Are attorney fees in Social Security claims regulated by law?
Attorney fees in Social Security Disability and Supplemental Security Income cases are regulated by Federal law. 42 U.S.C. § 406(a)(“The Commissioner of Social Security may, by rule and regulation, prescribe the maximum fees which may be charged for services performed in connection with any claim before the Commissioner of Social Security under this subchapter, and any agreement in violation of such rules and regulations shall be void.”); see also, HALLEX I-1-2-4 (Representative’s Fees Subject to SSA’s Authorization).
Subsequently promulgated Federal Regulations provide that “[a] representative may charge and receive a fee for his or her services as a representative only as provided in paragraph (b) of this section.” 20 C.F.R. § 404.1720. In order to charge and receive a fee, a representative must file a written request with SSA before charging or receiving a fee for services. 20 C.F.R. § 404.1720(b)(1). SSA must approve the amount of any fee charged or received. 20 C.F.R. § 404.1720(b)(2). Finally, “a representative must not charge or receive any fee unless we [SSA] have authorized it, and a representative must not charge or receive any fee that is more than the amount we [SSA] authorize.” 20 C.F.R. § 404.1720(b)(3).
Charging or accepting an unauthorized fee can subject a representative to criminal penalties under the Act:
“Any person who shall, with intent to defraud, in any manner willfully and knowingly deceive, mislead, or threaten any claimant or prospective claimant or beneficiary under this subchapter by word, circular, letter or advertisement, or who shall knowingly charge or collect directly or indirectly any fee in excess of the maximum fee, or make any agreement directly or indirectly to charge or collect any fee in excess of the maximum fee, prescribed by the Commissioner of Social Security shall be deemed guilty of a misdemeanor and, upon conviction thereof, shall for each offense be punished by a fine not exceeding $500 or by imprisonment not exceeding one year, or both. The Commissioner of Social Security shall maintain in the electronic information retrieval system used by the Social Security Administration a current record, with respect to any claimant before the Commissioner of Social Security, of the identity of any person representing such claimant in accordance with this subsection.” 42 U.S.C. § 406(a)(5).
In addition, charging or receiving an unauthorized fee can result in a representative losing his or her right to practice before SSA. SSA’s rules of conduct and standards of responsibility for representatives provide, in relevant part: “[a] representative must not: . . . (2) Knowingly charge, collect or retain, or make any arrangement to charge, collect or retain, from any source, directly or indirectly, any fee for representational services in violation of applicable law or regulation. . . .” 20 C.F.R. § 404.1740(c). Violations of the foregoing prohibition can lead to suspension or disqualification from representing claimants before SSA. 20 C.F.R. § 404.1745.