42 U.S.C. § 406 — Representation of claimants before Com-

Page 1937 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 406 Commissioner to carry out the activities de- scribed in subparagraph (A). (2) Enforcement (A) In general Notwithstanding any other provision of law, including the matter preceding para- graph (1) of section 505(a) of the Gramm- Leach-Bliley Act (15 U.S.C. 6805(a)), any vio- lation of this section and any certification made under this section shall be enforced in accordance with paragraphs (1) through (7) of such section 505(a) by the agencies de- scribed in those paragraphs. (B) Relevant information Upon discovery by the Commissioner, pur- suant to an audit described in paragraph (1), of any violation of this section or any cer- tification made under this section, the Com- missioner shall forward any relevant infor- mation pertaining to that violation to the appropriate agency described in subpara- graph (A) for evaluation by the agency for purposes of enforcing this section. (h) Recovery of costs (1) In general (A) In general Amounts obligated to carry out this sec- tion shall be fully recovered from the users of the database or verification system by way of advances, reimbursements, user fees, or other recoveries as determined by the Commissioner. The funds recovered under this paragraph shall be deposited as an off- setting collection to the account providing appropriations for the Social Security Ad- ministration, to be used for the administra- tion of this section without fiscal year limi- tation. (B) Prices fixed by Commissioner The Commissioner shall establish the amount to be paid by the users under this paragraph, including the costs of any serv- ices or work performed, such as any appro- priate upgrades, maintenance, and associ- ated direct and indirect administrative costs, in support of carrying out the pur- poses described in this section, by reim- bursement or in advance as determined by the Commissioner. The amount of such prices shall be periodically adjusted by the Commissioner to ensure that amounts col- lected are sufficient to fully offset the cost of the administration of this section. (2) Initial development The Commissioner shall not begin develop- ment of a verification system to carry out this section until the Commissioner determines that amounts equal to at least 50 percent of program start-up costs have been collected under paragraph (1). (3) Existing resources The Commissioner may use funds designated for information technology modernization to carry out this section. (4) Annual report The Commissioner shall annually submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the amount of indirect costs to the Social Secu- rity Administration arising as a result of the implementation of this section. (Pub. L. 115–174, title II, § 215, May 24, 2018, 132 Stat. 1323.) Editorial Notes REFERENCES IN TEXT The Gramm-Leach-Bliley Act, referred to in subsec. (e)(3), is Pub. L. 106–102, Nov. 12, 1999, 113 Stat. 1338. Title V of the Act is classified principally to chapter 94 (§ 6801 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title of 1999 Amendment note set out under sec- tion 1811 of Title 12, Banks and Banking, and Tables. CODIFICATION Section was enacted as part of the Economic Growth, Regulatory Relief, and Consumer Protection Act, and not as part of the Social Security Act which comprises this chapter. § 406. Representation of claimants before Com- missioner (a) Recognition of representatives; fees for rep- resentation before Commissioner (1) The Commissioner of Social Security may prescribe rules and regulations governing the recognition of agents or other persons, other than attorneys as hereinafter provided, rep- resenting claimants before the Commissioner of Social Security, and may require of such agents or other persons, before being recognized as rep- resentatives of claimants that they shall show that they are of good character and in good re- pute, possessed of the necessary qualifications to enable them to render such claimants valu- able service, and otherwise competent to advise and assist such claimants in the presentation of their cases. An attorney in good standing who is admitted to practice before the highest court of the State, Territory, District, or insular posses- sion of his residence or before the Supreme Court of the United States or the inferior Fed- eral courts, shall be entitled to represent claim- ants before the Commissioner of Social Secu- rity. Notwithstanding the preceding sentences, the Commissioner, after due notice and oppor- tunity for hearing, (A) may refuse to recognize as a representative, and may disqualify a rep- resentative already recognized, any attorney who has been disbarred or suspended from any court or bar to which he or she was previously admitted to practice or who has been disquali- fied from participating in or appearing before any Federal program or agency, and (B) may refuse to recognize, and may disqualify, as a non-attorney representative any attorney who has been disbarred or suspended from any court or bar to which he or she was previously admit- ted to practice. A representative who