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

Last Update: 12/9/24 (Transmittal I-1-108)

A. Consider the Authorized Fee Amount

1. Did the Social Security Administration (SSA) Determine the Fee Amount Correctly Under the Fee Agreement?

a. Initial Considerations

Determine whether the approved fee agreement includes a provision for a fee other than the lesser of 25 percent of past-due benefits or the current statutory fee cap as shown in Hearings, Appeals and Litigation Law (HALLEX) manual I-1-2-12 A.3, or whether there is an arithmetic error in the fee computation. See HALLEX I-1-2-7 for information on past-due benefits.

Request the processing center or field office to recalculate or confirm the amount of the fee and provide a brief narrative explanation when:

  • A party disagrees with the calculation; or

  • There appears to be an error considering the statutory fee cap, the percentage specified in the agreement, or any other terms in the fee agreement.

Diary the case for 30 days.

b. SSA Correctly Determined Fee

If SSA correctly determined the fee amount, proceed with the review.

c. SSA Incorrectly Determined Fee

If SSA incorrectly determined the fee:

  • Determine the correct fee under the terms of the agreement;

  • Notify all parties of the 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 in HALLEX I-1-2-47 B and C, below, and provide notice to the parties. See HALLEX I-1-2-48 for notice procedures.

Example:

The fee agreement provided for a fee of the lesser of 25 percent or the current statutory fee cap and further stated that, if SSA favorably decided the claim below the Appeals Council level, the fee would not exceed the lesser of 25 percent or $1,000. SSA favorably decided the claim at the hearing level without appealing to the Appeals Council. 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 the claimant owes no more than $1,000. The representative did not comment on the request for administrative review. The reviewing official should notify the parties that the correct fee under the terms of the agreement is $1,000.

2. Has SSA Authorized the Total Fee under the Fee Agreement?

a. Evaluation Considerations

The reviewing official must consider the total fee for all services when reviewing a request for administrative review of the authorized fee.

  • Concurrent Claims Involving a Common Issue

    In concurrent claims involving a common issue (e.g., disability in the same time period), consider the total fee amount based on the past-due benefits resulting from both the Title II claim and the Title XVI claim.

  • Title II Claims Involving One or More Auxiliary Beneficiaries

    In Title II claims involving one or more auxiliary beneficiaries, consider the total fee amount based on the past-due benefits of the primary claimant and any auxiliary beneficiary.

    Exceptions:

    Do not consider the past-due benefits of an auxiliary beneficiary in either of the following situations:

    • If an auxiliary beneficiary did not file an application for benefits until after the primary claimant's favorable decision, and the claimant did not mention the auxiliary beneficiary in the claimant's application, SSA will not attribute the past-due benefits of the auxiliary beneficiary to the services provided by the primary claimant's representative.

    • If an auxiliary beneficiary appointed a different representative, SSA will not use the individually represented auxiliary beneficiary's past-due benefits to authorize a fee for the primary claimant's representative.

    For more information, see POMS GN 03920.035B.

  • Title XVI Claims Involving an Eligible Spouse

    In Title XVI claims involving an eligible spouse, consider the fee amount based on the past-due benefits of the claimant and the claimant's spouse if the spouse's supplemental security income (SSI) benefits increased as a result of the claimant's eligibility or the spouse became eligible for SSI as a result of the claimant's eligibility.

    Exception:

    Do not consider the past-due benefits of the eligible spouse if the eligible spouse appointed a different representative. SSA will not use the individually represented spouse's past-due benefits to authorize a fee for the claimant's representative(s).

    For more information, see POMS GN 03920.036.

b. SSA Has Authorized the Total Fee under the Fee Agreement

If SSA has authorized the total fee under the fee agreement, continue with the review.

c. SSA Has Not Authorized the Total Fee under the Fee Agreement

If SSA has not authorized the total fee under the fee agreement, defer conducting the review until receiving notice of the outstanding fee amount(s). See HALLEX I-1-2-46 B.3 for development instructions.

B. Develop Explanation of Services and Time Spent

1. Contact with Representative

If you expect to assess whether the fee authorized under the fee agreement is reasonable, ask the representative to submit a written explanation detailing the representative's services and the amount of time spent on the case, if the representative has not already done so. Staff will use the appropriate correspondence template in the Fee Action Tracking System (FAcTS), Hearings and Appeals Case Processing System (HACPS), or the Office of Appellate Operations Case Processing System (OAOCPS) and the samples in HALLEX I-1-2-110 as needed.

Send a copy of the request for an explanation of services to the other parties (i.e., the claimant or other authorized individual, any auxiliary beneficiary or eligible spouse, and the decision maker as appropriate).

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

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

The administrative review process does not require changes to the fee authorized based on the approved agreement. Consider the following factors to assess whether a fee authorized under the fee agreement process is reasonable and to decide whether to affirm or modify a fee and, if modifying the fee, 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 the representative's services, including any amount authorized or requested previously, but not including the amount of any expenses incurred.

    NOTE:

    If a State or other governmental entity pays a fee to a representative for the representative's services on a claim 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 part of the total fee the official authorizes on administrative review. The regulatory exclusion found at 20 CFR 404.1720(e) and 416.1520(e) does not apply when the claimant or any auxiliary beneficiaries are liable to pay any part of a fee or any expenses.

  • 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.

D. Take Appropriate Action

1. Affirm the Fee Amount

Affirm the fee amount if you determine that the fee originally authorized under the fee agreement process, or subsequently authorized under HALLEX I-1-2-47 A.1, above is reasonable for the services provided.

Example:

The administrative law judge (ALJ) concludes that a reasonable fee for the case is $3,000. The fee originally authorized 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 will affirm the fee amount.

2. Modify the Fee Amount

Modify the fee if you determine that the fee originally authorized under the fee agreement process, or subsequently authorized under subsection A.1, above, is not reasonable for the services provided. Determine a reasonable fee based on evaluation of the factors listed in subsection C, above.

Examples:

  1. The fee authorized under the fee agreement process is the current statutory fee cap. 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 will decrease the amount of the authorized fee to $3,800.

  2. The ALJ concludes that a reasonable fee for the case is $6,300. The fee originally authorized under the fee agreement process is $6,000. The ALJ will modify the authorized fee amount to $6,300.

  3. The claimant's past-due benefits are $800 because of the receipt of workers' compensation benefits. The fee authorized under the fee agreement process is $200. The representative timely requested administrative review, stating that the $200 fee is unreasonable compensation for the services performed. The claimant did not respond to the notice of the request for administrative review. The ALJ concludes, considering the factors contained in HALLEX I-1-2-47 C, above that a reasonable fee for the representative's services is $1,200. The ALJ will modify the authorized fee to $1,200.

  4. The fee originally authorized under the fee agreement process was the current statutory fee cap. The claimant timely requested administrative review, stating that 25 percent of the past-due benefits payable was $2,250. SSA had revised the amount of past-due benefits payable because the claimant's receipt of workers' compensation required a reduction; however, the reduction occurred after release of the notice of the fee amount. The representative responded to the notice of the request for administrative review, stating that the current statutory fee cap was an entirely reasonable fee for the representative's services. The ALJ concluded, considering the factors contained in HALLEX I-1-2-47 C, above, that a reasonable fee for the representative's services is $2,800. The ALJ will modify the originally authorized fee, based on the most recent past-due benefits computation, and authorize a fee of $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. See POMS GN 03920.040B. for more information.