I-1-2-16.Fee Agreements — Subsequent Application Is Filed While Request for Review Is Pending at the Appeals Council

Last Update: 5/6/20 (Transmittal I-1-95)

A. Introduction

In some cases, a claimant may file a new application (subsequent application) while a request for review of a hearing decision in an earlier application (prior application) is pending at the Appeals Council (AC). This section addresses policy and procedure for cases in which the claimant is represented in connection with one or both applications and has entered into a fee agreement with one or more representatives in either the prior or the subsequent application, or both. Refer to Hearings, Appeals and Litigation Law (HALLEX) manual I-1-10 for instructions on when a subsequent application may be taken and processed while a prior application is pending review at the AC.

In this section, the term “application” (rather than “claim”) applies to each of the two pending actions. This usage reflects the policy stated below that, for purposes of determining a fee for representation, the Social Security Administration (SSA) considers the two applications to be parts of a single claim process. Accordingly, SSA will apply the fee agreement rules as if there were a single application or claim. See subsection C, below, for policy in applying the fee agreement rules.

B. Subsequent Application Process Description

1. Request for Review in Prior Application Pending at the AC

As described in HALLEX I-1-10-1 C., when a claimant is not precluded from filing a subsequent application while a request for review of a decision in a prior application is pending at the AC, the field office (FO) begins processing the subsequent application.

a. Subsequent Application Results in Favorable Initial or Reconsideration Determination

If the subsequent application results in a favorable initial or reconsideration determination, the FO or processing center (PC), as appropriate, effectuates the determination. In disability cases, after the disability determination services (DDS) adjudicates a case and makes a favorable determination, the effectuating component (i.e., the PC or FO):

  • sends a copy of the disability determination form, SSA-831, to the Office of Appellate Operations (OAO) in paper cases, or, in electronic cases, takes the necessary actions to create an automated electronic alert, before it effectuates payment;

  • adds a Special Message to the Master Beneficiary Record (MBR) to identify the claim as a subsequent application with the prior application pending at the AC, with or without representative fee involvement;

  • releases the award notice in the subsequent application; and

  • routes the folder to OAO (or notifies OAO that there is an electronic folder). (HALLEX I-1-10-30 describes the OAO process when a subsequent application is allowed at the initial or reconsideration level.)

If the AC, or an administrative law judge (ALJ) on remand from the AC, later issues a fully or partially favorable decision in the prior application, the AC or ALJ also may affirm or reopen the favorable determination in the subsequent application, depending on the circumstances in the case.

b. Subsequent Application Does Not Result in Favorable Initial or Reconsideration Determination

If the subsequent application does not result in a favorable initial or reconsideration determination and the claimant requests a hearing on the unfavorable determination, the Office of Hearings Operations (OHO) will not schedule a hearing or issue a decision until the AC acts on the request for review in the prior application. (Refer to HALLEX I-1-10-5 for OHO procedures.)

2. Commissioner's Decision on Prior Disability Application Is Pending in Federal Court

If the claimant files a new disability application while the Commissioner's final decision on a prior application is pending in federal court, a favorable decision issued at the hearing or AC levels cannot contain a disability onset earlier than the first day following the previously adjudicated period. If a favorable decision on a subsequent application under these circumstances is issued at the hearing or AC levels, the fee agreement filed with that application must be approved or disapproved. (See HALLEX I-2-8-16.)

C. Policy - Fee Agreements in Subsequent Application Cases

1. Cases This Policy Covers

The policy in this section applies to cases with the following profile:

  • A request for review of a hearing decision in a prior application is before the AC (based on a request for review of the hearing decision or remand from federal court) or the AC granted the request for review of the decision in the prior application and remanded the case to an ALJ for further action; or the AC reviewed the hearing decision on its own motion and the case is either pending before the AC or has been remanded to an ALJ;

  • The claimant filed a subsequent application; and

  • The claimant is represented in connection with one or both applications and has entered into a fee agreement with one or more representatives in the prior or subsequent application, or both.

2. Applying Fee Agreement Rules

When a case meets the profile in subsection C.1. above, SSA will apply all fee agreement rules as if there were only one claim pending. (Refer to HALLEX I-1-2-12 for fee agreement evaluation policy.)

