Effective Dates: 12/09/2024 - Present

Identification Number:
GN 03920 TN 55
Intended Audience:See Transmittal Sheet
Originating Office:ORDP ODP
Title:Administering Representatives Fees Provisions
Type:POMS Full Transmittals
Program:All Programs
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM

Part GN – General

Chapter 039 – Representation and Representative's Fee

Subchapter 20 – Administering Representatives Fees Provisions

Transmittal No. 55, 12/06/2024

Audience

PSC: BA, CA, CS, DE, DEC, DS, ES, ICDS, IES, PETE, RECOVR, SCPS, TSA, TST;
OCO-OEIO: BIES, CAQCR, CR, PETL, RECONR;
OCO-ODO: BTE, CR, CST, CTE, DS, PETE, PETL, RECOVR;
FO/TSC: CS, CS TII, CS TXVI, CSR, CTE, FR, OA, OS, RR, TA, TSC-CSR;

Originating Component

ODP

Effective Date

12/09/2024

Background

On August 21, 2024, we published the final rule Changes to the Administrative Rules for Claimants Representation and Provisions for Direct Payment to Entities, which introduces significant changes to our sub-regulatory guidance following the First Circuit Court’s decision in Marasco and Nesslebush, LLP v. Collins and Social Security.

In preparation for the second phase of implementing this final rule, we moved the content previously found in GN 03920.017 to this new section (GN 03920.016). These changes will be effective on December 9, 2024.

Summary of Changes

GN 03920.016 Payment of Representative's Fee

We added this new subsection with content previously published in GN 03920.017.

We also added information to this subsection outlining the requirements and procedures for representatives assigning direct payment of authorized fees to their entities.

In subsection A, we have provided instructions explaining the overall presumption that a representative will charge a fee unless specifically indicated on waiver submission.

In subsection B, we have provided instructions in the section that details guidelines on the direct payment of authorized fees to representatives. We have included in this section requirements for eligibility of direct payment, registration, and fee agreement. Additionally, it explains how we will make payments when there is a valid fee agreement or assignment is in place and instance where we cannot make payment when the representative has waived their right to payment. Lastly, these instructions discuss how the payment of the fee is affected if the representative is suspended, disqualified, or withdrawn from a case.

In subsection C, we have provided information that clarifies that representatives may assign the direct payment of their fee to an entity unless the representative waived direct payment or waived the right to the fee.

In subsection D, we have provided a list of factors with relative information that discuss the impact each factor may have on the direct payment of fees.

In subsection E, we have updated our policy to highlight the new policy on direct payment of fees to a deceased representative. We provided instruction that clarify the impact a deceased representative may have on payment of any authorized fee(s) before the implementation of the final rule as well as post implementation of the final rule. Lastly, we provide brief instructions for estate development with the appropriate cross reference of the full policy.

Conversion Table
Old POMS ReferenceNew POMS Reference
GN 03920.017GN 03920.016

GN 03920.016 Payment of a Representative's Fee

A. A representative's fee

We assume that an appointed representative will charge a fee for representing claimants before us unless:

  • •

    The representative waives the right to a fee, or

  • •

    A third party is responsible for the payment of the fee.

For more information on waiver of the right to charge a fee or of direct payment of an authorized fee, see GN 03920.020.

A representative may request a fee by filing a fee agreement or a fee petition. For more information on the fee agreement process, see GN 03930.000. For more information on the fee petition process, see GN 03940.000.

B. Direct payment of authorized fees

1. Requirements to receive direct payment

For a representative or court attorney to receive direct payment of an authorized fee from a claimant’s past-due benefits, they must be registered and eligible to receive direct payment at the time we certify the payment.

a. The representative must be registered

All representatives conducting business with us must register before being appointed. Court attorneys who do not represent the claimant before us must register if they seek direct payment of a court-awarded fee.

For more information on representative registration, see GN 03913.001A.2.

For more information on the direct payment of court-awarded fees, see GN 03920.060.

b. The representative must be eligible for direct payment of fees

A representative is eligible for direct payment of an authorized fee if:

  • •

    The representative is an attorney or is an active Eligible for Direct Payment Non-attorney (EDPNA); and

  • •

    At the time we certify payment, SSA has not issued a final decision suspending or disqualifying the representative.

