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CCH® UNEMPLOYMENT INSURANCE — 10/5/07

SSA finalizes without change attorney fee regulations

The Social Security Administration has announced that it is adopting as final, without change, interim final regulations that were published on April 5, 2007. The regulations implement changes to the attorney fee payment system that were enacted by recent legislation. These changes provided for the direct payment of fees in Title XVI (Supplemental Security Income-SSI) cases and in cases where a claimant is represented by an eligible nonattorney representative.

Background

The Social Security Act has traditionally provided for the direct payment of an attorney's fee by withholding from a successful claimant's past due benefits, an amount approved as the fee by the Commissioner or by a Federal court, and forwarding the withheld amount to the claimant's attorney. However, this had only been permitted in claims for benefit under the Title II of the Social Security Act. Two provisions of the Social Security Protection Act of 2004 (SSPA)(PubLNo 108-203), extended these fee withholding and direct payment procedures to claims under Title XVI and to nonattorney representatives.

Specifically, SSPA §302 amended Social Security Act §1631(d)(2) to extend the fee payment system to claims arising under Title XVI and SSPA §303 established a five-year demonstration project to examine the extension of the fee withholding and direct payment procedures to nonattorney representatives who meet certain prerequisites as described in SSPA §303.

Changes became effective April 5, 2007; confirmed as final August 9, 2007

Except for a few minor, technical changes, all of the changes announced by the Administration were made in order to conform its regulations to currently applicable statutory provisions. All of the changes were effective April 5, 2007, confirmed as final on August 9, 2007, and, are outlined below.

The definition of ``past-due benefits'' in Part 404 was revised to include benefits under Title XVI up to but not including the month the favorable decision was made (same as for Title II claims). A provision was also added that past-due benefits do not include continued payment of disability benefits during appeal or interim benefits in cases of delayed final decision (Reg. §404.1730).

The definition of ``past-due benefits'' in Part 416 was revised to explain that when the Administration determines the amount of past- due benefits, it subtracts the amount of any reduction under SSA §1127 for the concurrent receipt of benefits for the same period under both Title II and Title XVI, regardless of whether the actual reduction was applied to the Title II benefits or to the Title XVI benefits, and that past-due benefits do not include continued benefits or interim benefits (Reg. §416.1503).

Regulations were added to reflect the demonstration project extending benefit withholding and direct fee payment to nonattorneys under Title II and Title XVI (Regs §404.1717 and §416.1517).

Regulation §404.1720(b)(4) was revised and new paragraph (b)(4) was added to Reg. §416.1520, stating that the Administration will make direct payment of fees from past-due benefits under Title II and Title XVI, respectively, to attorneys and to nonattorneys eligible to participate in the direct payment demonstration project, and that it will assume no responsibility for the payment of any fee that it authorized to a nonattorney if the representative is not eligible to participate in the demonstration project. The Administration also revised the grammatical construction of the language of paragraph (c)(3) in both regulations to state that the notice of fee determination will state whether it is responsible for paying the fee, rather than whether it is not responsible for paying the fee.

Regulation §416.1520(d)(3) was revised to state that the Administration assumes no responsibility for fee payment based on a revised determination if the representative does not file the request for administrative review timely.

Specifically provides for the payment of an attorney's fee as allowed by a Federal court in any proceeding under Title XVI (Reg. §416.1528).

Specifically provides for the extension of the direct payment of fees from past-due benefits under Title II to nonattorneys eligible to participate in the direct payment demonstration project. The Administration also added a new paragraph (d) to reflect that it imposes an assessment on the representative when it pays a fee directly to the representative; to explain how it calculates the assessment; and states that the representative may not, directly or indirectly, request or otherwise obtain reimbursement of the amount of the assessment from the claimant (Regs. §404.1730 and §416.1530).

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