Sec.206.[42 U.S.C. 406](a)(1) The Commissionerof Social Security may prescribe rules and regulations governing therecognition of agents or other persons, other than attorneys as hereinafterprovided, representing claimants before the Commissioner of SocialSecurity, and may require of such agents or other persons, beforebeing recognized as representatives of claimants that they shall showthat they are of good character and in good repute, possessed of thenecessary qualifications to enable them to render such claimants valuableservice, and otherwise competent to advise and assist such claimantsin the presentation of their cases. An attorney in good standing whois admitted to practice before the highest court of the State, Territory,District, or insular possession of his residence or before the SupremeCourt of the United States or the inferior Federal courts, shall beentitled to represent claimants before the Commissioner of SocialSecurity. Notwithstanding the preceding sentences, the Commissioner,after due notice and opportunity for hearing, (A) may refuse to recognizeas a representative, and may disqualify a representative already recognized,any attorney who has been disbarred or suspended from any court orbar to which he or she was previously admitted to practice or whohas been disqualified from participating in or appearing before anyFederal program or agency, and (B) may refuse to recognize, and maydisqualify, as a non-attorney representative any attorney who hasbeen disbarred or suspended from any court or bar to which he or shewas previously admitted to practice. A representative who has beendisqualified or suspended pursuant to this section from appearingbefore the Social Security Administration as a result of collectingor receiving a fee in excess of the amount authorized shall be barredfrom appearing before the Social Security Administration as a representativeuntil full restitution is made to the claimant and, thereafter, maybe considered for reinstatement only under such rules as the Commissionermay prescribe. The Commissioner of Social Security may, after duenotice and opportunity for hearing, suspend or prohibit from furtherpractice before the Commissioner any such person, agent, or attorneywho refuses to comply with the Commissioner’s rules and regulationsor who violates any provision of this section for which a penaltyis prescribed. The Commissioner of Social Security may, by rule andregulation, prescribe the maximum fees which may be charged for servicesperformed in connection with any claim before the Commissioner ofSocial Security under this title, and any agreement in violation ofsuch rules and regulations shall be void. Except as provided in paragraph(2)(A), whenever the Commissioner of Social Security, in any claimbefore the Commissioner for benefits under this title, makes a determinationfavorable to the claimant, the Commissioner shall, if the claimantwas represented by an attorney in connection with such claim, fix(in accordance with the regulations prescribed pursuant to the precedingsentence) a reasonable fee to compensate such attorney for the servicesperformed by him in connection with such claim.
(2)(A) In the caseof a claim of entitlement to past-due benefits under this title, if—
(i) an agreement betweenthe claimant and another person regarding any fee to be recoveredby such person to compensate such person for services with respectto the claim is presented in writing to the Commissioner of SocialSecurity prior to the time of the Commissioner’s determinationregarding the claim,
(ii) the fee specifiedin the agreement does not exceed the lesser of—
(I) 25 percentof the total amount of such past-due benefits (as determined beforeany applicable reduction under section 1127(a)), or
(II) $4,000,and
(iii) the determinationis favorable to the claimant,
then the Commissioner of Social Security shall approve thatagreement at the time of the favorable determination, and (subjectto paragraph (3)) the fee specified in the agreement shall be themaximum fee. The Commissioner of Social Security may from time totime increase the dollar amount under clause (ii)(II) to the extentthat the rate of increase in such amount, as determined over the periodsince January 1, 1991, does not at any time exceed the rate of increasein primary insurance amounts under section 215(i) since such date. The Commissionerof Social Security shall publish any such increased amount in theFederal Register.
(B) For purposesof this subsection, the term “past-due benefits” excludesany benefits with respect to which payment has been continued pursuantto subsection (g) or (h) of section 223.
(C) In any caseinvolving—
(i) an agreement describedin subparagraph (A) with any person relating to both a claim of entitlementto past-due benefits under this title and a claim of entitlement topast-due benefits under title XVI, and
(ii) a favorabledetermination made by the Commissioner of Social Security with respectto both such claims,
the Commissioner of Social Security may approve such agreementonly if the total fee or fees specified in such agreement does notexceed, in the aggregate, the dollar amount in effect under subparagraph(A)(ii)(II).
(D) In the caseof a claim with respect to which the Commissioner of Social Securityhas approved an agreement pursuant to subparagraph (A), the Commissionerof Social Security shall provide the claimant and the person representingthe claimant a written notice of—
(i) the dollar amountof the past-due benefits (as determined before any applicable reductionunder section 1127(a)) and the dollar amount of the past-due benefits payable to the claimant,
(ii) the dollar amountof the maximum fee which may be charged or recovered as determinedunder this paragraph, and
(iii) a descriptionof the procedures for review under paragraph (3).