  1. SSA will consider both applications to constitute one claim for purposes of approving or disapproving a fee agreement.

  2. When deciding whether exceptions to the fee agreement process apply, SSA will consider any representative appointed in connection with the prior or subsequent application to have been an appointed representative in the claim.

  3. SSA will approve no more than one fee agreement in the one claim and will authorize a maximum fee not to exceed the lesser of 25 percent of past-due benefits or the specified dollar amount established pursuant to section 206(a)(2)(A)(ii)(II) of the Social Security Act (Act) (or a lesser cap specified in the fee agreement) for representative services provided in both applications (unless the fee is increased on administrative review).

  4. A representative who is dissatisfied with the fee authorized in a prior/subsequent application case may request administrative review. In such a case, SSA will find good cause for the late filing of a request for administrative review when either of the following situations exists:

    In non-court cases

  5. SSA authorized an amount equal to the statutory cap (or a lesser cap specified in the agreement) in connection with the subsequent application;

  6. SSA issued a favorable decision on the prior application that yields additional past-due benefits; and

  7. a party to the agreement requests administrative review within 15 days of receiving the notice SSA issued when implementing the decision on the prior application.

    In court cases

  8. SSA authorized an amount less than or equal to the statutory cap (or a lesser cap specified in the agreement) in connection with the subsequent application;

  9. a federal court issued a favorable decision on the prior application that yields additional past-due benefits; and

  10. a party to the agreement requests administrative review within 15 days of receiving the award notice SSA issued when implementing the decision on the prior application.

    NOTE 1:

    A representative has the right to request administrative review in connection with any initial fee authorization. When a representative is authorized a fee amount that is less than the statutory cap (or a lower cap specified in the fee agreement) because 25 percent of the claimant's and any auxiliary beneficiary's(ies') past-due benefits is less than the statutory or specified cap, and SSA issues a more favorable decision at a later date that could yield an additional fee to the representative, the representative has another opportunity to file a timely request for administrative review of the authorized fee amount.

    NOTE 2:

    The decision maker who issues the second favorable administrative action (i.e., the decision on the prior application) will process the request for administrative review of the authorized fee unless the only fee agreement submitted was in connection with the subsequent application. In that situation, the fee agreement decision maker for the subsequent application is the authorized fee reviewing official.

    NOTE 3:

    When a federal court issues a decision on the prior application that is more favorable than the decision SSA issued on the subsequent application and, after the court issues its decision, the representative requests administrative review of the fee SSA authorized based on the fee agreement approved in connection with the subsequent application, OAO staff reviews the fee.

  11. If the fee agreement includes a provision (i.e., two-tiered fee agreement) that the representative will not accept the statutory cap if the claimant files a subsequent application, the decision maker will disapprove the fee agreement.

If SSA disapproves a fee agreement and neither the claimant nor the representative requests review of the determination or the disapproval determination was affirmed on administrative review request, any representative appointed in the prior or subsequent application, who wishes to charge and collect a fee, must file a fee petition.

3. Documenting Appointment of a Representative and a Fee Agreement in the Subsequent Application

a. Claimant Represented in the Subsequent Application

If a claimant is represented in the subsequent application, SSA must document the representation.

  • If the claimant appoints the same representative as in the prior application, SSA will document the file with a new appointment of representative (form SSA-1696-U4 “Appointment of Representative” or equivalent statement) or a copy of the appointment of representative submitted in the prior application, if any, signed and currently dated by the claimant and/or representative to indicate that the representation is continuing.

  • If the claimant appoints a different representative or a representative for the first time, SSA will document the file with a new appointment of representative. In addition, SSA will inquire about any prior representation and document the subsequent application file accordingly.

SSA will accept the fee agreement filed with the subsequent application. SSA will include a photocopy of a fee agreement filed in the prior application along with the new fee agreement in both folders (refer to HALLEX I-1-2-12 A.2.).

b. Claimant Not Represented

If SSA does not receive an annotated copy of a previous appointment or a new appointment, SSA will presume that the claimant is not represented in the subsequent application.

Therefore, SSA will NOT:

  • notify any representative, including any representative appointed in the prior application, of any decision made in the subsequent application;

  • withhold any past-due benefits based on the subsequent application; or

  • authorize a fee to any representative, including any representative appointed in the prior application, for work on the subsequent application.