For information on EDPNA policy, see GN 03920.018.

For information on the effects of suspension or disqualification on a representative's ability to receive a fee, see GN 03970.060.

NOTE: The Registration, Appointment, and Services for Representatives (RASR) application will have a message to indicate if the EDPNA is currently ineligible for direct payment.

2. Entity eligibility for direct payment

An entity is eligible for direct payment of a representative fee’s when it meets the following conditions:

  • •

    The entity has properly registered with us;

  • •

    The entity accepts payment by electronic funds transfer; and

  • •

    At the time we certify payment, the entity is not on the Ineligible for Direct Payment Entity (IDPE) list.

For information on assignment of direct payment of fees to an entity, see GN 03920.021.

For more information about entity registration, see GN 03913.050.

3. When we directly pay representative fees

a. Fees authorized for representation before us

We directly pay up to 25 percent of past-due benefits to a representative when:

  • •

    The representative is eligible to receive direct payment (See GN 03920.016B.1.b., above);

  • •

    We issue a favorable determination or decision resulting in past-due benefits under Title II, Title XVI, or both (a concurrent claim);

  • •

    The representative has sought a fee under the fee agreement or fee petition process; and

  • •

    We have authorized a fee.

If the representative has assigned their right to receive direct payment of the fee to an entity, we will directly pay the entity if:

  • •

    The assignment was made prior to the date we notified the claimant and the representative of our favorable determination or decision;

  • •

    At the time the assignment was made, both the representative and the entity were eligible for direct payment; and

  • •

    At the time we certify payment, the representative and the entity continue to be eligible for direct payment.

NOTE: If the authorized fee exceeds 25 percent of the past-due benefits for the claim (including benefits for any auxiliary beneficiaries), the remainder of the authorized fee must be collected by the representative from the claimant.

b. Fees authorized for representation before a Federal court

We may directly pay up to 25 percent of past-due benefits to a court attorney when:

  • •

    A Federal court issues a judgment (either a court remand or court decision) favorable to the claimant that results in Title II or Title XVI past-due benefits or concurrent Title II and Title XVI past-due benefits;

  • •

    The court awards a fee to the court attorney under Section 206(b) of the Act;

  • •

    The court attorney registers for direct payment; and

  • •

    After paying any applicable representative fees for services performed before us, sufficient funds remain from withheld past-due benefits to pay part or all of the court-authorized fee.

For information on processing court-authorized attorney fees, see GN 03920.060.

4. When we do not directly pay representative fees that we authorize

We are not responsible for the direct payment of fees we may authorize in the following situations:

  • •

    A valid fee agreement was not submitted before the first favorable determination or decision was issued after the representative became involved in the claim, post-entitlement, or post eligibility action, and the record does not contain a timely filed fee petition or a statement of intent to file a fee petition;

  • •

    We effectuate a favorable determination or decision, and our attempts to obtain information (e.g., updated banking information, or an updated EIN) from one or more representatives are unsuccessful;

  • •

    No representative on the claim is eligible for direct payment;

  • •

    All representatives on the claim waive their fees or direct payment of their fees before we effectuate the favorable determination or decision;

  • •

    A third-party entity or individual agreed to pay the representative fees;

  • •

    The claim does not result in Title II or Title XVI past-due benefits; or

  • •

    At the time we effectuate the favorable determination or decision, the representative is ineligible for direct payment because we disqualified or suspended the representative(s), and the decision on the suspension or disqualification is final. See GN 03970.060.

If the claimant has filed for bankruptcy and a representative's fee is involved, see GN 02215.185A.3. and HALLEX I-1-2-3-C.

For information regarding fee waivers and third-party fee payment, see GN 03920.020.

For information on what to do when no fee petition or fee authorization is received and we are withholding the claimant’s past-due benefits, see GN 03930.090.

For more information on when an entity's point of contact (POC) may file a fee petition, see GN 03930.020A.

