TN 17 (11-09)

A. Introduction

We assume that a representative will charge a fee for services. Occasionally, a representative will provide services but waive the right to charge and collect a fee from either the claimant or any other source (i.e., the representative waives all fees). In addition, a representative eligible for direct fee payment may charge a fee but waive the right to direct payment of the fee from past-due benefits (see, Payment of Representative's Fee GN 03920.017).

A representative may volunteer this information:

• at the time the field office (FO) explains our fee provisions and direct payment procedures;

• when completing the Form SSA-1696-U4 (Appointment of Representative); or

• after a representative receives Form SSA-L1697-U3 (Notice to Representative of Claimant Before the Social Security Administration).

We do not inquire whether a representative will charge or collect a fee unless a representative works with a legal services organization that provides legal services free of charge (see GN 03920.020C).

If a representative waives his or her fee and later decides to charge and collect a fee, the representative must obtain the claimant's concurrence (in certain instances) and SSA's authorization. Instances that require the claimant's concurrence include the following situations:

• the initial appointment documentation contained the representative's waiver statement; or

• SSA has already notified the claimant of the representative's intent to waive the fee.

B. Policy for waiver statements

1. Waiver of all fees from any source

If a representative does not want to charge or collect a fee from any source (including claims decided by a court), the representative must:

• complete Part III of form SSA-1696-U4 by checking the box ‘Waiving fees from any source’ and providing signature and date; or

• sign the "Waiver of Fee" section of the SSA-L1697-U3; or

• submit a written statement that clearly and unequivocally states that the representative is waiving all fees.

The representative's written statement that he or she waives the right to charge and collect a fee constitutes a waiver of any fees for services in the case, whether charged to or collected from the claimant or a third party, such as an insurance company. The representative's waiver does not constitute a transfer or assignment of the right to charge and collect a fee based on those services to another person. See GN 03920.050 for policy on dividing the fee when there are multiple representatives in a fee agreement case.

2. Waiver of direct fee payment by SSA from past-due benefits of the claimant and of any auxiliary beneficiary

If a representative who is eligible for direct payment does not want to receive direct payment of his or her fee from the claimant's past-due benefits, the representative must:

• complete Part III of form SSA-1696-U4 by checking the box ‘Charging a fee but waiving direct payment' and providing signature and date; or

• sign the "Waiver of Direct Payment" section of the SSA-L1697-U3; or

• submit a written statement that clearly and unequivocally states that he or she waives direct payment of fees by SSA from past-due benefits.

The representative's written statement waiving the right to direct payment constitutes a waiver of direct payment of all fees for services in a case, including any related auxiliary beneficiary's portion of the fee, and any court- authorized fee. In concurrent claims, the waiver applies to both Title II and Title XVI cases.

If we learn of a representative's waiver of direct fee payment before we make direct payment, we will act on the waiver. In favorably decided concurrent claims, if a portion of the fee is payable from both the Title II and the Title XVI past due benefits, we will act on the waiver if we receive the waiver before we make the first fee payment to the representative.

EXAMPLE 1: An ALJ issued a favorable Title II decision and approved a fee agreement on January 2. On January 4, the hearing office (HO) received the representative's waiver of direct payment, date-stamped it, and faxed it to the Processing Center (PC). The PC associated the waiver statement with the claims file before the favorable decision was effectuated and was able to release the entire amount of past-due benefits to the claimant without withholding 25 percent for direct payment of the representative's fee. This is the correct action.

EXAMPLE 2: An ALJ issued a favorable concurrent decision and approved a fee agreement on March 3. The PC issued direct payment of the representative's fee based on the Title II past due benefits on March 30 and notified the FO of its action. On April 10, the HO received the representative's waiver of direct payment, date-stamped it, and faxed it to the PC. The PC forwarded the waiver statement to the FO. Because we did not receive the waiver statement before making direct payment on the Title II claim, we paid the additional fee based on the claimant's Title XVI past-due benefits directly to the representative.

If we associate the waiver statement after we issue direct payment and the representative questions the payment see, Representative's Fee - Erroneous Direct Payment and Assessment GN 03920.051.

If a representative waives direct payment of the fee from past due benefits but intends to charge and collect a fee from either the claimant or any auxiliary beneficiary, we must authorize the fee for services provided in proceedings before us unless the provisions in GN 03920.010B.2 apply.

