Rule2024-18497
Changes to the Administrative Rules for Claimant Representation and Provisions for Direct Payment to Entities
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 21, 2024
Effective
September 20, 2024
Issuing agencies
Social Security Administration
Abstract
We are revising our regulations to enable us to directly pay entities fees we may authorize to their employees, as required by the decision of the United States Court of Appeals for the First Circuit (First Circuit) in Marasco & Nesselbush, LLP v. Collins. To make direct payments, issue the necessary tax documents, and properly administer these rules, we are requiring all entities that want to be assigned direct payment of authorized fees and all representatives who want to be appointed on a claim, matter, or issue to register with us. We also are standardizing the registration, appointment, and payment processes. This rule will help us implement the changes required by the Marasco decision, increase accessibility to our electronic services, reduce delays, and help us prepare for more automation, thereby improving our program efficiencies.
Full Text
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<title>Federal Register, Volume 89 Issue 162 (Wednesday, August 21, 2024)</title>
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[Federal Register Volume 89, Number 162 (Wednesday, August 21, 2024)]
[Rules and Regulations]
[Pages 67542-67556]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-18497]
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SOCIAL SECURITY ADMINISTRATION
20 CFR Parts 404, 416, and 422
[Docket No. SSA-2023-0018]
RIN 0960-AI22
Changes to the Administrative Rules for Claimant Representation
and Provisions for Direct Payment to Entities
AGENCY: Social Security Administration.
ACTION: Final rule.
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SUMMARY: We are revising our regulations to enable us to directly pay
entities fees we may authorize to their employees, as required by the
decision of the United States Court of Appeals for the First Circuit
(First Circuit) in Marasco & Nesselbush, LLP v. Collins. To make direct
payments, issue the necessary tax documents, and properly administer
these rules, we are requiring all entities that want to be assigned
direct payment of authorized fees and all representatives who want to
be appointed on a claim, matter, or issue to register with us. We also
are standardizing the registration, appointment, and payment processes.
This rule will help us implement the changes required by the Marasco
decision, increase accessibility to our electronic services, reduce
delays, and help us prepare for more automation, thereby improving our
program efficiencies.
DATES:
Effective date: September 20, 2024.
Implementation: For information on implementation dates, see
SUPPLEMENTARY INFORMATION.
FOR FURTHER INFORMATION CONTACT: Mary Quatroche, Director, Office of
Disability Policy, Office of Vocational Evaluation and Process Policy,
Social Security Administration, 6401 Security Boulevard, Baltimore, MD
21235-6401, (410) 966-4794. For information on eligibility or filing
for benefits, call our national toll-free number, 1-800-772-1213 or TTY
1-800-325-0778, or visit our internet site, Social Security Online, at
<a href="https://www.ssa.gov">https://www.ssa.gov</a>.
SUPPLEMENTARY INFORMATION:
Implementation
We will implement this final rule in two phases as follows:
Implementation Phase 1: registration of representatives and
entities.
1. We will implement the following regulation sections on September
30, 2024:
Sec. 404.1703 Definitions.
Sec. 404.1705 Who may be your representative.
Sec. 404.1740 Rules of conduct and standards of responsibility for
representatives.
Sec. 416.1503 Definitions.
Sec. 416.1505 Who may be your representative.
Sec. 416.1540 Rules of conduct and standards of responsibility for
representatives.
Implementation Phase 2: appointment of a representative, assignment
of direct payment of a representative's fee, and direct payment of
representative fees to entities.
2. We will implement the following regulation sections on December
9, 2024:
Sec. 404.1707 Appointing a representative.
Sec. 404.1720 Fee for a representative's services.
Sec. 404.1730 Payment of fees.
Sec. 404.1735 Entity eligible for direct payment of fees.
Sec. 416.1507 Appointing a representative.
Sec. 416.1520 Fee for a representative's services.
Sec. 416.1530 Payment of fees.
Sec. 416.1535 Entity eligible for direct payment of fees.
Sec. 422.515 Forms used for withdrawal, reconsideration and other
appeals, appointment of representative, and representative
registration.
Background
On August 4, 2023, we published a notice of proposed rulemaking
(NPRM), Changes to the Administrative Rules for Claimant Representation
and Provisions for Direct Payment to Entities,\1\ which proposed to
update our regulations to enable us to directly pay to entities fees
that we may authorize to their employees, as required by the decision
of the First Circuit in Marasco & Nesselbush, LLP v. Collins, 6 F.4th
150 (1st Cir. 2021). This final rule adopts these proposed changes,
with modifications.
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\1\ 88 FR 51747.
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Generally, we must authorize fees that a representative \2\ wants
to charge or collect for services they provide to a claimant in
assistance with their claim.\3\ If we authorize a fee to the
representative, we may also pay that fee directly out of the claimant's
past-due benefits, if certain conditions are met.\4\ Previously, our
regulations did not allow a representative to assign direct payment of
authorized fees to the entity \5\ that employs the representative. With
the publication of this final rule, we will no longer prevent entities
from directly receiving fees associated with a representative's work on
a claim. Instead, we are establishing rules and procedures that will
allow a representative to assign \6\ direct payment of authorized fees
to an eligible entity with which the representative affiliates \7\
through registration,\8\ if certain criteria are met.\9\ To comply with
the First Circuit's decision, we are establishing or revising several
processes in our rules,
[[Page 67543]]
including: (1) registration of representatives and entities; (2)
assignment of direct payment of representational fees to entities, as
well as rescission of the assignment; (3) point of contact (POC) \10\
requirements for the entity; and (4) direct payment to entities by
electronic funds transfer (EFT).
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\2\ Representative means an attorney who meets all the
requirements of 20 CFR 404.1705(a) and 416.1505(a), or a person
other than an attorney who meets all the requirements of 20 CFR
404.1705(b) and 416.1505(b), and whom a claimant appoints to
represent them in dealings with us. For purposes of our Rules of
conduct and standards of responsibility for representatives in
404.1740-404.1799 and 416.1540-416.1599, ``representative'' also
includes an individual who provides representational services and an
individual who is listed as a point of contact (POC) for an entity,
as applicable to their identified role. This defined term is used in
changes to 20 CFR 404.1703, 404.1720, 404.1740, 416.1503, 416.1520,
and 416.1540. Representational services are defined in 20 CFR
404.1703 and 416.1503. For additional information, please see our
instructions under our Program Operations Manual System (POMS) GN
03910.020, available at: <a href="https://secure.ssa.gov/apps10/poms.nsf/lnx/0203910020">https://secure.ssa.gov/apps10/poms.nsf/lnx/0203910020</a>.
\3\ Any person who claims a benefit under our programs may
appoint a representative(s) to assist with their claim, and
representatives may seek a fee for the services they provide.
\4\ Generally, we will pay the fee directly if the
representative is registered and eligible for direct payment, did
not waive the fee or direct payment of the fee, and there are past-
due benefits.
\5\ Entity means any business, firm, or other association,
including but not limited to partnerships, corporations, for-profit
organizations, and not-for-profit organizations. See 20 CFR 404.1703
and 416.1503.
\6\ Assignment means the transfer of the right to receive direct
payment of an authorized fee to an entity as described in sections
404.1730(e) and 416.1530(e). This defined term is used in changes to
20 CFR 404.1703, 404.1730, 416.1503, and 416.1530.
\7\ Affiliate means to associate with an entity through our
prescribed registration process. See 20 CFR 404.1703 and 416.1503.
\8\ We allow representatives to affiliate with the entity of
their choice through registration using the Form SSA-1699,
Representative Registration.
\9\ If all the conditions are met, we will accept an assignment
and certify payment of the authorized fee to the entity. We are
making these changes to 20 CFR 404.1720 and 416.1520.
\10\ Point of Contact means an individual who registers as a
representative in the manner we prescribe and is selected by an
entity to speak and act on the entity's behalf and who assumes the
affirmative duties and obligations we prescribe. This defined term
is used in changes to 20 CFR 404.1703, 404.1735, 404.1740, 416.1503,
416.1535, and 416.1540. The POC's role is to assist us in the
resolution of fees or fee errors.
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How SSA Works With the Representative Community
While the Marasco case involved a single employment relationship
where the entity's employment contract reflected that its salaried
employees represent claimants only within the context of their
employment, in practice, not all representatives work as employees of a
single entity or with similar restrictions. Some are independent
contractors who affiliate with more than one entity during their
registration process and let us know on a case-by-case basis who they
affiliate with on each specific case. Others may work primarily with
one entity, but in a capacity that would permit them to continue to
represent claimants who hire them regardless of the representative's
employment status. We respect representatives' ability to structure
their employment relationships as they see fit and do not limit
representatives to affiliating with only one entity in our systems. As
the First Circuit acknowledged, there are multiple ways to structure a
process to directly pay entities. If we were to implement a process
that only considers or works for the type of employment relationship at
issue in Marasco, though, we would be imposing rules on representatives
at large where those rules may not be appropriate or efficient in all
cases.\11\
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\11\ For example, a limited review of the agency's available
data shows that there are currently more than 31,000 registered
representatives who are affiliated with more than one entity in our
systems, while approximately 6,350 are affiliated with just one
entity. This data does not capture representatives who are not
affiliated with any entity, nor do we have data on representatives
who have chosen not to register with us as registration is currently
voluntary. These numbers suggest that a substantial portion of the
representative community may structure their employment
relationships differently than the Marasco plaintiffs. As described
more fully below, the clear need to accommodate a variety of
employment relationships necessitated the approach which we finalize
in this rule. In addition, approaching the registration,
appointment, and fee assignment process in a manner more consistent
with that desired by commenters would require a complex overhaul of
legacy systems that the agency currently relies on to manage the
appointment and payment of claimant representatives, including
significant changes to multiple aspects of downstream systems. See
infra at 6-7. This would increase technical debt and preclude the
agency from prioritizing using available resources for
modernization.
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We intentionally developed a process broad enough to accommodate a
variety of employment relationships. For example, some representatives
are independent contractors who affiliate with more than one entity and
let us know which entity, if any, they are affiliated with in a
specific case. Other representatives affiliate with no entity at all
and operate as solo practitioners. Also, some representatives enter
into employment contracts that limit them to representing claimants
solely within the confines of that employment relationship, while
others may continue to represent individual claimants after they leave
the employment of the firm. These rules do not prevent entities from
structuring their own employment contracts to include stricter terms,
such as limiting their employees' ability to rescind assignments, if
doing so is appropriate for their particular employment relationship.
We think the process we are adopting serves the entire representative
community and the public.