5. Representative fees after suspension or disqualification

A disqualified or suspended representative is ineligible to receive direct payment; however, they may submit a fee petition requesting authorization for fees for services performed before being sanctioned. Sanctioned representatives, however, must collect any authorized fee directly from the claimant.

For information on communications with a representative after the appointment ends, see GN 03910.060C.

For information regarding fees for sanctioned representatives, see GN 03970.060A.

6. Payment of fees after a representative has withdrawn or been revoked

For fees authorized on or after December 9, 2024, we may directly pay the fee to the representative or assigned entity even if the representatives withdrew from the case or if the claimant revoked the representative’s appointment prior to the date of the determination or decision if all other conditions are satisfied under the fee agreement or fee petition processes.

NOTE: For fees authorized before December 9, 2024, we will not directly pay any fee authorized to a representative whose appointment was withdrawn or revoked prior to the date of the determination or decision. Collection of the authorized fee is a matter between the claimant and the representative.

For more information on fee authorization, see GN 03930.001 and GN 03940.001.

C. Assignment of direct payment to an entity

A representative affiliated with an organization, law firm, or other entity may assign to their entity the right to direct payment of fees we may authorize. However, we will not accept a fee assignment by a representative who is ineligible for or has waived direct payment of a fee or who has waived their right to charge a fee. We will also not accept a fee assignment made to an entity that is not eligible for direct payment. See GN 03920.016B.2 for entity eligibility requirements.

For more information on the assignment of direct payment to an entity, see GN 03920.021.

D. Factors that impact the amount we will directly pay

Several factors affect the amount of the authorized fee we can directly pay to a representative or entity.

1. The user fee

Whenever we certify direct payment of a fee to a representative, entity, or court attorney, we assess a user fee to cover the administrative costs of processing the payment. The user fee is deducted from the representative’s fee, not the claimant’s past-due benefits.

For more information on the user fee, see GN 03920.019.

2. Whether the fee results from a fee agreement or a fee petition

a. Fee agreement cases

When one or more representatives seek a fee using the fee agreement process, the agreement must first be approved before we can authorize the fee. See GN 03940.003 for information on the conditions that must be satisfied for a fee agreement to be approved.

If the fee agreement has been approved, we will authorize a fee that is the lesser of the statutory fee limit in effect (i.e., fee cap), or 25 percent of the past-due benefits resulting from the favorable determination or decision (including any past-due benefits awarded to any auxiliary beneficiaries or an eligible Title XVI spouse), unless the claimant and representative have agreed to a lesser amount. For more information on the fee cap limits for fee agreements, see GN 03920.006.

In a case with an approved fee agreement signed by multiple representatives, we will divide the authorized fee equally among all representatives who have not waived their right to charge and collect a fee. We will directly pay all representatives who are eligible for direct payment their share of the authorized fee. If one or more representatives have assigned direct payment of their fee to an entity, we will directly pay each of those representatives’ portions of the authorized fee to the assigned entity(ies) if eligible.

EXAMPLE: Joe applied for concurrent Title II and XVI benefits and appointed Bray and Shawn from Soaring High Disability (SHD), and Mary from Covering All Claims (CAC) as the appointed representatives. Joe and all three representatives signed the same fee agreement. Bray and Shawn assigned direct payment of their fees to SHD, while Mary did not assign direct payment of her fee to an entity. An administrative law judge ultimately issued a favorable decision in Joe’s case and approved the fee agreement. The total fee authorized under the fee agreement was $7,200. After deducting the user fee of $117 equally among the representatives, we will pay SHD two thirds of the fee ($4,722, Bray and Shawn’s fees combined), and we will pay Mary the remaining third ($2,361).

For more information on user fees and direct payment of authorized fees to multiple representatives under the fee agreement process, see GN 03920.019C.1.

For information on releasing funds for representative's fees, see GN 03920.050D.2.

When the fee agreement appears to have been incorrectly approved or the claim has resulted in no past-due benefits, see GN 03940.020G, GN 03940.025B.5., or GN 03940.046.

b. Fee petition cases

In fee petition cases, we may authorize a fee that exceeds 25 percent of the past-due benefits awarded to a claimant, any auxiliary beneficiaries, or eligible spouse.

