[Federal Register Volume 72, Number 153 (Thursday, August 9, 2007)]
[Rules and Regulations]
[Pages 44765-44768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-15242]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

[Docket No. SSA 2006-0097]
RIN 0960-AG35


Temporary Extension of Attorney Fee Payment System to Title XVI; 
5-Year Demonstration Project Extending Fee Withholding and Payment 
Procedures to Eligible Non-Attorney Representatives; Definition of 
Past-Due Benefits; and Assessment for Fee Payment Services

AGENCY: Social Security Administration.

ACTION: Final rules.

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SUMMARY: We are issuing these final rules to adopt without change the 
interim final rules published on April 5, 2007 to reflect in our 
regulations three self-implementing statutory provisions in the Social 
Security Protection Act of 2004 (SSPA) and three related self-
implementing provisions in earlier legislation. These earlier 
provisions are in the Omnibus Budget Reconciliation Act of 1990 (OBRA), 
the Social Security Independence and Program Improvements Act of 1994 
(SSIPIA), and the Ticket to Work and Work Incentives Improvement Act of 
1999 (TWWIIA).

DATES: The interim rule published on April 5, 2007, is confirmed as 
final effective August 9, 2007.

FOR FURTHER INFORMATION CONTACT: Marg Handel, Supervisory Social 
Insurance Specialist, Office of Income Security Programs, Social 
Security Administration, 239 Altmeyer Building, 6401 Security 
Boulevard, Baltimore, MD 21235-6401, (410) 965-4639. 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 http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION: 

Electronic Version

    The electronic file of this document is available on the date of 
publication in the Federal Register at http://www.gpoaccess.gov/fr/index.html.

Background

    Sections 206(a) and 1631(d) of the Social Security Act (Act) direct 
the Commissioner of Social Security (Commissioner) to determine the 
maximum fees representatives may charge claimants for services that 
they perform in claims before the Social Security Administration (SSA) 
under title II or title XVI of the Act. For claims under title II in 
which the claimant is

[[Page 44766]]

found entitled to past-due benefits, section 206 of the Act further 
authorizes the Commissioner to pay attorneys' fees, approved by the 
Commissioner or by a Federal court, out of a portion of the past-due 
benefits in the case. Prior to enactment of the SSPA (Pub. L. 108-203), 
we were not authorized to withhold and pay fees approved for attorneys 
in title XVI cases or for non-attorney representatives in cases under 
either title of the Act.

Direct Payment of Attorneys' Fees in Title XVI

    Section 302 of the SSPA amended section 1631(d)(2) of the Act to 
extend the attorney fee withholding and direct payment procedures to 
claims under title XVI of the Act. The amendments made by section 302 
apply with respect to attorney fees that were first required to be paid 
from title XVI past-due benefits on or after February 28, 2005, and we 
began paying fees directly to attorneys in cases effectuated on or 
after that date. Section 302 includes a sunset provision. Under that 
provision, the amendments made by section 302 will not apply to claims 
for benefits with respect to which the claimant and the representative 
enter into the agreement for representation after February 28, 2010.

Direct Payment of Fees to Eligible Non-Attorney Representatives

    Section 303 of the SSPA directs the Commissioner to carry out a 5-
year nationwide demonstration project to determine the potential 
results of extending the fee withholding and direct payment procedures 
that apply to attorneys under titles II and XVI of the Act, to non-
attorney representatives who meet certain minimum prerequisites 
specified in section 303 and any additional prerequisites that the 
Commissioner may prescribe. Under the prerequisites specified in 
section 303, individuals applying to participate in the demonstration 
project must have a bachelor's degree or equivalent education, possess 
liability insurance or equivalent insurance adequate to protect 
claimants in the event of malpractice by the representative, pass a 
criminal background check ensuring fitness to practice before SSA, pass 
an examination testing knowledge of the relevant provisions of the Act 
and the most recent developments in Agency and court decisions, and 
demonstrate ongoing completion of qualified continuing education 
courses. In addition, the Commissioner has required that individuals 
applying to participate in the demonstration project show that they 
have sufficient prior experience representing claimants before SSA. 
More detailed information about these prerequisites may be found in the 
Federal Register notices published at the start of the demonstration 
project in 2005 (70 FR 2447, January 13, 2005; 70 FR 14490, March 22, 
2005; and 70 FR 41250, July 18, 2005).
    The 5-year demonstration project on direct payment of fees to 
eligible non-attorneys under section 303 of the SSPA commenced on 
February 28, 2005. We began making direct payment to non-attorneys 
under the demonstration project on July 28, 2005, the date on which we 
determined that the initial group of applicants had satisfied the 
prerequisites for participation in the project. The demonstration 
project established by SSPA section 303 applies to claims for benefits 
with respect to which the agreement for representation is entered into 
after February 27, 2005, and before March 1, 2010. In these final 
rules, we are amending our regulations to reflect the fact that non-
attorney representatives participating in the demonstration project may 
have their approved fees withheld from their clients' past-due benefits 
and paid directly to them.