This approach is also necessary given certain limitations
surrounding information technology systems and resource constraints
which the agency faces as we work to leverage existing systems to
comply with the court's order without further delay.\12\ Transitioning
to a system that pays entities directly, without tethering such
payments to individual representatives, would require a significant
overhaul of our Registration, Appointment and Services for
Representatives (RASR) system and other legacy systems which are
currently critical to how we register, assign, and pay fees to
representatives. Within the constraints of our existing systems, the
approach in this rule effectively accommodates the variety of
employment relationships between entities and individuals who represent
claimants before us.
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\12\ See supra n.11.
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Registration
All representatives must register \13\ with us by completing and
submitting Form SSA-1699 (OMB No. 0960-0732), which is currently called
``Registration for Appointed Representative Services and Direct
Payment'' and is being changed to ``Representative Registration,''
prior to being appointed on any claim.\14\ Registration will be a one-
time process unless the representative's information changes. If there
are changes, registration information must be kept current by
submitting an updated Form SSA-1699. We will also require any
unregistered individual to register as a representative before being
named as a POC for an entity. We are making these changes in 20 CFR
404.1703, 404.1705, 404.1735, 416.1503, 416.1505, and 416.1535.
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\13\ We define Registration as a process by which an individual
or entity provides the information we require to conduct business
with us. This defined term is used in changes to 20 CFR 404.1703,
404.1705, 404.1735, 416.1503, 416.1505, and 416.1535.
\14\ We are not changing the process by which individual
representatives register. Detailed instructions about the process
can be found in our subregulatory instructions under our POMS
Subchapter GN 03913, available at: <a href="https://secure.ssa.gov/apps10/poms.nsf/lnx/0203913000">https://secure.ssa.gov/apps10/poms.nsf/lnx/0203913000</a>. Representatives do not have to be appointed
to be registered, but we will require individuals who want to become
appointed as representatives to be registered first. Therefore, we
recommend individuals who may wish to be appointed as
representatives at any time to register as early as possible.
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During the registration process, representatives may affiliate with
one or more entities, which allows us to issue a copy of Form IRS 1099
to their employer to assist the parties in their accounting and tax
reporting duties. Before a representative can assign direct payment of
any fee that may be authorized on a claim to an entity, the
representative must affiliate with the entity through registration. The
entity must also register with us and name a POC before we will accept
a representative's assignment of direct payment to that entity. To
collect this new information from an entity, we revised the standard
Form SSA-1694 (OMB No. 0960-0731), which is currently called ``Request
for Business Entity Taxpayer Information'' and is being changed to
``Entity Registration and Taxpayer Information'' to collect the
entity's name, POC information, and address, so that we may meet our
obligation to provide entities with a Form IRS 1099 for their tax
reporting responsibilities.\15\
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\15\ To enable direct payments to entities and meet our
mandatory tax reporting obligations to the Internal Revenue Service
(IRS), we also collect information such as tax identification
numbers, addresses, and banking institutions from entities using our
revised Form SSA-1694.
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Under this rule, registration for entities that do not want to
receive direct payment of assigned fees will continue to be voluntary.
Like representative registration, entity registration will be a one-
time transaction unless the entity needs to update its information by
submitting an updated Form SSA-1694. In addition,
[[Page 67544]]
any entity that registered with us under our prior process and now
wants to receive direct payment of assigned fees will have to register
again to provide the additional information we do not currently
have.\16\ Entities will be responsible, through their POC, for keeping
their information accurate and current. We are making these changes in
20 CFR 404.1735 and 416.1535.
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\16\ New information we will collect during entity registration
includes banking information for direct payment and information
regarding a designated POC.
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Appointment
To appoint a representative, we will require a claimant and their
chosen representative to complete and submit our appointment Form SSA-
1696 (OMB No. 0960-0527), ``Claimant's Appointment of a
Representative.'' \17\ When submitting an appointment, both the
claimant and the representative, whether an attorney or non-attorney,
must sign the Form SSA-1696.
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\17\ A new selection is available on the revised form for a
representative to assign direct payment of any authorized fee for a
specific claim to an eligible entity. All assignments must be
submitted using this standard form. However, a representative may
assign direct payment of a fee any time before the date we notify
the claimant of our first favorable determination or decision.
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We are making these changes in 20 CFR 404.1707 and 416.1507.
Payment Method
We will pay entities to whom direct payment of fees has been
assigned exclusively through EFT. We will continue applying a waiver
\18\ to allow individual representatives who have not assigned direct
payment of their fees to receive payment by check; however, we will not
apply the waiver to entity payments. This rule will not change our
current payment process or options for individual representatives. We
are making these changes in 20 CFR 404.1735 and 416.1535.
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\18\ EFT is required by law for Federal nontax payments, with
limited exceptions. One of those exceptions allows agencies to waive
the EFT requirement when the agency does not anticipate making
payments to the same recipient on a regular, recurring basis within
a one-year period and the recipient's financial institution does not
make remittance data explaining the purpose of the payment readily
available. See 31 CFR 208.4 (enumerating certain exceptions to the
requirement that all non-tax payments made by Federal agencies be
made by EFT). As the Department of the Treasury explained in a 2010
rulemaking proceeding, this exception arose to address the needs of
individual representatives seeking fee payments from us who claimed
that their banks were not able or willing to provide all the
information needed to identify the client on whose account the
deposit was made and who were precluded from electronically
depositing their fee payments into their employer/firm's bank
account. However, we had already taken steps to begin transmitting
information to banks to enable representatives to link payments to
clients, and we encouraged those banks to pass that information on
to their account holders as quickly as possible, thus addressing the
issue of the availability of information tying payments to specific
clients. See 31 CFR 208.4(a)(6); 75 FR 80315, 80325. And with this
final rule, we will directly pay entities, eliminating individual
representatives' concerns about the difficulty of transferring
payments from their own accounts to their employers' accounts.
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Assignment
To assign direct payment of an authorized fee, the representative
must: (1) be eligible \19\ for and seek direct payment; (2) be
affiliated through our registration \20\ process with an entity that is
eligible for direct payment; and (3) make the assignment timely and in
the manner we prescribe.\21\ Where all these conditions are satisfied,
we can honor an assignment.\22\
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\19\ We will check eligibility at the time we process the
assignment and at the time we certify the direct payment.
\20\ Currently this is done using Form SSA-1699.
\21\ Representatives must make the assignment using Form SSA-
1696.
\22\ An invalid assignment would not affect the processing of an
otherwise valid notice of appointment.
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Representatives may assign direct payment of fees at any time prior
to the date we notify the claimant of the first favorable determination
or decision in their claim.\23\ A representative may also rescind a
previously established assignment prior to the date we notify the
claimant of the first favorable determination or decision in their
claim.\24\ To ensure operational efficiency and accuracy, we cannot
accept assignments or rescission of assignments filed after the date we
notify the claimant of our first favorable determination or decision.
This rule will apply to claims pending when the regulations in 20 CFR
404.1720, 404.1730, 404.1735, 416.1520, 416.1530, and 416.1535 become
effective.
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\23\ Throughout this preamble, ``favorable determination or
decision'' refers to either a fully or partially favorable
determination or decision.
\24\ We will allow a representative to rescind an assignment by
submitting an updated version of our prescribed form.
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We will reject an assignment if either the representative or the
entity does not properly register prior to filing the assignment, or if
the representative does not properly identify the entity by providing
the entity's name and Employer Identification Number (EIN) on the Form
SSA-1696 when making the assignment. We will also reject any assignment
that is made to an entity that is ineligible for direct payment, that
is made by a representative who is not eligible for or requesting
direct payment of an authorized fee, or that is not filed before the
date that we notify the claimant of our first favorable determination
or decision. We will notify the representative if we reject an
assignment. The rejection of an assignment will not affect the
processing of an otherwise valid appointment or the representative's
own eligibility for direct payment.
An assignment may be invalidated if the entity or representative
become ineligible for direct payment. As discussed later in this
preamble, a change in a representative's relationship with the entity
would not, on its own, invalidate an assignment. For instance,
previously, our rules did not allow a representative to receive direct
payment if their appointment was withdrawn or revoked prior to a
favorable determination or decision. Now, however, a representative
will be able to withdraw from the appointment without losing their
eligibility for direct payment. As a result, if that representative
withdraws from the appointment when they leave the employment of an
entity, neither their withdrawal nor their change in employment would,
on their own, impact the validity of an assignment or their former
employer's eligibility to receive direct payment of the authorized fee,
even if they were the only representative for the relevant claimant
affiliated with that entity.\25\ However, as is the case with
individual representatives, to receive direct payment of an assigned
fee, whether that fee was authorized to a current or former employee,
the entity must ensure that it does not otherwise lose eligibility for
direct payment, such as by violating our rules by retaining
unauthorized fees or fees that exceed the amount we authorized.
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\25\ Also, in the event an appointed representative dies, if the
representative was eligible for direct payment, made a timely
assignment, and other criteria are met (e.g., there are past-due
benefits, we authorize a fee, the entity is eligible to receive
direct payment), we will honor the assignment and make direct
payment to the selected entity. At the time we pay the fee, we will
honor the assignment unless certain invalidating actions occur, such
as the representative timely rescinds the assignment, waives the
right to a fee (or direct payment of a fee), is sanctioned, or
becomes ineligible for direct payment, or the entity becomes
ineligible for direct payment.
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Payments to entities will still be subject to all our other rules
governing payment of fees.\26\ If, at the time we calculate the fee,
the assignment meets all the criteria for a valid assignment, we will
certify payment of the authorized fee to the entity. However, we will
not charge claimants with an overpayment in order to make direct
payment to an entity in situations where, through no error of our own,
we
[[Page 67545]]
did not withhold funds from past-due benefits; where we were not timely
informed of an assignment of direct payment of fees; where the entity
was, at the time of payment, ineligible for direct payment but later
became eligible; or where the representative waived the fee (or direct
payment of the fee), even if the representative withdrew the waiver, if
that withdrawal occurred after we already made all other payments and
released the past-due benefits.
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\26\ This includes the requirement that past-due benefits are
available and that we have withheld them.
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We will allow only one assignment per representative per case. This
restriction means a representative cannot assign direct payment to
multiple entities in a single case. However, if multiple
representatives involved in a case are affiliated with and assign
direct payment to different entities, we will make fee payments
following our existing rules for payments to multiple representatives
and apply the rules herein to each separate assignment. If all other
conditions for a valid assignment are met, we will honor the most
recently updated (and timely filed) assignment of direct payment of a
fee, which will supersede all prior assignment requests made by that
representative. We are making these changes in 20 CFR 404.1730,
404.1735, 416.1530, and 416.1535.
Resolution of Fee Issues
To facilitate resolution of fee discrepancies and other fee-related
issues, such as correcting a Form IRS-1099, we will require an entity
to name a POC during the entity's registration. Each entity will name a
single POC. This POC will need to register as a representative and must
not currently be suspended or disqualified from practicing before us.
