1. a. 

   If the issue has not been addressed previously on administrative review of a disapproval of the fee agreement, SSA must first consider both of the following:

   • •

     Were the conditions for approving the fee agreement met at the time the decision maker made the favorable determination on the claim or PE action? (GN 03940.003B lists the conditions.)

   • •

     Did any of the exceptions to the fee agreement process apply at the time the decision maker made the favorable determination on the claim or PE action or, if later, approved the fee agreement? (GN 03940.003D lists the exceptions or exclusions.)

2. b. 

   If the decision maker's approval of the fee agreement was incorrect, and the representative did not submit a Form SSA-1560-U4 or equivalent statement in connection with the request for administrative review of the amount of the fee, SSA must notify the parties of the disapproval of the agreement, and:

   • •

     Advise the representative that the representative must request approval of any fee the representative wants to charge and collect using the fee petition process.

   • •

     Advise the representative that the representative must request approval of a fee, or file a written notice of the intent to do so, within 60 days to receive direct payment from past-due benefits withheld.

   EXAMPLE: The CR approved a fee agreement specifying a fee of the lesser of 25 percent or $7,200, but $800 minimum. The notice of the fee determination authorized the representative to charge $600, which is 25 percent of the claimant's title XVI past-due benefits. The representative requested administrative review, stating that the amount of the fee under the approved agreement is $800. Because the fee agreement did not meet the statutory conditions, i.e., the agreement sets a fee that is more than 25 percent of the past-due benefits, the reviewer will notify the parties that the approval was incorrect and advise the representative to petition for approval of the fee the representative wants to charge and collect, assuming the representative did not file a fee petition or equivalent statement with the request.

3. c. 

   If the decision maker's approval of the fee agreement was incorrect, and the representative submitted a form SSA-1560-U4 or equivalent statement in connection with the request for administrative review of the amount of the fee, SSA must notify the parties of the disapproval of the agreement and:

   • •

     Advise the representative that SSA will consider authorizing the fee under the fee petition process.

   • •

     Forward the fee petition material to the individual in the PC delegated the authority to authorize the representative's fee under the fee petition process (see GN 03930.085).

   EXAMPLE: SSA issues notice of a favorable title XVI determination on July 10. On July 17, a fee agreement is received by SSA. The CR approves the fee agreement and issues a notice authorizing the representative to charge $50 (25 percent of the claimant's title XVI past-due benefits). The representative requests administrative review, stating that the amount of the fee is unreasonable. The representative also submits a completed Form SSA-1560-U4 to show the time spent and services provided. Because the fee agreement did not meet the statutory conditions for approval, i.e., the agreement was not filed with SSA before the date SSA made a favorable determination on the claim, the reviewer will notify the parties that the approval was incorrect and advise the representative that the Form SSA-1560-U4 will be considered under the fee petition process.

1. a. 

   SSA does not routinely recalculate the amount of the fee under a properly approved agreement, or confirm that the past-due benefits amount on which the fee is based was correctly calculated, when:

   • •

     no party has disagreed with the calculation; and

   • •

     there is no apparent error considering the $7,200 limit, the percentage specified in the agreement, and any other terms in the fee agreement.

   EXAMPLE: The claimant's Notice of Award shows past-due benefits as $2,000 and the amount of the fee under the approved agreement as $400. The fee agreement provided for a fee of 20 percent of past-due benefits.

2. b. 

   When a party has disagreed with the calculation or there appears to be an error, SSA must:

   • •

     check the fee amount;

   • •

     if necessary, confirm that the past-due benefits amount on which the fee is based was correctly calculated (see GN 03960.045 regarding recalculation of past-due benefits); and

   • •

     in the case of an affected auxiliary beneficiary who did not have a different representative, consider whether the portion of the fee assessed the auxiliary is correct.

3. c. 

   When the reviewer has checked the fee amount and found SSA incorrectly calculated the amount of the fee under the agreement, the reviewer must not evaluate the representative's services, as GN 03960.050 describes, if both of the following apply.

   • •

     SSA can modify the amount of the fee under the terms of the agreement in a manner consistent with the party's request.

   • •

     No other party objected to the proposed modification during the comment period.

   EXAMPLE: SSA authorized a fee of $1,500, which is 25 percent of past-due benefits. The claimant timely filed a request for administrative review, stating that the claimant owes the representative no more than $1,000. The fee agreement provided for a fee of the lesser of 25 percent or $4,000 and further stated that, if SSA favorably decided the claim below the hearing level, the fee would not exceed $1,000. SSA favorably decided the claim on the claimant's request for reconsideration. The representative did not comment on the request for administrative review. The reviewer will modify the fee to the correct amount, $1,000, in accordance with the agreement's terms.

4. d. 

