Effective Dates: 12/09/2024 - Present Previous | Next

Last Update: 12/9/2024 (Transmittal I-1-108)

HA 01120.012 Fee Agreements — Evaluation Policy

Renumbered from HALLEX section I-1-2-12

A. Statutory Conditions for Approval

The following statutory conditions must be met for a representative to obtain the Social Security Administration's (SSA) approval to charge and collect a fee under the fee agreement process. If the statutory conditions are met and no exceptions apply, a decision maker will approve the fee agreement.

NOTE: 

SSA provides a standardized fee agreement Form SSA-1693. This form solicits required information to comply with the statutory requirements for fee agreements. While there is no requirement to use this form, representatives may choose to submit fee agreements using this form to facilitate their approval.

  1. 1. 

    The representative or the claimant files the agreement with SSA before the date of the first favorable decision the representative worked toward achieving. When there are partially favorable and subsequent decisions or determinations (hereinafter, we refer to both as a decision), see Hearings, Appeals, and Litigation Law (HALLEX) manual HA 01120.014 (also Program Operation Manual System (POMS) GN 03940.004). The parties may submit the agreement in electronic or paper form. The decision maker cannot consider a fee agreement received after the date of the first favorable decision, even if the agreement was signed before the decision. If more than one agreement is received, the decision maker will act on the latest fee agreement received before the date of the favorable decision.

  2. 2. 

    The representative and the claimant both sign the fee agreement.

    1. a. 

      Representatives may use stamped or photocopied signatures in lieu of their actual signatures on a fee agreement and may submit a photocopy (or fax) of the original fee agreement. A fee agreement stamped only with a representative's firm's name is not acceptable, because although SSA may make direct payment of a fee to an entity with a valid assignment (see POMS GN 03920.021 for information on assignments), SSA only recognizes the appointment of individuals as representatives. An entity is not a party to a fee agreement even where an appointed representative validly assigned direct payment to that entity.

    2. b. 

      If the representative's signature is illegible and the decision maker has a question about the representative's information, Hearings or Appeals Council staff may contact the representative for clarification.

    3. c. 

      If, at the time the decision maker is prepared to issue a favorable decision, the decision maker realizes that the claimant or representative did not sign the agreement, the decision maker must disapprove the agreement because both did not sign it.

      NOTE: 

      Both the representative and claimant (or other authorized individual) may also use a commercial software product to affix their signature(s) to the fee agreement. See POMS DI 11005.017 for the requirements for, and additional information about, such commercial product applied signatures (CPAS).

    If the claimant appoints one representative and submits a fee agreement signed by that representatives and others, the decision maker must approve the fee agreement if all other conditions for approval are met and none of the exceptions in HALLEX HA 01120.012B, below, apply.

  3. 3. 

    The fee agreement allows for a fee that may not exceed the lesser of:

    1. a. 

      25 percent of the claimant's past-due benefits

      or

    2. b. 

      The statutory limit or fee cap (currently $9,200)

    NOTE 1: 

    The specified dollar amount in the above bullet is established pursuant to section 206(a)(2)(A)(ii)(II) of the Social Security Act (Act). This amount may be increased by the Commissioner of Social Security. The increased limit is effective as of the date of the favorable decision, not on the date the fee agreement was signed or filed. The fee agreement may contain language that permits a later increase in the fee cap, as of the day SSA approves the fee agreement. For additional information, refer to POMS GN 03920.006, Increases to Fee Cap Limits for Fee Agreements.

    NOTE 2: 

    In concurrent claims, the maximum SSA will approve for both titles under the fee agreement process is the lesser of 25 percent of the combined past-due benefits of both titles or the current fee cap.

    NOTE 3: 

    A two-tier fee agreement functions as a fee agreement through a prescribed level, oftentimes this is the first hearing. After that prescribed level, a two-tier agreement allows for a fee that may exceed the fee cap, and the representative usually intends to file a fee petition. The fee authorizer can approve a two-tier fee agreement only if the level at which a favorable decision is achieved is within the confines of the fee agreement. For instructions on evaluating two-tier fee agreements, see HALLEX HA 01120.015.

  4. 4. 

    The decision is favorable to the claimant. This can be a fully or partially favorable decision on a claim or a post-entitlement or post-eligibility decision that leads to new past-due benefits.

  5. 5. 

    The claim results in past-due benefits.

NOTE 1: 

The decision maker's approval or disapproval of a fee agreement is limited to whether the agreement meets the statutory conditions and is not otherwise excepted. Approval of the agreement is contingent on whether the claim results in past-due benefits, and another component will confirm if there are past-due benefits and notify the claimant and representative accordingly.

NOTE 2: 

Section 206(a)(2)(A) of the Act provides that the fee agreement process applies in a claim of entitlement to past-due benefits. Workers' compensation offsets and other similar actions are adjustments of benefit amounts to which entitlement has already been established. Consequently, the fee agreement process does not apply to this category of actions.