4. Approving or Disapproving a Fee Agreement When Making a Favorable Determination in the Subsequent Application

The FO or PC decision maker will approve or disapprove a fee agreement when SSA makes a favorable initial or reconsideration determination on the subsequent application, if the fee agreement was filed during the subsequent application process. The decision maker will approve or disapprove the fee agreement based on whether it:

  • meets the statutory conditions for approval (refer to HALLEX I-1-2-12 A); and

  • is or is not excepted from the fee agreement process (refer to HALLEX I-1-2-12 B). When deciding whether any exceptions to the fee agreement process apply, SSA will consider any representative appointed in the prior or the subsequent application to be an appointed representative in the claim.

The FO or PC decision maker will take no action on a fee agreement filed only in connection with the prior application. For more information, see Program Operations Manual System (POMS) GN 03940.038C.4.

5. Decision Maker Responsibilities Regarding Fee Agreement Approval or Disapproval

a. Decision Maker Issues Favorable Decision in Prior Application

Because SSA considers the prior and subsequent applications to be one claim for purposes of authorizing a fee for representation services under the fee agreement process, SSA will approve no more than one fee agreement. Therefore, SSA must consider any appointment(s) of representative and any fee agreement(s) filed in both the prior and subsequent application(s) to arrive at one overall fee agreement action.

If an Office of Hearings Operations (OHO) or AC decision maker issues a favorable decision in a prior application after SSA has issued a favorable determination in a subsequent application, the decision maker who issues the decision in the prior application is responsible for ensuring that the correct action is taken on the fee agreement(s) in the claim (i.e., both the prior and subsequent applications). See HALLEX I-1-2-6 B.1. and C.1.

In these situations, the OHO or AC decision maker will:

  • Consolidate information about representation and any fee agreement(s) the parties filed in the prior and subsequent applications.

  • Determine whether the decision maker must act on any fee agreement filed in the prior application, considering the determination in the subsequent application and the approval or disapproval of a fee agreement filed in the subsequent application (if applicable).

  • Rescind any approval of the fee agreement SSA issued in connection with the subsequent application, if the OHO or AC decision maker determines that the approval action was incorrect. Refer to the sample rescission language in HALLEX I-1-2-119.

    NOTE 1:

    The rescission should not be referred back to the original decision maker on the subsequent fee agreement.

  • If necessary, approve or disapprove the fee agreement(s).

    NOTE 2:

    In determining whether the fee agreement is excepted from the fee agreement process, the decision maker will consider any representative appointed in connection with the prior or the subsequent application to have been an appointed representative in the claim.

For more detailed guidance concerning OHO and AC decision maker actions in specific situations, see subsection D, below.

b. OHO or AC Decision Maker Does Not Issue a Favorable Decision in Prior Application

If an OHO or AC decision maker issues an unfavorable decision in a prior application or does not issue a decision, the OHO or AC decision maker will not act on a fee agreement or review any action the decision maker in the subsequent application took on a fee agreement.

For AC decisions after court remands, see HALLEX I-4-7-1.

6. Jurisdiction to Authorize Fees Under the Fee Petition Process if Fee Agreement Is Disapproved

a. Representative Appointed in Prior Application

If SSA disapproves a fee agreement and the representative(s) (appointed in connection with only the prior application or the prior and subsequent applications) later requests a fee through the fee petition process, the component that took the last action on the prior application will evaluate any fee petition(s) and authorize a fee(s). If the FO or PC decision maker disapproves the fee agreement in connection with the subsequent application while the prior application is pending at the AC, the FO or PC will advise the representative to file the fee petition with OAO staff when the representative has completed the representative's services.

b. Representative Appointed Only in Subsequent Application

If the FO or PC disapproved the fee agreement or the FO or PC fee agreement approval is rescinded, and the representative was appointed only in the subsequent application, the appropriate reviewer in the PC will evaluate that representative's fee petition and authorize that representative's fee.

D. Policy Applied to Specific Situations

These guidelines are for OHO and AC decision makers to follow when acting on a fee agreement in the situations described below.