   When the reviewer has checked the fee amount and found SSA incorrectly calculated the amount of the fee under the agreement, the reviewer must evaluate the representative's services, as GN 03960.050 describes, if an apparent error, rather than the requester's assertions, prompted the reviewer to check the fee amount.

   EXAMPLE: The claimant's Notice of Award shows past-due benefits as $4,608 and the amount of the fee under the approved agreement as $850.00. The fee agreement provided for a fee of the lesser of 25 percent of past-due benefits or $7,200. The representative files a request for administrative review stating that a reasonable fee for services in this case would be $1,500. The reviewer recognizes that 25 percent of the past-due benefits amount is $1,152.

   SSA can modify the amount of the fee under the terms of the agreement in a manner consistent with the party's request, but another party objected during the comment period.

   EXAMPLE: The claimant's Notice of Award shows past-due benefits as $5,000 and the amount of the fee under the approved fee agreement as $1,250. However, the fee agreement provided for a fee of the lesser of 20 percent of past-due benefits or $7,200. The claimant files a request for administrative review stating that the correct fee should be $1,000. The representative objects to the $1,000 fee during the comment period and states that a reasonable fee for services is $1,250.

   • •

     A party disagreed with the fee calculation but the correct amount of the fee under the agreement differs from the party's request.

   EXAMPLE: The representative files a request for administrative review, disagreeing with the fee calculation and asking for an increase in the fee. The reviewing official recognizes that the correct calculation of the fee amount under the approved fee agreement is less than the amount stated in the notice.

The statute restricts a decision maker's right to request administrative review to two situations. Therefore, for SSA to modify a fee authorized under a properly approved agreement based on a decision maker's request, the decision maker must establish one of the following:

• •

  The representative did not represent the claimant's interest adequately.

EXAMPLE: A representative delayed the claim(s) by making procedural errors or by repeatedly requesting extensions of time to submit readily available information or evidence.

• •

  The fee is clearly excessive in light of the services provided.

EXAMPLE ONE: The CR was about to issue a favorable determination when the FO received the claimant's recent appointment of representative and a fee agreement. The CR as decision maker approved the fee agreement but timely requested a reduction of the amount of the fee under the agreement after receiving a copy of the notice authorizing the fee. The decision maker stated in the request that the $7,200 fee resulting from the fee agreement was clearly excessive for the time it took the representative to interview the claimant, complete the appointment of representative and the fee agreement, and submit them. The reviewer concluded that the decision maker properly approved the agreement. The reviewer also agreed with the decision maker's statement. Therefore, the reviewer considers modifying the fee amount.

EXAMPLE TWO: The decision maker timely requested a reduction of the amount of the fee under the agreement after receiving a copy of the notice authorizing the fee. The decision maker stated “the fee was too high because SSA would have made a favorable determination even if the claimant had chosen to be unrepresented. Also, Administration employees would have provided the same services at no cost to the claimant.” The reviewer concluded that the decision maker properly approved the agreement. However, the reviewer considered the decision maker's rationale immaterial and did not find evidence of a clearly excessive fee for the services the representative provided. Therefore, the reviewer did not consider modifying the fee amount.

The claimant and representative have an unqualified right to request administrative review. SSA must modify a fee authorized under a properly approved agreement if the amount of the fee is unreasonable in light of the services provided. (GN 03960.050 explains the assessment.)

1. a. 

   An affected auxiliary beneficiary has an unqualified right to request administrative review. SSA must modify a fee authorized under a properly approved agreement if the total amount of the fee is unreasonable in light of the representative's services for the primary claimant and any affected auxiliary beneficiary(ies). (GN 03960.050 explains the assessment.)

2. b. 

   If the auxiliary beneficiary objected to sharing in payment of the fee under the agreement, the policy explained in GN 03920.035D. must be considered. (SSA does not modify a fee solely because an auxiliary beneficiary considers unfair the auxiliary's sharing in payment of the approved fee.)

   REFERENCE: Hopkins v. Cohen , 390 U.S. 530 (1968), reproduced as Social Security Ruling (SSR) 68-61c (C.E. 1968).

Handle notice as follows:

• •

  send written notice of the determination made on administrative review to the claimant, any affected auxiliary beneficiary(ies) not residing with the claimant, and the representative at their last known addresses;

• •

  send a copy of the notice to the decision maker; and

• •

  advise the parties that the determination is not subject to further review.

  REFERENCES:

  • •

    In title II cases, §206(a)(3)(C) of the Social Security Act, as amended

  • •

    In title XVI only, or concurrent titles II and XVI cases, §§1631(d)(2)(A) and§206(a)(3)(C) of the Social Security Act, as amended

See GN 03960.057B.3. for the procedure.

If a PC has jurisdiction for review, have the notice of determination signed by the official listed in GN 03960.070A.2.