42 U.S.C. § 406 : US Code - Section 406: Representation of claimants before Commissioner

Search 42 U.S.C. § 406 : US Code - Section 406: Representation of claimants before Commissioner

(a) Recognition of representatives; fees for representation before
Commissioner
(1) The Commissioner of Social Security may prescribe rules and
regulations governing recognition of agents or other persons, other
than attorneys as hereinafter provided, representing claimants
before the Commissioner of Social Security, and may require of such
agents or other persons, before being recognized as representatives
of claimants that they shall show that they are of good character
and in good repute, possessed of the necessary qualifications to
enable them to render such claimants valuable service, and
otherwise competent to advise and assist such claimants in the
presentation of their cases. An attorney in good standing who is
admitted to practice before the highest court of the State,
Territory, District, or insular possession of his residence or
before the Supreme Court of the United States or the inferior
Federal courts, shall be entitled to represent claimants before the
Commissioner of Social Security. Notwithstanding the preceding
sentences, the Commissioner, after due notice and opportunity for
hearing, (A) may refuse to recognize as a representative, and may
disqualify a representative already recognized, any attorney who
has been disbarred or suspended from any court or bar to which he
or she was previously admitted to practice or who has been
disqualified from participating in or appearing before any Federal
program or agency, and (B) may refuse to recognize, and may
disqualify, as a non-attorney representative any attorney who has
been disbarred or suspended from any court or bar to which he or
she was previously admitted to practice. A representative who has
been disqualified or suspended pursuant to this section from
appearing before the Social Security Administration as a result of
collecting or receiving a fee in excess of the amount authorized
shall be barred from appearing before the Social Security
Administration as a representative until full restitution is made
to the claimant and, thereafter, may be considered for
reinstatement only under such rules as the Commissioner may
prescribe. The Commissioner of Social Security may, after due
notice and opportunity for hearing, suspend or prohibit from
further practice before the Commissioner any such person, agent, or
attorney who refuses to comply with the Commissioner's rules and
regulations or who violates any provision of this section for which
a penalty is prescribed. 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.
Except as provided in paragraph (2)(A), whenever the Commissioner
of Social Security, in any claim before the Commissioner for
benefits under this subchapter, makes a determination favorable to
the claimant, the Commissioner shall, if the claimant was
represented by an attorney in connection with such claim, fix (in
accordance with the regulations prescribed pursuant to the
preceding sentence) a reasonable fee to compensate such attorney
for the services performed by him in connection with such claim.
(2)(A) In the case of a claim of entitlement to past-due benefits
under this subchapter, if -
(i) an agreement between the claimant and another person
regarding any fee to be recovered by such person to compensate
such person for services with respect to the claim is presented
in writing to the Commissioner of Social Security prior to the
time of the Commissioner's determination regarding the claim,
(ii) the fee specified in the agreement does not exceed the
lesser of -
(I) 25 percent of the total amount of such past-due benefits
(as determined before any applicable reduction under section
1320a-6(a) of this title), or
(II) $4,000, and
(iii) the determination is favorable to the claimant,
then the Commissioner of Social Security shall approve that
agreement at the time of the favorable determination, and (subject
to paragraph (3)) the fee specified in the agreement shall be the
maximum fee. The Commissioner of Social Security may from time to
time increase the dollar amount under clause (ii)(II) to the extent
that the rate of increase in such amount, as determined over the
period since January 1, 1991, does not at any time exceed the rate
of increase in primary insurance amounts under section 415(i) of
this title since such date. The Commissioner of Social Security
shall publish any such increased amount in the Federal Register.
(B) For purposes of this subsection, the term "past-due benefits"
excludes any benefits with respect to which payment has been
continued pursuant to subsection (g) or (h) of section 423 of this
title.
(C) In any case involving -
(i) an agreement described in subparagraph (A) with any person
relating to both a claim of entitlement to past-due benefits
under this subchapter and a claim of entitlement to past-due
benefits under subchapter XVI of this chapter, and
(ii) a favorable determination made by the Commissioner of
Social Security with respect to both such claims,
the Commissioner of Social Security may approve such agreement only
if the total fee or fees specified in such agreement does not
exceed, in the aggregate, the dollar amount in effect under
subparagraph (A)(ii)(II).
(D) In the case of a claim with respect to which the Commissioner
of Social Security has approved an agreement pursuant to
subparagraph (A), the Commissioner of Social Security shall provide
the claimant and the person representing the claimant a written
notice of -
(i) the dollar amount of the past-due benefits (as determined
before any applicable reduction under section 1320a-6(a) of this
title) and the dollar amount of the past-due benefits payable to
the claimant,
(ii) the dollar amount of the maximum fee which may be charged
or recovered as determined under this paragraph, and
(iii) a description of the procedures for review under
paragraph (3).
(3)(A) The Commissioner of Social Security shall provide by
regulation for review of the amount which would otherwise be the
maximum fee as determined under paragraph (2) if, within 15 days
after receipt of the notice provided pursuant to paragraph (2)(D) -

