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Direct Payment of Authorized Fee to a Representative

Excerpted from "Social Security Handbook". See the up-to-date, official Social Security Handbook at ssa.gov.

2019. Direct Payment of Authorized Fee to a Representative

2019.1 When does SSA authorize direct payments to a representative?

Prior to February 28, 2005, if you were represented by an attorney and your claim was for old age, survivors, or disability insurance benefits (Title II benefits), we could withhold up to 25 percent of past-due benefits. We could certify for direct payment to the attorney the lesser of the amount of the authorized fee or 25 percent of past-due benefits. Also prior to February 28, 2005, we assumed no responsibility for the payment of any fees, if the representative was not an attorney or the claim was for SSI (Title XVI) benefits.

For representation agreements entered into on or after February 28, 2005, we can make direct payment to an attorney if your claim is for SSI benefits. In addition, we can make direct payment to a non-attorney representative whom we determine is eligible to receive direct payment, if your claim is for SSI or old age, survivors, or disability benefits.

We do not make direct payment to a representative if the representative waives the right to direct payment.

2019.2 Does SSA charge to pay the representative directly?

When SSA makes direct payment to a representative, the law requires us to deduct 6.3 percent from the representative's fee to cover administrative costs. This "user fee" cannot exceed $75 (or a higher amount based on annual adjustments). The representative cannot charge or collect this expense from you.

2019.3 When does SSA pay the fee?

We will pay an authorized fee to a representative under the fee agreement process soon after we determine the fee amount, unless you, your representative, or the decision maker requests review before we issue the payment. If that occurs, we will not pay the representative until we have completed the review and notified the parties of the determination on review.

2019.4 How does a representative receive direct payment if there is no fee agreement?

If there is no fee agreement in the case or we disapproved a fee agreement, the representative must file a fee petition or notice of intent to submit a fee petition with us in order to receive direct payment of a fee from past-due benefits. The representative must file the petition or notice within 60 days of notification of a favorable determination, i.e., the Award Notice.

2019.5 If the claimant has deposited a fee into an escrow account, what must the representative who is eligible to receive direct payment do to receive payment?

When you and a representative have a trust or escrow agreement (to assure payment of an authorized fee), the representative must identify and disclose the amount of the trust/escrow account when he or she files a fee agreement or petitions us for a fee. The representative must also disclose any payment(s) toward this fee that may have come from a source other than you. We reduce direct payment to the representative by any amount you deposited into a trust/escrow account and any payments toward the fee from some other source.

2019.6 What must the representative do if the total amount of the authorized fee cannot be certified?

If we cannot certify the total amount of the authorized fee for direct payment out of past-due benefits, the representative must look to you and any auxiliary beneficiaries for the balance.

2019.7 If a Federal court rules in favor of a claimant, what fee may an attorney collect?

If a Federal court rules in your favor, the court may allow, as part of its judgment, a reasonable fee to an attorney who represented you in court. Prior to February 28, 2005, the fee allowed by the court cannot exceed 25 percent of you and your family's Title II past-due benefits resulting from the favorable judgment. Beginning February 28, 2005, the fee allowed by the court may include 25 percent of your Title XVI past-due benefits. We may certify the amount of the fee allowed by the court for payment directly to the attorney out of your past-due benefits.

In addition, if a Federal court rules in your favor, under the Equal Access to Justice Act (EAJA), your attorney may request reimbursement of the expenses he or she incurred in representing you. If the court allows a fee and the attorney is awarded a fee under EAJA, the attorney must refund to you the amount of the smaller fee.

Last Revised: Jan. 31, 2006

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