HA 01120.009 Direct Payment of Fees to Representatives and Entities

A. Introduction

Direct payment means that the Social Security Administration (SSA) pays all or part of an authorized fee directly to the representative or an eligible entity based on a valid assignment. If SSA determines that a representative or entity is eligible to receive direct payments, SSA pays the fee from withheld past-due benefits. For additional information about assigning direct payment of fees, see Program Operations Manual System (POMS) GN 03920.021.

1. Representative Eligible to Receive Direct Fee Payment

A representative who is eligible to receive direct payment of a fee is:

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Either an attorney, or a non-attorney whom SSA has determined meets the requirements set forth in section 206(e) of the Social Security Act (Act); and
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Registered as a representative with the agency before the representative's appointment in the claim(s) or other matter(s). For further information about registration, see POMS GN 03913.000.

As discussed more fully in POMS GN 03920.018, eligible for direct payment non-attorney (EDPNA) representatives are non-attorney representatives who must apply for and maintain accreditation with SSA. EDPNAs must possess a bachelor's degree or equivalent qualifications, pass a written examination administered by SSA, secure professional liability insurance or the equivalent, undergo a criminal background check, and complete continuing education courses.

A representative who has been suspended or disqualified by SSA from serving as a representative becomes ineligible for direct payment, either permanently or for the duration of their suspension, as of the date of the final agency action on their suspension or disqualification.

NOTE:

Although a sanctioned individual is ineligible to receive direct payment as of the date of their suspension or disqualification, they may still file a fee petition for services provided before that date. In general, the payment of such a fee is a matter between the representative and the claimant. For further information, see POMS GN 03920.016.

2. Entity Eligible for Direct Payment

Per Hearings, Appeals, and Litigation Law (HALLEX) manual HA 01120.001 C, an individual representative may assign their right to direct payment of an authorized fee to an eligible entity. To receive direct payment through an assignment, an entity must:

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Have an Employer Identification Number (EIN),
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Be registered with SSA before a representative submits an assignment naming the entity as the assignee,
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Not be listed in the Ineligible for Direct Payment Entities List (IDPE) (see POMS GN 03920.052 for more information about the IDPE list),
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Designate and maintain an employee who is registered as a representative with SSA as a point of contact (POC) to speak and act on the entity's behalf, and
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Accept payment by electronic funds transfer.

For more information on the requirements for an entity to be eligible to receive direct payment by assignment see POMS GN 03920.021.

B. Direct Payment

SSA will directly pay an authorized fee to an eligible representative or an eligible entity with a valid assignment, to the extent possible, when:

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SSA effectuates a fully or partially favorable determination or decision (hereinafter “decision”);
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The claimant is, or was, represented by an eligible representative who did not waive the fee or direct payment of the fee; and
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The favorable decision results in past-due benefits.

SSA will not issue direct payment of authorized fees when:

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The favorable decision does not result in Title II or Title XVI past-due benefits;
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The record does not contain either a valid fee agreement submitted before the first favorable decision the representative worked towards achieving, a timely-filed fee petition, or a timely-filed statement of intent to file a fee petition (as defined in 20 CFR 404.1730(c) and 416.1530(c));
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SSA effectuates a favorable decision, and staff attempts to obtain necessary information from the representative(s) to enable direct payment is unsuccessful. See POMS GN 03930.090 for a discussion of staff responsibilities when SSA is withholding past-due benefits and no fee petition or authorization is received;
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No representative on the claim or other matter is eligible or registered for direct payment before SSA effectuates the favorable determination or decision;
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All representatives on the claim or other matter waived their fees or direct payment of their fees before SSA effectuates the favorable determination or decision;
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A third-party entity (not an affiliated entity) or individual agreed to pay the fees, and all representatives waived their right to collect a fee from the claimant and any affected auxiliary beneficiary or eligible spouse (see POMS GN 03920.010B for the policy on payment by a third-party entity); or
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At the time of effectuation, the representative is ineligible for direct payment because SSA has suspended or disqualified the representative, and the decision is final.

1. Fee Agreement Cases

The amount that SSA will certify for direct payment to a representative or to an eligible entity based on a valid assignment is the amount authorized as a result of the approved fee agreement, minus:

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The assessment imposed to cover administrative costs (see HALLEX HA 01120.009 B.3. below), and
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Any funds the claimant put into a trust or escrow account (see HALLEX HA 01120.008).

2. Fee Petition Cases

In fee petition cases, the amount that SSA will certify for direct payment to a representative or to an entity based on a valid assignment is the lesser of the authorized fee or 25 percent of the claimant and any auxiliary's past-due benefits, minus:

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The assessment (or “user fee”) imposed to cover administrative costs (see HALLEX HA 01120.009 B.3. below), and
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Any funds the claimant put into a trust or escrow account.

3. Assessment on Representatives

Sections 206(d) and 1631(d)(2) of the Act require SSA to charge an assessment (or “user fee”) to recover SSA's costs for determining and certifying representative fees. This user fee is set either at the lesser of 6.3 percent of the amount SSA certifies for direct payment to a representative or entity, or a flat rate that is adjusted based on annual cost-of-living adjustments. SSA generally collects the user fee imposed on the representative or entity by withholding it from the amount of the fee to be certified for payment to the representative or entity from a claimant's past-due benefits. This provision applies to fees SSA directly pays from Title II or Title XVI past-due benefits under both the fee agreement and fee petition processes, and to court-awarded fees that SSA directly pays from Title II or Title XVI past-due benefits. See POMS GN 03920.019 for current and past flat-rate dollar limits and other information on the user fee.

For favorably decided cases, SSA will:

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Deduct the user fee from the amount of the representative fee payable if SSA certifies direct payment to the representative or entity.

NOTE:

If the representative or entity established a trust or escrow account and SSA is notified of the amount in the account before making direct payment, the escrow amount is subtracted from the payable fee amount before the user fee is calculated.
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Pay the representative or entity the remainder (i.e., all or part of the payable fee amount, minus the user fee). In a fee agreement case, SSA will make direct payment immediately when all development is complete and the fee under the approved agreement can be set.
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Release excess withheld funds, if any, to any auxiliary beneficiary or eligible spouse except in a concurrent case when offset has not yet occurred or in a case with Federal court involvement.
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Advise the claimant that the representative cannot charge or collect the user fee from them.

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http://policy.ssa.gov/poms.nsf/lnx/2501120009

HA 01120.009 - Direct Payment of Fees to Representatives and Entities (I-1-2-9) - 12/09/2024
Batch run: 04/20/2025
Rev:12/09/2024