Rescinded September 14, 2018 by FR Vol. 83, No. 179, page 46771


An attorney successfully prosecuted claims for mother's and child's insurance benefits after securing for his clients a court decree of adoption which was necessary for their entitlement to the benefits claimed. He requested the Administration to approve a fee of $150 which he intended to charge his clients for services in connection with both the court action and the claims. Held, the Administration could not approve the fee because its authority to regulate or approve an attorney's fee applies only to services rendered in connection with a proceeding before the Administration and does not extend to services in a court proceeding, even though the court proceeding may have been necessary for successful prosecution of a claim for social security benefits.

Shortly after a worker died, his widow, W, age 43, filed a claim on his earnings record for mother's insurance benefits for herself, and for child's insurance benefits for C, a foster child, 8 years old and living with her. For several years up to the time the worker died, C had been supported exclusively by the worker and W, and had been living in their household. C's claim was disallowed because he was not the worker's child, legally adopted child, or step-child, as required by sections 202(d) and 216(e) of the Act. W's claim for mother's insurance benefits was also disallowed because she did not have in her care a child, legally adopted child, or step-child of the worker entitled to a child's insurance benefit, as required by section 202(g)(1)(E). Both C and W met all other requirements and would be entitled to benefits if C could qualify as the worker's child, legally adopted child, or step-child.

Upon receiving notice that the claims had been disallowed, W retained an attorney to prosecute her claim. He obtained from the local office of the Bureau of Old-Age and Survivors Insurance information about section 216(e) and other pertinent requirements for entitlement. Upon the attorney's advice and with his help, W instituted adoption proceedings in the appropriate State court which resulted in legal adoption of C by W within two years after the worker's death. The attorney then submitted to the Bureau a request for reconsideration of the disallowed claims, proof of the legal adoption, and a request for approval of a fee of $150 to be paid him by W for specified services in connection with the request for reconsideration and the adoption proceedings.

Since C was legally adopted by the worker's widow within 2 years after the worker's death, and had been entirely supported by the worker and his wife in their household when the worker died, under section 216(e), C is deemed to have been the legally adopted child of the worker as of the date of the worker's death. Accordingly, upon reconsideration the Bureau reversed its initial determination and awarded child's and mother's insurance benefits to C and W, effective with the month in which the worker died.

After determination on the claims the question was whether the Administration could approve the attorney's proposed fee covering both the services he rendered in connection with the claims before the Administration and the services he rendered in the adoption proceeding which was instituted at least in part to further prosecution of the claims before the Administration.

Section 206 provides, in part, as follows:

*** The Secretary may, by rule and regulation, prescribe the maximum fees which may be charged for services performed in connection with any claim before the Secretary under this title, and any agreement in violation of such rules and regulations shall be void. ***

Regulations No. 4, 404.976 deals with the requirement for obtaining the Administration's approval of the fee which an attorney may charge for services rendered in a proceeding under title II of the Act. Section 404.977a defines "services rendered in a proceeding under title II" as "services rendered in connection with any claim . . . under such title, including any services in connection with any asserted right calling for an initial or reconsidered determination by the Bureau, a decision by a hearing examiner or a decision or order by the Appeals Council." However, 404.974 provides, inter alia, that services in any State or Federal court proceeding shall not be considered services before the Social Security Administration, for purposes of the fee regulation provision.

Under these regulations, the Administration has no authority to regulate the fee charged by an attorney for his services in a State court proceeding, however closely such court proceeding may be related to a claim before the Administration.

Therefore, it is held that the attorney's fee for the particular services rendered in the court proceedings for W's adoption of C is not subject to regulation or approval by the Administration. The attorney was so informed, and a fee of $50 was approved for his services in connection with the prosecution of W's and C's claims for mother's and child's insurance benefits before the Bureau.

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