Prior to charging or collecting a fee from a claimant or a third party for services provided in any proceeding before the Social Security Administration (SSA), a representative generally must obtain SSA's authorization. To do so, the representative must use one of two mutually exclusive fee authorization processes:
SSA considers any claim or asserted right under Titles II, XVI, or XVIII of the Social Security Act (Act) that results in the following to be a proceeding before SSA for fee purposes:
- Any initial, revised, or reconsidered determination or action by a field office or processing center; or
- Any decision or action by an Administrative Law Judge or an Administrative Appeals Judge.
When all of the following conditions are present, SSA need not authorize a fee:
The claimant and any affected auxiliary beneficiaries are free of direct or indirect liability to pay a fee or expenses, either in whole or in part, to a representative or to someone else, AND-
The third-party entity that actually pays the representative's fee and expenses, is a business, firm, association, partnership, corporation, for-profit or not-for-profit organization, or a government agency that is paying from its own funds, AND-
The representative submits to us a form SSA-1696-U4 (or a written statement) waiving the right to charge and collect a fee and any expenses from the claimant and affected auxiliaries, if any, in the form and manner described below:
Complete Part III of the SSA-1696-U4 by checking the box “Waiving fees and expenses from the claimant and any auxiliary beneficiaries” and providing signature and date, or
Submit a written statement that clearly and unequivocally states that the representative intends to receive a fee from a third-party entity and that the claimant and any auxiliary beneficiary are not directly or indirectly responsible for payment of the fee; and if eligible for direct payment
When the SSA or a Federal court authorizes a representative's fee based on an approved fee agreement or a fee petition, SSA will withhold up to 25 percent of the claimant's Title II and Title XVI past-due benefits for payment of all or part of the authorized fee, if the following criteria are met:
- At least one of the claimant's representatives is an attorney or a non-attorney whom SSA has determined is eligible for direct payment of fees.
- The claimant is entitled to past-due benefits under Title II and Title XVI.
- The attorney or non-attorney representative who is otherwise eligible to receive direct payment has not waived his or her fee or waived the right to direct payment.
- An attorney or non-attorney representative whom the claimant appoints after December 31, 2006 to represent him or her before SSA, or an attorney for whom a Federal court approves a fee after December 31, 2006, has registered to receive direct payment by taking two steps:
1. Submitting, one time, a completed Form SSA-1699, Registration of Individuals and Staff for Appointed Representative Services.2. Submitting, in connection with a specific claim(s), a completed Form SSA-1695, Identifying Information for Possible Direct Payment of Authorized Fees.
When SSA makes direct fee payment, the law requires SSA to charge an assessment (user fee) to cover administrative costs. SSA deducts this assessment from the amount payable to the representative. The representative cannot charge or collect this expense from the claimant.
The assessment is capped at the lower of either a flat rate dollar amount or 6.3 percent of the amount of the fee payable from past-due benefits. The flat rate dollar amount cap is adjusted periodically based on the cost of living adjustments. For direct payments made to representatives on or after December 1, 2018, the assessment is limited to $95.
When a claimant, affected auxiliary beneficiary, or representative disagrees with the amount of the fee SSA authorized, he or she may protest that determination by requesting administrative review. Under the fee agreement process only, the SSA decision maker may also request administrative review of the fee amount authorized.
Under the fee agreement process, the party requesting administrative review must do so within 15 days of receiving the notice of the determination approving or disapproving the fee agreement or authorizing the amount of the fee. Under the fee petition process, the party requesting administrative review must do so within 30 days after the date of the notice of the fee authorization.
The Act and SSA regulations prohibit representatives from charging or collecting any fee for representational services that SSA has not authorized, or that is more than the maximum amount SSA authorized, except for those fees described in the section, When SSA's Authorization Is Not Required, above.
Any representative found to have charged or collected an unauthorized fee may be suspended or disqualified from practice before SSA until authorized to do so and may be barred from appearing before SSA until full restitution is made to the claimant. The representative may also be subject to fines and imprisonment as specified in sections 206(a)(5) of the Act.