(3)(A) The Commissionerof Social Security shall provide by regulation for review of the amountwhich would otherwise be the maximum fee as determined under paragraph(2) if, within 15 days after receipt of the notice provided pursuantto paragraph (2)(D)—
(i) the claimant,or the administrative law judge or other adjudicator who made thefavorable determination, submits a written request to the Commissionerof Social Security to reduce the maximum fee, or
(ii) the person representingthe claimant submits a written request to the Commissioner of SocialSecurity to increase the maximum fee.
Any such review shall be conducted after providing the claimant,the person representing the claimant, and the adjudicator with reasonablenotice of such request and an opportunity to submit written informationin favor of or in opposition to such request. The adjudicator mayrequest the Commissioner of Social Security to reduce the maximumfee only on the basis of evidence of the failure of the person representingthe claimant to represent adequately the claimant’s interestor on the basis of evidence that the fee is clearly excessive forservices rendered.
(B)(i) In the case ofa request for review under subparagraph (A) by the claimant or bythe person representing the claimant, such review shall be conductedby the administrative law judge who made the favorable determinationor, if the Commissioner of Social Security determines that such administrativelaw judge is unavailable or if the determination was not made by anadministrative law judge, such review shall be conducted by anotherperson designated by the Commissioner of Social Security for suchpurpose.
(ii) In the caseof a request by the adjudicator for review under subparagraph (A),the review shall be conducted by the Commissioner of Social Securityor by an administrative law judge or other person (other than suchadjudicator) who is designated by the Commissioner of Social Security.
(C) Upon completionof the review, the administrative law judge or other person conductingthe review shall affirm or modify the amount which would otherwisebe the maximum fee. Any such amount so affirmed or modified shallbe considered the amount of the maximum fee which may be recoveredunder paragraph (2). The decision of the administrative law judgeor other person conducting the review shall not be subject to furtherreview.
(4) Subject to subsection(d), if the claimant is determined to be entitled to past-due benefitsunder this title and the person representing the claimant is an attorney,the Commissioner of Social Security shall, notwithstanding section 205(i), certify forpayment out of such past-due benefits (as determined before any applicablereduction under section 1127(a)) to such attorney an amount equal to so much of themaximum fee as does not exceed 25 percent of such past-due benefits(as determined before any applicable reduction under section 1127(a)).
(5) Any person whoshall, with intent to defraud, in any manner willfully and knowinglydeceive, mislead, or threaten any claimant or prospective claimantor beneficiary under this title by word, circular, letter or advertisem*nt,or who shall knowingly charge or collect directly or indirectly anyfee in excess of the maximum fee, or make any agreement directly orindirectly to charge or collect any fee in excess of the maximum fee,prescribed by the Commissioner of Social Security shall be deemedguilty of a misdemeanor and, upon conviction thereof, shall for eachoffense be punished by a fine not exceeding $500 or by imprisonmentnot exceeding one year, or both. The Commissioner of Social Securityshall maintain in the electronic information retrieval system usedby the Social Security Administration a current record, with respectto any claimant before the Commissioner of Social Security, of theidentity of any person representing such claimant in accordance withthis subsection.
(b)(1)(A) Whenever acourt renders a judgment favorable to a claimant under this titlewho was represented before the court by an attorney, the court maydetermine and allow as part of its judgment a reasonable fee for suchrepresentation, not in excess of 25 percent of the total of the past-duebenefits to which the claimant is entitled by reason of such judgment,and the Commissioner of Social Security may, notwithstanding the provisionsof section 205(i), but subject to subsection (d) of this section, certify the amountof such fee for payment to such attorney out of, and not in additionto, 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 representationexcept as provided in this paragraph.
(B) For purposesof this paragraph—
(i) the term “past-due benefits” excludes any benefits with respect to whichpayment has been continued pursuant to subsection (g) or (h) of section 223, and
(ii) amounts of past-duebenefits shall be determined before any applicable reduction undersection 1127(a).
(2) Any attorney whocharges, demands, receives, or collects for services rendered in connectionwith proceedings before a court to which paragraph (1) is applicableany amount in excess of that allowed by the court thereunder shallbe guilty of a misdemeanor and upon conviction thereof shall be subjectto a fine of not more than $500, or imprisonment for not more thanone year, or both.[124]
(c) The Commissionerof Social Security shall notify each claimant in writing, togetherwith the notice to such claimant of an adverse determination, of theoptions for obtaining attorneys to represent individuals in presentingtheir cases before the Commissioner of Social Security. Such notificationshall also advise the claimant of the availability to qualifying claimantsof legal services organizations which provide legal services freeof charge.