3. Waiver of fee payment from claimant and any auxiliary beneficiary but not from a third party

A representative must obtain SSA's authorization to charge and collect a fee from a third party unless the conditions in GN 03920.010B.2 apply.

a. Third-party individual pays fee

If the representative expects to receive payment of a fee from a third party who is an individual, the representative must obtain our authorization to charge and collect a fee for services before us. The representative must:

• complete Part III of the SSA-1696-U4 by checking the box ‘Charging a fee but waiving direct payment' and providing signature and date, or

• submit a written statement that clearly and unequivocally states that the representative intends to receive a fee from a third-party individual; and if eligible for direct payment

• include the signed “Waiver of Direct Payment” section of the SSA-L1697-U3 or a written statement waiving his or her right to direct payment.

b. Third-party entity pays fee

If the representative expects to receive payment of a fee from a third-party entity (see GN 03920.010A.3) and the claimant and any auxiliary beneficiary will have no direct or indirect financial liability to pay any fees or any expenses, the representative does not need to obtain our authorization to charge and collect a fee for services (see GN 03920.010B). However, the representative must:

• complete Part III of the SSA-1696-U4 by checking the box ‘Waiving fees and expenses from the claimant and any auxiliary beneficiaries' and providing signature and date, or

• submit a written statement that clearly and unequivocally states that the representative intends to receive a fee from a third-party entity and that the claimant and any auxiliary beneficiary are not directly or indirectly responsible for payment of the fee; and if eligible for direct payment

• include the signed “Waiver of Direct Payment” section of the SSA-L1697-U3 or a written statement waiving his or her right to direct payment.

Representatives may use language similar to the following: “I waive all rights to charge and collect any fees or expenses from my client (the claimant) and any auxiliary beneficiaries directly or indirectly, in whole or in part. A third-party entity will pay my fee and any expenses for this appointment. I certify that the claimant and any auxiliary beneficiaries are free of all liability to pay any fees or expenses from services provided in their cases.”

NOTE: When informing SSA that a third party will pay the representative's fee, use of the SSA-1696 with the appropriate fee arrangement box checked eliminates the need for submission of a written statement.

C. Procedure for legal services organizations for FO and PC

Usually the FO is aware of organizations within its service area that routinely waive the fee. Therefore, in Title II and Title XVI cases in which the representative works for such an organization and is eligible for direct payment, proceed as follows:

1. Representative waived the fee

If the representative has already waived the fee, the FO or PC follows the appropriate process in GN 03920.020D.2 or GN 03920.020D.3.

2. Representative did not waive the fee

If the representative, is eligible for direct fee payment, did not waive the fee, withhold past due benefits (per Title II Past Due Benefits Subject to Withholding GN 03920.035 and Title XVI Past Due Benefits Subject to Withholding GN 03920.036), and continue with the usual processing procedures.

3. Waiver issue status unknown

• Withhold past due benefits until the issue of the fee can be resolved.

• Contact the representative by telephone to determine if the representative wishes to waive the fee.

• Secure a fee waiver statement and file the statement in the claim file, if the representative wishes to waive the fee.

• Document the Modernized Claims System (MCS) Report of Contact (RPOC) screen or an SSA-5002 (Report of Contact) in Title II claims.

• Complete the Evidence screen in Shared Processes, or an SSA-5002 in Title II post entitlement cases.

• Document the Modernized Supplemental Security Income Claims System (MSSICS) Report of Contact (DROC) screen or an SSA-5002 in Title XVI claims or post-eligibility cases, and check the appropriate box on Form SSA-1128 (Representative Involved) if there is a paper claim file.

  If the initial contact is unsuccessful, continue contact attempts to determine whether the representative intends to waive the fee. These attempts should continue until the component is ready to effectuate the claim. When the component is ready to effectuate the decision, proceed with GN 03920.020C.1 or GN 03920.020C.2 as appropriate.

  If the FO is unable to determine whether the representative who is eligible for direct payment waived the fee, it should:

• document efforts to contact the representative on the Evidence screens in Shared Processes; and

• withhold 25 percent of past due benefits in a District Office Final Authorization (DOFA) claim or advise the PC to withhold past due benefits in a non-DOFA claim;

• withhold past-due benefits in an SSI claim as described in GN 03920.036;

  For cases pending at an HO, or the Appeals Council (AC), prepare a Report of Contact (SSA-5002) and forward to the appropriate location, or annotate the claim file in the Electronic Disability Collect System (EDCS).

  For further instructions regarding releasing past due benefits that have been withheld, see GN 03930.090 (for non-court cases) and GN 03930.091 (for court cases).

D. Procedure for Fee waiver statements – FO and PC

1. Receipt of a waiver statement

If the representative submits the waiver statement to the FO, the FO follows the instructions in GN 03920.020D.2 or GN 03920.020D.3, as appropriate.