In all of the following scenarios, these assumptions apply:

  • a favorable decision is issued at the hearing or AC level in the prior application after the FO or PC issued a favorable determination in the subsequent application;

  • if SSA received a fee agreement with the subsequent application, the FO or PC decision maker acted on the fee agreement (either approved or disapproved it); and

  • the decision maker's action on the fee agreement in the subsequent application was correct based on information known to that decision maker (i.e., considering the provisions of that fee agreement and the information about representation in the subsequent application file).

1. OHO or AC Decision Maker Reopens Determination in Subsequent Application and Issues Favorable Decision

When an OHO or AC decision maker reopens the favorable determination in the subsequent application, any approval of a fee agreement based on that favorable determination is vacated (see HALLEX I-1-2-11). If an OHO or AC decision maker issues a favorable decision after reopening the favorable determination in the subsequent application, the decision maker who issues the favorable decision will approve or disapprove the latest-dated fee agreement filed in connection with either application, from each representative (whether or not the decision maker in the subsequent application previously acted on it). Because the AC or hearing decision supplants the favorable determination in the subsequent application, the OHO or AC decision maker is the sole decision maker in the claim for purposes of approving or disapproving the fee agreement. When deciding whether any exceptions to the fee agreement process apply, the decision maker will consider any representative appointed in the prior or the subsequent application to have been an appointed representative in the claim.

2. Decision Maker in Subsequent Application Approved Fee Agreement - OHO or AC Issues a Favorable Decision on Prior Application - OHO or AC Does Not Reopen Determination in Subsequent Application

If an OHO or AC decision maker issues a favorable decision in the prior application without reopening the determination in the subsequent application, the OHO or AC decision maker will review any fee agreement approval issued in connection with the subsequent application to determine whether it is still correct, considering the information regarding representation in both the prior and subsequent application files.

a. Same Representative(s) in Both Applications

The OHO or AC decision maker will take no action on the fee agreement if:

  • the claimant appointed the same representative(s) who signed the fee agreement approved in the subsequent application, to represent the claimant in the prior application; and

  • the claimant appointed no other representative(s) in the prior application.

NOTE:

The fee authorized for services in both applications stems from the fee agreement approved in the subsequent application. No further action on the fee agreement is necessary.

b. Different Representatives in Prior and Subsequent Applications

If the AC plans to act favorably in the prior application or to remand the prior application, it generally reviews the evidence in the subsequent application file (see HALLEX I-1-10-20, I-1-10-25 and I-1-10-30). The decision maker is then in a position to evaluate information regarding representation in both the prior and subsequent applications. If at least one representative appointed in connection with the prior application did not sign the fee agreement approved in the subsequent application, the decision maker will:

  • rescind the previous approval of the fee agreement in the subsequent application; and

  • disapprove any fee agreement filed in connection with the subsequent application, and if applicable, disapprove any fee agreement filed in connection with the prior application. Refer to HALLEX I-1-2-119 for sample rescission and disapproval language.

EXCEPTION:

If the representative who did not sign the fee agreement approved in the subsequent application later waived charging and collecting a fee, and there is no other basis for rescission, the OHO or AC decision maker will take no action on the fee agreement.

When approving or disapproving the fee agreement, the OHO or AC decision maker must consider whether the agreement meets the statutory requirements before disapproving the fee agreement solely on the grounds that an exception applies. If the OHO or AC decision maker disapproves a fee agreement in this scenario, the following order of priority determines the order for listing the bases for disapproval, if there is more than one:

  • The fee agreement does not meet one of the statutory criteria for approval (e.g., provides for a fee that exceeds the lesser of 25 percent of past-due benefits or $7,200).

  • One or more of the “multiple representative” exceptions apply:

  • the representatives appointed in the prior and subsequent applications all did not sign a single fee agreement or waive their right to charge or collect a fee (refer to HALLEX I-1-2-12 B.1.); or

  • the claimant discharged a representative or a representative withdrew in either the prior or subsequent application and the former representative did not waive the right to charge or collect a fee (refer to HALLEX I-1-2-12 B.3.).

NOTE:

If, considering all representatives appointed in the prior and the subsequent applications, one of the “multiple representative” exceptions to the fee agreement process applies, SSA may not use the fee agreement process to authorize fees to any representative in the claim. In this situation, all representatives, including any representative whose fee agreement was previously approved, must file a fee petition to obtain authorization to charge and collect a fee. Therefore, if the information in the prior application file that indicates that a fee agreement should be excepted was not known to the decision maker in the subsequent application, and that decision maker approved a fee agreement, rescission of the approval and then disapproval of the fee agreement is necessary.

