I-1-2-1.Representative Fees - Overview

Last Update: 12/9/24 (Transmittal I-1-108)

Citations:

A. Introduction

The Social Security Act (Act) directs the Commissioner to authorize the fee a representative may charge and collect for services provided to a claimant in proceedings before the Social Security Administration (SSA).

There are two separate, mutually exclusive processes by which a representative may seek SSA's authorization for any fee the representative wants to charge and collect:

  • the fee agreement process; and

  • the fee petition process.

At the hearings 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, 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 claimant or representative must file a fee agreement before the date SSA makes the first favorable determination or decision the representative worked toward achieving. If the claimant or representative does not file an agreement before that date, SSA presumes the representative 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 under HALLEX I-1-2-12, the representative must file a fee petition to charge and collect a fee.

NOTE:

For purposes of this section and all fee-related matters, a determination or decision is “favorable” if it is fully or partially favorable.

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 signed by the claimant and the appointed representative, specifying 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) or post-entitlement or post-eligibility (PE) action.

SSA will not approve a fee agreement filed after the date SSA makes the first favorable determination or decision on the claim. For claims decided 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 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 when effectuating the favorable determination or decision. If no one requests administrative review (see HALLEX I-1-2-41 for information on fee agreement 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 provided in pursuing the claim(s) or PE action. In general, the representative petitions for a fee after their services in the case have ended. Refer to HALLEX I-1-1-30 A for guidance on when a representative's appointment ends. As described in HALLEX I-1-2-53 A (see also Program Operations Manual System (POMS) GN 03930.020A), in limited circumstances, an entity's point of contact (POC) or an individual representing the deceased representative's estate may file a petition on behalf of the deceased representative. See HALLEX I-1-2-1 C for information regarding representative assignment of direct payment of fees to an entity and HALLEX I-1-2-2 G for the definition of an entity's POC.

Based on the petition, SSA authorizes a “reasonable” fee for the specific services provided. In determining a reasonable fee, SSA considers criteria the regulations prescribe in 20 CFR 404.1725 and 416.1525. See HALLEX I-1-2-57 for more information about the criteria and examples for evaluating fee petitions.

C. Assignment of Direct Payment of Fees to an Entity

Regardless of whether an individual representative uses the fee agreement or fee petition process, SSA has established a mechanism by which a representative may assign (i.e., transfer) to an entity their right to receive direct payment of authorized fees from the claimant's past-due benefits. When all the requirements are met, an appointed representative may assign and SSA will directly pay the entity, any fee authorized to the representative. For additional information about the assignment of fees, see POMS GN 03920.021.

1. Requirements for a Representative to Assign the Right to Direct Payment of Fees

To assign direct payment of an authorized fee to an entity, an appointed representative must:

  • Be eligible for direct payment (e.g., an attorney or Eligible for Direct Payment Non-Attorney representative (EDPNA) who is not sanctioned);

  • Not have waived the fee or direct payment;

  • Assign the entire fee to a single entity;

  • Make the assignment before the date SSA makes the first favorable determination or decision on the specific case; and

  • Be affiliated with the entity through the agency's registration process.

2. Requirements for an Entity to be Eligible to Receive Direct Payment of Fees by Assignment

To receive direct payment through an assignment, an entity must:

  • Have an Employer Identification Number (EIN);

  • Have registered with us before a representative submits an assignment naming the entity as the assignee;

  • Not be listed on the Ineligible for Direct Payment Entities (IDPE) list (see POMS GN 03920.052 for more information about the IDPE list);

  • Designate and maintain an employee who is registered as a representative with SSA as a POC to speak and act on the entity's behalf; and

  • Have a banking account that accepts Electronic Funds Transfer (EFT).

D. Informing Representatives of Fee Petition Option

If the case is pending at the hearing level and 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 the representative 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 or PE action is pending or forward it to the representative with their copy of the hearing decision. If the representative indicates an interest in obtaining the form online, the OHO staff will:

When the AC issues a favorable or partially favorable decision, staff in the Office of Appellate Operations (OAO) provides the representative with form SSA-1560.

NOTE:

Where there is evidence to suggest that an entity's POC or another individual listed in HALLEX I-1-2-53 A (see also GN 03930.020A) will file a fee petition on behalf of a deceased representative, OHO and OAO staff will notify them that the Form SSA-1560 is formatted for use by individual representatives. These individuals should use another writing when filing a fee petition on behalf of the representative.

E. Administrative Review

Generally, when a claimant, affected auxiliary beneficiary or eligible spouse, or representative disagrees with SSA's action on a fee agreement or fee petition, they 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 limited circumstances. Additionally, an entity's POC may also request administrative review of a fee agreement or fee petition in the limited circumstances described below in HALLEX I-1-2-1 E.1 and E.2.

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.

Generally, only the claimant or representative may request review of the approval or disapproval of the fee agreement. The claimant, an affected auxiliary beneficiary or eligible spouse, or the representative may request review of the fee amount authorized under the fee agreement for any reason. The decision maker may request administrative review to reduce the authorized fee amount only based on:

  • 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 initial fee authorization notice to request administrative review.

Refer to HALLEX I-1-2-41 and I-1-2-45 for additional information on administrative review of fee agreement.

NOTE 1:

Although the fee agreement and fee petition processes are mutually exclusive, if a representative submits a fee petition after SSA has approved a fee agreement, but before SSA authorizes a fee, SSA will consider the fee petition as a request for administrative review of the fee agreement approval. After SSA has approved a fee agreement and authorized a fee, SSA will consider the fee petition as a request for administrative review of the amount of the fee authorized. In either scenario, the fee petition must be submitted within 15 days of receiving the initial fee authorization notice.

NOTE 2:

An entity is not a party to a fee agreement even when an appointed representative validly assigned their right to direct payment of a fee to that entity. As such, the entity and its point of contact (POC) generally do not have the right to file for administrative review of a fee agreement determination or the fee amount authorized under the fee agreement. However, if a representative who has validly assigned direct payment of any authorized fees dies and at least one other representative who signed the agreement remains active on the claim (see HALLEX I-1-2-12 B.3), or if the representative dies after an initial fee was authorized pursuant to a fee agreement, the entity's POC may request administrative review under the fee agreement process. For more information about the assignment of fees, including the roles and responsibilities of POCs, see POMS GN 03920.021.

2. Fee Petition

The claimant, an affected auxiliary beneficiary or eligible spouse, the representative, and, in limited circumstances, an entity's POC or another individual who filed a fee petition, the right to request administrative review of the initial fee authorization pursuant to a fee petition. A request for review of a fee authorization under the fee petition process must be filed with SSA within 30 days of receiving the initial fee authorization notice.

Refer to HALLEX I-1-2-61, I-1-2-62 and I-1-2-63 for additional information on administrative review of fee petition.

3. Processing the Request for Administrative Review

Upon completion of the review, the reviewing official (see HALLEX I-1-2-42 B and I-1-2-61 E) 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 reviewing official after an administrative review is final and binding. It is not subject to further administrative or judicial review.