Why must the Social Security Administration compute the workers' compensation offset before Social Security computes the retroactive disability insurance benefits and, when applicable, the representative's fee under an approved agreement, and before Social Security pays the authorized fee to a representative who is an attorney or eligible-for-direct-payment non-attorney?
The Social Security Act generally requires a reduction of disability insurance benefits when an individual is also entitled to periodic benefits under a workers' compensation law or plan, or to certain public disability benefits. By law, Social Security cannot withhold or make direct fee payment of more than 25% of the resulting past due benefits. Also, when authorizing a fee under the fee agreement process, Social Security must apply the percentage specified in the approved fee agreement to the total past-due benefits after the applicable reduction (if any), compare the resulting amount with the statutory maximum (e.g., $5,300), and authorize a fee in the lesser amount. Thus, if a claimant receives workers' compensation and the reduction applies, Social Security cannot calculate a fee under an approved agreement until it receives the evidence necessary to compute the required offset and determine the correct amount of past-due benefits. Representatives can help to speed up the process by submitting verification of workers' compensation to Social Security.