has been disqualified or suspended pursuant to this sec- tion from appearing before the Social Security Administration as a result of collecting or re- ceiving a fee in excess of the amount authorized shall be barred from appearing before the Social Security Administration as a representative until full restitution is made to the claimant Page 1938 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 406 and, thereafter, may be considered for reinstate- ment only under such rules as the Commissioner may prescribe. The Commissioner of Social Se- curity may, after due notice and opportunity for hearing, suspend or prohibit from further prac- tice before the Commissioner any such person, agent, or attorney who refuses to comply with the Commissioner’s rules and regulations or who violates any provision of this section for which a penalty is prescribed. The Commissioner of So- cial Security may, by rule and regulation, pre- scribe the maximum fees which may be charged for services performed in connection with any claim before the Commissioner of Social Secu- rity under this subchapter, and any agreement in violation of such rules and regulations shall be void. Except as provided in paragraph (2)(A), whenever the Commissioner of Social Security, in any claim before the Commissioner for bene- fits under this subchapter, makes a determina- tion favorable to the claimant, the Commis- sioner shall, if the claimant was represented by an attorney in connection with such claim, fix (in accordance with the regulations prescribed pursuant to the preceding sentence) a reason- able fee to compensate such attorney for the services performed by him in connection with such claim. (2)(A) In the case of a claim of entitlement to past-due benefits under this subchapter, if— (i) an agreement between the claimant and another person regarding any fee to be recov- ered by such person to compensate such person for services with respect to the claim is pre- sented in writing to the Commissioner of So- cial Security prior to the time of the Commis- sioner’s determination regarding the claim, (ii) the fee specified in the agreement does not exceed the lesser of— (I) 25 percent of the total amount of such past-due benefits (as determined before any applicable reduction under section 1320a–6(a) of this title), or (II) $4,000, and (iii) the determination is favorable to the claimant, then the Commissioner of Social Security shall approve that agreement at the time of the favor- able determination, and (subject to paragraph (3)) the fee specified in the agreement shall be the maximum fee. The Commissioner of Social Security may from time to time increase the dollar amount under clause (ii)(II) to the extent that the rate of increase in such amount, as de- termined over the period since January 1, 1991, does not at any time exceed the rate of increase in primary insurance amounts under section 415(i) of this title since such date. The Commis- sioner of Social Security shall publish any such increased amount in the Federal Register. (B) For purposes of this subsection, the term ‘‘past-due benefits’’ excludes any benefits with respect to which payment has been continued pursuant to subsection (g) or (h) of section 423 of this title. (C) In any case involving— (i) an agreement described in subparagraph (A) with any person relating to both a claim of entitlement to past-due benefits under this subchapter and a claim of entitlement to past- due benefits under subchapter XVI, and (ii) a favorable determination made by the Commissioner of Social Security with respect to both such claims, the Commissioner of Social Security may ap- prove such agreement only if the total fee or fees specified in such agreement does not exceed, in the aggregate, the dollar amount in effect under subparagraph (A)(ii)(II). (D) In the case of a claim with respect to which the Commissioner of Social Security has approved an agreement pursuant to subpara- graph (A), the Commissioner of Social Security shall provide the claimant and the person rep- resenting the claimant a written notice of— (i) the dollar amount of the past-due benefits (as determined before any applicable reduction under section 1320a–6(a) of this title) and the dollar amount of the past-due benefits payable to the claimant, (ii) the dollar amount of the maximum fee which may be charged or recovered as deter- mined under this paragraph, and (iii) a description of the procedures for re- view under paragraph (3). (3)(A) The Commissioner of Social Security shall provide by regulation for review of the amount which would otherwise be the maximum fee as determined under paragraph (2) if, within 15 days after receipt of the notice provided pur- suant to paragraph (2)(D)— (i) the claimant, or the administrative law judge or other adjudicator who made the fa- vorable determination, submits a written re- quest to the Commissioner of Social Security to reduce the maximum fee, or (ii) the person representing the claimant submits a written request to the Commis- sioner of Social Security to increase the max- imum fee. Any such review shall be conducted after pro- viding the claimant, the person representing