Overview of Representatives' Fees

SSA's Fee Authorization Processes

A representative who wants to charge or collect a fee from a claimant or a third party, for services provided in any proceeding before the Social Security Administration (SSA) under the Social Security Act (the Act), must first obtain SSA's authorization. To do so, a representative must use one of two mutually exclusive fee authorization processes:  the fee agreement process or the fee petition process.

Fee Agreement Process  Before SSA decides the claim, the representative or the claimant may file a fee agreement. Generally, SSA will approve an agreement (under § 206(a)(2)(A) of the Act) if the other statutory conditions are met and no exceptions apply. If SSA approves the fee agreement and no one requests administrative review, the fee specified in the agreement is the maximum fee the representative may charge and collect.

Fee Petition Process  After the representative's services in the case have ended, he or she may petition for a fee. SSA reviews the fee petition and authorizes a "reasonable" fee (under §206(a)(1) of the Act) for the specific services provided.

• An initial, revised, or reconsidered determination or action by a field office or processing center; or
  
• A decision or action by an Administrative Law Judge or an Administrative Appeals Judge.

• An application for Social Security monthly benefits, supplemental security income (SSI) payments, or a lump-sum death payment;
  
• An application for hospital insurance benefits or supplementary medical insurance benefits;
  
• A request to establish or continue a period of disability;
  
• A request to modify the amount of benefits;
  
• A request to reinstate benefits;
  
• A request to waive recovery of an overpayment, or an appeal of an overpayment waiver denial determination; and
  
• A request to revise an earnings record.
  

• The claimant and affected auxiliary beneficiary(ies) are free of direct or indirect liability to pay a fee or expenses, either in whole or in part, to a representative or to someone else.
  
• The entity that pays the fee and expenses incurred, if any, on behalf of the claimant(s) or beneficiary(ies) is a nonprofit organization or a Federal, state, county, or city agency.
  
• A government entity provides or administers the funds used to pay a fee or any expenses.
  
• A representative submits a written statement to SSA waiving the right to charge and collect a fee and expenses from a claimant or auxiliary beneficiary(ies).
  

When the Social Security Administration (SSA) or a Federal court authorizes a representative's fee based on an approved fee agreement or a fee petition, SSA will withhold up to 25 percent of the claimant's title II and/or title XVI past-due benefits for payment of all or part of the authorized fee if the following criteria are met:

• At least one of the claimant's representatives is an attorney or a non-attorney whom SSA has determined is eligible to participate in the direct payment demonstration project.
• The claimant is entitled to past-due benefits under title II and/or title XVI.
• The attorney or non-attorney who is otherwise eligible to receive direct payment has not waived his or her fee or waived the right to direct payment.
• An attorney or non-attorney whom the claimant appoints after December 31, 2006 to represent him or her before SSA, or an attorney for whom a Federal court approves a fee after December 31, 2006, has registered to receive direct payment by taking two steps:
• Submitting, one time, a completed online or paper Form SSA-1699, Request for Appointed Representative’s Direct Payment Information.
• Submitting, in connection with the specific claim(s), a completed Form SSA-1695, Identifying Information for Possible Direct Payment of Authorized Fees.

When SSA makes direct fee payment, the law requires SSA to charge an assessment to cover administrative costs. SSA deducts this service charge from the amount payable to the representative. The representative cannot charge or collect this expense from the claimant.

The Social Security Protection Act of 2004 (Public Law No. 108-203) introduced several changes to direct payment, which became effective at different times.

• Beginning with direct payments SSA makes to representatives on or after September 1, 2004, the service charge is capped at the lower of either a flat rate dollar amount or 6.3 percent of the amount of the fee payable from past-due benefits. The flat rate dollar amount cap is adjusted periodically based on the cost of living.
  • For direct payments made to representatives on or after December 1 2007, the service charge is capped at a flat rate dollar amount of $79.
  • For direct payments made to representatives on or after December 1 2006 but before December 1 2007, the service charge is capped at a flat rate dollar amount of $77.
    
  • For direct payments made to representatives on or after September 1, 2004 but before December 1, 2006 the service charge is capped at a flat rate dollar amount of $75.
  • Before September 1, 2004 the service charge is 6.3 percent of the representative fee payable from past-due benefits, not limited to a flat rate dollar amount.
• Beginning February 28, 2005, the law requires SSA to conduct two demonstration projects, on:
• Extending the withholding and direct payment provisions to non-attorney representatives. SSA announced the criteria for non-attorneys to become eligible to participate in this demonstration project, and the project procedures, in Federal Register notices published January 13, 2005 (70 Fed. Reg. 2447) and July 18, 2005 ( 70 Fed. Reg. 41250 ).
• Withholding, for direct payment of all or part of the authorized fee, the lesser of 25 percent of the claimant's title XVI past-due benefits (calculated before any interim assistance reimbursement to the state), or all of the title XVI past-due benefits after any interim assistance reimbursement to the state.

When a claimant or representative disagrees with SSA's determination to approve or disapprove a fee agreement, he or she may request administrative review of that determination.

When a claimant, affected auxiliary beneficiary, or representative disagrees with the amount of the fee SSA authorized, he or she may protest that determination by requesting administrative review. Under the fee agreement process only, the SSA decision maker may also request administrative review of the fee amount authorized.

Under the fee petition process, the party requesting administrative review must do so within 30 days after the date of the notice of the fee authorization. Under the fee agreement process, the party requesting administrative review must do so within 15 days of receiving the notice of the determination approving or disapproving the fee agreement or authorizing the amount of the fee.