TN 8 (08-13)
GN 03970.010 Rules of Conduct and Standards of Responsibility for Representatives
CITATIONS: Social Security Act Secs. 206, 206(a), 1631(d), 208, 1106, 1107, and 1631(d)(2) CFR No. 4 Sec. 404.1740 and CFR No. 16 Sec. 416.1540
Regulations No. 4 Sec. 404.1740, Regulations No. 16 Sec. 416.1540, and Regulations No. 10, Sec. 410.687
A. Introduction to rules of conduct and standards of responsibility for representatives
To ensure that claimants receive competent services from their representatives and to improve the efficiency of the Social Security Administration’s (SSA) administrative process, SSA formulated the Rules of Conduct and Standards of Responsibility for Representatives. (20 CFR 404.1740 and 20 CFR 416.1540). These rules establish affirmative duties and describe prohibited actions for representatives. We may suspend or disqualify a representative from practicing before us if the representative violates these rules.
B. Policy on affirmative duties for representatives
A representative must:
Act with reasonable promptness in obtaining and submitting, as soon as practicable, to SSA or the disability determination services (DDS), information and evidence that the claimant (or the representative) wants the decision-maker to consider when ruling on the claimant’s claim.
Assist the claimant in complying, as soon as practicable, with SSA's or DDS' requests for information or evidence at any stage of the administrative decision-making process in his or her claim. In disability and blindness claims, this includes assisting the claimant to acquire and provide evidence about the claimant's:
work experience and efforts,
workers' compensation, and
other disability or non-disability related information
Conduct his or her dealings in a manner that furthers the efficient, fair, and orderly conduct of the administrative decision-making process. This includes both of the following:
Provide competent representation to a claimant
Providing competent representation means that a representative knows the significant issue(s) in a claim and has a working knowledge of the applicable provisions of the Social Security Act, the Regulations, and the Social Security Rulings. In addition, the representative should also know how to obtain and submit evidence regarding the claim; and
Act with reasonable diligence and promptness
Acting with reasonable diligence and promptness means that the representative provides prompt and responsive answers to requests and communications from SSA or DDS pertaining to the processing of a pending claim.
Conduct business with us electronically at the times and in the manner we prescribe on matters for which the representative requests direct fee payment.
On September 12, 2011, we published a final rule requiring that certain representatives conduct business with us electronically using our online services (76 FR 56107). We said that we would publish a notice in the Federal Register announcing each new electronic service requirement.
On January 31, 2012, we filed a Notification of Implementation of Requirement announcing that representatives who are eligible for and request direct fee payment on a case must file certain medical appeals electronically beginning on March 16, 2012 (77 FR 4653).
We initially provided an educational period to encourage representatives to work with iAppeals and to become more familiar with the process. Now that this initial educational period has expired, we are providing instructions on how to refer potential sanctions situations to the Office of General Counsel (OGC).
Accept and process all paper appeals (SSA-561, Request for Reconsideration, and HA-501, Request for Hearing by Administrative Law Judge, along with paper SSA-3441s, Disability Report - Appeal). Do not return paper appeals to the representatives and do not re-contact the representatives to ask them to re-submit their already-filed paper appeals forms in an electronic format. Do not require submission of the SSA-1696 (Appointment of Representative) or the SSA-1695 (Identifying Information for Possible Direct Payment of Authorized Fees) prior to, or in conjunction with the appeals submission. Instead, for referral of violations for possible imposition of sanctions, see GN 03970.017F in this section.
We are not mandating that representatives use direct deposit.
This new requirement does not affect direct payment of fees. Continue to pay fees directly to an eligible representative on cases where the representative has requested direct payment, even for paper appeals.
C. Policy on prohibited actions for representatives
A representative must not:
In any manner or by any means threaten, coerce, intimidate, deceive, or knowingly mislead a claimant, or prospective claimant or beneficiary, regarding benefits or other rights under the Social Security Act.
Knowingly charge, collect, or retain, or make 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.
Knowingly make or present, or participate in the making or the presentation of, false or misleading oral or written statements, assertions, or representations about a material fact or law concerning a matter within SSA's jurisdiction.
Through his or her own actions or omissions and without good cause, unreasonably delay or cause to be delayed, the processing of a claim at any stage of the administrative decision-making process. Unreasonable delay is delay that is not justifiable, or delay that is preventable with reasonable care.