3. Decision Maker in Subsequent Application Correctly Disapproved Fee Agreement - OHO or AC Issues a Favorable Decision - OHO or AC Does Not Reopen Determination in Subsequent Application

If an OHO or AC decision maker issues a favorable decision in the prior application without reopening the determination in the subsequent application, the OHO or AC decision maker will review any fee agreement disapproval in the subsequent application to determine whether the decision maker must take additional action on the fee agreement in the prior application.

a. Same Representative(s) in Both Applications

The OHO or AC decision maker will take no action on the fee agreement if the claimant appointed the same representative(s) in both applications and no other representative in the prior application. In this situation, the representative already has received notice of the determination on the fee agreement.

b. Different Representatives in Prior and Subsequent Applications

The OHO or AC decision maker will disapprove any fee agreement filed in the prior application if the representative(s) appointed in the prior application did not sign the fee agreement disapproved in the subsequent application. (See subsection D.2.b., above, for the basis for disapproval.) The decision maker will notify the representative(s) in the prior application of the disposition of the fee agreement and of the right to file a fee petition to request fee authorization.

4. No Fee Agreement in Subsequent Application - OHO or AC Issues a Favorable Decision; OHO or AC Does Not Reopen Determination in Subsequent Application

If an OHO or AC decision maker issues a favorable decision in the prior application without reopening the determination in the subsequent application, and there was no fee agreement submitted in connection with the subsequent application, the OHO or AC decision maker will approve or disapprove the fee agreement filed in connection with the prior application. When deciding whether any exceptions to the fee agreement process apply, the decision maker will consider any representative appointed in connection with the prior or the subsequent application to have been an appointed representative in the claim.

NOTE:

In this scenario, OHO or AC is responsible for approving or disapproving the fee agreement and notifying the parties. Although there was no fee agreement in the subsequent application, the OHO or AC decision maker must consider whether a representative was appointed in the subsequent application and, if so, whether that representative is a signatory to any fee agreement filed in the prior application.

5. Two-tiered Fee Agreement

An OHO or AC decision maker evaluates a two-tiered fee agreement (see HALLEX I-1-2-15) like any other fee agreement in the situations described in subsections D.1. through D.4., above. When these circumstances require the OHO or AC decision maker:

  • not to act on the fee agreement (e.g., claimant had same representative(s) in connection with the subsequent and prior applications and AC does not reopen the determination on the subsequent application), the OHO or AC decision maker also will not rescind the previous approval or disapproval of the two-tiered fee agreement; or

  • to act on the agreement, the OHO or AC decision maker will disapprove the fee agreement if the decision maker is rendering a decision at any stage of the process at which the agreement, by its own terms, no longer applies.

In such a situation, it is possible that a two-tiered fee agreement approved in the subsequent application may not provide, at the level of OHO or AC review, for a fee not to exceed the lesser of 25 percent of past-due benefits or $7,200 (or other specified dollar amount pursuant to the Act) (see HALLEX I-1-2-15). If so, the decision maker will identify that as the first basis for disapproving the fee agreement and, if the claimant had different representatives in the prior and subsequent applications, the decision maker will identify the exception as the second basis for disapproval. Refer to the examples in subsection G, below.

E. Procedure - DDS Allows a Subsequent Application

If the DDS allows a subsequent application, the FO either sends OAO a copy of form SSA-831 completed in the case or an electronic alert is sent to the Appeals Review Processing System (ARPS) record, as described in HALLEX I-1-10-30.

F. Procedure - OHO or OAO Support Staff Actions on Fee Agreement in Prior Application

The support staff:

  • reviews the appointment(s) of representative, fee agreement(s), and fee agreement approval or disapproval in both the prior and subsequent application files;

  • considers the policy in subsection C, above, and the policy applied to specific situations in subsection D, above;

  • makes a recommendation on the fee agreement submitted in connection with the prior and/or subsequent application(s), as necessary; and

  • prepares an order(s) to rescind any prior free agreement approval, if warranted, and to approve or disapprove the fee agreement(s), as necessary.

