below the court level results in an initial or amended award, the month of effectuation is the calendar month SSA certifies that all evidence necessary to begin payment is present.

1. In a title II case, the month of effectuation is:

   • the calendar month the claims representative (CR), claims authorizer (CA) or claims technical examiner (CTE) signs the Form SSA-101-U3 (Determination of Award) [this includes both the Automated SSA 101 (A101) and the Electronic Form 101 (EF101)], or

   • the calendar month a CR, CA or CTE triggers payment on the Modernized Claims System (MCS) by using his or her electronic signature.

2. In a title XVI case, the month of effectuation is the month that the CR makes the final input to send the title XVI claim to pay via the Modernized Supplemental Security Income Claims System (MSSICS) or the Form SSA- 450s or 1719b input.

The month of effectuation is the calendar month the CR, CA or CTE certifies payment regardless of when the benefit authorizer (BA) or benefit technical examiner (BTE):

• triggers the award; or

• corrects resulting input edits.

NOTE: The month of effectuation is the actual calendar month regardless of the current operating month.

2. Reinstatement Action

If the favorable decision results in a resumption of benefits, the month of effectuation is the calendar month the CA, CTE, reconsideration reviewer, senior claims processing specialist, disability examiner, or CR certifies the claim for payment by transmitting the folder to a benefit authorizer or benefit technical examiner with instructions for resumption of benefit payments. In a title XVI case, the month of effectuation is the month that the CR makes the final input for payment via MISSICS or an SSA-1719b.