I-1-2-1.Representative Fees - Overview
Last Update: 2/25/05 (Transmittal I-1-48)
Federal Mine Safety and Health Act of 1977, § 413(b)
42 CFR §§498.00 ff.
The Social Security Act (the Act) directs the Commissioner to authorize the fee a duly appointed representative may charge and collect for services provided to a claimant in proceedings before the Social Security Administration (SSA).
There are two alternative, mutually exclusive processes by which a representative may seek SSA's authorization for any fee he/she wants to charge and collect:
the fee agreement process and
the fee petition process.
The delegations of authority applicable at the hearing and Appeals Council levels, to approve a fee agreement and authorize a reasonable fee based on a fee petition are stated in I-1-2-6.
If a representative knowingly charges, collects, or retains, or makes any arrangement to charge, collect, or retain, from any source, directly or indirectly, any fee for representational services in violation of applicable law or regulation, the Commissioner may suspend or prohibit the representative from further practice before the Agency (see I-1-1-40).
B. Fee Authorization Processes
The representative generally selects which of the two fee authorization processes to use. To use the fee agreement process, the representative must file a fee agreement before the date SSA makes the first favorable determination or decision the representative worked toward achieving. If the representative does not file an agreement before that date, SSA presumes he/she will either file a fee petition or waive a fee. If a representative elects the fee agreement process but SSA does not approve the agreement, either because it does not meet the statutory conditions described in I-1-2-12 (A.) or an exception in I-1-2-12 (B.) applies, and SSA upholds the disapproval of the agreement on administrative review (if applicable), the representative must file a fee petition if he/she wants to charge and collect a fee.
1. Fee Agreement
Under the fee agreement process, SSA authorizes a fee based on a fee agreement between the claimant and the representative. A fee agreement is a written statement that the claimant and his/her appointed representative sign. The agreement specifies the fee the representative expects to charge and collect and the claimant expects to pay for services the representative provides in pursuing the claimant's benefit rights in proceedings before SSA.
SSA will not approve a fee agreement that a representative files in a claim on or after the date SSA makes the first favorable determination or decision in the claim that the representative worked toward achieving. For claims at the initial or reconsideration level, the date of the notice to the claimant is the controlling date. For claims decided at the hearing or Appeals Council levels, the date of the Administrative Law Judge (ALJ) or Appeals Council (AC) decision is controlling.
A fee agreement submitted to SSA may remain in effect throughout the administrative appeals process of a claim(s) and during the administrative proceeding following a court remand.
When SSA issues a favorable determination or decision, it will approve an agreement signed by the claimant and the representative if the agreement meets the statutory conditions in sections 206(a)(2)(A) and 1631(d)(2)(A) of the Social Security Act and no exceptions apply. The statutory conditions and exceptions are listed in I-1-2-12. If SSA approves the fee agreement, it will authorize a fee based on the approved agreement in the course of effectuating the favorable determination or decision. If no one requests administrative review (see I-1-2-41 for information on administrative review), the fee specified in the agreement is the maximum the representative may charge and collect.
2. Fee Petition
A fee petition is a written statement signed by the claimant's representative requesting the fee the representative wants to charge and collect for all the services he/she provided in pursuing the claimant's benefit rights in proceedings before SSA. The representative petitions for a fee after his/her services in the case have ended. Refer to I-1-1-30 (A.) for guidance on when a representative's appointment ends.
Based on the petition, SSA authorizes a “reasonable” fee (under § 206(a)(1) of the Social Security Act) for the specific services provided. In determining a reasonable fee, SSA considers criteria the regulations prescribe. See I-1-2-57 for criteria on evaluating fee petitions.
C. Informing Representatives of Fee Regulations
If the representative has not submitted a fee agreement and has not waived the right to charge and collect a fee in a written statement, the hearing office (HO) staff must provide him/her with Form SSA-1560-U4 (Petition to Obtain Approval of a Fee for Representing a Claimant before the Social Security Administration). Refer to POMS GN 03930.155B. or Social Security Online, Representing Clients, http://www.socialsecurity.gov/online/ssa-1560.html, for Form SSA-1560-U4.
The HO staff may provide Form SSA-1560-U4 to the representative at any time while the claim is pending, or forward it to the representative with his/her copy of the ALJ's decision. If the representative indicates an interest in obtaining the form off the internet, the HO staff will:
refer the representative to: http://www.socialsecurity.gov/online/ssa-1560.pdf, and
document the file to this effect. In such a situation, it is not necessary for the HO staff to mail the Form SSA-1560 to the representative.
When the AC issues a favorable or partially favorable decision, staff in the Office of Appellate Operations provides the representative with Form SSA-1560-U4.
D. Administrative Review
When a claimant, affected auxiliary beneficiary, or representative disagrees with SSA's action on the fee agreement or fee petition, he/she may request administrative review of that action. In the fee agreement process, the decision maker who approved the agreement also may request administrative review of the amount of the authorized fee under certain circumstances.
1. Fee Agreement
Under the fee agreement process, there are two separate and distinct administrative review processes:
review of the approval or disapproval of the fee agreement, and
review of the amount of the fee authorized under the fee agreement.
The claimant, affected auxiliary beneficiary or representative may request review for any reason. The decision maker may request the Commissioner to reduce the authorized fee only on the basis of evidence of the failure of the person representing the claimant to represent adequately the claimant's interest, or of evidence that the fee is clearly excessive for the services rendered.
Each party to the agreement and the decision maker have 15 days after receipt of the pertinent notice to request administrative review.
2. Fee Petition
The regulations afford the claimant, affected auxiliary beneficiary(ies) and the representative the right to request administrative review of the initial fee authorization. A request for review of a fee authorization under the fee petition process must be filed with SSA within 30 days after the date of the notice of SSA's initial authorization.
3. Action on the Request for Administrative Review
Upon completion of the review, the person conducting the review shall affirm or reverse the approval or disapproval of the fee agreement or affirm or modify the amount of the fee authorized under either the fee agreement or fee petition. The decision of the person conducting the review is not subject to further review.