Background

This transmittal updates Volume I, Division 1, Chapter 2, Representative Fees of the Hearings, Appeals, and Litigation Law (HALLEX) manual. We made these updates to reflect regulatory changes set forth in the final rule entitled “Changes to the Administrative Rules for Claimant Representation and Provisions for Direct Payment to Entities” published on August 21, 2024 (89 FR 67542). The final rule establishes two implementation dates for the numerous policy and systems changes required to comply with the decision of the United States Court of Appeals for the First Circuit in Marasco & Nesselbush, LLP v. Collins. Phase 1 took effect on Septermber 30, 2024. As part of Phase 2, we made the following chages to HALLEX I-1-2 to be pulished an implemented on December 9, 2024.

Explanation of Content and Changes

I-1-2-1 – We made updates throughout the section to account for the new assignment process and the role of an entity's point of contact (POC) in the fee authorization and direct payment of authorized fees. In subsection B.2, we introduce the limited circumstances when an entities POC or the legal representative of a deceased representative's estate may file a fee petition on behalf of the deceased representative. We added a new subsection C., “Assignment of Direct Payment of Fees to an Entity,” which sets forth the new agency policy for representatives to assign (or transfer) direct payment of any authorized fees to an affiliated entity. We reordered the remaining subsections. In new subsection E., we clarified the limited circumstances in which an entity's POC may request administrative review under both the fee petition and fee agreement processes. We made editorial changes and removed gendered language thoughout the section as appropriate.

I-1-2-2 – In subsection A., we updated the definition of “representative” to reflect the new regulatory definition in the CFR 404.1703 and 416.1503. We also added a new subsection E., to include a definition of an “Entity.” We reordered the remaining subsections and added a new subsection G., to include a definition for “Point of Contact.” We made editorial changes and removed gendered language thoughout the section as appropriate.

I-1-2-3 – We made updates throughout the section to clarify that, while the agency may now directly pay authorized fees to an affiliated entity based on a valid assignment, the individual representative generally must still seek the Social Security Administration's (SSA) authorization of the fee. We also clarified the limited circumstances in which an entity's POC or other authorized individual may seek SSA's authorization on behalf of a deceased representative. We added several citations to the Program Operations Manual System (POMS) to clarify the location of instructions for staff at the initial and reconsideration levels. In subsection C., we updated instructions to clarify that the Office of the General Counsel (OGC) will provide guidance on the outcome of any bankruptcy proceeding involving a claimant whose fee agreement the agency must consider. We also made editorial changes and removed gendered language thoughout the section as appropriate.

I-1-2-4 – We added a note cross-referencing HALLEX I-1-2-5 for information about the circumstances when SSA is not required to autorize a fee. We updated the section to clarify what constitutes “proceedings before SSA,” which may require the agency's authorization for fees, including proceedings following a remand from Federal court. We made editorial changes to the section as appropriate.

I-1-2-5 – We made updates throughout the section to reflect the regulatory change that representatives may assign direct payment of their authorized fee to an entity. We made editorial changes, and removed gendered language thoughout the section as appropriate.

I-1-2-7 – In subsection A.2., we added a citation to POMS GN 03920.033. In subsection C, we clarify that, in fee agreement cases with no court involvement, SSA withholds the amount specified in the agreement up to the maximum 25 percent of past-due benefits. We made editorial changes and clarifications and removed gendered language thoughout the section as appropriate.

I-1-2-8 – We added a cross-reference to Social Security Ruling (SSR) 82-39 for additional information about trust and escrow accounts for representative fees. We also clarified that the representative or entity responsible for the account must refund to the claimant any amount in the trust or escrow account in excess of the authorized fee amount. We also provide instructions for Office of Hearings Operations (OHO) and Office of Appellate Operations (OAO) staff to contact a representative or POC to inquire about funds held in a trust or escrow account. We made editorial changes and removed gendered language thoughout the section as appropriate.

I-1-2-9 – We updated the title of the section to “Direct Payment of Fees to Representatives and Entities.” We reorganized the section for clarity. We updated the title of subsection A., to “Introduction.” We updated the definition of “Representative Eligible to Receive Direct Fee Payment.” We also added a definition in subsection A.2. for “Entity Eligible for Direct Payment.” In subsection B., we added a list of circumstances when SSA will not issue direct payment of authorized fees. We made additional updates throughout the section to reflect the regulatory change that a representatives may assign direct payment of their authorized fee to an entity. We made editorial changes and removed gendered language thoughout the section as appropriate.