Divulge, without the claimant's consent, except as authorized by regulations prescribed by SSA or as provided by Federal law, any information SSA or the DDS furnishes or discloses about a claim or prospective claim.
Attempt to influence, directly or indirectly, the outcome of a decision, determination, or other administrative action by offering or granting a loan, gift, entertainment, or anything of value to a presiding official, SSA or DDS employee, or witness who is or may be expected to be involved in the administrative decision-making process, except as reimbursement for legitimately incurred expenses or lawful compensation for the services of an expert witness retained on a non-contingency basis to provide evidence.
Engage in actions or behavior prejudicial to the fair and orderly conduct of administrative proceedings, including, but not limited to:
repeated absences from, or persistent tardiness at, scheduled proceedings without good cause;
willful behavior which has the effect of improperly disrupting proceedings or obstructing the adjudicative process; and
threatening or intimidating language, gestures, or actions directed at a presiding official, witness, or SSA or DDS employee that results in a disruption of the orderly presentation and reception of evidence.
Violate any section of the Act for which the law prescribes a criminal or civil monetary penalty.
Refuse to comply with any of our rules or regulations.
Suggest, assist, or direct another individual to violate our rules or regulations.
Advise any claimant or beneficiary not to comply with any of our rules or regulations.
Fail to comply with our decision about sanctions.
Knowingly assist someone who is suspended or disqualified to provide representational services or exercise the authority of a representative as described in 20 CFR 404.1710 and 20 CFR 414.1510.
NOTE: The sanctions described in the introduction are not exclusive. Aside from suspension or disqualification, a representative who engages in conduct that violates a provision of the Act may also be subject to incarceration, fines, and civil monetary penalties. See information on violations of the Social Security Act in GN 04105.000, Violations of the Social Security Act.
D. Definitions of violations and non-violations
1. Fee violations
a. Total unauthorized fee collection
A total unauthorized fee collection is when the representative collects his or her fee directly from the claimant, any auxiliary beneficiary, another individual (whether related or unrelated to the claimant or auxiliary beneficiaries), or through an erroneous SSA fee payment, without prior SSA authorization. (Payments to representatives by third-party entities are an exception to the SSA general authorization requirement. See information on representative’s fees not subject to Social Security Administrations authorization in GN 03920.010 and 20 CFR 404.1720(e) for other exceptions). For processing instructions, see information on referrals of suspected fee violations, possible fee violations, and non-fee violations in GN 03970.017.
b. Partial unauthorized fee collection
A partial unauthorized fee collection occurs when SSA authorizes a fee based on a fee agreement or fee petition, but the representative collects an amount in excess of the fee SSA authorized. The amount over the authorized fee is a partial unauthorized fee collection. For processing instructions, see information on referrals of suspected fee violations, possible fee violations, and non-fee violations in GN 03970.017.
NOTE: Occasionally, SSA pays a representative in error. Such a direct payment error may result in an unauthorized fee collection if the representative does not return the erroneous fee on receipt or following an SSA request (see GN 03970.010D.3. in this section). This unauthorized fee collection could be partial or total as described in GN 03970.010D.1.a. and GN 0970.010D.1.b. in this section. For example, the Processing Center (PC) or Field Office (FO) directly pays the representative more than the fee amount that SSA authorized (and the representative does not return the excess payment). This often is in the form of a duplicate payment and it can be any amount in excess of the authorized fee. For processing instructions, see information on referrals of suspected fee violations, possible fee violations, and non-fee violations in GN 03970.017.
2. Non-fee violations
Non-fee violations are unrelated to charging and collecting a fee. A representative commits a non-fee violation when he or she fails to comply with the affirmative duties in GN 03970.010B (in this section), or if he or she violates any of the prohibited actions in GN 03970.010C (in this section), in the Rules of Conduct, except for the fee rule in GN 03970.010C.2. (in this section) to knowingly charging, collecting, or retaining a fee in violation of law or regulation. For example, ignoring a request to submit certain evidence or obstructing the administrative process; deliberate and consistent tardiness or inexcusable delay for hearings; disruptive, coercive, or threatening behavior to SSA staff or claimants; conspiring to submit or knowingly submitting false documents; disclosing the claimant’s or auxiliary’s private information without his or her prior consent; or failing to conduct business with us electronically when SSA requires it, are all non-fee violations. Some non-fee violations may also be criminal violations.