However, a POC is not required to be an attorney, appointed on any
individual claim, or eligible for direct payment. We will collect the
POC's information, including the POC's name, Rep ID,\27\ and phone
number, during the entity's registration. We will reject any
registration that is missing this information and will ask the entity
or POC to provide the missing information. To ensure consistent
communication, we will hold the POC and the entity jointly responsible
for keeping their information current.
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\27\ During the individual registration process, we issue a
Representative Identification number (Rep ID) for representatives to
use in lieu of their Social Security number (SSN).
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We expect the POC to assist us in resolving fee-related matters and
to conduct all entity affairs with us with diligence, truthfulness, and
competence. Regardless of whether the POC is appointed on any claim, we
will hold the POC responsible under our Rules of conduct and standards
of responsibility for representatives if these duties are not met, but
we will not hold the POC financially responsible for repayment of
excess or otherwise erroneous fee payments made directly to the entity.
The entity will be responsible for repayment of excess or otherwise
erroneous fees via a remittance.\28\ We revised our Rules of conduct
and standards of responsibility for representatives to account for the
new POC role in our processes. We made these changes in 20 CFR
404.1735, 404.1740, 416.1535, and 416.1540.
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\28\ This is similar to what we currently do for individuals.
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Entities may become ineligible for direct payment if they do not
remit excess or otherwise erroneous fees; if they do not maintain an
active POC; if they, through their POCs, do not assist us in correcting
a fee payment error; or if they do not otherwise comply with our rules.
An entity will need to update the entity registration to name a new POC
immediately if there is any change in the current POC's status.\29\ We
will work with the POC to correct possible fee inaccuracies or recover
erroneous fees.
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\29\ To update a POC's information, the new POC must submit an
updated Form SSA-1694.
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We will maintain a list of entities that are ineligible for direct
payment because, after notice to that entity's POC, the entity failed
to resolve a fee matter or other issue restricting their eligibility.
We will stop direct payments to any entity on this list and will not
accept new assignments from representatives made to an entity on this
list. We will remove an entity from the list and accept new assignments
when the entity resolves to our satisfaction the fee matter or other
issue restricting eligibility. If the entity is ineligible for direct
payment at the time we are ready to make direct payment, we will make
the payment to the representative who filed the assignment if that
representative remains eligible for direct payment. If the
representative is no longer eligible for direct payment at that time,
we will, as we currently do, release the funds to the claimant. We are
making these changes in 20 CFR 404.1735 and 416.1535.
Fee Waiver
Representatives who waive their fee, direct payment, or both will
not be permitted to make an assignment because there would be no fee or
direct payment to assign. We will not accept fee waivers or direct
payment waivers made by representatives who previously assigned direct
payment of a fee and did not rescind the assignment prior to the date
we notify the claimant of our first favorable determination or
decision. Issues arising from untimely assignment submissions or
rescissions, improper waivers, or similar events would be matters
between the entity and the representative. We are making these changes
in 20 CFR 404.1730 and 416.1530.
Form SSA-1695
On October 2, 2006, we issued a Federal Register Notice (FRN),
``Registration Requirements for Representatives to Receive Direct
Payment of Fees Approved for Services Provided Before the Social
Security Administration or a Federal Court and Forms 1099-MISC'' that
required the submission of Form SSA-1695 ``Identifying Information For
Possible Direct Payment of Authorized Fees'' (OMB No. 0960-0730).\30\
We subsequently included relevant information from this collection
instrument in the Form SSA-1696, while eliminating the representative's
SSN requirement. The 2006 FRN's requirements are obsolete with the
publication of this final rule.
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\30\ 71 FR 58043 (Oct. 2, 2006).
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Explanation of Changes
As mentioned above, we are updating our regulations to enable us to
directly pay authorized fees to entities when certain conditions are
met. Accordingly, we are making changes to the following sections: 20
CFR 404.1703, 404.1705, 404.1707, 404.1720, 404.1730, 404.1735,
404.1740, 416.1503, 416.1505, 416.1507, 416.1520, 416.1530, 416.1535,
416.1540, and 422.515.
Sections 404.1703, 404.1705, 416.1503, and 416.1505
In these sections, we are adding definitions, including affiliate,
assignment, point of contact, and registration. We are also revising
our definition of representative, revising representative registration
requirements, and making minor stylistic changes.
Sections 404.1707 and 416.1507
In these sections, we are revising the process for appointments and
modifying language to accommodate developments in methods for filing
appointments.
[[Page 67546]]
Sections 404.1720, 404.1730, 404.1735, 404.1740, 416.1520, 416.1530,
416.1535, and 416.1540
In these sections, we discuss assignments and eligibility for
assignments. In these sections, we also explain a POC's role and
responsibilities under our Rules of conduct and standards of
responsibility for representatives.
Section 422.515
In this section, we update the title and description of the newly
required and revised Form SSA-1696 Claimant's Appointment of a
Representative and add the newly required and revised Form SSA-1699
Representative Registration.
Modifications From the NPRM
In several places, this final rule differs from the Code of Federal
Regulations (CFR) text we proposed in the NPRM. As we discuss, we are
adding a definition and revising language because we received comments
specifically asking for clarification on old and new terminology. More
specifically, we revised 20 CFR 404.1703 and 416.1503 to include a
definition for ``affiliate'' and revised the definitions of
``representative'' and ``point of contact.'' We revised 20 CFR
404.1705(c) and 416.1505(c) to give the agency operational flexibility
with processing registration and appointment forms. We revised 20 CFR
404.1730(b)(i) and 416.1530(b)(i) for consistency with regulatory
language elsewhere in this subpart. We revised 20 CFR 416.1530(b) to
explain that we will pay a representative out of the past-due benefits
the smallest of the amounts in paragraphs (b)(1)(iii) through (v), and
we are clarifying that we are redesignating paragraph (b)(1)(iii) as
(b)(1)(v) and redesignating paragraph (e) as paragraph (f). We also
revised 20 CFR 404.1730(e) and 416.1530(e) to clarify that we will
prescribe how representatives may make and rescind assignments. We
revised 20 CFR 404.1735(d) and 416.1535(d) for consistency with the
change to the definition of ``point of contact.'' We revised 20 CFR
404.1720(f), 404.1730(e), 416.1520(f), and 416.1530(e) to clarify that
a representative may assign direct payment of a fee to an entity. We
also revised 20 CFR 422.515 to reflect the correct title of Form SSA-
1696 and to include Form SSA-1699.
This final rule now defines affiliate to mean ``to associate with
an entity through our prescribed registration process.''
We revised the representative definition to cite to our Rules of
conduct and standards of responsibility for representatives in
404.1740-404.1799 and 416.1540-416.1599.
We revised the point of contact definition to clarify that the POC
need not be an established representative, but rather must register as
a representative before filling that role. This final rule revises the
definition of point of contact to mean ``an individual who registers as
a representative in the manner we prescribe and is selected by an
entity to speak and act on the entity's behalf and who assumes the
affirmative duties and obligations we prescribe.''
Comments Summary
We received eleven submissions of public comments on the proposed
rule. Many comments were supportive of the overall regulatory change,
i.e., establishing a process that permits the direct payment of
representatives' fees to entities rather than only to the
representatives. At the same time, multiple commenters asked questions
or expressed confusion about some parts of our proposed implementation,
and others documented concerns about various aspects of the proposed
rule. Below we summarize and respond to the public comments.
This rule is necessary to establish the basic regulatory authority
and framework we will use to comply with the court's order in Marasco.
This rule is designed to give us the flexibility to adjust as we
receive feedback from the advocate community and the public at large
with implementation. Our intention is to use this flexibility to
improve the process based on experience, and we will provide
information on updates to the process through subregulatory
instructions as appropriate. Our subregulatory instructions are
generally publicly available.
Comments and Responses
Requests for Clarification
Comment: Multiple commenters opined that some of the central
changes in the NPRM were inconsistent with the First Circuit's holding
in Marasco, and that these changes will not actually steer payments to
law firms. Some commenters disagreed with us establishing a process
that allows the individual representative to decide whether or not to
assign direct payment of authorized fees to an entity, arguing that the
fees authorized for services performed as a representative while
working as an employee belong to the entity, not the representative,
and that the First Circuit's decision so held.
Response: We disagree with this interpretation of the First
Circuit's decision. Prior to discussing ways in which we might comply
with the decision, the First Circuit explicitly stated, ``[i]t is not
our role to determine what those mechanisms should be. However, we can
see multiple ways of adjusting the current approach without disturbing
the agency's judgment that only individuals should represent claimants.
As noted above, the SSA already expects law firms to disclose an
attorney-representative's affiliation with a firm. In such cases, the
associate-representative could advise the SSA that any fees authorized
from the claimant's past-due benefits are jointly payable to the
firm.'' Marasco & Nesselbush, LLP v. Collins, 6 F.4th 150, 177-78 (1st
Cir. 2021). In other words, the court preserved SSA's flexibility in
establishing the process by which direct payments would be made to
entities. In so doing, it contemplated a process like the one SSA
adopts here, in which the representative would ``advise'' SSA whether
fees should be made directly to an entity. Id.
Therefore, the flexibility offered by the First Circuit is
important, as the court considered only one type of representative/
entity relationship, rather than the many types of relationships that
actually exist. The First Circuit did not state that authorized fees
must be paid to the entity without the representative's involvement. In
addition, on remand from the First Circuit, the district court ordered
the agency to ``[e]stablish a process to ensure that law firms that
employ salaried associates to represent SSA claimants may receive
direct payment of the attorney's fees to which the firms' associates
are entitled for representation performed while employed by those law
firms.'' (emphasis added). Accordingly, we have established a process
that is consistent with the First Circuit's decision, that complies
with the district court's order, and that also does not ``disturb[ ]''
our ``judgment that only individuals should represent claimants.''
Marasco, 6 F. 4th at 177-178.
Moreover, the assignment process aligns with a suggestion by the
First Circuit that the agency ``could simply honor the limited power of
attorney that . . . firms require their associates to execute, in which
the associates relinquish payments made to them for representing SSA
claimants.'' Marasco, 6 F.4th at 178. It would be untenable for the
agency to efficiently review and accurately make payments based on
requirements set out in a range of powers of attorney (with varied
terms
[[Page 67547]]
governed by different state laws, which might also include an
associate's right to rescind) that firms might require associates to
execute. However, the assignment process adopted here accomplishes the
same result as honoring any powers of attorney by allowing
representatives to indicate that their authorized fees should be
directly paid to an entity, through a uniform process that is efficient
and workable for representatives and agency employees.
