I-1-2-1.Representative Fees - Overview
Last Update: 5/6/20 (Transmittal I-1-95)
Social Security Act sections 206(a) and (b), 701, 1631(d)(2), and 1872
20 CFR Part 404, Subpart R passim and 20 CFR Part 416, Subpart O passim
The Social Security Act (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 or she wants to charge and collect:
the fee agreement process; and
the fee petition process.
At the hearing and Appeals Council (AC) levels, Hearings, Appeals and Litigation Law (HALLEX) manual I-1-2-6 provides the delegations of authority to approve a fee agreement and authorize a reasonable fee based on a fee petition.
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 SSA (see HALLEX 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 or 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 HALLEX I-1-2-12 A. or an exception in HALLEX 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 or 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 or her appointed representative sign. The agreement specifies the fee the representative expects to charge and collect and the claimant expects to pay for the representative's services in pursuing the claim(s).
SSA will not approve a fee agreement filed after the date SSA makes the first favorable determination or decision on the claim. 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 AC levels, the date of the hearing or 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 Act and no exceptions apply. HALLEX I-1-2-12 lists the statutory conditions and exceptions. If SSA approves the fee agreement, it will authorize a fee in the course of effectuating the favorable determination or decision. If no one requests administrative review (see HALLEX 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 the services he or she provided in pursuing the claim(s). The representative petitions for a fee after his or her services in the case have ended. Refer to HALLEX I-1-1-30 A for guidance on when a representative's appointment ends.
Based on the petition, SSA authorizes a “reasonable” fee (under section 206(a)(1) of the Act) for the specific services provided. In determining a reasonable fee, SSA considers criteria the regulations prescribe. See HALLEX 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, Office of Hearings Operations (OHO) staff must provide him or her with form SSA-1560, “Petition For Authorization To Charge And Collect A Fee For Services Before The Social Security Administration.”
OHO staff may provide form SSA-1560 to the representative at any time while the claim is pending or forward it to the representative with his or her copy of the hearing decision. If the representative indicates an interest in obtaining the form off the internet, the OHO staff will:
refer the representative to: http://www.ssa.gov/forms/ssa-1560.pdf; and
document the file to this effect. In such a situation, it is not necessary for OHO 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.
D. Administrative Review
When a claimant, affected auxiliary beneficiary, or representative disagrees with SSA's action on a fee agreement or fee petition, he or 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, an affected auxiliary beneficiary or the representative may request review for any reason. The decision maker may request that the Commissioner reduce the authorized fee only on the basis of:
evidence that the representative failed to adequately represent the claimant's interest, or
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.
Refer to HALLEX I-1-2-41 and I-1-2-45 for an expanded discussion on this subject.
2. Fee Petition
The regulations afford the claimant, an affected auxiliary beneficiary 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.
Refer to HALLEX I-1-2-61, I-1-2-62 and I-1-2-63 for an expanded discussion on this subject.
3. Action on the Request for Administrative Review
Upon completion of the review, the person conducting the review will 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 process. The decision of the person conducting the review is not subject to further review.