Non-violations are actions in conflict with our fee-charging rules, generally done because of lack of knowledge and without intent to violate our rules. In these cases, the representative often acts to correct the issue before SSA intervenes or upon notification. For example, SSA sends a representative an unauthorized fee check by mistake, but the representative repays the fee immediately after he or she learns that the check was a mistake and before SSA takes further action.
Non-violations usually occur when the representative is not at fault, or the questionable fee is not an actual violation of our rules.
4. Examples of non-violations
a. Collecting an authorized fee
A representative petitions for and SSA authorizes a fee of $1,950. Withheld past-due benefits are only $1,640. Through error, SSA pays the representative directly the full fee of $1,950. The representative is not in violation of any Social Security regulations because the representative has not collected a fee in excess of what SSA authorized.
b. Direct payment of an authorized fee to an ineligible non-attorney, but not through fault of the representative
The representative correctly identifies herself as a non-attorney ineligible to receive direct fee payment. She submits neither an SSA-1695, nor an SSA-1699 (Request for Appointed Representatives Direct Payment Information). SSA authorizes a fee and directly pays the amount to the representative in error. Because the representative did not do anything to secure a direct fee payment and SSA’s payment was in error, the representative has not violated SSA’s rules. Refer to Office of General Council those situations where a non-attorney actually took affirmative steps to secure a direct fee payment by wrongly claiming attorney or eligible for direct payment non-attorney (EDPNA) status, per GN 03970.017.
c. Requesting SSA’s authorization to charge a fee
Susie B., a representative employed by a non-profit group petitions, for a fee in a title XVI (SSI) claim. The organization’s bylaws however, prohibit the representative from petitioning SSA for a fee. Since the representative did not waive her right to charge and collect a fee and since SSA has no authority to enforce a non-profit organization’s rules (SSA only governs the authorization and payment of fees), the representative may file a fee petition and receive an authorized fee without violating SSA rules.
E. Examples of violations of affirmative duties or engaging in prohibited conduct--actions subject to suspension or disqualification
While the following examples do not cover every situation, they provide a general idea of the types of situations that may indicate that a representative has failed to meet his or her affirmative duties or has engaged in prohibited conduct. This conduct may lead to a representative’s suspension or disqualification and possibly criminal prosecution.
1. Failure to provide competent representation
Before the hearing John Rep, the appointed representative, submits the wrong evidence. He is ill informed about the process, and unfamiliar with Social Security laws. At the hearing, the representative is unfamiliar with the issue(s) or the applicable Social Security laws and regulations or with the facts of the case. During the course of the hearing, it becomes evident that the representative is unprepared to ask questions, argues the wrong issue, or cites the wrong title or rule. By failing to provide the claimant with competent representation, the representative has failed to perform his affirmative duties, as described in GN 03970.010B (in this section).
2. Collecting a fee without SSA’s authorization
Jane Jones, a representative of a claimant for title XVI benefits advises the claimant that she will charge the claimant 25 percent of retroactive benefits if SSA allows the claim, but nothing if we deny the claim. The representative tells the claimant that she does not want all the “red tape” involved with direct payment of her fee from SSA and persuades the claimant to bring her first installment check to the representative's office for settlement of the fee. The representative never submits a fee agreement or fee petition to SSA and further tells the claimant that, “anyway, SSA routinely authorizes representative fees of 25 percent of retroactive benefits.” SSA allows the case on reconsideration, which results in the reopening of a prior denied claim and an award of retroactive benefits. The claimant pays the representative, per their agreement, 25 percent of her retroactive benefits–$8,500. By knowingly charging, collecting, and retaining a fee without SSA's authorization, the representative has engaged in prohibited conduct as described in GN 03970.010C (in this section).
NOTE: SSA permits representatives to collect a fee from a claimant prior to receiving authorization from SSA as long as they hold the money in a trust or escrow account and do not withdraw the money until they receive SSA’s authorization. See information on representative’s fee – trust or escrow accounts in GN 03920.025.
