Effective Dates: 12/18/2024 - Present Previous | Next

TN 51 (12-24)

GN 03940.004 Fee Agreements - Partially Favorable Decisions and Decisions Revised on Appeal - Titles II and XVI

A. Partially Favorable Decisions

If we issue a partially favorable determination or decision (hereinafter, we generally refer to both as a "decision"), the decision maker will approve the fee agreement, subject to the conditions in GN 03940.003, and if approved, we will authorize a fee under the terms of the agreement. Refer to DI 25501.280 for additional information on what constitutes a partially favorable decision.

NOTE: Do not confuse partially favorable decisions or decisions revised on appeal with partial adjudication. Partial adjudication, described in GN 01010.110, is our method of awarding benefits to a claimant before completing all development on a claim. When we partially adjudicate a claim, the decision is an interim action subject to revision. As such, we defer authorizing a fee in these claims until we have completed all development. GN 03940.036 provides procedures for partial adjudication involving deferred development.

B. Fee Agreement Submitted Before First Favorable Decision

The decision maker's approval of a fee agreement can remain in effect for any subsequent favorable decision we may issue on appeal if there has been no change in pertinent circumstances and if the approval was proper. A pertinent circumstance is one that affects the statutory conditions of approval or exceptions to the fee agreement process. For example, the appointment of another representative, who did not sign the same agreement, after the initial decision, would be a change in the pertinent circumstances affecting the initial approval of the fee agreement. Additionally, if we issue a subsequent decision at a level of review that triggers the second tier of a two-tiered fee agreement (e.g., the Appeals Council issues a fully favorable decision when reviewing an appealed partially favorable decision from an administrative law judge), that would also be a change in the pertinent circumstance. See GN 03940.005 for more information on two-tiered fee agreements. Accordingly, if a fee agreement was approved in connection with a favorable initial or reconsideration determination or a hearing decision, and on appeal we issue a revised favorable decision on the same claim(s), no further action is required on the fee agreement unless the initial fee agreement approval was improper or there has been a change in the pertinent circumstances.

EXAMPLE: If a claims specialist (CS) has properly approved a fee agreement and on reconsideration a determination is issued that is either more or less favorable than the initial determination, the fee agreement will not require a second approval by a CS. However, if the CS' approval was improper under the statute and the exceptions listed in GN 03940.003, or if there was a change in the pertinent circumstances subsequent to the approval such that an exception applies, the payment center (PC) reviewing official must rescind approval of the fee agreement. Refer to GN 03940.020G. for procedures on processing incorrectly approved fee agreements.

If on appeal, we make a more favorable decision yielding additional benefits, and there are no changes to the pertinent circumstances, we will use the additional benefits when recalculating the past-due benefits, and may authorize an additional fee, subject to the limits established by the fee agreement and the statutory maximum as indicated in GN 03940.003B.3., unless a higher amount was already awarded on administrative review.

If on appeal, we make a more favorable decision which yields past-due benefits in a case in which there were previously no past-due benefits, the decision maker evaluates the fee agreement in accordance with GN 03940.003.

C. Fee Agreement Submitted After First Favorable Decision

1. Requirement for Approval - New Appointed Representative on Appeal

To obtain our approval to charge and collect a fee under the fee agreement process in a claim resulting in more than one favorable decision, the representative or the claimant must have filed the agreement with us before the date of the first favorable decision we made after the representative's involvement began. We can only approve one fee agreement in the claim. If the fee agreement is approved, we cannot authorize another fee based on a fee petition as the two processes are mutually exclusive.

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    We consider the representative appointed on a claim as of the date the claimant signed and dated the Form-SSA 1696 (Claimant's Appointment of a Representative), or if the form is not dated, as of the day we receive the completed Form SSA-1696 that is signed by both the claimant and representative.

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    Unless the representative or the claimant files the fee agreement before the date of the first favorable decision made after the representative's appointment, we presume the representative will either waive a fee or use the fee petition process to obtain our approval to charge and collect a fee.

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    If the representative or claimant does not file a fee agreement before we make a favorable decision on a claim where the representative is appointed, but files a fee agreement before we make a revised favorable decision on appeal, the decision maker will disapprove the fee agreement.