I-1-2-10 – We updated subsection A., to reflect the regulatory change that appointed representatives may assign direct payment of their authorized fee to an entity. We also clarified that SSA will assume representatives eligible for direct payment will request direct payment, and that a representative must sign their written statement waiving a fee. We added a note in subsection B., to clarify that representatives are encouraged to use Form SSA-1696 to waive a fee, or direct payment of a fee, and to do so early in the administrative process. We renumbered the remaining notes. We also removed former note 3 and replaced it with new note 4, to clarify that SSA will not accept fee or direct payment waivers from representatives who previously assigned their fee to an entity and did not rescind (or cancel) the assignment. In subsection C., we added a link to the Office of Appellate Operation's (OAO) Registration, Appointment, and Services for Representatives (RASR) reference site. In subsection D, we updated POMS citations for information and processing instructions of erroneous fee payments. We made editorial changes and removed gendered language thoughout the section as appropriate.

I-1-2-11 – We updated the section to clarify that the individuals who sign the fee agreement are considered the parties to the agreement. In the note, we added a link to the electronic fee agreement Form SSA-1693 (e1693) and to the SSA website for representative information. We made editorial changes and removed gendered language thoughout the section as appropriate.

I-1-2-12 – In subsection A, we added a note explaining that use of the standard Form SSA-1693 is options but may facilitate approval of fee agreements. In subsection A.1., we added cross-references to HALLEX and POMS sections for additioanl guidance about considering fee agreements in cases with partially favorable and subsequent decisions. In subsection A.2., we clarified that an entity is not a party to the cee agreement even if a representative validly assigns direct payment to that entity. We also added a note reminding staff to consult any relevant agency guidance on alternative signature methods. In subsection A.3., we added a note explaining the impact “two-tiered” fee agreements have on considerating the statutory fee cap. In subsection B, we updated the exceptions to the fee agreement process to clarify that decision makers may approve a fee agreement when there are multiple appointed representatives and one or more representative(s) withdrew, was revoked, or died before the favorable decision, so lond as one representaive who signed the agreement remains appointed on the case. When a representative has died, we clarified that notice of the fee agreement determination will be sent to the entity POC or deceased representative's estate, depending on whether there was a valid assignment. In Subsection B.5., we changed the exception to clarify that the relevant date for a claimant being declared legally incompetent is the date they sign the fee agreement. In subsection C.3, we updated instructions about the death of a representative, consistent with the new policy on exceptions to the fee agreement. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-14 – We updated the section to reflect the regulatory change that appointed representatives may assign direct payment of their authorized fee to an entity. In subsection B, we updated the note to clarify that a fee agreement with two-tiered language limiting the agreement to the hearing level results in a pertinent change when the Appeals Council (AC) issues a revised favorable decision, and the fee agreement will be disapproved. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-15 – We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-16 – We reorganized the section for clarity. In subsection A, we clarify that certain conditions must be met to consider two applications as one “claim” for fee purposes. In subsection B.2., we further clarify that, when the claimant files a subsequent application while the prior application is pendingn in Federal court, SSA treats the two applications as separate unless SSA consolidates the claims after a court remand. We updated the title of subsection C.1., to “Policy Applicability,” and added a new subsection C.3. “Administrative Review.” We added a note in new subsection C.3.b., to clarfiy that an entity is not a party to a fee agreement even when an appointed representative has assigned direct payment of their authorized fee to the entity, but that the entity's POC may request administrative review on behalf of a deceased representative in limited circumstances. We renumbered the remaining subsections. We removed references to sample language in certain HALLEX sections that will be archived in the futre. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-17 – We removed references to sample language in certain HALLEX sections that will be archived in the future and indicated that appropriate templates can be found in the Hearing and Appeals Processing System (HACPS), the Docuent Generation System (DGS) and the Office of Appellate Opperations Case Processing System (OAOCPS). We updated the section to reflect the regulatory change that representatives may assign direct payment of their authorized fee to an entity. We added a note to subsection A., to clarify that staff should not send fee agreement determinations to an entity's POC even where there is a valid assignment. In subsection A.1, we also clarified that the notice must include information about the right to request administrative review. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-18 – We updated the section to reflect the regulatory change that appointed representatives may assign direct payment of their authorized fee to an entity. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-25 – We updated references in the section to reflect current case processing systems. In subsection A, we updated the two notes to account for the requirement that all appointments use a current Form SSA-1696 as of December 9, 2024. We also clarify that staff may not disclose any information from the claim(s) file when contacting a represenative without a valid appointment. We also clarify that staff must ensure that updates are made in the Registration, Appointment, and Services for Representatives (RASR) application. In subsection B.2, we added a note explaining that a representative, who validly assigned direct payment,. We updated the title of subsection C., to “Adjudicator Requests Review.” We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-41 – In subsection A, we removed the note because the information is provided elsewhere. We added a note to subsection B., to clarify that, although an entity is not a party to the fee agreement even when the appointed representative assigns their right to direct payment of an authorized fee to an entity, its POC may submit a request for review in limited cirumstances when an assigning representaitve has died. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-42 – In subsection A, we added a note explaining that, while an entity is not a party to the fee agreement, its POC may request adminstrative review on behalf of a decaeased represetantive with a valid assignment in limited circumstances. In subsection B, We updated terminology to reflect current agency terms, such as OAO Executive Director. We also updated OHO reviewin officials to reflect new deligation of reviewing authority. We added instructions to subsection C. and E., to include Privacy Act considerations. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-43 – We updated terminology to reflect current agency terms, such as OAO executive director, and the new OHO reviewing officials. We also updated and clarified processing instructions to ensure that a request for review is properly forwarded to the component with jurisdiction to consider the request, and to remove unnecessary instructions to send requests to the OAO Attorney Fee Branch (AFB). In subsection A, we added insturctions to account for case processing with the Electronic Non-Medical application (ENM). We removed references to sample language in certain HALLEX sections that will be archived in the future and indicated that the appropriate templates can be found in the Fee Action Tracking System (FAcTS), HACPS and OAOCPS. In subsection B, we updated instructions for identifying parties to account for the limited situations when a POC may request adminstrative review. We updated subsection C., D., and F., to include Privacy Act considerations. We clarified instructions for reviewing the fee agreement approval or disapproval and updated other processing instructions, including adding references to the Electronic Non-Medical Application (ENM). We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-44 – We updated terminology to reflect current agency terms, such as OAO executive director, and the new OHO reviewing officials. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-45 – We updated the section to reflect the regulatory change that appointed representatives may assign direct payment of their authorized fee to an entity. We removed added references to HACPS and OAOCPS to reflect current case processing. We made editorial changes throughout the section as appropriate.