3. Indirect collection of a fee from the claimant without SSA’s authorization — third party payment
Joe Abel, a claimant, has a private insurance policy that pays him benefits when he is unable to work. The insurance company informs Mr. Abel that the terms of the policy require him to file for title II disability insurance benefits (DIB). The claimant receives assurance that the insurance company provides, at no charge, a representative to represent him before SSA. The claimant agrees to this representation. Later, SSA awards the claimant DIB. Tom Cain, the representative informs SSA that he is waiving his fee in this representation. Following the terms of the policy, the claimant notifies the insurance company about the award of benefits. The insurance company then pays the representative $6,000 for representation of the claimant before SSA and deducts the same amount from the claimant's insurance policy benefits. By knowingly circumventing our rules, which require that when a third party pays a representative’s fee, the claimant and any auxiliary beneficiaries must be free of liability directly or indirectly, the representative engaged in prohibited conduct as described in GN 03970.010C (in this section). See 20 CFR 404.1720(e) and 20 CFR 416.1520(e).
4. Indirect collection of a fee without SSA’s authorization — third-party payment by an individual
Pat Slick, the appointed representative, informs the claimant that she will not receive a fee unless SSA allows the case and the case results in past-due benefits. The representative also advises the claimant that SSA must authorize her fee unless an entity or government agency is paying for the fee from its funds. To avoid delay in payment and “red tape” the representative suggests that the claimant’s uncle write a check from his company’s account to pay the fee and the claimant can later reimburse the uncle. The representative waives her fee from SSA. The representative receives a check from the uncle’s company for her requested fee. When the representative collects the indirect payment, she has knowingly circumvented our rules and engages in prohibited conduct described in GN 03970.010C (in this section). See 20 CFR 404.1720(e) and 20CFR 416.1520(e).
5. Failure to refund an unauthorized fee involving a duplicate fee payment by SSA
Jim Cool, a representative, receives a properly authorized direct payment of $1,800 from withheld past-due benefits for his services representing a disability claimant before the Office of Disability Adjudication and Review (ODAR). Inadvertently, SSA certifies duplicate payment of the fee to the United States Treasury. The representative receives the second check of $1,800 and deposits the check into his account. The FO or PC notifies the representative of the duplicate fee payment, provides copies of the United States Treasury checks involved, and seeks refund. The representative ignores the notices from the FO or PC to refund the duplicate payment or declines to repay. This conduct violates the rules in GN 03970.010C (in this section), as the representative is now knowingly retaining a fee in excess of the amount SSA authorized.
6. Charging and collecting an unauthorized fee - fee contracts with a minimum fee
Joe Harper, a claimant, signs a fee contract with Mr. Sawyer, a representative for representational services before SSA. This fee contract states that the “minimum” fee is $1,000. The fee contract does not state that SSA must authorize the fee. Later, the representative sends SSA a fee petition requesting $1,000 for representing the claimant. SSA authorizes a fee for $700. The representative then seeks an additional $300 from the claimant. This is a fee violation because the representative is charging, and possibly collecting, a fee that is $300 more than the fee SSA authorized. Furthermore, the representative misled the claimant concerning the minimum fee. In a fee petition matter, SSA never determines a fee based upon a specific sum agreed between the representative and the claimant, and the representative never told the claimant that SSA has to authorize the fee. See GN 03970.010C (in this section).
7. Making an arrangement to charge, collect, or retain a fee for representational services directly from a claimant’s bank account
Bob Sid, a representative, requires that prospective clients agree to and implement the following conditions before appointing him as their representative:
Establish a bank account in the client’s name that permits the representative to sign, or requires the representative to co-sign, checks against the funds in that account, or allows the representative to make electronic withdrawals; and
Request that SSA direct deposits the client’s Social Security or Supplemental Security Income benefit or both into the account.
After SSA deposits the claimant’s past-due benefits into the account, the representative writes a check, or requires the claimant to co-sign a check against the funds, or the representative accesses the funds to collect his fee for representative services. Any such arrangement circumvents the direct payment provisions of the Social Security Act and the Social Security Disability Applicants’ Access to Professional Representation Act of 2010. By gaining such control of the claimant’s Social Security benefits, the representative may violate the provisions in sections 207 and 1631(d)(1) of the Act that prohibit the transfer or assignment of the right of any person to any future payment (benefits) under our titles. (For information on assignment of benefits, see GN 02410.001D.2.) In addition, if a fee is collected from the claimant without SSA’s prior authorization, then the representative is charging and collecting an unauthorized fee and may be violating our regulations in 20 CFR 404.1720, CFR 20 404.1740(c)(2), and CFR 416.1540(c)(2).