1. OHO or AC Decision Maker to Take No Action on the Fee Agreement

OHO or OAO support staff prepares section I of the recommendation form at HALLEX I-1-2-117 for the OHO or AC decision maker, stating why no action is needed on the fee agreement in the prior application. The preparer of the form will add the form to the file.

2. OHO or AC Decision Maker to Approve or Disapprove Fee Agreement - Favorable Determination in Subsequent Application Not Reopened

OHO and OAO support staff follow the order preparation and file routing and release instructions in HALLEX I-1-2-25. OHO and OAO support staff prepare forms as follows:

  • OAO staff substitutes the recommendation form in HALLEX I-1-2-117 for the standard recommendation form in HALLEX I-1-2-104.

  • If the OHO or AC decision maker must only disapprove a fee agreement, the OHO or OAO staff prepares the order at HALLEX I-1-2-118.

  • If the OHO or AC decision maker must rescind the approval or disapproval of a fee agreement submitted in connection with the subsequent application, and disapprove the fee agreement, OHO or OAO staff prepares the order at HALLEX I-1-2-119.

3. OHO or AC Decision Maker to Approve or Disapprove the Fee Agreement; Favorable Determination in Subsequent Application Reopened

OHO and OAO support staff follow the order preparation and file routing and release instructions in HALLEX I-1-2-25. OHO and OAO support staff prepare forms as follows:

  • OAO staff substitutes the recommendation form in HALLEX I-1-2-117 for the standard recommendation form in HALLEX I-1-2-104;

  • OHO or OAO staff prepares the order at HALLEX I-1-2-120 if the OHO or AC decision maker approves the fee agreement, or at HALLEX I-1-2-121 if the OHO or AC decision maker disapproves the fee agreement.

G. Examples

The following examples of OHO or AC decision maker action on a fee agreement illustrate the application of the policy statements in this section.

1. Fee Agreement Approved in Subsequent Application - Same Representative Filed the Same Fee Agreement in Prior Application - Determination in Subsequent Application Not Reopened

  • In filing a subsequent application in July 2023, the claimant indicates that the claimant is represented by attorney Kirk of the firm of Kirk, Spock and McCoy, P.C., in a request for review pending before the AC. The claimant and Representative Kirk entered into a fee agreement on July 1, 2023, providing that:

  • The fee will not exceed the lesser of 25 percent of past-due benefits or $7,200, if SSA favorably decides the claim(s) at or before the level of the first ALJ hearing decision in the case; and

  • the fee will equal 25 percent of past-due benefits if the claim progresses beyond that level of the administrative appeals process.

  • The FO adjudicator determines that the claimant also wishes Representative Kirk to represent the claimant in the subsequent application and obtains copies of the appointment and fee agreement, annotated to indicate that Representative Kirk also represents the claimant in the subsequent application.

  • When making a favorable initial determination on the subsequent application, the FO adjudicator approves the fee agreement between the claimant and Representative Kirk. (At the initial determination level, the first “tier” in the fee agreement applied.)

  • The PC calculates that the past-due benefits resulting from the favorable decision in the subsequent application were $12,000. Based on the approved fee agreement, the PC releases a notice authorizing a fee of $3,000 to Representative Kirk, and directly pays Representative Kirk that amount less the applicable user fee.

  • In the prior application pending at the AC, the claimant also had appointed Representative Kirk, and had entered into a fee agreement on April 2, 2021, with the same terms as those in the agreement approved in the subsequent application, except that the fee cap was then $6,000.

  • The AC issues a favorable decision in the prior application, affirming the findings in the determination on the subsequent application and further finding an earlier date of onset.

  • The “A Member” administrative appeals judge (AAJ) reviews the appointments of representative and the fee agreement approval in the subsequent application.

  • Because the fee agreement with Representative Kirk has already been approved, and there is no other appointed representative in the claim, the AAJ takes no action on the fee agreement.

NOTE:

The AAJ does not evaluate the fee agreement under the second “tier,” because SSA reached a favorable determination under the first. See subsection D.5., above.