(i) the claimant, or the administrative law judge or other
adjudicator who made the favorable determination, submits a
written request to the Commissioner of Social Security to reduce
the maximum fee, or
(ii) the person representing the claimant submits a written
request to the Commissioner of Social Security to increase the
maximum fee.
Any such review shall be conducted after providing the claimant,
the person representing the claimant, and the adjudicator with
reasonable notice of such request and an opportunity to submit
written information in favor of or in opposition to such request.
The adjudicator may request the Commissioner of Social Security to
reduce the maximum fee only on the basis of evidence of the failure
of the person representing the claimant to represent adequately the
claimant's interest or on the basis of evidence that the fee is
clearly excessive for services rendered.
(B)(i) In the case of a request for review under subparagraph (A)
by the claimant or by the person representing the claimant, such
review shall be conducted by the administrative law judge who made
the favorable determination or, if the Commissioner of Social
Security determines that such administrative law judge is
unavailable or if the determination was not made by an
administrative law judge, such review shall be conducted by another
person designated by the Commissioner of Social Security for such
purpose.
(ii) In the case of a request by the adjudicator for review under
subparagraph (A), the review shall be conducted by the Commissioner
of Social Security or by an administrative law judge or other
person (other than such adjudicator) who is designated by the
Commissioner of Social Security.
(C) Upon completion of the review, the administrative law judge
or other person conducting the review shall affirm or modify the
amount which would otherwise be the maximum fee. Any such amount so
affirmed or modified shall be considered the amount of the maximum
fee which may be recovered under paragraph (2). The decision of the
administrative law judge or other person conducting the review
shall not be subject to further review.
(4) Subject to subsection (d) of this section, if the claimant is
determined to be entitled to past-due benefits under this
subchapter and the person representing the claimant is an attorney,
the Commissioner of Social Security shall, notwithstanding section
405(i) of this title, certify for payment out of such past-due
benefits (as determined before any applicable reduction under
section 1320a-6(a) of this title) to such attorney an amount equal
to so much of the maximum fee as does not exceed 25 percent of such
past-due benefits (as determined before any applicable reduction
under section 1320a-6(a) of this title).
(5) 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.
(b) Fees for representation before court
(1)(A) Whenever a court renders a judgment favorable to a
claimant under this subchapter who was represented before the court
by an attorney, the court may determine and allow as part of its
judgment a reasonable fee for such representation, not in excess of
25 percent of the total of the past-due benefits to which the
claimant is entitled by reason of such judgment, and the
Commissioner of Social Security may, notwithstanding the provisions
of section 405(i) of this title, but subject to subsection (d) of
this section, certify the amount of such fee for payment to such
attorney out of, and not in addition to, the amount of such past-
due benefits. In case of any such judgment, no other fee may be
payable or certified for payment for such representation except as
provided in this paragraph.
(B) For purposes of this paragraph -
(i) the term "past-due benefits" excludes any benefits with
respect to which payment has been continued pursuant to
subsection (g) or (h) of section 423 of this title, and
(ii) amounts of past-due benefits shall be determined before
any applicable reduction under section 1320a-6(a) of this title.
(2) Any attorney who charges, demands, receives, or collects for
services rendered in connection with proceedings before a court to
which paragraph (1) of this subsection is applicable any amount in
excess of that allowed by the court thereunder shall be guilty of a
misdemeanor and upon conviction thereof shall be subject to a fine
of not more than $500, or imprisonment for not more than one year,
or both.
(c) Notification of options for obtaining attorneys
The Commissioner of Social Security shall notify each claimant in
writing, together with the notice to such claimant of an adverse
determination, of the options for obtaining attorneys to represent
individuals in presenting their cases before the Commissioner of
Social Security. Such notification shall also advise the claimant
of the availability to qualifying claimants of legal services
organizations which provide legal services free of charge.
(d) Assessment on attorneys
(1) In general
Whenever a fee for services is required to be certified for
payment to an attorney from a claimant's past-due benefits
pursuant to subsection (a)(4) or (b)(1) of this section, the
Commissioner shall impose on the attorney an assessment
calculated in accordance with paragraph (2).
(2) Amount
(A) The amount of an assessment under paragraph (1) shall be
equal to the product obtained by multiplying the amount of the
representative's fee that would be required to be so certified by
subsection (a)(4) or (b)(1) of this section before the
application of this subsection, by the percentage specified in
subparagraph (B), except that the maximum amount of the
assessment may not exceed the greater of $75 or the adjusted
amount as provided pursuant to the following two sentences. In
the case of any calendar year beginning after the amendments made
by section 301 of the Social Security Protection Act of 2003 (!1)
take effect, the dollar amount specified in the preceding
sentence (including a previously adjusted amount) shall be
adjusted annually under the procedures used to adjust benefit
amounts under section 415(i)(2)(A)(ii) of this title, except such
adjustment shall be based on the higher of $75 or the previously
adjusted amount that would have been in effect for December of
the preceding year, but for the rounding of such amount pursuant
to the following sentence. Any amount so adjusted that is not a
multiple of $1 shall be rounded to the next lowest multiple of
$1, but in no case less than $75.
(B) The percentage specified in this subparagraph is -
(i) for calendar years before 2001, 6.3 percent, and
(ii) for calendar years after 2000, such percentage rate as
the Commissioner determines is necessary in order to achieve
full recovery of the costs of determining and certifying fees
to attorneys from the past-due benefits of claimants, but not
in excess of 6.3 percent.
(3) Collection
The Commissioner may collect the assessment imposed on an
attorney under paragraph (1) by offset from the amount of the fee
otherwise required by subsection (a)(4) or (b)(1) of this section
to be certified for payment to the attorney from a claimant's
past-due benefits.
(4) Prohibition on claimant reimbursement
An attorney subject to an assessment under paragraph (1) may
not, directly or indirectly, request or otherwise obtain
reimbursement for such assessment from the claimant whose claim
gave rise to the assessment.
(5) Disposition of assessments
Assessments on attorneys collected under this subsection shall
be credited to the Federal Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance Trust Fund, as
appropriate.
(6) Authorization of appropriations
The assessments authorized under this section shall be
collected and available for obligation only to the extent and in
the amount provided in advance in appropriations Acts. Amounts so
appropriated are authorized to remain available until expended,
for administrative expenses in carrying out this subchapter and
related laws.