However, we will only directly pay the authorized fee up to 25 percent of past-due benefits. The claimant is responsible for paying the remainder of the authorized fee that we could not directly pay from past-due benefits.

For information on user fees and direct payment of authorized fees to multiple representatives under the fee petition process, see GN 03920.019C.2.

For information on calculating the authorized fee when there are multiple representatives appointed, see GN 03920.050.

NOTE: An entity’s POC may only file a fee petition under the limited circumstance in GN 03930.020A. For more information on assignment, see GN 03920.021.

3. Administrative review changes the amount of the authorized fee

Parties to a fee authorization may request administrative review of the amount of the fee authorized under either the fee agreement or fee petition process. If the reviewing official finds that the fee was not reasonable, the reviewing official may increase or decrease the authorized fee.

When evaluating the reasonableness of a fee authorized under either the fee agreement or fee petition process, the reviewing official may authorize a fee that exceeds 25 percent of the claimant’s past-due benefits or the fee cap (in cases involving a fee agreement). However, we will only directly pay an amount that does not exceed 25 percent of the past-due benefits. The claimant is responsible for paying the remainder of the authorized fee that we could not directly pay from the past-due benefits. For more information on evaluating the reasonableness of the fee authorized under the fee agreement process, see GN 03960.050.

For more information about modifying the initial fee authorization based on a request for administrative review of the fee amount, see GN 03950.035 (fee petitions) and GN 03960.040 (fee agreements).

For information on failure to withhold past-due benefits, including instructions for when a representative is unable to collect the authorize fee from the claimant, see GN 03920.055D. If the representative is unable to collect the authorized fee from the claimant, see GN 03920.055.

4. Trust and escrow accounts

Funds held in a trust or escrow account do not affect the amount of past-due benefits we withhold. However, when the sum of the past-due benefits withheld and the funds in the trust or escrow account exceed the authorized fee, the funds in a trust or escrow account may reduce the amount of the fee we directly pay to a representative.

For information on how to calculate a representative’s fee in claims involving funds in a trust or escrow account, see GN 03920.025.

5. Interim assistance reimbursement (in Title XVI or concurrent claims)

Interim assistance reimbursement (IAR) is a payment we make to reimburse a state that has provided interim assistance in cash or through vendor payments to an individual for meeting basic needs.

When an individual entered into an IAR agreement with the State, and a favorable determination or decision is issued that results in past-due benefits, we will reimburse the State from the claimant’s withheld past-due benefits prior to paying the representative’s fee.

For information on Title XVI past-due benefits payable, including when an IAR is involved, see GN 03920.033.

6. Auxiliary beneficiaries or eligible spouse not independently represented

An auxiliary beneficiary or Title XVI eligible spouse is presumed to be represented by the same representative(s) as the claimant, and their past-due benefits are also withheld for possible direct payment of the representative’s fee. See GN 03910.025C.

If an auxiliary beneficiary or spouse is independently represented, their past-due benefits will be withheld separately for possible direct payment of their representative’s fee. We will not withhold their past-due benefits for possible direct payment of the claimant’s representative’s fee. For more information on withholding past-due benefits from auxiliary beneficiaries and an eligible Title XVI spouse, see GN 03920.035B and GN 03920.036B.

7. Rounding

To determine the direct payment amount, we round to the nearest cent if the past-due benefits withholding amount, total authorized fee, or user fee ends with a fraction of a penny. For information on the nearest cent rounding policy, see RS 00601.020B.

E. Direct payment of an authorized fee when the representative is deceased

Under both the fee agreement or fee petition processes, if a representative dies before we authorize or certify payment of a fee, but the representative had properly and timely assigned direct payment of fees to an affiliated entity, we will pay any fees we authorize to the entity, unless the entity is no longer eligible to receive direct payment, or the representative became ineligible for direct payment after making the assignment but before dying. If there is no fee agreement, the fee agreement has been disapproved, or the representative had not filed a fee petition at the time of death, the entity’s POC may file a fee petition and the entity may receive direct payment of any fee we authorize. The entity’s POC may also request administrative review on behalf of the deceased representative under either the fee agreement or fee petition processes, and we may directly pay the entity any fee authorized upon administrative review.

