I-1-2-5.Representative's Fees Not Subject to Authorization
Last Update: 10/9/19 (Transmittal I-1-93)
A representative, whether an attorney or non-attorney, must obtain the Social Security Administration's (SSA) authorization to charge and collect a fee for services provided in proceedings before SSA, unless one of the exceptions in subsections A through D applies.
A. Payment by Third-Party Entity or Government Agency
A third-party entity or a Federal, state, county, or city government agency pays the representative's fees and expenses from its own funds and both of the following conditions apply:
The claimant and the claimant's auxiliary beneficiary(ies), if any, are not liable to pay a fee, expenses, or any part thereof, directly or indirectly, to the representative or someone else; and
The representative submits to SSA a written statement that waives the right to charge and collect a fee and any expenses from the claimant and the claimant's auxiliary beneficiary(ies), if any, directly or indirectly, in whole or in part.
See 20 CFR 404.1720(e)(1) and 416.1520(e)(1) for when SSA does not need to authorize a fee. See also 20 CFR 404.1703 and 416.1503 for the definition of “entity.”
B. Out-of-Pocket Expenses
SSA is not required to authorize the amount of out-of-pocket expenses a representative collects. Out-of-pocket expenses are expenses a representative incurs, for which he or she has been paid or expects to be paid (e.g., the cost of obtaining copies of doctor or hospital reports and a birth or death certificate).
These expenses are matters for the representative and claimant to settle. However, SSA will question out-of-pocket expenses if it appears that the representative is attempting to circumvent SSA's fee authorization process by designating his or her services as an out-of-pocket expense.
C. Court Proceedings
Proceedings before state or Federal courts (even state court actions to establish relationship or death) are not proceedings before SSA; therefore, the fee authorization provisions do not apply. For information regarding attorneys' fees for representation in proceedings before a court, see Program Operations Manual System GN 03920.060.
D. Legal Guardian or Other Court Appointed Representatives
A legal guardian, committee, conservator, or other court-appointed representative (legal guardian) may ask a court to approve a fee for services provided in connection with proceedings before SSA. If the court orders a fee, SSA's fee authorization is not required.
A legal guardian of a claimant whom a court has found to be legally incompetent is not a “representative” as defined by SSA. If a legal guardian would like to become a representative for dealings with SSA, the claimant must appoint the legal guardian to be his or her representative.
If a legal guardian asks SSA for information regarding fees, SSA should advise him or her first to ask the court to approve a fee for all services, including those provided in connection with proceedings before SSA.
If a legal guardian files a fee petition, SSA must inform the legal guardian that SSA will not act on the fee request until the court has acted.
If the legal guardian is an appointed representative and contacts SSA and states that the court declined to order a fee on the fee request, SSA will inform the legal guardian that he or she may file a fee petition with SSA for only those services provided in proceedings before SSA. If the legal guardian files a fee petition, the legal guardian must furnish SSA:
copies of his or her accounting submitted to the court;
copies of the fee request submitted to the court; and
the court's declination or any court ordered fee for his or her services as legal guardian.
E. Entitlement Only to Hospital Insurance Benefits Under Sections 226(b)(2)(C), 226(e), and 226A of the Social Security Act
Fee Agreement Process Not Available in Certain Cases Involving Entitlement to Hospital Insurance Benefits
The fee agreement process cannot be used for fee authorization in cases where the claimant is entitled only to hospital insurance benefits and not cash benefits because there are no “past-due benefits” from which to calculate a representative's fee. A successful appeal of a claim for entitlement to hospital insurance benefits results only in a decision to enroll the claimant in the hospital insurance program without paying a premium, also known as “Medicare Part A.”
Fee Petition Filed by a Representative for Authorization of a Fee for Services Provided to the Beneficiary
SSA uses the procedures in 20 CFR 404.1725 and 416.1525 to approve a fee petition filed by a hospital insurance beneficiary's representative. However, because there are no “past-due benefits” in such cases, direct payment of the authorized fee is not available. In other words, a hospital insurance beneficiary's representative may only collect his or her fee directly from the hospital insurance beneficiary.