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6.3% Attorney Fee Assessment


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Public Law 106-170 established a fee for the services required to determine and certify payments to attorneys from a claimant's past-due Title II Social Security benefits (hereafter called "user fee"). User fees collected from attorneys do not go to offset Agency administrative costs, but go directly into the Social Security trust funds. Congress set the user fee at 6.3 percent of the amount of the fee certified for payment to the attorney through the year 2000. For years after 2000, the percentage rate specified was "such percentage rate as the Commissioner determines is necessary in order to achieve full recovery of the costs of determining and certifying fees to attorneys from the past-due benefits of claimants, but not in excess of 6.3 percent."

Cost Accounting Procedures

The attorney user fee workload directly affects four major components of the Social Security Administration: the Office of Disability and International Operations (ODIO), the Program Service Centers (PSCs), the Office of Hearings and Appeals (OHA), and SSA's local field offices. Under established cost accounting policies and procedures, attorney fee related costs should include the cost associated with the work in these organizations plus an appropriate share of support costs, such as time spent by staff components.

SSA's management information, work measurement, and cost accounting systems currently identify attorney fee related work in ODIO and the PSCs. The Agency is currently working to identify related work in OHA and field offices. Data for ODIO and the PSCs indicate that costs for these two components alone exceed the 6.3% fee established by law.

In SSA's cost accounting system for ODIO and the PSCs, attorney fees are a sub-workload of the ALJ Reversals and Appeals workload. SSA uses a work measurement technique called work sampling to determine the amount of time spent on workloads processed in these components. Samplers walk around with a clipboard or hand-held recorder once or twice a day to record what work each employee is processing at that moment. The cost accounting system identifies the expenditures associated with this workload and divides these costs between the Title II Social Security program and the Title XVI Supplemental Security Income program. To calculate the cost of attorney fee work, the percentage of samples for that work compared to the total samples for the ALJ Reversals and Appeals workload is applied to total costs for this workload as identified in SSA's cost accounting system.

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Based on these work sampling techniques, in FY 2000, ODIO and the PSCs spent $85.5 million to process decisions rendered by the OHA. Over 47% of the total cost was spent to process attorney fee payments and collect the user fee. The cost of the ODIO and PSCs attorney fee work is 7.7% of the total fee payments to the attorneys. This percentage does not include the attorney fee work done in SSA's local field offices or in the OHA. However, had these offices been included, the resulting cost percentage would have been higher.

Additionally, we have an administrative file that contains 1 percent of all Social Security beneficiaries, based on specific digits of their Social Security numbers. This file contains data fields that indicate the date in which an attorney fee was paid, as well as the amount of the fee. We multiplied sample results from this file by 100 to estimate attorney fee impacts on all Social Security beneficiaries. Therefore, using data from this administrative file for 1997-1999 and part of 2000, we estimated that attorney fee payments would total $519 million in calendar year 2000.

Samples for SSI work or inquiries are also not included in the calculations. Therefore, the attorney fee work samples displayed in the "FY 2000 Attorney Fee Work Samples" file do not equal the attorney fee work samples posted in the Federal Register.

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Tab A: Calculations on which the 7.7% figure is based

Tab B: FY 2000 Work sampling statistics of Administrative-Law-Judge
Reversals/Appeals that include attorney fees

Tab C: Cost Analysis figures for FY 2000

  • 2400 DIO-S Activity 00 CON
  • 2400 DIO-S Activity 00 SSI
  • 2300 PSC Activity 00 CON
  • 2300 PSC Activity 00 SSI
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Last reviewed or modified Monday Jan 14, 2008
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