Definition of ``Past-Due Benefits''

    The amount of ``past-due benefits'' is important in calculating the 
fees of representatives and in determining the maximum amount we can 
pay directly for representation. Since we last defined the term ``past-
due benefits'' in our regulations, there have been several legislative 
enactments that affect the definition of past-due benefits. In section 
5106 of the OBRA (Pub. L. 101-508), section 321(f) of the SSIPIA (Pub. 
L. 103-296), and section 302 of the SSPA, the Act was amended to 
exclude from past-due benefits any continued benefits paid pursuant to 
Sec.  404.1597a of part 404, any interim benefits paid pursuant to 
section 223(h) of the Act, any continued benefits paid pursuant to 
Sec.  416.996 of part 416, any continued benefits paid pursuant to 
Sec.  416.1336(b) of part 416, and any interim benefits paid pursuant 
to section 1631(a)(8) of the Act; to specify how a reduction under 
section 1127 of the Act (for receipt of benefits for the same period 
under both title II and title XVI) affects the past-due benefit 
computation; and to address the effect of interim assistance 
reimbursement payments. We are amending our regulations to reflect 
these statutory changes.

Assessment on Direct Payment of Fees

    Section 406 of the TWWIIA (Pub. L. 106-170) amended section 206 of 
the Act by adding section 206(d), which imposed an assessment on 
attorneys for the services we provide in determining and paying fees 
directly to attorneys from the benefits due claimants under title II of 
the Act. When that provision took effect on February 1, 2000, the 
amount of the assessment was 6.3 percent of the direct payment amount, 
with a provision allowing the Commissioner to determine for future 
years the percentage (not to exceed 6.3 percent) necessary to achieve 
full recovery of the costs of determining and paying fees to attorneys. 
Effective September 1, 2004, section 301 of the SSPA revised section 
206(d) to cap the assessment at the lesser of the amount calculated 
using the percentage rate determined by the Commissioner or $75, and to 
provide for annual adjustment of the $75 cap based on the cost-of-
living computation in section 215(i)(2)(A)(ii) of the Act. Sections 302 
and 303 of the SSPA extended this assessment to the direct payment of 
fees to attorneys under title XVI and to the direct payment of fees to 
non-attorney representatives participating in the demonstration project 
authorized by section 303.

Explanation of Changes

    We are amending our regulations on representation in 20 CFR parts 
404 and 416 to reflect the legislative changes to sections 206, 1127 
and 1631(d) of the Act that were enacted under section 5106 of OBRA, 
section 321(f) of the SSIPIA, section 406 of the TWWIIA, and sections 
301 and 302 of the SSPA. In addition, we are revising the regulations 
to reflect the provisions of section 303 of the SSPA. We are making 
only those substantive changes necessary to conform our regulations to 
these currently applicable statutory provisions. In these changes we 
are:
     Amending Sec.  404.1703 to revise the definition of 
``past-due benefits'' to explain that we determine past-due benefits 
before any applicable reduction for receipt of benefits for the same 
period under title XVI and that past-due benefits do not include 
continued payment of disability benefits during appeal or interim 
benefits in cases of delayed final decision.
     Adding to Sec.  416.1503 the definition of ``past-due 
benefits'' for title XVI benefits to explain that when we determine the 
amount of past-due benefits, we subtract the amount of any reduction 
under section 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

[[Page 44767]]

