Questions on Fees from NOSSCR Spring 2018

We ran out of time at the NOSSCR conference in the discussion of attorney fees.  I answer those questions here:

I have had several instances recently where I did all the case prep, but then did not rep the client at the hearing (fired the week before the hearing, client with dementia doesn't remember hiring me and then hires another attorney, client became unresponsive). The ALJs awarded fees in all cases after fee petition, but fee is not withheld. Clients refuse to pay-- what do I do?

 The agency does not withhold fees for a discharged or withdrawing representative.  You have to collect the fee from the claimant or representative payee.  The only way to turn that award into something collectible is to turn it into a state court judgment.  Consult your state rules about suing your client -- most carriers frown on it and if the claimant is demented, that person may try to relitigate the fee award from the ALJ.

Is it proper for an ALJ to reduce a requested fee on a fee petition on the basis that the fee petition was "delayed," e.g., 6 months after the Notice of Award was issued?

Is there a reason for the delay other than the press of business?  If the fee petition seeks less than the entire withholding, then the delay has prejudiced the claimant by delaying the receipt of the residual withholding.

Do we have any recourse for this scenario: we had an AC remand awarded upon second hearing for a closed period of benefits. Even though the rep paperwork and fee agreement were on file, SSA failed to withhold our fee. The client won't return our calls. HELP! 

I successfully represented a client and the Judge approved the fee agreement.  The client was paid the full amount of the back pay but SSA mistakenly did not withhold my fee.  Suggestions... 

Ask the field office in an SSI case or the processing center/OCO in a DIB case to create an overpayment and pay you directly -- assuming that you are eligible for direct payment.  You need to document your collection efforts to qualify for the creation of the overpayment.  The agency will not declare an overpayment without that showing nor if the claimant is deceased.

I've had problems in which SSA is failing to release past-due benefits to my clients while my fee petitions are pending. Shouldn't SSA be releasing 75% of those benefits to my clients in the interim? (Instead of telling my clients that "your lawyer is holding up payment of your benefits?")

A writ of mandate comes to mind.  Don't file one, threaten to file one.  If this is a Title II claim, it is a rogue in the office.  If this is a Title XVI claim, the claimant gets the benefit in three payments with the bulk coming at the end of 12 months.

How should I handle getting a 1099 from SSA every year? Why does no one ever directly address this with NOSSCR or SSA or IRS?

File a schedule C that declares the income reported on the 1099 and then report the transfer of the entire corpus of those funds to the firm or other entity.  NOSSCR cannot control the IRS reporting requirements; nor does SSA.

 how do you address the fee with the client at signup in cases where the ALJ finds disability 5 1/2 months prior or say 7 months prior?

Anticipate the scenario as part of the fee agreement.  You can reserve the right to seek administrative review of the fee agreement or opt into a fee petition process in those cases.  We take risk in representing claimants of either a small fee or no fee.  This is part of the process.

What is the review process available if the Payment Center disapproves your fee agreement after an ALJ approved it (Assuming the PC disapproved for an incorrect reason)?

Seek administrative review of the fee agreement disapproval by the PC.  Due process requires a notice and opportunity to be heard.   See HALLEX I-1-2-49. 

Prior attorney withdraws but does not waive.  Does SSA send copy of favorable decision or award letter.  You file fee petition.  How does prior attorney know when to file?

SSA notifies the representative to file a fee petition and/or the representative files a fee petition on discharge/withdrawal. 

If a client fires a rep and hires someone else, and the previous rep withdraws, why does the new rep still have to do a fee petition?

Because the withdrawing representative still has the right to seek a fee.  If the previous representative waives, then the ALJ can approve the current representative fee's fee agreement.

It took almost a year for my fee agreement to be approved. SS told me my clients full backpay would not be disbursed until my fee agreement was approved. This didn't happen. They gave her everything. Now I have to collect from her direct. How can I prevent this from happening in the future?

The backpay should be released and the withholding held back.  If I were told that SSA would not release the PDB until my fee was set, I would demand that the agency release that 75% of the PDB to the client.  As to release of the withholding, it happens because the agency makes mistakes.