  • The PC calculates that the additional past-due benefits resulting from the AC's favorable decision are $20,000. Based on the fee agreement approved in the subsequent application, the PC sends notice authorizing an additional fee of $4,200 ($7,200 less the $3,000 previously authorized), and directly pays Representative Kirk that amount (less the applicable user fee).

  • If any party requests administrative review of the amount of the fee based on the notice released in the prior application, the Attorney Fee Officer, as the reviewing official, will consider the amount of fees authorized in both the prior and subsequent applications in determining an overall fee for services throughout the entire claims process.

2. Fee Agreement Approved in Subsequent Application - Different Representative Was Appointed in Prior Application - Determination in Subsequent Application Not Reopened

  • In the subsequent application, the claimant appoints attorney Kirk of the firm of Kirk, Spock and McCoy, P.C. The claimant and Representative Kirk entered into a fee agreement on July 1, 2023, specifying a fee not to exceed the lesser of 25 percent of past-due benefits or $7,200.

  • The FO approves the fee agreement between the claimant and Representative Kirk when making a favorable determination on the subsequent application.

  • The PC calculates that the title II past-due benefits resulting from the favorable determination in the subsequent application are $18,000. Based on the approved fee agreement, the PC releases a notice authorizing a fee of $4,500 to Representative Kirk, and directly pays Representative Kirk that amount less the applicable user fee.

  • In the prior application on review at the AC, the claimant had appointed Representative Kirk and had also appointed attorney Spock of the same firm. The claimant and Representatives Kirk and Spock had entered into a fee agreement on April 1, 2007, providing that:

    1. the fee will not exceed the lesser of 25 percent of past-due benefits or $4,000 if SSA favorably decides the claim(s) at or before the level of the first ALJ hearing decision in the case; and

    2. the fee will be equal to 25 percent of past-due benefits if the claim progresses beyond that level of the administrative appeals process.

      Neither the previous appointment nor the previous fee agreement had been made available to the decision maker in the FO.

      • The AC issues a favorable decision in the prior application, affirming the findings in the determination on the subsequent application and further finding an earlier date of onset.

      • The “A Member” AAJ reviews the appointments of representative in both the prior and subsequent applications and the fee agreement approval in the subsequent application. The AAJ notes that an exception applies, because the claimant appointed an attorney (Representative Spock) who did not sign the fee agreement in the subsequent application. Therefore, the fee agreement approval must be rescinded and the agreement disapproved.

      • The AAJ:

    3. Issues an order to Representative Kirk rescinding the fee agreement approval the FO issued (in connection with the subsequent application and the fee agreement dated July 1, 2017) and disapproving that fee agreement. The basis for the disapproval is that an exception applies: the claimant appointed more than one representative, all representatives did not sign a single fee agreement, and the representative who did not sign the fee agreement did not waive charging and collecting a fee.

    4. Issues an order to Representatives Kirk and Spock disapproving the fee agreement submitted in connection with the prior application. Because the second “tier” of the agreement provides for a fee that exceeds the statutory limits at the level of AC review, the first basis for the disapproval is that it specifies a fee that is not limited to the lesser of 25 percent of past-due benefits or $7,200. The second basis is that an exception applies: the claimant appointed more than one representative; not all representatives signed a single fee agreement; and the representative who did not sign the fee agreement did not waive charging and collecting a fee.

      • The AAJ's orders notify Representatives Kirk and Spock that they must send their fee petitions to OAO staff in order to charge and collect fees.

      • The PC notifies Representative Kirk that the fee based on the incorrectly approved fee agreement is no longer the authorized fee. However, Representative Kirk's fee petition may include services performed in connection with both applications.

      • The PC calculates that the additional title II past-due benefits resulting from the AC's favorable decision are $30,000. The PC recalculates the past-due benefits under the rules for “Partially Favorable Decisions — Decision More Favorable on Appeal” in POMS GN 03920.030B and withholds the appropriate amount.

      • After Representatives Kirk and Spock file fee petitions, OAO staff authorizes reasonable fees based on the attorneys' services.

      • Based on the authorizations, the PC determines 1) whether Representative Kirk is owed any additional direct payment from withheld title II past-due benefits, considering the previous authorization of $4,500, or whether Representative Kirk owes money back (i.e., if the authorization on the fee petition was for less than $4,500), and 2) how much, if any, to pay to Representative Spock from withheld title II past-due benefits.