BASIC (06-09)

GN 03943.005 Policy Overview for Increased Specified Dollar Cap on Fee Agreements

A. Background

The Social Security Act lays out a number of statutory conditions that must be met for a representative to charge and collect a fee under the fee agreement process. One of the statutory conditions provides that the fee specified in the agreement must not exceed the lesser of 25 percent of past-due benefits or a specified dollar cap. The Commissioner of Social Security may also from time to time increase the specified dollar cap. This section deals with policy and procedures to handle increases in the specified dollar cap.

NOTE: The controlling event for applying the increased specified dollar cap is the date the SSA decision maker acts on the fee agreement. When the decision maker on the fee agreement is at the hearing level and above, the date the SSA decision maker acts on the fee agreement is the date of the fee agreement approval order.

For policy on the statutory conditions for approval of a fee agreement and for evaluation of a fee agreement, see GN 03940.003A.

B. History of increases in the specified dollar cap

Below are the applicable specified dollar caps for fees authorized under the fee agreement process.

For fee agreements approved before February 1, 2002, the maximum dollar amount of the fee may not exceed the lesser of 25 percent of past-due benefits or $4,000.

For fee agreements approved on or after February 1, 2002, the maximum dollar amount of the fee may not exceed the lesser of 25 percent of past-due benefits or $5,300.

On February 4, 2009, the Commissioner announced through a Federal Register notice an increase in the specified dollar cap for fee agreements approved on or after June 22, 2009. For fee agreements approved on or after June 22, 2009, the new maximum dollar amount of the fee may not exceed the lesser of 25 percent of past-due benefits or $6,000.

C. Fee agreement actions related to increased specified dollar cap

1. SSA approves the fee agreement before June 22, 2009

The following is a brief review of issues that may arise as a result of the increase in the specified dollar cap when a fee agreement is approved before June 22, 2009.

a. More favorable decision issued after fee agreement approval

The decision maker’s approval of a fee agreement may remain in effect for any subsequent favorable decision SSA issues if the approval was proper and there is no change in the pertinent circumstances. For fee agreement policy in partially favorable and subsequent decisions, see GN 03940.004. Accordingly, if an SSA decision maker approves a fee agreement that established a specified dollar cap of $5,300 (or less) before June 22, 2009, and SSA issues a subsequent favorable decision on or after June 22, 2009 on the same issue, the original approval remains in effect, and no further action is required on the fee agreement. The terms of the approved fee agreement, including the specified dollar cap, apply to any additional payments to the representative that could result from that agreement.

b. Dual entitlement claims

Sometimes SSA issues favorable decisions to the same claimant in more than one type of claim for benefits, e.g., dual entitlement and simultaneous entitlement. Dual entitlement claims usually involve a common issue, e.g., disability based on an individual’s own SSN and on the SSN of a parent (disabled adult child claim). In claims involving a common issue, the representative is authorized a single fee for services.

Accordingly, if SSA approves a fee agreement with a specified dollar cap of $5,300 (or less) before June 22, 2009, and issues another favorable decision on or after that date, the terms of the approved fee agreement, including the cap of $5,300 (or less), limit the maximum fee the representative may charge for services performed at the administrative level.

2. Decision maker acts before June 22, 2009 on a fee agreement that calls for a fee exceeding the lesser of 25 percent of past-due benefits or $5,300

If the decision maker acts on a fee agreement before June 22, 2009 and the fee specified in the agreement exceeds the lesser of 25 percent of past-due benefits or $5,300, the decision maker will disapprove the fee agreement. It does not meet the statutory conditions for approval described in GN 03940.003 Fee Agreement Evaluation.

3. Decision maker acts June 22, 2009 or later on a fee agreement that does not call for a fee exceeding the lesser of 25 percent of past-due benefits or $6,000.

If the decision maker considers a fee agreement for approval on or after June 22, 2009, and the fee specified in the agreement does not exceed the lesser of 25 percent of past-due benefits or $6,000, the decision maker will approve the fee agreement if all other statutory conditions are met and no exceptions apply.

4. Decision maker receives a revised fee agreement which was submitted to SSA before the date of the favorable decision, but not received until after the date of the favorable decision

Under the provisions of the Act, in order to approve a fee agreement, SSA must receive the agreement before the date of the favorable decision. For the definition of the date SSA makes a favorable decision, see GN 03940.001B. In some cases, SSA may receive a revised fee agreement before the date of the favorable decision, but the agreement is not available to the decision maker until after the date of the favorable decision. In those cases:

  • the decision maker approves or disapproves the revised fee agreement as provided in GN 03940.003, considering the change in the provisions regarding the specified dollar cap effective June 22, 2009.

  • SSA sends the parties notice of the determination on the revised fee agreement, to include administrative review rights if the decision maker disapproved the revised fee agreement. For policy on fee agreement notices, see GN 03940.008.

For instructions on processing revised fee agreements, see GN 03943.015.

NOTE: The date of receipt of the fee agreement (date stamp, etc.) should be documented and the agreement should be associated with the claim folder.

D. Revised fee agreements

SSA accepts revised fee agreements to update an earlier fee agreement. As GN 03940.003C.1. explains, if SSA has received more than one fee agreement between the claimant and representative, the decision maker acts on the most recently negotiated and signed fee agreement which SSA received before the date of the favorable decision. For policy on revised fee agreements, see GN 03943.015.

E. Fee Agreement Language

Although the fee agreement must be a written statement, SSA does not dictate fee agreement language. There may be many variations of acceptable fee agreement language. When evaluating a fee agreement, decision makers should:

  • allow for reasonable wording or content variations,

  • approve the fee agreement if it meets the requirements of the Act and is not excepted from the fee agreement process; and

  • consider the examples in GN 03940.003A.3.

SSA accepts language in a fee agreement that would apply whether SSA acts on the agreement before, on or after June 22, 2009. If a decision maker approves an agreement with language such as that shown in GN 03940.003A.3., NOTE 3, Examples 3-1, 3-2, and 3-3, the specified dollar cap is:

  • $5,300 if the fee agreement is approved before June 22, 2009; and

  • $6,000 if the fee agreement is approved on or after June 22, 2009.

F. Administrative review of the amount of the fee

If an administrative review of the amount of the fee is requested, reviewing officials must follow the guidelines in GN 03960.040 and GN 03960.043 to determine whether to affirm or modify the fee amount. Please note that the increase in the specified dollar cap from $5,300 to $6,000 is not in and of itself a consideration in deciding whether to affirm or modify the amount of the fee.


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GN 03943.005 - Policy Overview for Increased Specified Dollar Cap on Fee Agreements - 07/10/2009
Batch run: 07/10/2009
Rev:07/10/2009