Therefore, our process permits and facilitates direct payment of
authorized fees to entities, as the court ordered, while accommodating
the varying types of underlying relationships between representatives
and entities, in which we have no involvement. Those relationships may
take many forms, and we respect the choices entities and
representatives make with regard to their employment agreements and
contractual terms, as well as local laws affecting such relationships.
To simplify implementation and build flexibility, we will allow any
representative to affiliate with an entity and assign direct payment,
if applicable, to that entity. We will not verify whether the
representative is salaried with the entity or is a contractor. We
currently allow representatives to affiliate with the entity or
entities of their choice through registration using the Form SSA-1699
to provide the entity with an informational IRS Form 1099. Similarly,
we will require the representative to use our prescribed registration
process to affiliate with an entity as a condition for a representative
to assign direct payment of a fee to a particular entity.
Comment: Commenters had concerns about whether the principal
representative should be required to be the de facto POC and whether
language regarding the principal representative will remain on the Form
SSA-1696. Commenters also expressed concerns that if there is a POC
assigned and a principal representative did not waive fees, the
proposed rule does not clarify the impact a fee waiver by a later
appointed representative would have on the payment to the entity.
Response: The POC and principal representative are separate roles,
and the POC's function will not change, impact, or affect that of a
principal representative. Principal representatives are chosen by
claimants when a claimant appoints more than one representative on
their claim. The claimant is responsible for making decisions related
to the appointment, and the ability to designate the principal
representative will remain on the Form SSA-1696. The principal
representative must be one of the representatives appointed by the
claimant. When there are multiple representatives appointed on a single
claim, we send notices for non-fee-related matters only to the
principal representative, who is responsible for distributing the
information to the other representatives.
In contrast, POCs are individuals chosen by entities to resolve
fee-related issues on any claim for which the entity receives direct
payment of a fee. They must be registered as representatives with us
but do not need to be appointed on any individual claim. Rather, the
POC's role is to assist us in the resolution of any fee issues or
errors with respect to direct payments to an entity. We have revised 20
CFR 404.1703 and 416.1503 to clarify the POC's role. Further, due to
applicable Federal law (including the Privacy Act), regulations
(including our regulations), and directives governing how, when, and to
whom we may disclose a claimant's personal information, unless the POC
is also appointed by the claimant as a representative, the POC is not
entitled to any information about the claim or claimant other than what
is necessary to resolve fee-related issues on behalf of the entity. For
non-fee issues, we will continue to communicate with and send claim-
related notices to the principal representative only.
Because we continue to recognize only individuals as appointed
representatives, the right to a fee for services will remain with the
representative--even though direct payment may be assigned to an
entity. When a representative, whether the principal representative or
another representative who is appointed on the case, waives the fee, we
will not authorize or pay a fee to that representative or to an
affiliated entity. However, if there are other representatives
appointed on the case who have assigned direct payment of their fee to
an entity and who did not waive their fee, we will authorize or pay a
fee to those representatives and honor any assignments of direct
payment those representatives made to an entity, if all relevant
conditions are met.
Any appointed representative on a case who is eligible for direct
payment can assign direct payment to an entity, but each assignment is
limited to only one entity per representative per claim. Different
representatives appointed on the same claim can assign their respective
payments to the same or different entities.
Comment: Another commenter asked us to clarify the processing times
for registration so that representatives are aware of the lead time
required before they can be appointed. In addition, they asked for
clarification on the method by which assignments will be made for an
entity to receive direct payment of an authorized fee.
Response: We are implementing this final rule in two phases to
accommodate concerns about processing times, with the first
implementation phase focused on registering representatives and
entities. After representatives and entities have had the opportunity
to properly register, the second implementation phase will generally
focus on assignment and direct payment of representative fees to
entities. We are developing training that we will provide to agency
staff who will be involved in this process to ensure they are prepared
to explain the new requirements and necessary forms to claimants,
prospective claimants, and anyone assisting them.
We will begin accepting entity registrations as soon as practicable
and will generally process registrations as we receive them. We also
plan to notify currently-registered entities about the changes in our
rules and the need to update their registration. Our records indicate
that there are approximately 5,000 registered entities that will need
to update their registration to provide us their banking institution
information and name a POC in order to receive direct payment via EFT
based on an assignment. We have also identified several thousand EINs
belonging to unregistered entities, meaning that representatives have
listed these entities as affiliated with them, but these entities are
unregistered. These entities must register in order to receive direct
payment based on an assignment.
Individual representatives who are already registered and
affiliated with an entity do not need to update their registration,
unless their information changes or they wish to be affiliated with a
different entity. Nonetheless, we plan to notify currently-registered
individuals about the changes in our rules.
We have revised Form SSA-1696 (Claimant's Appointment of a
Representative). On the revised form, a selection is available to
assign direct payment of the fee to an affiliated entity. A
representative may make an assignment any time before the date we
notify the claimant of our first favorable determination or decision.
All assignments must be filed using this standard form. We have added
regulatory language to clarify that the assignment must be made in the
manner we prescribe and will elaborate in our
[[Page 67548]]
instructions \31\ that the manner of assignment will be on the Form
SSA-1696. We made these changes in 20 CFR 404.1730(e)(iii) and
416.1530(e)(iii). We encourage representatives to make their assignment
at the time of appointment or as early as possible to help us collect
this critical information early and process it in an efficient manner.
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\31\ Our instructions include POMS and HALLEX, which are
publicly available.
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Comment: Commenters opined that the proposed rule is unclear about
whether the changes apply to new appointments and assignments after the
date of the final rule, or if the assignments can be made
``retroactively.''
Response: In pending cases where a representative is already
appointed, the representative may assign direct payment to an entity in
accordance with these rules. The assignment must be made before the
date we notify the claimant of our first favorable determination or
decision.
However, although we will allow assignments for cases that are
already in process prior to the final rule's effective dates, we cannot
accept assignments or rescission of assignments filed after the date we
notify the claimant of our first favorable determination or decision
for reasons of operational efficiency and accuracy. The vast majority
of fees authorized by the agency use the fee agreement process, and
section 206(a)(2)(A) of the Social Security Act (Act) \32\ requires fee
agreements to be approved at the time of the favorable determination.
Once the fee agreement is approved, our processes for authorizing the
fee amount and issuing direct payments of the authorized fee begin.
Because the timeline for the process that follows the fee agreement
approval can be dependent on the facts of each case, we chose the time
in the process that could be applied most uniformly and efficiently by
agency technicians, and in the interest of uniformity, we will apply
that rule regardless of whether the fees are authorized using the fee
petition or fee agreement processes. We anticipate this deadline for
making or rescinding appointments will minimize errors.
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\32\ 42 U.S.C. 406(a)(2)(A).
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Attempting to treat differently pipeline cases in which a favorable
determination or decision has been issued, but authorized
representative fees have not been paid, by the effective date of the
rule would greatly complicate our implementation of new policies and
business processes. It would also increase the risk of processing
errors.
Comment: Commenters stated that we had not been specific enough in
identifying all the circumstances that would invalidate an assignment.
As an example, they asked, ``. . . what is the impact of the death of a
representative who assigned fees to an entity prior to his death?''
Response: An established assignment will be invalidated if a
representative or entity becomes ineligible for direct payment after
the assignment is filed. For example:
[cir] A representative may become ineligible for direct payment if
they are sanctioned or if they are an eligible for direct payment non-
attorney (EDPNA) who has lost their eligibility for direct payment.
[cir] An entity may become ineligible if, for example, it fails to
remit excess fees.
Further, we will not accept untimely assignments, e.g., assignments
made after we notified the claimant of the first favorable
determination or decision on the case. If we determine in the future
that other circumstances will invalidate an assignment, we will make
those circumstances public in our subregulatory instructions. While we
are unable to anticipate every possible circumstance at this time, we
recognize the uncertainty this might cause the representative community
as they try to comply with our rules and policies. To minimize this
uncertainty, in addition to publishing changes in our publicly
available subregulatory instructions, we will provide any updates to
this policy to representatives through the channels we use to
communicate with advocates, such as our Dear Colleague Letters and news
announcements on our advocate web page. This will ensure that the
representative community is aware of any changes.
Regarding this specific example raised by the commenter, in the
event an appointed representative dies, we will continue to honor an
already-filed assignment if the representative was eligible for direct
payment at the time of death and other necessary criteria for
assignment and direct payment are met (e.g., there are past-due
benefits, we authorize a fee, and the entity is eligible to receive
direct payment).
Comment: Commenters asked how we will ensure that entities are paid
for work performed by their salaried employees when that work was
performed as a part of the representative's employment. Commenters had
concerns that the proposed rule allows a representative to rescind an
assignment prior to the award of a claim, thus creating the possibility
that the representative could ``take with them the fees to which the
firm was clearly entitled.''
Response: While we recognize entities' concerns about receiving
compensation for work done by their employees, representative and
entity relationships can take many forms, and we are not in a position
to know how those relationships are arranged. We respect the choices
entities and representatives make with regard to their employment
agreements and contractual terms, and we established a process that is
flexible enough to accommodate a variety of relationships. Permitting
an individual representative to rescind an assignment is important to
that flexibility, as rescission might be appropriate in certain
relationships. For example, an employment contract might permit a
representative to leave a firm's employ but continue their
representation and collect associated fees.
As well, maintaining this flexibility helps to protect claimant
rights. Specifically, our process protects the claimant's ability to
continue to be represented by the individual representative of their
choice, regardless of that individual's employment relationship. To
hinder that flexibility could disincentivize representatives who are
not in the type of employment relationship that was at issue in Marasco
from continuing representation in these circumstances.
While there may be other ways to preserve this flexibility, we are
unable at this time to commit the significant information technology
investments that would be required to, for instance, allow
representatives the option of splitting direct payment of their
authorized fee to accommodate those situations in which they are
employed by an entity for only part of the time that they represent a
claimant.\33\ But again, nothing in these rules prevents entities and
representatives from addressing such situations through their
employment contracts (e.g., they agree that direct payment of such a
fee should be made to the entity with the entity returning a portion to
the representative, or they agree that direct payment of the fee should
be made to the representative with the representative returning a
portion to the entity).
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\33\ See, e.g., supra n.11.
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The agency's new process is available to representatives and
entities to use as appropriate for their individual circumstances.
Ultimately, while we acknowledge the need for entities to receive
payment for the work representative employees do while in their employ,
and we encourage entities
[[Page 67549]]
and representatives to decide on and document those arrangements as
part of a formal employment contract, we cannot assume responsibility
for mediating the many types of employer-employee relationships. To do
so would not be feasible.
