I-1-2-47.Administrative Review of the Amount of the Fee Under the Fee Agreement — Procedures for Determining Fee Amount

Last Update: 1/28/03 (Transmittal I-1-44)

A. Consider the Authorized Fee Amount

1. Did SSA Determine the Fee Amount Correctly Under the Fee Agreement

If necessary, consider whether the Social Security Administration (SSA) correctly determined the amount of the fee under the agreement. Determine whether the approved fee agreement includes a provision for a fee other than the lesser of 25 percent of past-due benefits or $6,000, or whether there is an arithmetic error in SSA's computation.

  • The reviewing official will recalculate, or request the processing center (PC) or field office (FO) to recalculate, the amount of the fee when:

    • a party disagrees with the calculation; or

    • there appears to be an error considering the $6,000 limit, the percentage specified in the agreement, and/or any other terms in the fee agreement.

  • The claim(s) file(s) should contain the payment history and fee amount worksheets when the reviewing official receives it. If these documents are not in the file and the reviewing official believes a recalculation or confirmation of the amounts determined is necessary, he/she will refer the file(s) to the appropriate component (PC or FO) and ask for a recalculation or confirmation and a brief narrative explanation.

NOTE:

Refer to I-1-2-7 for information on past-due benefits. Diary the case for 30 days.

2. SSA Correctly Determined Fee

Proceed to 4. below.

3. SSA Incorrectly Determined Fee

If SSA incorrectly determined the fee, then:

  • correctly determine the fee under the terms of the agreement;

  • notify all parties of that corrected fee amount;

  • provide the parties 15 days to comment; and

  • if the amount of the fee can be modified in a manner consistent with the party's request, and no party objects during the comment period, modify the amount of the fee without evaluating the representative's services and circumstances, as set out below; and proceed to I-1-2-48 for notice procedures.

    Example:

    The fee agreement provided for a fee of the lesser of 25 percent or $6,000 and further stated that, if SSA favorably decided the claim below the Appeals Council level, the fee would not exceed $1,000. SSA favorably decided the claim on the claimant's request for hearing. SSA set a fee of $1,500, which was 25 percent of past-due benefits. The claimant timely filed a request for administrative review, stating that she owes no more than $1,000. The representative did not comment on the request for administrative review. The reviewing official notifies the parties that the correct fee under the terms of the agreement is $1,000.

4. Factors for Assessing Whether the Fee Determined Under the Fee Agreement is Reasonable

Consider the following factors to assess whether the fee determined under the fee agreement process is reasonable and to decide whether to affirm or modify a fee and, if so, to what extent:

  • The expectation of the parties when they entered into the fee agreement, as expressed in the written agreement filed with SSA.

  • For title XVI cases, the purpose of the supplemental security income program (i.e., to assure a minimum level of income for recipients who otherwise do not have sufficient income and resources to maintain a standard of living at the established Federal minimum income level).

  • For title II cases, the purpose of the program (i.e., to provide a measure of economic security for program beneficiaries).

  • The type and extent of services the representative provided.

  • The results the representative achieved or did not achieve.

  • The amount the representative requested for his/her services, including any amount authorized or requested before, but not including the amount of any expenses incurred.

  • The administrative review level at which the claimant retained the representative and the level to which the representative took the claim.

  • The complexity of the case based on the work or documentation needed to resolve the issues.

  • The level of skill and competence required of the representative in providing the services.

  • The amount of time the representative spent on the case.

NOTE:

If a State or other governmental entity pays a fee to a representative for representing a claimant for benefits under title XVI of the Social Security Act, the State-paid fee is payment or partial payment of the total fee SSA authorizes for services the representative renders. The reviewing official must consider the amount of any State-paid fee as included in the total fee he/she authorizes on review.