B. Exceptions

In certain situations, decision makers cannot approve a fee agreement, even though the language in the agreement meets the statutory requirements listed in HALLEX HA 01120.012A. The agreement is excepted from the fee agreement process in the following situations:

  1. 1. 

    The claimant appointed more than one representative, and not all representatives who want to charge and collect a fee signed a single fee agreement. This requirement applies even when all representatives have validly assigned direct payment of their authorized fee to the same entity.

    NOTE 1: 

    Single fee agreement is defined as one agreement signed by all parties, including all representatives, whether they work for the same or different entities or for themselves. Therefore, if the claimant appoints a different representative after other representatives have already submitted a fee agreement, the parties must resubmit the existing agreement amended with the additional representative's signature or a new agreement signed by all appointed representatives.

    NOTE 2: 

    This exception does not apply if the representative(s) who did not sign the fee agreement waived charging and collecting a fee.

  2. 2. 

    The claimant discharged all representatives, or all representatives withdrew from the case, before SSA favorably decided the claim.

    NOTE: 

    This exception does not apply if there are multiple appointed representatives who signed a single fee agreement and one or more remains active on the claim. When at least one representative remains appointed, the decision maker will approve the fee agreement so long as it meets all the statutory conditions and is not otherwise excepted.

  3. 3. 

    The representative died before SSA issued the favorable decision, and there is no remaining representative(s) appointed on the claim.

    When the representative dies before SSA issues a favorable decision and the claimant or representative submitted an otherwise valid fee agreement, if no representative(s) remains appointed on the claim the decision maker will:

    1. 1. 

      Disapprove the fee agreement, and

    2. 2. 

      Notify the parties, including the deceased representative's estate or the entity's point of contact (POC) if there is a valid assignment, that the fee agreement is disapproved. The estate of the deceased representative or the entity's POC based on a valid assignment may file a fee petition for the services performed by the deceased representative. In the notice to the deceased representative's estate or the entity's POC, the decision maker must redact the claimant's personally identifiable information (PII) (e.g., address or Social Security number).

    NOTE: 

    If the representative dies after SSA issues the favorable decision, refer to the instructions in HALLEX HA 01120.012C.4.c, below.

  4. 4. 

    The representative is suspended or disqualified from representing claimants before SSA.

    The decision maker must disapprove the fee agreement even if the representative had assigned direct payment of a fee to an entity. A suspended or disqualified individual is ineligible to receive direct payment, so any assignment they may have made also becomes invalid (see POMS GN 03920.021).

    NOTE: 

    The decision maker does not need to disapprove the fee agreement if the representative is not suspended or disqualified and has assigned direct payment of fees to an entity that is on the ineligible for direct payment entity (IDPE) list. In this situation, the assignment is invalid, but SSA may still pay the authorized fee to the individual representative if the representative is eligible for direct payment. Refer to POMS GN 03920.051 for information about the IDPE list.

  5. 5. 

    A state court declared the claimant legally incompetent prior to the date they signed the fee agreement, and the claimant's legal guardian did not sign the fee agreement.

    NOTE: 

    If SSA determined that the claimant is mentally incapable of managing the claimant's own funds or is in the process of evaluating the claimant's mental capability, the effectuating component will defer sending notice regarding the amount of the fee under the fee agreement until SSA has selected a representative payee. However, the decision maker will not disapprove the fee agreement for this reason.

C. Considerations Related to the Statutory Conditions for Approval and the Exceptions

1. Agreement Provisions That Will Not Cause SSA to Disapprove a Fee Agreement

The decision maker will not disapprove a fee agreement solely because it contains a provision stating that:

  • •

    The representative has the right to seek review of the amount that otherwise would be the maximum fee under section 206(a)(2)(A) of the Act. SSA explains administrative review rights in the fee determination and authorization notices.

  • •

    The representative may request administrative review (under section 206(a)(3)(A) of the Act) of the amount of the fee if the past-due benefits do not exceed a certain amount.

  • •

    The authorized fee does not include any out-of-pocket expenses (e.g., costs involved in obtaining copies of medical reports or state sales tax, etc.). Reasonable out-of-pocket expenses are not subject to SSA's review.

  • •

    A named third party will pay the representative a fee equal to the lesser of 25 percent of the past-due benefits or the current statutory fee cap, and the claimant and any auxiliary beneficiary or eligible spouse will have no financial liability for paying the authorized fee.

  • •

    The representative will charge interest on the unpaid balance of the authorized fee.

  • •

    The representative will share the authorized fee with another person who referred the case.

2. Provisions or Situations That Will Cause SSA to Disapprove a Fee Agreement

a. Fee Amount

The following are examples of agreement provisions that are inconsistent with the statutory condition that the fee specified in the agreement does not exceed the lesser of 25 percent of the past-due benefits or $9,200. SSA will disapprove a fee agreement containing a provision that:

  • •

    The claimant will pay a minimum fee.