As required, our process enables employers to directly receive fees
authorized to representatives they employ through the assignment
process. However, entities may structure their own employment contracts
to prohibit or limit rescission of the assignment, if doing so is
appropriate for their particular employment relationship, and may
enforce those contracts as necessary. Additionally, neither the First
Circuit's opinion nor the district court's order require the agency to
favor a specific type of employment relationship.
Recapture of Fees
Comment: One commenter expressed concerns specifically about our
proposed process for recovering excess or otherwise erroneous fees.
They expressed, ``No organizational requirements should permit Social
Security to unilaterally recapture a fee from a representative or
organization's bank account even if a fee was clearly, erroneously
paid.'' They also stated, ``Representatives remain responsible to
return unearned, or mistakenly paid fees, but permitting Social
Security to unilaterally take those fees whether disputed or not could
lead to further mistake, violate a representative's appeals rights, and
unduly harm a business that cannot predict the involuntary withdrawal
of funds from its operating account, potentially years after a fee was
paid and dispersed on the good faith belief that it was valid.''
Response: We are not proposing to recapture fees from bank
accounts. We currently have a long-established process to handle
collection of erroneous or excess fees from individuals and are
developing a similar process to collect erroneous or excess fees from
entities. With this rule we require entities to name a POC so that we
can work with that person to detect and confirm whether an error has
occurred and, where appropriate, collect the excess fee via a
remittance from the entity similar to what we currently do for
individuals. We do not withdraw excess fees directly from an entity's
or individual representative's bank account, and this rule will not
change that.
Registration of Representatives and Entities
Comment: Some commenters had concerns with the revised definition
of the term ``representative,'' as well as the proposed rule's
requirement that individual representatives register prior to being
appointed on a claim.
One commenter stated, ``The proposed rule's expansion of this
requirement [registration by all representatives and use of the
representative ID] appears to be beyond the scope of addressing the
First Circuit direction to develop a process for paying entities
directly and may well discourage friends and family from providing
valuable assistance to claimants.'' However, they did concur that
entities themselves should be required to register to receive direct
payment.
Response: We expect that requiring all representatives to register
with us will have several benefits. While we generally communicate with
unregistered representatives via manual notifications, requiring all
representatives to register will allow us to conduct business more
efficiently because it will allow us to automate more notices, minimize
manual errors, properly track transactions and related communications,
and improve our sanctions process. The registration requirement will
help us further automate communications that are managed by our
centralized representative database and share the information with our
secondary databases used to process cases at different adjudicatory
levels, so these systems can also automate their communications. We
expect this increased automation will also make the processing of
appointments and fee payments more efficient by reducing errors
associated with manual actions. In addition, the registration
requirement will enable us to better track all representatives' actions
and conduct on their cases, rather than just those who choose to
register with us, and it will extend access to our electronic services
to more representatives. Access to our Electronic Records Express (ERE)
system, for example, has been an important tool for representatives to
obtain real-time information from our files in an easy and efficient
way without the need to contact an agency employee for that
information.
Our subregulatory instructions already provide that general
assistance, including accompanying a claimant to an appointment or our
offices, or providing general help or casual advice, is not considered
``representational services.'' \34\ Relatives, friends, or other
individuals who want to assist claimants in this manner do not need to
be registered or appointed. They can perform tasks such as interpreting
for claimants, helping claimants fill out forms, or joining claimants
in interviews. However, anyone who wants to actively represent a
claimant, speak to us on behalf of a claimant, or access our electronic
files must be appointed (unless the individual has other legal
authority to do so). If friends and family members want to act in the
capacity of an appointed representative, with the rights and
responsibilities that go along with that role, they will need to
register with us.
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\34\ See POMS GN 03910.020 Qualifications for and Recognition of
Representatives, available at: <a href="https://secure.ssa.gov/apps10/poms.nsf/lnx/0203910020">https://secure.ssa.gov/apps10/poms.nsf/lnx/0203910020</a>.
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Comment: Commenters expressed concerns with our proposal to connect
the appointment document (Form SSA-1696) to the payment of fees.
Response: As explained in more detail above, we chose to maintain
our rule that only individuals, not entities, may be appointed as
representatives. As such, our process facilitates direct payment to
entities through assignment, which provides a reasonably reliable means
for law firms to obtain fees compensating them for an individual's
representation of a claimant on behalf of the entity directly from
claimants' past-due benefits. The representative must make the
assignment in the manner we prescribe--which will be the updated Form
SSA-1696. We may update the prescribed manner in the future if
appropriate.
We will collect the assignment selection on Form SSA-1696 because
this collection instrument is required to document the appointment, is
the first form we receive on a claim about the representation and is
already used to collect information about payment of fees such as
whether the representative will waive their fee or direct payment.
Creating a separate form, or other means, to collect the assignment
would be redundant and would create additional burden for claimants,
their representatives, and us. In recent years, we archived another
form (SSA-1695) and incorporated information contained therein on the
Form SSA-1696 to help reduce the need for more forms. Further, our
records show that most representatives use the Form SSA-1696 to
document their appointments, so adding a box to collect the assignment
information does not significantly increase the burden on
representatives and their clients.
[[Page 67550]]
Comment: Commenters expressed confusion and concern that the
wording of our new requirement that attorneys also sign notices of
appointment could be misconstrued as requiring all representatives to
sign the same notice of appointment.
Response: Previously, our regulations only required non-attorneys
to sign written notices of appointment. With these new rules, every
representative, whether an attorney or non-attorney, will need to sign
a prescribed notice of appointment before we will recognize the
appointment. Each representative will need to sign a separate Form SSA-
1696; we will not accept appointment forms signed by multiple
representatives.
Requiring all representatives to sign the SSA-1696 regardless of
attorney or non-attorney status will improve efficiency by implementing
a uniform rule, as technicians will no longer be required to confirm
different requirements are met depending on the representative's status
as an attorney or non-attorney. It will also strengthen uniformity in
the processing of appointments.
Fee Agreements and Fee Waivers
Comment: Multiple commenters said that the proposed rule fails to
provide the procedures and required format for fee agreements with
enough specificity, including whether all representatives appointed on
a claim will be permitted to agree to be bound by a previously executed
entity fee agreement without requiring an additional wet signature on a
single document. Commenters also asked if the requirement that all
representatives who jointly represent one claimant and have signed the
same fee agreement will continue or whether one fee agreement with the
entity's POC would suffice.
Response: These comments concern our fee authorization policies
rather than our fee payment procedures. Our fee authorization policies,
including who must sign a fee agreement, were not before the court and
were not part of the First Circuit's decision or the district court's
order. Therefore, because our focus is implementing a new process to
pay entities as required by the court's order, we are not revising our
rules related to who must sign a fee agreement or otherwise revising
our fee authorization policies at this time. We continue to require
that all representatives who will or may ask for a fee sign the same
fee agreement to ensure that we authorize one fee under the same
approved agreement and that the fee we authorize under this process
does not exceed the maximum statutory limit. We will continue to accept
revised fee agreements if they are filed prior to the date of the first
favorable determination or decision.
Comment: A commenter expressed concern that the proposed rule does
not include a requirement that we find that the fee set forth in an
approved fee agreement is reasonable.
Response: Section 206(a) of the Act \35\ sets out several criteria
for fee agreements, including that the fee under the fee agreement must
not exceed the lesser of 25 percent of the claimant's past-due benefits
or the maximum dollar limit set by the Commissioner ($7,200 as of
November 2022).\36\ We do not examine reasonableness or consider
services when evaluating a fee agreement. Under section 206(a)(1) of
the Act,\37\ we are tasked with determining whether the fee is
reasonable when a fee petition, rather than a fee agreement, is filed.
We consider the purpose of the program and use seven factors to
ascertain whether the fee requested by a fee petition is
reasonable.\38\
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\35\ 42 U.S.C. 406(a).
\36\ 87 FR 39157 (June 30, 2022). The maximum dollar limit will
increase to $9,200 effective November 30, 2024. 89 FR 40523 (May 10,
2024).
\37\ 42 U.S.C. 406(a)(1).
\38\ See 20 CFR 404.1725 and 416.1525.
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The Marasco decision was limited to the issue of payment to the
entity after we authorize a fee. The decision did not address or
require changes to our rules for evaluating fee agreements or fee
petitions, and these rules do not change any of our existing rules in
that area.
Fee Petitions
Comment: Commenters pointed out that the proposed rule is silent on
fee petitions, and they wanted to know whether we will allow the entity
or POC to file one fee petition on behalf of all the representatives
who were salaried employees of the entity. One commenter asked that we
give entities the right to request a fee. Another said, ``The proposed
rule does not include any mechanisms for a law firm to collect a fee
via the fee petition process for work performed by salaried associates
who have left the employ of the firm.''
Response: So long as the necessary criteria are met, we will pay
any authorized fee directly to an entity if there is a valid
assignment, regardless of whether the representative opted to use the
fee agreement or fee petition process, and regardless of whether the
representative is currently appointed on a case. For example, as we
explained above, if a representative who has assigned direct payment of
the authorized fee leaves the employment of an affiliated entity or
withdraws their appointment, this will not affect an entity's
eligibility to receive direct payment of an authorized fee. As well, we
note that it is common to have more than one representative assigned to
a claim (and sign on to the fee agreement, if applicable), and to have
additional representatives assigned to a case if one leaves. Moreover,
we have already made policy and procedural changes to permit withdrawn
representatives hired by the Federal Government to file fee petitions
for services they provided prior to withdrawing and joining the
government, and to receive direct payment of those fees.\39\ In total,
these provisions offer mechanisms for entities to receive direct
payment of fees, regardless of the fee authorization process used by
the representative. As we explained above with respect to fee
agreements, with this final rule we are not revising who we recognize
as a representative, and therefore we are likewise not revising our
rules related to fee petitions.
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\39\ See POMS GN 03980.005, available at: <a href="https://secure.ssa.gov/apps10/poms.nsf/lnx/0203980005">https://secure.ssa.gov/apps10/poms.nsf/lnx/0203980005</a>; id. GN 03980.010,
available at <a href="https://secure.ssa.gov/apps10/poms.nsf/lnx/0203980010">https://secure.ssa.gov/apps10/poms.nsf/lnx/0203980010</a>;
id. GN 03980.071, available at <a href="https://secure.ssa.gov/apps10/poms.nsf/lnx/0203980071">https://secure.ssa.gov/apps10/poms.nsf/lnx/0203980071</a>.
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Electronic Funds Transfers/Direct Deposits and 1099s
Comment: Some commenters opposed our proposed requirement that
entities receive payments via electronic funds transfer (EFT), and they
expressed concern about what information we would provide to the banks
linking payments to specific clients, and what information individual
banks would provide to their customers. Some commenters asked that we
provide information linking payments to clients directly to
representatives or entities via text, email, mail, or a dedicated
portal. Because of these concerns, some commenters asked that we ensure
the EFT process is fully developed and appropriate guidance is provided
to financial institutions and entity payees before the proposed rule
becomes final. Another commenter urged us to return to the process of
identifying claimants and fee amounts on all Forms IRS 1099 we issue.
