I-5-1-18.Increased Dollar Cap for Fee Agreements

Table of Contents
I Purpose
II Introduction
III Policy Statement
IV Procedure
V Inquiries

ISSUED: June 19, 2009

I. Purpose

This Temporary Instruction supplements instructions in the Hearings, Appeals and Litigation Law (HALLEX) manual, Volume I, Division 1, Chapter 2, to provide Office of Disability Adjudication and Review (ODAR) staff and decision makers with guidance on acting on fee agreements involving the increased dollar cap.

II. Introduction

On February 4, 2009, the Commissioner announced through a Federal Register notice that the dollar cap that a fee agreement may specify will increase from $5,300 to $6,000, effective for fee agreements approved on or after June 22, 2009.

The Social Security Administration (SSA) released an Emergency Message, EM-09006, regarding the fee agreement dollar cap increase on February 12, 2009.

III. Policy Statement

A. .Effective Date of Increased Dollar Cap

The increase in the dollar cap from $5,300 to $6,000 is effective for fee agreements approved on or after June 22, 2009. The controlling event is the date the decision maker acts on the fee agreement, not the date the fee agreement was signed or filed, or the date of the determination/decision on the claim for benefits. (HALLEX I-1-2-12 A. 3, NOTE 1.)

  • For fee agreements approved on or after February 1, 2002 and before June 22, 2009, the fee specified in the fee agreement may not exceed the lesser of 25 percent of past-due benefits or $5,300.

  • For fee agreements approved on or after June 22, 2009, the fee specified in the fee agreement may not exceed the lesser of 25 percent of past-due benefits or $6,000.

B. Fee Agreement Language

SSA accepts language in a fee agreement that would apply whether SSA acts on the agreement before, on or after June 22, 2009. The following are examples:

  • If SSA favorably decides the claim, I will pay my representative a fee equal to the lesser of 25 percent of my past-due benefits or the dollar amount established pursuant to section 206(a)(2)(A), which is currently $5,300, but may be increased from time to time by the Commissioner of Social Security.

  • If SSA favorably decides the claim, I will pay my representative a fee equal to the lesser of 25 percent of my past-due benefits or $5,300 (or such higher amount as prescribed by the Commissioner of Social Security pursuant to section 206(a)(2)(A) of the Social Security Act).

  • I will pay my representative a fee equal to 25 percent of any past-due benefits from my claim or, if less, the maximum dollar amount allowed pursuant to section 206(a)(2)(A) of the Social Security Act based on the date SSA approves my fee agreement.

Decision makers may approve fee agreements with any of these provisions before June 22, 2009, or on or after June 22, 2009, if they otherwise meet the statutory requirements and are not subject to any exception in I-1-2-12 B. However, the amount SSA authorizes to the representative will depend on whether the fee agreement was approved before June 22, 2009, or on or after June 22, 2009.

C. Fee Agreement Approved – SSA Issues Additional Favorable Decision

The decision maker's approval of a fee agreement can remain in effect for any subsequent favorable decision SSA may issue on the same issue or issues, if there has been no change in pertinent circumstances and if the approval was proper. (HALLEX I-1-2-14 B.)

Accordingly, if a fee agreement was approved in connection with a favorable initial or reconsideration determination or a hearing decision, and an Administrative Law Judge (ALJ) or the Appeals Council (AC) issues a subsequent favorable decision on the same issue or issues, no further action is required on the fee agreement unless the initial fee agreement approval was improper. The component that effectuates the subsequent decision will determine if the representative(s) is due any additional fee based on the subsequent decision.

NOTE:

Sometimes SSA issues favorable decisions to the same claimant in more than one type of claim for benefits, e.g., dual entitlement and simultaneous entitlement. Dual entitlement claims usually involve a common issue, e.g., disability based on an individual's own SSN and on the SSN of a parent (disabled adult child claim). In claims involving a common issue, the representative is authorized a single fee for services.

If an SSA decision maker approves a fee agreement that specifies a dollar cap of $5,300 (or less) before June 22, 2009, and SSA issues a subsequent favorable decision on or after June 22, 2009, the terms of the approved fee agreement, including the specified dollar cap of $5,300 (or less), apply to any additional payments to the representative that could result from that agreement.

IV. Procedure

A. Decision Maker Action on a Fee Agreement

Before June 22, 2009, decision makers will approve fee agreements in which the fee specified does not exceed the lesser of 25 percent of past-due benefits or $5,300 (assuming other statutory conditions are met and no exception applies.)

On or after June 22, 2009, decision makers will approve fee agreements in which the fee specified does not exceed the lesser of 25 percent of past-due benefits or $6,000 (assuming other statutory conditions are met and no exception applies.)

