SSA Disability Representatives:

Fee Payment Changes Show Promise, but Eligibility Criteria and Representative Overpayments Require Further Monitoring

GAO-08-5: Published: Oct 15, 2007. Publicly Released: Oct 15, 2007.

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The Social Security Protection Act of 2004 temporarily expanded the practice of paying representatives' fees directly out of a claimant's benefits. This practice, known as fee withholding, was previously available only to attorneys in Disability Insurance (DI) cases. It has been extended to attorneys in Supplemental Security Income (SSI) cases, and to nonattorneys--who meet eligibility criteria--in both DI and SSI cases. The act also mandated that GAO examine (1) the professional experience of disability representatives, (2) how judges and claimants view representatives' performance, (3) how the implementation of fee withholding for nonattorneys has been viewed, and (4) the impact of fee withholding in the SSI program. GAO surveyed representatives and judges, and interviewed claimants and Social Security Administration (SSA), state, and other officials.

Nonattorneys who have successfully applied for fee withholding eligibility had more experience representing claimants than attorneys or ineligible nonattorneys. From our surveys, we estimate that eligible nonattorneys had represented on average over 240 disability claimants over 2 years, while other representatives had represented on average fewer than 90. Eligible nonattorneys were also most likely to specialize in disability representation. Judges and claimants considered the performance of eligible nonattorneys to be generally on a par with that of attorneys, but judges rated ineligible nonattorneys less highly. Judges we surveyed rated eligible nonattorneys as about equal to attorneys overall, and many said a law degree is not necessary for effective disability representation. Claimants we interviewed were generally satisfied with their representatives, regardless of type. Judges and eligible nonattorneys were generally satisfied with the implementation of fee withholding for nonattorneys, including most of the eligibility criteria for nonattorneys. However, both groups expressed concern about the experience standard, which currently allows nonattorneys who have represented as few as five disability claims before SSA over a 2-year period to qualify for fee withholding. Most judges we interviewed and more than half of the eligible nonattorneys considered this insufficient. And, according to an association of representatives, fee withholding is attracting more inexperienced nonattorneys to the field of disability representation. Fee withholding has increased the number of SSI claimants represented by attorneys, but has also complicated payments in certain SSI cases. In some cases, representatives can now inappropriately receive more than the fee authorized by SSA. At least 10 states pay fees to representatives of successful SSI claimants, and SSA does not coordinate with most of these states to prevent overpayments to representatives through fee withholding and state payments. Also, claimants eligible for both DI and SSI have experienced delays in receiving their benefits as a result of fee withholding in the SSI program. SSA has tentative plans to address these delays.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Commissioner of the Social Security Administration should monitor the effectiveness of the nonattorney eligibility criteria in continuing to ensure that only well-qualified representatives receive access to fee withholding, and if necessary adjust the experience standard or other criteria.

    Agency Affected: Social Security Administration

    Status: Closed - Implemented

    Comments: In previous updates, the Social Security Administration (SSA) said it agreed with this recommendation, and planned to take action to implement it when and if fee withholding were permanently extended to non-attorneys. The extension of fee withholding to qualified non-attorneys was made permanent by Congress in February of 2010 (Public Law 111-142). As a result, the SSA recently re-assessed its eligibility criteria for non-attorneys who want to qualify for fee withholding and is developing new regulations regarding the eligibility criteria.

    Recommendation: The Commissioner of the Social Security Administration should assess the extent to which representatives collect more than their authorized fee through a combination of state payments and fee withholding, and if necessary identify and implement cost-effective solutions to ensure that representatives either are not paid more than their authorized fee or return anything they receive in excess of their authorized fee.

    Agency Affected: Social Security Administration

    Status: Closed - Not Implemented

    Comments: The Social Security Administration (SSA) agreed with the recommendation and noted that, if fee withholding in Supplemental Security Income (SSI) claims were made permanent, it would work with states to ensure that representatives do not receive fees in excess of that approved by SSA for services performed before SSA. In February 2010, Congress made permanent the extension of fee withholding to representatives of SSI claimants (Public Law 111-142). In April 2012, SSA that because the environment for representatives of SSI claimants changed since the issuance of our report, the agency no longer sees the need to implement this recommendation.

    Recommendation: The Commissioner of the Social Security Administration should continue to explore cost-effective changes that would address SSI benefit payment delays related to fee withholding in cases where recipients receive both SSI and DI benefits.

    Agency Affected: Social Security Administration

    Status: Closed - Implemented

    Comments: On September 29, 2008, the Social Security Administration (SSA) implemented the Title XVI (Supplemental Security Income) Estimated Fee Withholding process. SSA now withholds up to 25 percent of a claimant's past due title XVI payments for direct payment of representative fees at the time it adjudicates the claim. Therefore, the agency can pay the remaining 75 percent of the claimant's retroactive benefits immediately. SSA officials report that there are now substantially fewer complaints from claimants about title XVI payment delays.

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