I-1-2-9.Direct Payment of Fees to Representatives

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

A. Definitions

1. Direct Payment

Direct payment means that the Social Security Administration (SSA) pays all or part of an authorized fee directly to the representative. If SSA determines that a representative is eligible to receive direct payments, SSA pays the fee from benefits SSA withheld from past-due benefits.

2. Representative Eligible to Receive Direct Fee Payment

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

3. Representative Ineligible for Direct Payment

A representative ineligible for direct fee payment is:

  • a non-attorney who did not apply to become an Eligible for Direct Pay Non-Attorney (EDPNA) or does not meet the requirements set forth in section 206(e) of the Act (non-attorney representatives 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 (See Program Operations Manual System GN 03920.018)); or

  • a representative who has withdrawn or been discharged from representing a claimant.

NOTE 1:

A representative may be entitled to payment for services provided before his or her suspension or disqualification from serving as a representative, but the representative cannot receive direct payment of those fees on or after the effective date of the suspension or disqualification. See Hearings, Appeals and Litigation Law (HALLEX) manual I-1-1-57 A.

NOTE 2:

Only representatives who have registered with SSA can receive direct payment of a fee. See subsection B, below.

B. Direct Payment

SSA will directly pay an authorized fee, to the extent possible, when:

  • SSA effectuates a fully or partially favorable determination or decision;

  • the claimant is represented by an attorney or eligible for direct pay non-attorney who did not waive the fee or direct payment of the fee;

  • the appointed representative properly registered for direct payment and filed all necessary documentation seeking direct payment on the claim;

  • the representative is not sanctioned; and

  • the favorable determination or decision results in past-due benefits.

1. Fee Agreement Cases

The amount that SSA will certify for direct payment to a representative is the amount authorized as a result of the approved fee agreement, less:

  • the assessment imposed to cover administrative costs (see subsection B.3. below), and

  • any funds the claimant put into a trust or escrow account that the representative established (see HALLEX I-1-2-8).

2. Fee Petition Cases

In fee petition cases, the amount that SSA will certify for direct payment to a representative is the lesser of the authorized fee or 25 percent of the claimant and auxiliary's(ies') past-due benefits, if any, less:

  • the assessment imposed to cover administrative costs (see subsection B.3. below), and

  • any funds the claimant put into a trust or escrow account that the representative established.

NOTE:

The agency directly pays authorized fees in the order they are received, such that the amount directly paid for a fee authorized by the agency may be reduced if the agency already released funds for a fee authorized by a court. Any remaining authorized fee would need to be collected directly from the claimant.

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 a flat rate that is adjusted based on annual cost-of-living adjustments. SSA sets the assessment rate based upon the cost it incurs to determine and certify fees. The Commissioner may collect the assessment imposed on the representative by withholding it from the amount of the fee to be certified for payment to the representative 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 Program Operations Manual System GN 03920.019 for current and past flat-rate dollar limits and other information on the assessment.)

For favorably decided cases, SSA will:

  • Deduct the assessment fee from the amount of the representative fee payable if SSA certifies direct payment to the representative.

    NOTE:

    If the representative 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.

  • Pay the representative 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.

  • Release excess withheld funds, if any, to the beneficiary(ies) except in a concurrent case when offset has not yet occurred or in a case with federal court involvement.

  • Advise the claimant that the representative cannot charge or collect the assessment from him or her.