B. Representative Submits a Revised Fee Agreement

As a result of the increased dollar cap for fee agreements, ODAR components may receive revised fee agreements. This section provides instructions for receiving, handling, and acting on the revised fee agreement.

1. Receiving and associating the revised fee agreement

  1. Document the date of receipt (e.g., date stamp) if it is not already stamped or otherwise date-documented.

  2. If the claim is pending, associate the revised fee agreement with the claim folder (whether paper or electronic). See section IV. B. 2. below.

  3. If a decision maker issued a favorable decision, forward the revised fee agreement to the decision maker. See section IV. B. 3. below.

  4. If a decision maker issued an unfavorable decision, associate the revised fee agreement, or forward it for association, with the claim folder.

  5. After a decision maker acts on the revised fee agreement, send a copy of the order, the revised fee agreement, and any other fee-related documents to the effectuating component(s).

    NOTE:

    In concurrent title II and title XVI claims cases, send copies to both the field office and the processing center.

2. Decision maker action - pending claim

  1. The decision maker acts on the most recently negotiated and signed fee agreement that SSA received before the date of the favorable decision. (HALLEX I-1-2-12 C. 1.)

  2. Based on the terms of the agreement and the date on which the decision maker acts on the agreement (see section IV. A.), the decision maker approves or disapproves the fee agreement.

    NOTE:

    In considering a revised fee agreement, the decision maker must consider, inter alia, whether the agreement is between the claimant and the same representative or representatives, i.e., whether the name(s) and signature(s) are all the same as on the earlier agreement. If not, an exception to the fee agreement process may apply. (HALLEX I-1-2-12 B.)

  3. If an SSA decision maker previously issued a favorable determination or decision, and in connection with the adjudication, acted on a fee agreement and the action was proper, the decision maker in a subsequent favorable decision on the same issue or issues does not act on the fee agreement. See section III. C. above.

3. Decision maker action – decision maker receives revised fee agreement after the date of the favorable decision

  1. The decision maker approves or disapproves the fee agreement. (HALLEX I-1-2-12.) For example, if the agreement is filed with SSA after the date of a favorable decision, the decision maker disapproves the agreement because it was not filed before the date we made a favorable decision.

  2. If an SSA decision maker previously issued a favorable determination or decision and, in connection with that adjudication, acted on a fee agreement, the decision maker in a subsequent favorable decision on the same issue or issues does not act on the revised fee agreement. See section III. C. above.

  3. If the decision maker previously approved a fee agreement in association with a favorable decision and is considering a revised fee agreement in association with the same favorable decision, the decision maker must consider whether the revised fee agreement was filed with SSA before or after the date of the favorable decision that he or she issued.

    NOTE:

    The claimant or representative may have filed a revised fee agreement with SSA before the date the decision maker issued the favorable decision, but the agreement may not have been associated with the file before the date of the favorable decision.

    If the revised fee agreement was filed with SSA before the date of the favorable decision, see IV. B. 3. d. below. If the revised fee agreement was filed with SSA after the date of the favorable decision, see IV. B. 3. e. below.

  4. If the revised fee agreement was filed with SSA before the date of the favorable decision, the decision maker issues an amended order approving or disapproving the revised fee agreement and providing administrative review rights. In approving or disapproving the fee agreement, the decision maker applies the applicable cap as of the date he or she acts on the fee agreement (see I-5-1-18 III. A.). The amended order should specifically state 1) that the previous order of approval is no longer in effect, and 2) the date of the fee agreement that the decision maker is acting on.

  5. If the revised fee agreement was filed with SSA after the date of the favorable decision, the decision maker disapproves the revised fee agreement and issues the following notice:

    We wrote you earlier to tell you that we approved your fee agreement. We also received a revised fee agreement between you and your representative, dated [date of revised fee agreement]. We did not approve the revised fee agreement because the Social Security Administration did not receive the written agreement before I decided the claim. Therefore, the approval of the earlier fee agreement remains in effect.

C. Administrative Review of the Approval or Disapproval of a Fee Agreement

If a decision maker acts on a fee agreement (including a revised fee agreement), he or she must provide administrative review rights regarding the approval or disapproval. (HALLEX I-1-2-41.)

D. Administrative Review of the Amount of the Fee

The increase in the fee cap is not in and of itself a consideration in deciding whether to affirm or modify the amount of the fee on administrative review in the fee agreement process. The reviewing official will follow the guidelines in HALLEX I-1-2-47 in determining whether to affirm or modify the fee amount.

V. Inquiries

Hearing Office personnel should contact the Regional Office. Regional Office personnel should contact the appropriate branch in the Office of the Chief Administrative Law Judge. Office of Appellate Operations personnel should contact the Executive Director's Office.