that past-due benefits do not include continued benefits or interim 
benefits.
     Adding new Sec. Sec.  404.1717 and 416.1517 to reflect the 
demonstration project extending benefit withholding and direct fee 
payment to non-attorneys under title II and title XVI. These sections 
also define ``eligible to participate in the direct payment 
demonstration project'' and describe the claims to which the 
demonstration project applies.
     Amending Sec.  404.1720 to revise paragraph (b)(4) to 
provide that we make direct fee payments from title II past-due 
benefits both to attorneys and to non-attorney representatives eligible 
to participate in the direct payment demonstration project, and that we 
assume no responsibility for the payment of any fee that we have 
authorized to a non-attorney if the representative is not eligible to 
participate in the demonstration project. We are also revising 
paragraph (c)(3) to provide that our notice of a fee determination will 
state whether we are responsible for paying the representative's fee 
from past-due benefits.
     Amending Sec.  416.1520 to add a new paragraph (b)(4) 
stating that we make direct payment of fees from past-due benefits 
under title XVI to attorneys and to non-attorneys eligible to 
participate in the direct payment demonstration project, and that we 
assume no responsibility for the payment of any fee that we have 
authorized to a non-attorney if the representative is not eligible to 
participate in the demonstration project. We are revising paragraph 
(c)(3) to state that our notice of fee determination will state whether 
we are responsible for paying the fee, rather than that we are not 
responsible for paying the fee. We are also revising paragraph (d)(3) 
to state that we assume no responsibility for fee payment based on a 
revised determination if the representative does not file the request 
for administrative review timely.
     Revising Sec.  416.1528 to place the existing text in a 
newly designated paragraph (a) having the heading, ``Representation of 
a party in court proceedings'' and to add a new paragraph (b) that has 
the heading ``Attorney fee allowed by a Federal court.'' Paragraph (b) 
states that the court may allow a reasonable fee to an attorney as part 
of its favorable judgment in a proceeding under title XVI of the Act 
and that we may pay the attorney the amount of the fee out of, but not 
in addition to, the amount of the past-due benefits payable to the 
claimant by reason of the court judgment.
     Amending Sec.  404.1730 to insert a previously omitted 
``the'' in paragraph (a), to add a cross-reference to the definition of 
``past-due benefits'' in Sec.  404.1703, and to reflect in paragraphs 
(b) and (c) the extension of the direct payment of fees from past-due 
benefits under title II to non-attorneys eligible to participate in the 
direct payment demonstration project. We are also adding a new 
paragraph (d) to reflect that we impose an assessment on the 
representative when we pay a fee directly to the representative; to 
explain how we calculate the assessment; and to state that the 
representative may not, directly or indirectly, request or otherwise 
obtain reimbursement of the amount of the assessment from the claimant.
     Adding new Sec.  416.1530 to state that direct payment of 
fees under title XVI extends to attorneys for fees we authorize and for 
fees a Federal court allows, and extends to non-attorneys eligible to 
participate in the direct payment demonstration project for fees we 
authorize. This section also describes the maximum amount we will pay 
to the representative; shows that we impose an assessment on the 
representative when we pay a fee directly to the representative; 
explains how we calculate 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.
    In addition to these substantive changes, we are revising 
Sec. Sec.  404.1720(b)(4) and 404.1730(a), (b) and (c) to refer to the 
person claiming a right under the old-age, disability, dependents', or 
survivors' benefits program in the second person, and thus make the 
language in these sections consistent with the use of the second person 
throughout the regulations.

Interim Final Rule

    On April 5, 2007 (72 FR 16720), we published interim final rules 
with request for comments. The interim final rules were effective on 
that date. We received no public comments on the interim final rules. 
Thus, we are adopting them without change.

Regulatory Procedures

Executive Order 12866, as amended

    The Office of Management and Budget (OMB) earlier determined that 
the interim final rules we published on April 5, 2007, met the criteria 
for a significant regulatory action under Executive Order 12866, as 
amended. Accordingly, those interim final rules were subject to OMB 
review. Because these final rules merely adopt the provisions of the 
earlier interim final rules without change, however, OMB determined 
that it did not need to review these rules again. We also have 
determined that these rules meet the plain language requirement of 
Executive Order 12866, as amended.

Regulatory Flexibility Act

    We certify that these final rules will not have a significant 
economic impact on a substantial number of small entities. Also, these 
final rules simply reflect legislation already in effect. Therefore, a 
regulatory flexibility analysis as provided in the Regulatory 
Flexibility Act, as amended, is not required.

Paperwork Reduction Act

    The Paperwork Reduction Act (PRA) of 1995 says that no persons are 
required to respond to a collection of information unless it displays a 
valid OMB control number. In accordance with the PRA, SSA is providing 
notice that OMB has approved the information collection requirements 
contained in Sec. Sec.  404.1717, 404.1730(c)(1), 404.1730(c)(2)(i), 
404.1730(c)(2)(ii), 416.1517, 416.1528(a), 416.1530(c)(1), 
416.1530(c)(2)(i), and 416.1530(c)(2)(ii) of these final rules. The OMB 
Control Number for this (these) collection(s) is 0960-0745, expiring 
06/30/2010.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social 
Security-Disability Insurance; 96.002, Social Security-Retirement 
Insurance; 96.004, Social Security-Survivors Insurance; and 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.

    Dated: July 31, 2007.
Michael J. Astrue,
Commissioner of Social Security.

0
Accordingly, the interim final rules amending subpart R of part 404 and 
subpart O of part 416 of chapter III of title 20 of the Code of Federal 
Regulations, which were published at

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72 FR 16720 on April 5, 2007, are adopted as final rules without 
change.

 [FR Doc. E7-15242 Filed 8-8-07; 8:45 am]
BILLING CODE 4191-02-P