8. Failing to file electronic requests for appeals as required
The attorney or EDPNA routinely requests direct payment of fees on cases that he or she submits paper appeal requests on medically denied initial claims or reconsiderations. By failing to file these appeals electronically, the attorney or EDPNA is violating the affirmative duty to conduct business with us electronically when we require it.
The attorney or EDPNA routinely suggests that the claimant submit a paper request for reconsideration or hearing and then after the fact, routinely submits the SSA-1696 indicating his or her choice of direct fee payment along with the SSA-1695. By routinely encouraging the claimant to file these appeals in paper and subsequently submitting the SSA-1696 and SSA-1695, the attorney or EDPNA is circumventing the affirmative duty to conduct business with us electronically.
NOTE: As long as a representative submits any part of the appeal electronically, we will consider that he or she is complying with the requirement to use iAppeals. When a representative continually fails to comply, however, and repeatedly submits appeals entirely on paper, at the same time requesting direct fee payment, we may document and refer the representative to OGC for an investigation that could lead to his or her suspension or disqualification.
F. Examples of criminal violations — actions subject to criminal prosecution
While the following examples do not cover every situation, they provide a general idea of the types of situations that may indicate that a representative has engaged in prohibited conduct. Some actions that violate the Rules of Conduct Prohibited Actions may also violate laws that have criminal penalties. For example, a fee violation or a representative’s knowing and willful action to deceive, mislead, or threaten a claimant or beneficiary could violate not only SSA’s Rules of Conduct and Standards of Responsibility for Representatives, but also could constitute a criminal violation. We may find an individual guilty of a criminal violation and also suspend or disqualify him or her from being a claimants’ representative.
1. Knowingly make or participate in making a false statement
Trudy Jones, a mother files on behalf of her 2-year old son, alleging the deceased number holder (NH) is the child's father. She is unable to establish the child's relationship to the NH or provide proof that the NH supported the child before his death, so SSA denies her claim at the initial level. The mother appoints a representative to appeal the unfavorable determination. The representative submits additional evidence in the form of four affidavits of persons alleging knowledge, which attest to the NH’s paternity of the child. The child is awarded benefits as a surviving child. SSA later learns that a legal wife and two children are entitled to benefits on the earnings record of the deceased. During the adverse claim proceedings, the legal wife challenges the validity of the illegitimate child's paternity. An investigation reveals that the affiants only had casual acquaintance with the deceased. The representative initiated conversation with all four affiants in a bar and ultimately persuaded each to prepare and sign the affidavits in return for $50 each. In this instance, the representative engaged in prohibited conduct as described in GN 03970.010C (in this section), which could subject the representative to suspension or disqualification from practicing before SSA and possibly criminal penalties, including a fine and incarceration.
Becky T., the claimant, approaches H. P. Finn, a representative, to inquire about filing a claim for title XVI benefits and about representation in this claim. After explaining all options, the representative asks the claimant if she wishes to file for benefits at SSA, and if she would like the representative to represent her in her claim. The claimant shakes her head uncertainly and replies that she would like to think about it. She promises to call back. After the claimant leaves, the representative applies online on the claimant’s behalf, clicking to sign the application as if the representative were actually the claimant. By impersonating the claimant, the representative engaged in prohibited conduct that could subject him to suspension or disqualification and possible criminal penalties, including a fine and incarceration.
2. Unauthorized disclosure of beneficiary information
Jules Smith, a busy representative shares an office with Tim Nemo, an independent insurance agent. The insurance agent proposes to pay the representative a finder's fee for the name, address, and monthly benefit amount of each of his or her clients found entitled because of disability. The insurance agent intends to use these beneficiaries as prospective customers for a medical insurance plan he hopes to sell, as a supplement to coverage provided by State and Federal programs. The representative agrees and provides the agent a list of such people without first obtaining consent from his clients. By divulging information that he obtained from SSA, without the claimant’s written consent, the representative engaged in prohibited conduct as described in GN 03970.010C (in this section). This conduct could subject the representative to suspension or disqualification and possibly criminal penalties, including a fine and incarceration.