Response: We will use EFT to pay entities. Electronic payments are
widely used, are preferred by the Department of the Treasury's Fiscal
Service, and are efficient. Our current systems do not support paying
entities by check, and system updates to facilitate this functionality
would be expensive and take significant time, diverting resources from
other important system
[[Page 67551]]
improvements necessary to carry out our core programs. When we certify
a fee payment, we transmit key information linking payments to the
related claims such as the claimant's first name, last name, and Social
Security Number. We confirmed with the Department of the Treasury that
it passes on this information to banking institutions. However, we
understand that while the information is available, it may not be
readily accessible by all representatives or entities depending on
their choice of banking institution. We appreciate the concern raised
and are actively looking for ways to make this information more
accessible to representatives and entities while responsibly allocating
limited resources.
Designated Point of Contact
Comment: Several commenters asked whether we would consider
communicating with the POC's assistant(s), so that paralegals and other
non-representatives could handle the administrative work while the
representatives focused on the legal work. One commenter stated, ``Most
people in law firms who collect fees for the entity are legal
assistants and not lawyers; therefore, they likely would not be
registered representatives.'' They objected to our proposal to require
that the POC be an individual who is a registered representative.
Response: A POC is not required to be an attorney; they need only
be an individual registered with us in the manner we explained above
using Form SSA-1699. The POC is not required to be eligible for direct
payment or be appointed on any claim. As such, there is no reason the
POC cannot be a paralegal or other staff member. As stated above, we
expect the POC to assist us with resolving fee-related matters related
to direct payment of fees to the entity. As also explained above, we
will hold the POC responsible under our Rules of conduct and standards
of responsibility for representatives,\40\ as appropriate to their
role.
---------------------------------------------------------------------------
\40\ 20 CFR 404.1740-404.1799, 416.1540-416.1599.
---------------------------------------------------------------------------
Requiring individuals to register with us before being designated
as POCs will facilitate quicker processing of the entity's registration
because, at the time the entity submits its registration, the
registered individual's information will already be in our system and
will not need to be manually keyed in by a technician prior to
processing the entity's registration, which would otherwise be the
case. It will also allow us to readily identify and verify the POC when
we share certain claim information to resolve fee matters and, if
needed, ensure accountability under our rules of conduct. Registration
will also help us ensure that we keep accurate and comprehensive
records of our communications with the entities and their POCs.
Comment: Another commenter asked about the procedure for the entity
to amend the POC and how quickly we will be able to process the change.
Response: To update a POC's information the new POC must submit an
updated Form SSA-1694. While the processing of the form is centralized
and streamlined, it is not instantaneous. As such, entities should make
every effort to make updates as early as possible.
Proposed Criteria
Comment: One commenter suggested a modification to the revised
definition of ``Registration'' to indicate that the representative must
have started the registration process prior to appointment.
Response: For reasons explained above, we deem it important that
individual representatives now register with us through Form SSA-1699
in order to be appointed on a claim. To ensure a representative is
registered before being appointed, Form SSA-1696 requires that the
representative seeking appointment provide their Rep ID, which is
issued at the completion of registration. Therefore, we cannot process
a request to be appointed until registration is complete. Although we
cannot process a new registration through Form SSA-1699 at the same
time as a request for appointment through Form SSA-1696, we will not
reject the Form SSA-1696 solely because it is submitted with an initial
representative registration; we will hold the Form SSA-1696 and process
it once registration is complete. Furthermore, we do not have the
administrative capacity or systems resources to track registration in
phases. When we receive a completed Form SSA-1699, it is placed in a
processing queue. When it is processed, our system automatically
generates and sends a notice to the representative to confirm
registration. We do not expect registration delays will have a
significant effect on a claimant's ability to timely appoint a
representative.
Comment: A commenter suggested that we establish an Administrative
POC or similar position who is accessible and required to be reasonably
responsive to fee inquiries. The commenter opined that just as we plan
to require that firms have a POC that can be reached to address fee
issues, representatives should have a fee coordinator at SSA, or
similar position who is accessible and required to be reasonably
responsive to fee inquiries.
Response: Appointed representatives and entity POCs may direct fee
inquiries to the appropriate processing center.\41\ We will train staff
who will be handling this workload in this newly developed process to
ensure that they are able to respond to fee inquiries from an appointed
representative or an entity's POC.
---------------------------------------------------------------------------
\41\ Specific contact information for processing centers can be
found on our website <a href="http://www.ssa.gov">www.ssa.gov</a>.
---------------------------------------------------------------------------
Comment: One commenter encouraged us to implement a process that
minimizes the issuance of multiple checks when the fee agreement
includes multiple employees of a single firm.
Response: Under the new rule, we will pay entities by way of direct
payment, not a check, so we will not be issuing multiple checks to
entities. In addition, if all appointed representatives eligible for
direct payment assign direct payment of their fees to the same entity,
we plan to make one total payment to the entity rather than multiple
payments for each assignment.
Comment: Commenters encouraged us to formally recognize and permit
the submission of valid, electronically signed representative documents
(i.e., Appointment of Representative and Fee Agreements).
Response: Electronic signature procedures are beyond the scope of
this rule. However, we note that we currently accept electronic
versions of the SSA-1696 and SSA-1693, (Fee Agreement for
Representation Before the Social Security Administration), which can be
electronically completed, signed, and filed. The e1696 and e1693 can be
found on our website at: <a href="https://www.ssa.gov/representation/">https://www.ssa.gov/representation/</a>.
Comment: Commenters expressed concerns that claimants and some
representatives may not be aware that they are now required to file our
prescribed form (Form SSA-1696) to document an appointment.
Response: Our records show that the use of a written statement in
lieu of an SSA-1696 is very rare by both claimants and representatives.
However, our new requirement that representative appointments be made
through the SSA-1696, along with other new requirements, will be made
clear to the public through the publishing of this rule in the Federal
Register; communications to the representative community; and
announcements on our website at <a href="http://www.ssa.gov/representation">www.ssa.gov/representation</a>. In
addition, as noted above, we are developing training that we will
provide
[[Page 67552]]
to agency staff that will be involved in this process to ensure they
are prepared to explain the new requirements and necessary forms to
representatives, claimants, prospective claimants, and anyone assisting
them.
Comment: Finally, a commenter suggested we specify that when the
principal representative or the principal law firm withdraws, this also
automatically serves as a withdrawal of the secondary representative in
the same firm, unless stated otherwise. The commenter opined that
current rules do not treat the secondary representative as withdrawn,
even though they have not touched the file in several months, if at
all.
Response: Only the appointed representative can withdraw their
acceptance of an appointment. Representatives, including the principal
representative, are prohibited from withdrawing on another
representative's behalf. We are not changing this policy.
Additionally, each representative is responsible for conducting
their dealings in such a way that furthers the efficient and orderly
conduct of our administrative decision-making process, including
withdrawing representation in a non-disruptive manner.\42\
Representatives have an affirmative duty to withdraw themselves when
appropriate and to ensure that such withdrawal is not disruptive.
---------------------------------------------------------------------------
\42\ See 20 CFR 404.1740(b)(3) and 416.1540(b)(3); POMS GN
03970.010 Rules of Conduct and Standards of Responsibility for
Representatives, available at: <a href="https://secure.ssa.gov/apps10/poms.nsf/lnx/0203970010">https://secure.ssa.gov/apps10/poms.nsf/lnx/0203970010</a>.
---------------------------------------------------------------------------
Regulatory Procedures
Executive Order 12866, as Supplemented by Executive Orders 13563 and
14094
We have consulted with the Office of Management and Budget (OMB)
and determined that this final rule meets the criteria for a
significant regulatory action under E.O.s 12866 and 14094 and is
subject to OMB review.
Anticipated Accounting Costs of This Final Rule
Anticipated Transfers to Our Programs
Our Office of the Chief Actuary estimates that this final rule
would not materially affect the availability and quality of
representation. Specifically, this means any small incidental changes
to scheduled OASDI (Old Age, Survivors, Disability, Insurance) benefits
and federal SSI (Supplemental Security Insurance) payments would
collectively be less than our baseline significance number of $500,000
over the period of fiscal years 2024 through 2033.
Anticipated Administrative Costs to the Social Security Administration
The systems upgrades necessary to comply with the Marasco decision
are funded and currently underway. Once the rule becomes effective, the
Office of Budget, Finance, and Management estimates administrative
costs of less than 15 work years and $2 million annually from the
updates to our current business process.
Executive Order 13132 (Federalism)
We analyzed this final rule in accordance with the principles and
criteria established by E.O. 13132 and determined that this final rule
will not have sufficient federalism implications to warrant the
preparation of a federalism assessment. We also determined that this
final rule would not preempt any State law or State regulation or
affect the States' abilities to discharge traditional State
governmental functions.
Regulatory Flexibility Act
We certify that this final rule will not have a significant
economic impact on a substantial number of small entities. Although
this final rule would require small entities who want to receive direct
payment of authorized fees to provide us with certain information,
maintain an active POC responsible for interacting with us, and accept
payment by EFT, these requirements would not disadvantage small
entities or limit their ability to compete with larger competitors.
Additionally, this final rule does not place significant costs on
entities.
We estimate that the time required for a small entity to complete
the one-time transaction required to fill out and submit a basic
registration form, provide banking information, and identify a POC
would be minimal. Once the initial registration is complete, there
would be no additional burden on the entity unless and until the entity
needed to update its registration information. We anticipate that small
entities that take advantage of the opportunity to receive direct
payment of authorized fees through the assignment process may
experience slight cost savings because of improved accuracy and
efficiency in their recordkeeping processes and because they would no
longer need to collect and properly account for payments made to
individual representative employees. Therefore, a regulatory
flexibility analysis as provided in the Regulatory Flexibility Act, as
amended, is not required.
Paperwork Reduction Act
The final rule requires revisions to our existing information
collections to enable SSA to directly pay entities fees we may
authorize to their employees, and to register all entities who wish
direct payment to register with us, using our revised, standardized
registration system. For some sections in this rule, we previously
accounted for the public reporting burdens under the following OMB
approved information collections: 0960-0527 (SSA-1696 Claimant's
Appointment of a Representative, which allows an individual to appoint
a representative, and requires the representative's agreement to serve
as representative), 0960-0731 (SSA-1694, Request for Business Entity
Taxpayer Information, which requests specific taxpayer data from
representatives requesting a fee), and 0960-0732 (SSA-1699,
Representative Registration, which requires the representatives to
prove eligibility when they register with SSA and allows them to
request a fee). Consequently, we are not reporting those sections
below.