I-1-2-46 – In subsection A., we added instructions for sending the request to the proper reviewing component and how to determine the reviewing official's contact information. We updated terminology to reflect current agency terms, such as OAO executive director, and the new OHO reviewing officials. We removed the note at the bottom of subsection A as it is unnecessary. We added a note to new A.2. to account for the limited circumstances when an entirty POC may request adminstrative review. In new subsection A we moved the examples from A.3., to A.3.a. In subsection A.3.b., we added instructions for Privacy Act considerations. In subsection C., we added the instructions in C.2. for untimely filed requests where good cause is shown to C.1. We then changed C.3. to C.2. and clarified in the subheading that these instructions apply to late requests without good cause. We added instructions to C.2., to add the good cause letter to the claim file. In subsection E.2.b., we updated the name of Form SSA-1560. We removed references to sample language in certain HALLEX sections that will be archived and indicated that the appropriate templates can be found in HACPS and OAOCPS. We added references to the Electronic Non-Medical application (ENM) as appropriate. We updated the section to reflect the regulatory change that appointed representatives may assign direct payment of their authorized fee to an entity. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-47 – We updated the section to reflect the regulatory change that appointed representatives may assign direct payment of their authorized fee to an entity. We added references to notice templates in FAcTS, HACPS, and OAOCPS. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-48 – We updated the section to reflect the regulatory change that appointed representatives may assign direct payment of their authorized fee to an entity. We added references to notice templates in FAcTS, HACPS, and OAOCPS. In subsectoin A.5, we moved the second note after the first and renamed them NOTE 1 and NOTE 2 respectively. In subsectoin B, we clairfy that staff may allert the effectuating componenet by email about a determination in the Onelie Retrieval System (ORS), instead of sending a copy of the determination notice to that componenet. We made editorial changes throughout the section as appropriate.

I-1-2-49 – We updated terminology to reflect current agency terms, such as OAO executive director, and the new OHO reviewing officials. We updated the section throughout to account for electronic processing of effectuating component protests. In subsection B, we added new note 2 to clarify that OHO and OAO staff may refer fee agreements they suspect were incorrectly approved to the appropriate reviewing officials or office without receiving a protest from the effectuating component first. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-51 – We updated the section to reflect the regulatory change that appointed representatives may assign direct payment of their authorized fee to an entity. We also clarified that in limited circumstances, an entity POC or another authorized individual may file a fee petition on behalf of a representative. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-53 – We updated subsection A to explain the limited circumstance when an entity POC or another authorized individual may file a fee petition on behalf of a deceased representative, and must provide proof of death when doing so. We also clarified that each individual representative must file their own fee petition outside of these limited circumstances. In subsection A, we also clarified that fee authorizers will not return a fee petition when a representative improperly files one but will authorize no fee in response to the petition. We updated subsections B. and C., to provide additional clarity and instructions for how, and when, to file a fee petition. In subsection D., we incorporated information previously contained in HALLEX section I-1-2-54. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-54 – We are archiving this section as the information contained therein has been incorporated in I-1-2-53 subsection D.