If a representative who was eligible for direct payment dies without having assigned the right to direct payment of an authorized fee to an entity, we may directly pay the representative’s estate any fee we authorize for the services that the representative has provided. If there is no fee agreement, the fee agreement has been disapproved, or the representative had not filed a fee petition at the time of death, the executor or other State recognized representative of the estate may file a fee petition (see GN 03930.020A), and the estate will receive direct payment of any fee we authorize. The executor or other State recognized representative of the estate may also request administrative review on behalf of the deceased representative under either the fee agreement or fee petition processes, and we may directly pay the estate any fee authorized upon administrative review.

NOTE: We cannot directly pay a deceased representative’s authorized fee if the representative did not validly assign direct payment and there is no estate, or the estate is closed by court order.

For more information regarding the limited circumstances under which an entity’s POC or the executor or legal representative of a deceased representative’s estate may file a fee petition or request administrative review, see GN 03930.020A, GN 03950.001C.2., and GN 03960.001B.10

1. Authorizing fees for services performed by a deceased representative

a. Fee authorizations made prior to December 9, 2024

For fee authorizations made prior to December 9, 2024, if a representative died before the date of the decision, any existing fee agreement would be disapproved. We would notify the parties, including the deceased's estate, (redacting Personally Identifiable Information, as necessary), that we disapproved the agreement, but the estate may request a fee for the deceased representative’s services by filing a fee petition. However, because the representative died prior to the issuance of the decision and could not have received direct payment of a fee on the date of death, collection of any fee we authorize would be between the estate and the claimant.

For fee authorizations made prior to December 9, 2024, if a representative died after the decision was issued, we would directly pay the representative’s estate any fee we authorized under either the fee agreement or fee petition processes. If the representative had not filed a fee petition prior to dying, the representative’s estate may file a fee petition and receive direct payment of any authorized fees.

b. Fee authorizations made on or after December 9, 2024

Effective December 9, 2024, the date of a representative’s death is no longer a factor considered when determining whether we will directly pay an authorized fee.

If the representative validly assigned direct payment of their fee to an entity prior to death, we will directly pay the authorized fee to the entity. If no assignment was made, we will directly pay the authorized fee to the representative’s estate.

If there was no fee agreement, or the fee agreement was disapproved, and the representative assigned direct payment of the fee to the entity, the entity’s POC may file a fee petition and the entity will receive direct payment of any fee authorized if the conditions in B.3.a, above, are satisfied. If there was no assignment, the executor or other State-recognized representative of the representative’s estate may file a fee petition and the estate will receive direct payment of any fee authorized.

If multiple representatives are appointed, and one of them dies, we may still authorize and directly pay a fee under the fee agreement process, assuming the conditions for approval of a fee agreement are otherwise satisfied. For more information on payment of a deceased representative's fee when there is a fee agreement, see GN 03940.009D.6 and GN 03940.009B.

NOTE 1: If the representative did not make a valid assignment before death, the executor or state-recognized representative of the deceased representative’s estate can waive the fee or direct payment of the fee.

NOTE 2: We cannot directly pay a deceased representative’s authorized fee if there is no estate, or the estate is closed by court order.

For more information on updates to representatives' registration, see GN 03913.010.

For more information on assignment of direct payment of authorized fees to an entity, see GN 03920.021.

For more information on exceptions to the fee agreement process, see GN 03940.003.

2. Estate Development

To authorize and pay a fee to an estate, we must identify the executor of the representative’s estate (or other individual recognized by the State as a representative of the estate). For more information on identifying the executor of an estate, and what to do when the executor cannot be found, see GN 03913.010.

Once a deceased representative's information is updated in RASR to reflect the executor, we will follow existing procedures to authorize and certify payment of the fee.


GN 03920 TN 55 - Administering Representatives Fees Provisions - 12/09/2024