    Example:

    An agreement specifies that the representative's fee will be 25 percent of past-due benefits or the current fee cap, whichever is less, except that if 25 percent of past-due benefits does not exceed $1,500, the representative's fee will be $1,500. This constitutes an agreement that the least the claimant will owe is $1,500. Such an agreement is not consistent with the statutory provisions for approval.

  • •

    If 25 percent of the past-due benefits exceeds the current fee cap, the representative will receive a fee equaling the fee cap and retains the right to petition for an additional fee.

NOTE: 

Do not confuse petition with request administrative review. SSA does not authorize fees under both the fee agreement and fee petition processes in the same case. Whereas a representative retains the right to request administrative review under the fee agreement process, the representative who has submitted a fee agreement may not use the fee petition process after SSA issues a favorable decision, unless the fee agreement specified that it only applied through a specific level of the administrative review process (i.e., a two-tiered fee agreement) or the initial decision maker disapproved the fee agreement. See HALLEX HA 01120.001 and HA 01120.015 for information about two-tiered fee agreements. However, the decision maker may consider a fee petition to be a request for administrative review of the authorized fee amount if the request was filed within the 15-day period for requesting administrative review and is requesting a fee greater than the amount authorized as explained in HALLEX HA 01120.001E.1 (see also POMS GN 03960.010B.1.d).

b. Unappointed Representative

If a representative and claimant both signed the Form SSA-1696 and the fee agreement, and a person other than the appointed representative (e.g., a paralegal working under the supervision of the appointed representative) actually attended the hearing as the claimant's sole advocate, that individual is performing representational services on behalf of the claimant, so they must be registered with SSA as a representative (see HALLEX HA 01110.010A) and be appointed by the claimant. The decision maker will request a Form SSA-1696 signed by the claimant and the person who attended the hearing. If that person did not sign the fee agreement, the decision maker will disapprove the fee agreement.

The decision maker will take these actions because the representative may not delegate to an unappointed assistant or associate the authority to represent the claimant, including undertaking tasks that require making significant decisions regarding the case, such as appearing as the claimant's advocate in a hearing before an ALJ (see HALLEX HA 01110.020B). Appearing as the claimant's advocate in a hearing requires making decisions about presenting evidence, cross-examining witnesses, arguing facts and law, and appealing any adverse ruling. Only an individual whom the claimant has appointed, and whom SSA has accepted as the claimant's representative, has the authority to perform such representational services for the claimant.

NOTE 1: 

If the paralegal in the above scenario had been appointed and signed the fee agreement, the ALJ approved the fee agreement, and the claimant was entitled to past-due benefits, the paralegal would share the authorized fee. The paralegal would only receive direct payment of their share of the authorized fee if they were an eligible for direct pay non-attorney (EDPNA) representative (see HALLEX HA 01120.009A.1 and POMS GN 03920.018).

NOTE 2: 

If an unappointed paralegal signed the fee agreement but did not appear at the hearing or perform services on the claimant's behalf, the ALJ may still approve the fee agreement. The agency would not consider the paralegal in the fee authorization or distribution. See POMS GN 03940.003B2.

3. Factors Not to Consider

a. Representative's Hours and Services

The number of hours the representative spends on a claim and the representative's specific services are not conditions for approval of a fee agreement. Therefore, the decision maker may not request or consider this information when making the initial determination on the fee agreement.

b. Death of Claimant

The death of a claimant, whether before or after the favorable decision, does not affect the decision maker's review of the fee agreement. If the claimant dies before or after the decision maker completes action in the matter the claimant engaged the representative to handle, the decision maker will presume, absent evidence to the contrary, that the representative's authority continues.

c. Death of Representative After Decision Issued

When a claimant or representative submitted a valid fee agreement and the representative dies after a decision maker issues a favorable decision, the decision maker will approve the fee agreement if the decision maker did not do so at the time of the favorable decision. The decision maker will notify the parties, including the deceased representative's estate when the representative did not assign direct payment of their fee, of the fee agreement approval. When notifying the deceased representative's estate, the decision maker must ensure that the claimant's PII (e.g., address and Social Security number) is redacted.

If the representative dies after they validly assigned direct payment of an authorized fee to an entity, it is not necessary to notify the deceased's representative's estate. See POMS GN 03920.021 for general information about the assignment of direct payment of fees to an entity.

NOTE: 

For the policy when a representative dies before a decision maker issues the favorable decision, see HALLEX HA 01120.012B.3, above.

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/2501120012
HA 01120.012 - Fee Agreements — Evaluation Policy (I-1-2-12) - 12/09/2024
Batch run: 12/11/2025
Rev:12/09/2024