I-1-2-55 – We updated the section title to “Representative Is Eligible to Receive Direct Fee Payment – Procedures up to Receipt of Petition.” In subsection A, we reordered information for clarity. We also added a note explaining the circumstances when an effectuating component will share information from a claimant's award notice with an entity's POC and instructions explaining when SSA will send a 20-day close out notice to an entity's POC. We updated the subsection B title to “OHO and OAO Coordination with Effectuating Component.” In subsection B., we added contact information for OHO and OAO fee staff. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-56 – We updated the section to reflect that in limited circumstances an entity's POC or another authorized individual may now file a fee petition on behalf of an entity. We updated subsection A.2., to provide instructions for when an improper party files a fee petition. In subsection A.4., we explain that staff should not presume the claimant received a copy of the fee petition when a POC or another individual files it. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-57 – We updated instructions and clarified instructions for evaluating fee petitions. We updated the section to reflect the regulatory change that appointed representatives may assign direct payment of their authorized fee to an entity. We updated the section to reflect that in limited circumstances an entity's POC or another authorized individual may now file a fee petition on behalf of an entity. In subsection E., we updated instructions for documenting fee rationales in HACPS and OAOCPS. We also added new subsection F to include instructions for processing the fee authorization order and communicating it to the effectuating component(s). We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-58 – We are archiving this section as the information contained therein has been incorporated in other HALLEX sections and further instructions can be found in HACPS and OAOCPS.

I-1-2-59 – We revised the introduction for clarity and added a reference to HALLEX I-1-2-6, which provides information on the designated officials with authority to issue initial fee authorizations. We removed subsection A because the referenced forms were made obsolete and are no longer in use. Subsections B and C became new subsections A and B and renamed for clarity. In the revised subsection A, we reorganized the information, and added two new bullets with additional instructions that addressed the information that should be included in the order. We added instructions for cases where an entity's POC or another individual has filed the fee petition. We added references to POMSGN 03905.085 and HALLEX I-1-2-57 A, as appropriate. In the revised subsection B, we removed the reference to HALLEX I-1-2-58 C and included information on processing fee authorizations. We also added a cross-reference to instructions specific to OHO. We updated instructions and clarified instructions for evaluating fee petitions. We updated the section to reflect that in limited circumstances an entity's POC may now file a fee petition on behalf of an entity. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-61 – We updated subsection A to reflect that in limited circumstances an entity's POC or another individual may now file a fee petition on behalf of a deceased representative and request administrative review in the same circumstances. In subsection E., we updated terminology to reflect current agency terms, such as OAO executive director, and the new OHO reviewing officials. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-62 – We updated processing instructions to reflect current case processing and to add references to ENM. We updated terminology to reflect current agency terms, such as OAO executive director, and the new OHO reviewing officials. We updated the section to reflect the regulatory change that appointed representatives may assign their authorized fee to an entity. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-63 – In subsection A., we explained the limited circumstances when an entity POC or another individual may file a request for adminstrative reivew on behald of a representative. We made editorial changes and removed gendered language throughout the section as appropriate.

I-1-2-64 – We added an introductory paragraph explaining the procedure used when the Social Security Administration (SSA) receives a request for administrative review of an initial fee authorization made by a decision maker at the hearing or Appeals Council levels. We added a subsection A., entitled “Determine Whether the Recipient is the Proper Reviewing Official.” In this new subsection, we instructed readers to determine whether the request has been submitted to the proper reviewing official before sending any correspondence. We further explained how to refer the request to the proper reviewing official and how to find the reviewing official's contact information. Former subsections A and B became new subsections B and C. We expanded new subsection B to include Privacy Act considerations. We added references to the ENM as appropriate. We also made editorial changes and removed gendered language throughout the section.

I-1-2-65 – We updated the section to reflect the regulatory change that representatives may assign direct payment of their authorized fee to an entity. We updated processing instructions to reflect current case processing and to add references to ENM. In subsection C, we added Privacy Act considerations. We also made editorial changes and removed gendered language throughout the section.

I-1-2-81 – We updated the section to reflect the regulatory change that representatives may assign direct payment of their authorized fee to an entity. In subsection A, we clarified that a representative may be subject to administrative sanctions for violations of the Social Security Act (Act) and regulations, as well as criminal charges for violations of the Act. We also updated this subsection to explain that an entity POC may face administrative sanctions when they do not comply with the agency's rules of conduct and standards of responsibility for representatives, and that entities that fail to return and excess or otherwise erroneous fee payment may be found ineligible for direct payment. We updated the section to reflect current case processing systems, OAOCPS and HACPS. We also made editorial changes and removed gendered language throughout the section.

Date: December 9, 2024