2. Calculating Past-Due Benefits

For purposes of calculating a fee under an approved fee agreement in claims involving more than one favorable decision, "past-due benefits" are those additional benefits resulting from the favorable decision we made after the representative was appointed on the claim. Refer to GN 03920.030, Representative’s Fee – Title II Past-Due Benefits, and GN 03920.031, Representative’s Fee - Title XVI Past-Due Benefits.

3. Examples

a. EXAMPLE 1

We initially decided that the claimant was not disabled. The claimant appointed a representative, who requested reconsideration. On December 20, 2023, we notified the claimant that they had been found disabled as of a date later than they alleged. The representative requested a hearing and, for the first time, presented a fee agreement specifying a fee equal to the lesser of 25 percent of past-due benefits or the applicable specified dollar amount of the fee cap as outlined in GN 03940.003B.3. After a hearing, the administrative law judge (ALJ) found the claimant disabled as of the onset date alleged.

In this case, the ALJ will disapprove the agreement because the first favorable decision we made after the representative was appointed is the reconsideration determination dated December 20, 2023. Neither the representative nor the claimant filed the fee agreement before the date of that determination. Therefore, the representative must file a fee petition to obtain our approval to charge and collect a fee for services provided in connection with the claim.

b. EXAMPLE 2

We initially decided that the claimant was entitled to a period of disability and disability insurance benefits for a closed period. The claimant disagreed with the decision, and appointed a representative to assist in appealing that decision. The representative filed a request for reconsideration, the Form SSA-1696 (Claimant's Appointment of a Representative), and a copy of a fee agreement specifying a fee equal to the lesser of 25 percent of past-due benefits or the applicable specified dollar amount of the fee cap as outlined in GN 03940.003B.3. Upon reconsideration, we decided that the claimant's disability did not cease, but continued through the date of the determination.

Assuming the fee agreement meets the other requirements for approval, the decision maker will approve the fee agreement because the representative filed it before the date of the first favorable decision we made after the representative was appointed on the claim.

NOTE: In this situation, the past-due benefits for fee purposes are those additional benefits that resulted from the new decision that the claimant's disability did not cease. Past-due benefits do not include the benefits already paid to the claimant based on the initial closed-period determination.

c. EXAMPLE 3

Based on an application filed on July 9, 2023, we decided that the unrepresented claimant became disabled on January 1, 2023, and was entitled to a period of disability and disability insurance benefits. After the claimant received that determination, they requested a hearing before an ALJ and appointed a representative. In addition, the claimant submitted a fee agreement and requested that SSA reopen an unfavorable hearing decision dated March 15, 2019, that had been issued on an earlier application they had filed on December 12, 2018. The ALJ reopened the prior hearing decision and found the claimant entitled to benefits based on the 2018 application.

If the agreement meets the other requirements for approval, the ALJ must approve the fee agreement because the representative filed it before the date of the first favorable decision SSA made after the claimant appointed them on the claim. The past-due benefits for fee purposes would only include the period from the December 12, 2018 filing date through the January 1, 2023 established onset date in the first favorable decision.

d. EXAMPLE 4

Based on an application filed on March 3, 2021, we initially decided that the claimant was not disabled. The claimant appointed a representative, who requested reconsideration, and on reconsideration we decided that the claimant became disabled on April 13, 2022 and was entitled to a period of disability and disability insurance benefits. We approved the fee agreement that the representative submitted with the application and authorized a fee to that representative. The representative requested a hearing before an ALJ, but prior to the ALJ hearing the representative withdrew and waived collecting any additional fees on this claim. A representative may waive a fee or direct payment of a fee, but our policy does not provide for a partial fee waiver option (see GN 03920.020). Before the hearing, the claimant appointed a new representative and signed a fee agreement with the new representative. The new representative represented the claimant at the hearing, and the hearing decision resulted in an earlier onset date and additional past-due benefits awarded to the claimant. The ALJ must vacate the approval of the first fee agreement because of the change in pertinent circumstances. There are now multiple appointed representatives and they did not all sign a single fee agreement. The ALJ must also disapprove the fee agreement submitted by the new representative, because although the first representative withdrew from the claim, they did not waive their entire fee. Therefore, there are multiple representatives seeking a fee who did not all sign the most recent fee agreement.

 

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GN 03940.004 - Fee Agreements - Partially Favorable Decisions and Decisions Revised on Appeal - Titles II and XVI - 12/18/2024
Batch run: 12/18/2024
Rev:12/18/2024