B. Develop Explanation of Services and Time Spent

1. Contact with Representative

If the reviewing official expects to assess whether the fee determined under the fee agreement is reasonable, ask the representative to:

  • submit a written explanation detailing his/her services and the amount of time spent on the case, if he/she has not already done so, and

    NOTE:

    The representative may use a Form SSA-1560-U4 (Petition to Obtain Approval of a Fee for Representing a Claimant before the Social Security Administration) for this purpose.

  • send copies of the written explanation to the other parties.

The reviewing official will send a copy of the request for an explanation of services to the other parties.

Refer to I-1-2-110 for sample letters.

2. Concurrent Titles II and XVI Claims Involving a Common Issue and Representative's Services Led to a Favorable Decision in Both Programs

In these cases the reviewing official will ask the representative for an explanation that addresses services in connection with both the titles II and XVI claims (i.e., services that were unique to one as well as services that are common to both). (See Social Security Ruling SSR 83-27.)

NOTE:

In these cases, the reviewing official must inform the parties that he/she will review the total fee under the fee agreement and consider the services the representative provided in connection with both claims.

3. Distribution of Representative's Explanation and Opportunity to Respond

The reviewing official must ensure that all parties received copies of the representative's explanation and afford them the opportunity to submit written comments within 15 days of receipt of that communication.

C. Consider Whether the Fee is Reasonable

Because the factors the reviewing official considers are qualitative as well as quantitative, he/she will use the factors shown in A.4. to first determine the range within which a fee would be considered reasonable.

1. Affirm the Fee Amount

The reviewing official will affirm the fee amount if he/she determines that the fee originally determined under the fee agreement process, or subsequently determined under A.1. above, is reasonable for the services provided.

Example:

The Administrative Law Judge (ALJ) concludes that a reasonable fee for the case would be $3,000. The fee originally determined under the fee agreement process is $3,000, and there has been no change in the amount of the past-due benefits or past-due benefits payable. The ALJ affirms the fee amount.

2. Modify the Fee Amount

The reviewing official will modify the fee if he/she determines that the fee originally determined under the fee agreement process, or subsequently determined under B. above, is not reasonable for the services provided. He/she must determine a reasonable fee based on evaluation of the factors listed in A.

Examples:

  1. The fee authorized under the fee agreement process is $6,000. The claimant timely requests that the ALJ lower the representative's fee. The ALJ concludes that a reasonable fee for the representative's services is $3,800. The ALJ must decrease the amount of the fee to $3,800.

  2. The ALJ concludes that a reasonable fee for the case would be $6,300. The fee originally determined under the fee agreement process is $6,000. The ALJ modified the fee amount to $6,300.

  3. The claimant's past-due benefits are $800 because of his receipt of workers' compensation benefits. The fee determined under the fee agreement process is $200. The representative timely requested administrative review, stating that the $200 fee is unreasonable compensation for the services she performed. The claimant did not respond to the notice of the request for administrative review. The ALJ concludes, considering the factors contained in A. above, that a reasonable fee for the representative's services would be $1,200. The ALJ modified the originally determined fee to $1,200.

  4. The fee originally determined under the fee agreement process was $6,000. The claimant timely requested administrative review, stating that 25 percent of his past-due benefits payable was $2,250. SSA had revised its determination of the past-due benefits payable because his receipt of workers' compensation required a reduction; however, the reduction occurred immediately after release of the notice of the fee amount. The representative responded to the notice of the request for administrative review, stating that $6,000 was an entirely reasonable fee for his services. The Attorney Fee Officer concluded, considering the factors contained in A. above, that a reasonable fee for the representative's service would be $2,800. The Attorney Fee Officer modified the originally determined fee, based on the most recent past-due benefits computation, to $2,800.

NOTE:

Increases and decreases in the amount of past-due benefits or past-due benefits payable after SSA has authorized a fee usually do not affect the amount of the fee under the fee agreement process. However, if a party requests administrative review, SSA determines the fee under the fee agreement process using the most recently calculated past-due benefits amount, when it notifies the parties of the amount of the fee after administrative review.