5.4 Fee Agreements and Direct Payment Flashcards
“What are SSA’s rules regarding fee agreements for representatives?”
Answer: “All fee agreements must be submitted to and approved by the SSA before representatives can charge claimants.”
Explanation: “The SSA reviews agreements to ensure fees are reasonable and comply with regulatory caps.”
Source: CFR §404.1720.
“What is the fee cap for EDPNA representatives?”
“The fee is capped at 25% of past-due benefits or $7,200, whichever is less.”
Explanation: “This cap ensures that claimants retain the majority of their benefits while compensating representatives fairly.”
Source: SSA Fee Cap Guidelines.
“What happens if a representative charges an unauthorized fee?”
Answer: “The representative may be disqualified, required to refund the claimant, and face other disciplinary actions.”
Explanation: “Unauthorized fees are a serious ethical violation.”
“What is direct payment of fees?”
Answer: “The SSA withholds approved fees from the claimant’s past-due benefits and pays them directly to the representative.”
Explanation: “This ensures timely payment while protecting claimants from overcharging.”
Source: CFR §404.1725.
Case Scenario: Paul’s EDPNA representative files a fee agreement with SSA, requesting 30% of past-due benefits as their fee. The agreement also specifies that the representative will receive payment directly from SSA.
Question: Does this fee agreement comply with SSA rules?
Answer: No, the fee agreement does not comply with SSA rules because the fee cap in 2025 is 25% of past-due benefits or $7,200, whichever is less.
Legal Explanation: SSA approves fee agreements only if they meet the following criteria:
Fees must not exceed 25% of past-due benefits or $7,200.
Representatives must request direct payment for fees through SSA-approved agreements.
Case Scenario: Lisa, an SSI recipient, agrees to pay her representative a $5,000 flat fee without SSA approval. The representative accepts the payment directly from Lisa.
Question: Does this arrangement comply with SSA rules?
Answer: No, the arrangement violates SSA rules because all fees must be approved by SSA, and representatives cannot accept direct payments outside of an approved fee agreement.
Legal Explanation: Representatives must:
File and obtain SSA approval for all fee agreements.
Avoid direct payments outside of SSA-approved processes.
Failure to follow these rules can result in penalties and disqualification.
Fee Agreements:
SSA must approve all fees, and the 2025 fee cap is 25% of past-due benefits or $7,200.