(d) Assessmenton Attorneys.—
(1) In general.—Whenever a fee for services is required to be certified forpayment to an attorney from a claimant’s past-due benefits pursuantto subsection (a)(4) or (b)(1), the Commissioner shall impose on theattorney an assessment calculated in accordance with paragraph (2).
(2) Amount.—
(A) The amountof an assessment under paragraph (1) shall be equal to the productobtained by multiplying the amount of the representative’s feethat would be required to be so certified by subsection (a)(4) or(b)(1) before the application of this subsection, by the percentagespecified in subparagraph (B), except that the maximum amount of theassessment may not exceed the greater of $75 or the adjusted amountas provided pursuant to the following two sentences. In the case ofany calendar year beginning after the amendments made by section 301 of the Social Security Protection Act of 2003 take effect, the dollaramount specified in the preceding sentence (including a previouslyadjusted amount) shall be adjusted annually under the procedures usedto adjust benefit amounts under section 215(i)(2)(A)(ii), except suchadjustment shall be based on the higher of $75 or the previously adjustedamount that would have been in effect for December of the precedingyear, but for the rounding of such amount pursuant to the followingsentence. Any amount so adjusted that is not a multiple of $1 shallbe rounded to the next lowest multiple of $1, but in no case lessthan $75.
(B) The percentagespecified in this subparagraph is—
(i) for calendar yearsbefore 2001, 6.3 percent, and
(ii) for calendaryears after 2000, such percentage rate as the Commissioner determinesis necessary in order to achieve full recovery of the costs of determiningand 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 attorneyunder paragraph (1) by offset from the amount of the fee otherwiserequired by subsection (a)(4) or (b)(1) to be certified for paymentto the attorney from a claimant’s past-due benefits.
(4) Prohibitionon claimant reimbursem*nt.—An attorneysubject to an assessment under paragraph (1) may not, directly orindirectly, request or otherwise obtain reimbursem*nt for such assessmentfrom the claimant whose claim gave rise to the assessment.
(5) Dispositionof assessments.—Assessments on attorneyscollected under this subsection shall be credited to the Federal Old-Ageand Survivors Insurance Trust Fund and the Federal Disability InsuranceTrust Fund, as appropriate.
(6) Authorizationof appropriations.—The assessments authorizedunder this section shall be collected and available for obligationonly to the extent and in the amount provided in advance in appropriationsActs. Amounts so appropriated are authorized to remain available untilexpended, for administrative expenses in carrying out this title andrelated laws.
(e)(1) The Commissionershall provide for the extension of the fee withholding proceduresand assessment procedures that apply under the preceding provisionsof this section to agents and other persons, other than attorneys,who represent claimants under this title before the Commissioner.
(2) Fee-withholdingprocedures may be extended under paragraph (1) to any nonattorneyrepresentative only if such representative meets at least the followingprerequisites:
(A) The representativehas been awarded a bachelor’s degree from an accredited institutionof higher education, or has been determined by the Commissioner tohave equivalent qualifications derived from training and work experience.
(B) The representativehas passed an examination, written and administered by the Commissioner,which tests knowledge of the relevant provisions of this Act and themost recent developments in agency and court decisions affecting thistitle and title XVI.
(C) The representativehas secured professional liability insurance, or equivalent insurance,which the Commissioner has determined to be adequate to protect claimantsin the event of malpractice by the representative.
(D) The representativehas undergone a criminal background check to ensure the representative’sfitness to practice before the Commissioner.
(E) The representativedemonstrates ongoing completion of qualified courses of continuingeducation, including education regarding ethics and professional conduct,which are designed to enhance professional knowledge in matters relatedto entitlement to, or eligibility for, benefits based on disabilityunder this title and title XVI. Such continuing education, and theinstructors providing such education, shall meet such standards asthe Commissioner may prescribe.
(3)(A) The Commissionermay assess representatives reasonable fees to cover the cost to theSocial Security Administration of administering the prerequisitesdescribed in paragraph (2).
(B) Fees collectedunder subparagraph (A) shall be credited to the Federal Old-Age andSurvivors Insurance Trust Fund and the Federal Disability InsuranceTrust Fund, or deposited as miscellaneous receipts in the generalfund of the Treasury, based on such allocations as the Commissionerdetermines appropriate.
(C) The fees authorizedunder this paragraph shall be collected and available for obligationonly to the extent and in the amount provided in advance in appropriationsActs. Amounts so appropriated are authorized to remain available untilexpended for administering the prerequisites described in paragraph(2).
[123]See Vol. II,P.L. 108-203, §303, with respect to a nationwide demonstrationproject providing for extension of fee withholding procedures to non-attorneyrepresentatives and §304, with respect to a GAO study regardingthe fee payment process for claimant representatives.
[124]See Vol. II, P.L. 96-481, withrespect to an award of attorney fees and other expenses.