However, the application of the revisions under this final rule
requires burden changes and information collection revisions to the
currently approved information collections under the following
information collection requests: 0960-0527 (SSA-1696, Claimant's
Appointment of a Representative, which allows an individual to appoint
a representative, and requires the representative's agreement to serve
as representative), 0960-0731 (SSA-1694, Request for Business Entity
Taxpayer Information, which requests specific taxpayer data from
representatives requesting a fee), and 0960-0732 (SSA-1699,
Representative Registration, which requires the representatives to
prove eligibility when they register with SSA and allows them to
request a fee). We anticipate these revisions will increase the burdens
for the affected information collections.
We published a Notice of Proposed Rulemaking (NPRM) on August 4,
2023, at 88 FR 51747. In that NPRM, we solicited comments under the PRA
on the burden estimate; the need for the information; its practical
utility; ways to enhance its quality, utility, and clarity; and on ways
to minimize the burden on respondents, including the use of automated
collection techniques or other forms of information technology. The
comments section above includes our responses to the PRA-related public
comments we received under the NPRM.
[[Page 67553]]
Note: While this information collection request encompasses
multiple information collection (IC) tools, not all of the ICs will
become effective at the same time. We expect to make the SSA-1694
(OMB No. 0960-0731) and the SSA-1699 (OMB No. 0960-0732) effective
on September 30, 2024. However, we expect to make the SSA-1696 (OMB
No. 0960-0527) effective December 9, 2024.
The following chart shows the time burden information associated
with the final rule for the public reporting requirements we are
revising:
----------------------------------------------------------------------------------------------------------------
Anticipated
Description of Average burden estimated total
CFR citations; OMB No. form new public Number of Frequency of per response burden under
No. reporting respondents response (minutes) regulation
requirement (hours)
----------------------------------------------------------------------------------------------------------------
404.1707(a), 416.1507(a), SSA- You [claimant] 1,100,000 1 7 128,333
1696 (0960-0527). Effective complete and
Date: December 9, 2024. sign our
prescribed
appointment
form, and
404.1707(a), 416.1507(a), SSA- Your 1,100,000 1 5 91,667
1696 (0960-0527). Effective representative
Date: December 9, 2024. completes and
signs our
prescribed
appointment
form, and
404.1720(f), 416.1520(f), SSA- A representative 500,000 1 5 * 41,667
1696 (0960-0527). Effective who is eligible
Date: December 9, 2024. for direct
payment of an
authorized fee
may assign the
authorized fee
to an entity
that is
eligible for
direct payment.
404.1730(e)(2), A representative 150,000 1 3 7,500
416.1530(e)(2), SSA-1696 may rescind an
(0960-0527). Effective Date: assignment
December 9, 2024. before the date
on which we
notify you of
our first
favorable
determination
or decision.
404.1735, 416.1535, SSA-1694 An entity is
(0960-0731). Effective Date: eligible for
September 30, 2024. direct payment
if the entity:
(a) has an
Employment
Identification
Number,.
(b) is
registered with
us in the
manner we
prescribe,.
(c) has not been
found
ineligible for
direct payment,
(d) designates
and maintains
an employee who
is a registered
representative
as a point of
contact to
speak and act
on the entity's
behalf,
(e) accepts
payment via
electronic
transfer, and
(f) conforms to 7,000 1 18 2,100
our rules
404.1705(c), 404.1730(e)(v), Your 15,382 1 20 15,382
404.1735(b) 416.1505(c), representative(
416.1530(e)(v), 416.1535(b), s) must be
SSA-1699 (0960-0732). registered with
Effective Date: September us in the
30, 2024. manner we
prescribe
before you
submit the
appointment(s).
----------------------------------------------------------------
Totals................... ................ 2,867,382 ............ ................ 276,394
----------------------------------------------------------------------------------------------------------------
The following chart shows the theoretical cost burdens associated
with the final rule:
----------------------------------------------------------------------------------------------------------------
Anticipated
estimated total Average
Number of burden under theoretical Total annual
OMB No.; form No.; CFR citations respondents regulation from hourly cost opportunity cost
chart above amount (dollars) ***
(hours) (dollars) **
----------------------------------------------------------------------------------------------------------------
404.1707(a), 416.1507(a), SSA-1696 (0960- 1,100,000 128,333 ** 13.30 *** 1,706,829
0527). Effective Date: December 9, 2024.....
404.1707(a), 416.1507(a), SSA-1696 (0960- 1,100,000 91,667 ** 84.84 *** $7,777,028
0527). Effective Date: December 9, 2024.....
404.1720(f), 416.1520 (f), SSA-1696 (0960- 500,000 * 41,667 ** 84.84 *** 3,535,028
0527). Effective Date: December 9, 2024.....
404.1730(e)(2), 416.1530(e)(2), SSA-1696 150,000 7,500 ** 84.84 *** 636,300
(0960-0527). Effective Date: December 9,
2024........................................
404.1735, 416.1535, SSA-1694 (0960-0731). 7,000 2,100 ** 84.84 *** 178,164
Effective Date: September 30, 2024..........
SSA-1699, (0960-0732), Effective Date: 15,382 5,127 ** 84.84 *** 434,975
September 30, 2024..........................
------------------------------------------------------------------
Totals................................... 2,867,382 276,394 ............ *** 14,268,324
----------------------------------------------------------------------------------------------------------------
* This is not additional burden but part of the existing burden for those representatives who complete this
instrument but also check the assignment box. We include it here to indicate a change in burden for this
regulatory section.
** We based these figures on average Legal Service hourly salary, as reported by Bureau of Labor Statistics data
(<a href="https://www.bls.gov/oes/current/oes231011.htm">https://www.bls.gov/oes/current/oes231011.htm</a>) and the average DI payments based on SSA's current FY 2024
data (<a href="https://www.ssa.gov/legislation/2024FactSheet.pdf">https://www.ssa.gov/legislation/2024FactSheet.pdf</a>).
*** This figure does not represent actual costs that SSA is imposing on recipients of Social Security payments
to complete this application; rather, these are theoretical opportunity costs for the additional time
respondents will spend to complete the application. There is no actual charge to respondents to complete the
application.
SSA submitted a single new Information Collection Request which
encompasses revisions to information collections currently under OMB
Numbers 0960-0527, 0960-0731 and 0960-0732 to OMB for the approval of
the changes due to the final rule. After approval at the final rule
stage, we will adjust the figures associated with the current OMB
numbers for these forms to reflect the new burden.
As we have revised the associated burdens for the above-mentioned
forms since we made revisions to the final rule which were not included
at the NPRM stage, we are currently soliciting comment on the burden
for the forms as
[[Page 67554]]
shown in the charts above. If you would like to submit comments, please
send them to:
Currently under Review--Open for Public Comments (<a href="https://www.reginfo.gov/public/do/PRAMain">https://www.reginfo.gov/public/do/PRAMain</a>) \43\ and choosing to click on one of
SSA's published items. Please reference Docket ID Number [SSA-2023-
0018] in your submitted response.
---------------------------------------------------------------------------
\43\ Please note that the link to the specific ICR connected to
this regulation will only become active the day after the final rule
publishes in the Federal Register.
---------------------------------------------------------------------------
Social Security Administration, OLCA, Attn: Reports Clearance
Director, Mail Stop 3253 Altmeyer, 6401 Security Blvd., Baltimore MD
21235, Fax: 833-410-1631, Email address: <a href="/cdn-cgi/l/email-protection#064954285463766974727528456a636774676865634675756728616970"><span class="__cf_email__" data-cfemail="ce819ce09cabbea1bcbabde08da2abafbcafa0adab8ebdbdafe0a9a1b8">[email protected]</span></a>.
You can submit comments until September 20, 2024, which is 30 days
after the publication of this document. To receive a copy of the OMB
clearance package, contact the SSA Reports Clearance Officer using any
of the above contact methods. We prefer to receive comments by email or
fax.
(Federal Assistance Listings Nos. 96.001, Social Security--
Disability Insurance; 96.002, Social Security--Retirement Insurance;
96.004, Social Security--Survivors Insurance; 96.006, Supplemental
Security Income)
List of Subjects
20 CFR Part 404
Administrative practice and procedure; Blind; Disability benefits;
Old-age, Survivors, and Disability insurance; Reporting and
recordkeeping requirements; Social Security.
20 CFR Part 416
Administrative practice and procedure; Aged, Blind, Disability
benefits, Public assistance programs; Reporting and recordkeeping
requirements; Supplemental Security Income (SSI).
20 CFR Part 422
Administrative practice and procedure; Reporting and recordkeeping
requirements; Social security.
The Commissioner of the Social Security Administration, Martin
O'Malley, having reviewed and approved this document, is delegating the
authority to electronically sign this document to Faye I. Lipsky, who
is the primary Federal Register Liaison for SSA, for purposes of
publication in the Federal Register.
Faye I. Lipsky,
Federal Register Liaison, Office of Legislation and Congressional
Affairs, Social Security Administration.
For the reasons stated in the preamble, we amend 20 CFR parts 404,
416, and 422 as set forth below:
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE
(1950- )
Subpart R--Representation of Parties
0
1. The authority citation for subpart R of part 404 is revised to read
as follows:
Authority: 42 U.S.C. 405(a), 406, 902(a)(5), and 1320a-6.
0
2. In Sec. 404.1703, add definitions for ``Affiliate'',
``Assignment'', ``Point of Contact'', and ``Registration'' in
alphabetical order and revise the definition of ``Representative'' to
read as follows:
Sec. 404.1703 Definitions.
* * * * *
Affiliate means to associate with an entity through our prescribed
registration process.
Assignment means the transfer of the right to receive direct
payment of an authorized fee to an entity as described in Sec.
404.1730(e).
* * * * *
Point of Contact means an individual who registers as a
representative in the manner we prescribe and is selected by an entity
to speak and act on the entity's behalf and who assumes the affirmative
duties and obligations we prescribe.
Registration means a process by which an individual or entity
provides the information we require to conduct business with us.
* * * * *
Representative means an attorney who meets all of the requirements
of Sec. 404.1705(a), or a person other than an attorney who meets all
of the requirements of Sec. 404.1705(b), and whom you appoint to
represent you in dealings with us. For purposes of our Rules of conduct
and standards of responsibility for representatives in Sec. Sec.
404.1740 through 404.1799, Representative also includes an individual
who provides representational services and an individual who is listed
as a point of contact for an entity, as applicable to their identified
role.
* * * * *
0
3. In Sec. 404.1705, redesignate paragraph (c) as paragraph (d), add a
new paragraph (c), and revise newly redesignated paragraph (d) to read
as follows:
Sec. 404.1705 Who may be your representative.