If the representative submits the waiver statement to an HO or the AC:

The HO or AC associate the waiver with the claim file and alert the FO or the PC of the waiver statement by properly annotating the system, or by using forms HA-5051-U3 (Transmittal of Decision or Dismissal by Administrative Law Judge) or HA-505 (Transmittal used at hearing level and above) and by checking the appropriate box on Form SSA-1128.

If the HO indicates the representative has waived a fee, but the claim file does not contain a waiver statement, the FO or PC should accept the report of waiver, assume the HO has retained the waiver statement, continue processing the claim, and obtain a copy of the waiver statement from the HO for the claim file.

2. Processing waiver statement (from any source) – representative ineligible for direct payment

When a representative who is not eligible for direct payment does not expect to charge and collect a fee, the claims representative (CR) must:

• Obtain a completed waiver statement on either an SSA-1696-U4 or an SSA-L1697-U3, or the following statement:

  “I (representative's name), hereby waive my right to charge and collect a fee from any source for the services I will provide or have provided on behalf of (claimant's name) in (his/her) claim for (Supplemental Security Income payments, or Social Security benefits, or both)”;

• Ensure that the representative:

  1. signed and dated the statement;

  2. provided his or her address;

• Notify the claimant that we have been advised that the representative will not be charging a fee and that if the representative later decides to charge and collect a fee, the representative must still obtain our authorization; and

• Send a copy of the notice to the representative.

3. Processing waiver statement (from any source) – representative eligible for direct payment

a. Waiver statement received before award notice issued

When a representative who is eligible for direct fee payment does not expect to charge and collect a fee, the CR, claims authorizer (CA) or claims technical examiner (CTE):

• does not withhold past-due benefits;

• obtains a completed waiver statement on either an SSA-1696-U4 or an SSA-L1697-U3, or a statement as described in GN 03920.020D.2.; and

• notifies the claimant and the representative that we have been advised that the representative will not be charging a fee and that if the representative later decides to charge and collect a fee, the representative must still obtain our authorization.

b. Waiver statement received after past-due benefits withheld

1. Title II Claim If we have already withheld benefits in a Title II claim, the CA/CTE instructs the benefit authorizer (BA) or benefit technical examiner (BTE) to:

   • release past-due benefits to the claimant; and

   • notify the claimant and the representative that the representative advised us that the representative will not be charging a fee and that if the representative later decides to charge and collect a fee, the representative must still obtain our authorization.

2. Title XVI Claim If we have already withheld benefits in a Title XVI claim, the CR:

   • records the waiver on the SSR;

   • resolves any issue(s) related to the fee withholding and releases past-due benefits; and

   • notifies the claimant and the representative that we have been advised that the representative will not be charging a fee and that if the representative later decides to charge and collect a fee, the representative must still obtain our authorization.

3. Concurrent Title II and Title XVI Claims In concurrent Title II and Title XVI claims, the FO or PC that receives the waiver notification will first eliminate withholding and notify the other component, the PC or the FO, for its necessary actions.

4. Processing waiver statement (a third party entity is paying the fee)

When a representative expects to charge and collect a fee from a third-party entity, the CR, CA or CTE:

• does not withhold past-due benefits;

• secures a waiver of direct payment on an SSA-1696-U4 or on the SSA-L1697-U3;

• obtains a written waiver statement as described in GN 03920.020B.3.b; and

• notifies the claimant and the representative that we have been advised that the representative will not be charging a fee and that if the representative later decides to charge and collect a fee, the representative must still obtain our authorization.

E. Procedure for unclear waiver statement

If a representative submits a statement that is unclear, the FO or PC should resolve the issue by calling the representative and documenting the conversation on a Report of Contact (see, Direct Contact by Telephone GN 01070.315).

F. Procedure for fee violation

If a representative waives fees and later either attempts to or actually charges the claimant a fee for services provided without our authorization, follow the instructions in GN 03970.017 through GN 03970.025.

G. Procedure for coding when third party is involved

1. MCS

Complete the MCS NOT2 screen as follows when a third-party payer is responsible for paying the fee:

2. SSI

Complete the appropriate MSSICS screens as follows when a third-party payer is responsible for paying the fee:

H. Procedure for notices when third party is involved

Include the following dictated language on all notices involving a third party:

“Your representative has informed us that a third-party is paying your representative's fee. Under our rules, we do not need to authorize your representative's fee when a third-party entity, such as a business, government agency or other organization is paying your representative's fee and neither you nor your auxiliary beneficiaries, if any, are responsible for paying any fees and expenses.

If you or any other individual is paying your representative's fee, we must first authorize that fee before your representative charges or collects it.”