* * * * *
(c) Your representative(s) must be registered with us in the manner
we prescribe.
(d) We may refuse to recognize your chosen representative if the
person does not meet the requirements in this section. We will notify
you and the proposed representative if we do not recognize the person
as your representative.
0
4. Revise Sec. 404.1707 to read as follows:
Sec. 404.1707 Appointing a representative.
We will recognize a person as your representative if:
(a) You and your representative complete and sign our prescribed
appointment form; and
(b) You or your representative file our prescribed appointment form
in the manner we designate.
0
5. In Sec. 404.1720, add paragraph (f) to read as follows:
Sec. 404.1720 Fee for a representative's services.
* * * * *
(f) Assignment of direct payment of fees. A representative who is
eligible for direct payment of an authorized fee may assign direct
payment of the authorized fee to an entity that is eligible for direct
payment of fees (see Sec. Sec. 404.1730(e) and 404.1735).
0
6. In Sec. 404.1730:
0
a. Revise the paragraph (b) heading;
0
b. Revise paragraph (b)(1) introductory text;
0
c. Redesignate paragraph (b)(1)(i) as (b)(1)(iii) and paragraph
(b)(1)(ii) as (b)(1)(iv);
0
d. Add new paragraphs (b)(1)(i) and (ii); and
0
e. Add paragraph (e).
The revisions and additions read as follows:
Sec. 404.1730 Payment of fees.
* * * * *
(b) Fees we may pay--(1) Attorneys and eligible non-attorneys.
Except as provided in paragraph (c) of this section, if we make a
determination or decision in your favor and you were represented by an
attorney or an eligible non-attorney (see Sec. 404.1717), and as a
result of the determination or decision you have past-due benefits;
(i) We will pay your representative out of the past-due benefits
the lesser of the amounts in paragraph (b)(1)(iii) or
[[Page 67555]]
(iv) of this section, less the amount of the assessment described in
paragraph (d) of this section, unless the representative files a waiver
of the fee or direct payment of the fee; and
(ii) If there is a valid assignment (see paragraph (e) of this
section), we will pay the representative's fee (see paragraph (b)(1)(i)
of this section) to an entity.
* * * * *
(e) Assignment of direct payment of a fee to designated entity. (1)
A representative may assign direct payment of the fee we authorize to
an eligible entity if the representative:
(i) Is eligible for direct payment;
(ii) Has not waived the fee or direct payment;
(iii) Assigns direct payment of the entire fee we authorize to one
entity in the manner we prescribe;
(iv) Makes the assignment before the date on which we notify you of
our first favorable determination or decision; and
(v) Affiliates with the entity through registration.
(2) A representative may rescind an assignment in the manner we
prescribe before the date on which we notify you of our first favorable
determination or decision.
(3) A representative may not assign direct payment of a fee to an
entity that is ineligible to receive direct payment.
(4) A representative may not waive a fee or direct payment of a fee
if the representative previously assigned direct payment of a fee in
accordance with paragraph (e)(1) of this section and did not timely
rescind that assignment in accordance with paragraph (e)(2) of this
section.
0
7. Add Sec. 404.1735 to read as follows:
Sec. 404.1735 Entity eligible for direct payment of fees.
An entity is eligible for direct payment of an authorized fee if
the entity:
(a) Has an Employer Identification Number;
(b) Has registered with us in the manner we prescribe;
(c) Has not been found ineligible for direct payment;
(d) Designates and maintains an employee who is registered as a
representative in the manner we prescribe as a point of contact to
speak and act on the entity's behalf;
(e) Accepts payment via electronic funds transfer; and
(f) Conforms to our rules.
0
8. In Sec. 404.1740, add paragraph (c)(15) to read as follows:
Sec. 404.1740 Rules of conduct and standards of responsibility for
representatives.
* * * * *
(c) * * *
(15) While serving as a point of contact for an entity, violate
applicable affirmative duties, engage in prohibited actions, or conduct
dealings with us in a manner that is untruthful or does not further the
efficient and prompt correction of a fee error.
PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND
DISABLED
Subpart O--Representation of Parties
0
9. The authority citation for subpart O is revised to read as follows:
Authority: 42 U.S.C. 405(a), 406, 902(a)(5), 1320a-6, and
1383(d).
0
10. In Sec. 416.1503, add definitions for ``Affiliate'',
``Assignment'', ``Point of Contact'', and ``Registration'' in
alphabetical order and revise the definition of ``Representative'' to
read as follows:
Sec. 416.1503 Definitions.
* * * * *
Affiliate means to associate with an entity through our prescribed
registration process.
Assignment means the transfer of the right to receive direct
payment of an authorized fee to an entity as described in Sec.
416.1530(e).
* * * * *
Point of Contact means an individual who registers as a
representative in the manner we prescribe and is selected by an entity
to speak and act on the entity's behalf and who assumes the affirmative
duties and obligations we prescribe.
Registration means a process by which an individual or entity
provides the information we require to conduct business with us.
* * * * *
Representative means an attorney who meets all of the requirements
of Sec. 416.1505(a), or a person other than an attorney who meets all
of the requirements of Sec. 416.1505(b), and whom you appoint to
represent you in dealings with us. For purposes of our Rules of conduct
and standards of responsibility for representatives in Sec. Sec.
416.1540 through 416.1599, Representative also includes an individual
who provides representational services and an individual who is listed
as a point of contact for an entity, as applicable to their identified
role.
* * * * *
0
11. In Sec. 416.1505, redesignate paragraph (c) as paragraph (d), add
a new paragraph (c), and revise newly redesignated paragraph (d) to
read as follows:
Sec. 416.1505 Who may be your representative.
* * * * *
(c) Your representative(s) must be registered with us in the manner
we prescribe.
(d) We may refuse to recognize your chosen representative if the
person does not meet the requirements in this section. We will notify
you and the proposed representative if we do not recognize the person
as your representative.
0
12. Revise Sec. 416.1507 to read as follows:
Sec. 416.1507 Appointing a representative.
We will recognize a person as your representative if:
(a) You and your representative complete and sign our prescribed
appointment form; and
(b) You or your representative file our prescribed appointment form
in the manner we designate.
0
13. In Sec. 416.1520, add paragraph (f) to read as follows:
Sec. 416.1520 Fee for a representative's services.
* * * * *
(f) Assignment of direct payment of fees. A representative who is
eligible for direct payment of an authorized fee may assign direct
payment of the authorized fee to an entity that is eligible for direct
payment of fees (see Sec. Sec. 416.1530(e) and 416.1535).
0
14. In Sec. 416.1530:
0
a. Revise the paragraph (b) heading;
0
b. Revise paragraph (b)(1) introductory text;
0
c. Redesignate paragraphs (b)(1)(i), (ii), and (iii) as (b)(1)(iii),
(iv), and (v);
0
d. Add new paragraphs (b)(1)(i) and (ii);
0
e. Redesignate paragraph (e) as (f); and
0
f. Add a new paragraph (e).
The revisions and additions read as follows:
Sec. 416.1530 Payment of fees.
* * * * *
(b) Fees we may pay--(1) Attorneys and eligible non-attorneys.
Except as provided in paragraph (c) of this section, if we make a
determination or decision in your favor and you were represented by an
attorney or an eligible non-attorney (see Sec. 416.1517), and as a
result of the determination or decision you have past-due benefits;
(i) We will pay your representative out of the past-due benefits
the smallest
[[Page 67556]]
of the amounts in paragraphs (b)(1)(iii) through (v) of this section,
less the amount of the assessment described in paragraph (d) of this
section, unless the representative files a waiver of the fee or direct
payment of the fee; and
(ii) If there is a valid assignment (see paragraph (e) of this
section), we will pay the representative's fee (see paragraph (b)(1)(i)
of this section) to an entity.
* * * * *
(e) Assignment of direct payment of a fee to designated entity. (1)
A representative may assign direct payment of the fee we authorize to
an eligible entity if the representative:
(i) Is eligible for direct payment;
(ii) Has not waived the fee or direct payment;
(iii) Assigns direct payment of the entire fee we authorize to one
entity in the manner we prescribe;
(iv) Makes the assignment before the date on which we notify you of
our first favorable determination or decision; and
(v) Affiliates with the entity through registration.
(2) A representative may rescind an assignment in the manner we
prescribe before the date on which we notify you of our first favorable
determination or decision.
(3) A representative may not assign direct payment of a fee to an
entity that is ineligible to receive direct payment.
(4) A representative may not waive a fee or direct payment of a fee
if the representative previously assigned direct payment of a fee in
accordance with paragraph (e)(1) of this section and did not timely
rescind that assignment in accordance with paragraph (e)(2) of this
section.
* * * * *
0
15. Add Sec. 416.1535 to read as follows:
Sec. 416.1535 Entity eligible for direct payment of fees.
An entity is eligible for direct payment of an authorized fee if
the entity:
(a) Has an Employer Identification Number;
(b) Has registered with us in the manner we prescribe;
(c) Has not been found ineligible for direct payment;
(d) Designates and maintains an employee who is registered as a
representative in the manner we prescribe as a point of contact to
speak and act on the entity's behalf;
(e) Accepts payment via electronic funds transfer; and
(f) Conforms to our rules.
0
16. In Sec. 416.1540, add paragraph (c)(15) to read as follows:
Sec. 416.1540 Rules of conduct and standards of responsibility for
representatives.
* * * * *
(c) * * *
(15) While serving as a point of contact for an entity, violate
applicable affirmative duties, engage in prohibited actions, or conduct
dealings with us in a manner that is untruthful or does not further the
efficient and prompt correction of a fee error.
PART 422--ORGANIZATION AND PROCEDURES
Subpart F--Applications and Related Forms
0
17. The authority citation for subpart F is revised to read as follows:
Authority: 42 U.S.C. 1320b-10(a)(2)(A).
0
18. In Sec. 422.515, revise the section heading and the listing for
form SSA-1696 and add a listing for form SSA-1699 in numerical order to
read as follows:
Sec. 422.515 Forms used for withdrawal, reconsideration and other
appeals, appointment of representative, and representative
registration.
* * * * *
SSA-1696--Claimant's Appointment of a Representative. (For use by
claimants or representatives as a notice of their appointment of a
representative in a claim, issue, or other matter that is pending a
determination or a decision before us).
SSA-1699--Representative Registration. (For use by individuals to
register with us as representatives prior to appointment as a
representative on a claim or designation as a point of contact for an
entity).
* * * * *
[FR Doc. 2024-18497 Filed 8-20-24; 8:45 am]
BILLING CODE 4191-02-P
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</html>Indexed from Federal Register on August 21, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.