the claimant, and the adjudicator with reasonable notice of such request and an opportunity to submit written information in favor of or in op- position to such request. The adjudicator may request the Commissioner of Social Security to reduce the maximum fee only on the basis of evidence of the failure of the person rep- resenting the claimant to represent adequately the claimant’s interest or on the basis of evi- dence that the fee is clearly excessive for serv- ices rendered. (B)(i) In the case of a request for review under subparagraph (A) by the claimant or by the per- son representing the claimant, such review shall be conducted by the administrative law judge who made the favorable determination or, if the Commissioner of Social Security determines that such administrative law judge is unavail- able or if the determination was not made by an administrative law judge, such review shall be conducted by another person designated by the Commissioner of Social Security for such pur- pose. (ii) In the case of a request by the adjudicator for review under subparagraph (A), the review shall be conducted by the Commissioner of So- cial Security or by an administrative law judge or other person (other than such adjudicator) who is designated by the Commissioner of Social Security. Page 1939 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 406 1 See References in Text note below. (C) Upon completion of the review, the admin- istrative law judge or other person conducting the review shall affirm or modify the amount which would otherwise be the maximum fee. Any such amount so affirmed or modified shall be considered the amount of the maximum fee which may be recovered under paragraph (2). The decision of the administrative law judge or other person conducting the review shall not be subject to further review. (4) Subject to subsection (d), if the claimant is determined to be entitled to past-due benefits under this subchapter and the person rep- resenting the claimant is an attorney, the Com- missioner of Social Security shall, notwith- standing section 405(i) of this title, certify for payment out of such past-due benefits (as deter- mined before any applicable reduction under section 1320a–6(a) of this title) to such attorney an amount equal to so much of the maximum fee as does not exceed 25 percent of such past- due benefits (as determined before any applica- ble reduction under section 1320a–6(a) of this title). (5) Any person who shall, with intent to de- fraud, in any manner willfully and knowingly deceive, mislead, or threaten any claimant or prospective claimant or beneficiary under this subchapter by word, circular, letter or adver- tisement, or who shall knowingly charge or col- lect directly or indirectly any fee in excess of the maximum fee, or make any agreement di- rectly or indirectly to charge or collect any fee in excess of the maximum fee, prescribed by the Commissioner of Social Security shall be deemed guilty of a misdemeanor and, upon con- viction thereof, shall for each offense be pun- ished by a fine not exceeding $500 or by impris- onment not exceeding one year, or both. The Commissioner of Social Security shall maintain in the electronic information retrieval system used by the Social Security Administration a current record, with respect to any claimant be- fore the Commissioner of Social Security, of the identity of any person representing such claim- ant in accordance with this subsection. (b) Fees for representation before court (1)(A) Whenever a court renders a judgment fa- vorable to a claimant under this subchapter who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representa- tion, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment, and the Commissioner of Social Security may, notwith- standing the provisions of section 405(i) of this title, but subject to subsection (d) of this sec- tion, certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits. In case of any such judgment, no other fee may be payable or certified for payment for such representation except as provided in this paragraph. (B) For purposes of this paragraph— (i) the term ‘‘past-due benefits’’ excludes any benefits with respect to which payment has been continued pursuant to subsection (g) or (h) of section 423 of this title, and (ii) amounts of past-due benefits shall be de- termined before any applicable reduction under section 1320a–6(a) of this title. (2) Any attorney who charges, demands, re- ceives, or collects for services rendered in con- nection with proceedings before a court to which paragraph (1) of this subsection is applicable any amount in excess of that allowed by the court thereunder shall be guilty of a misdemeanor and upon conviction thereof shall be subject to a fine of not more than $500, or imprisonment for not more than one year, or both. (c) Notification of options for obtaining attor- neys The Commissioner of Social Security shall no- tify each claimant in writing, together with the notice to such claimant of an adverse deter- mination, of the options for obtaining attorneys to represent individuals in presenting their cases before the Commissioner of Social Secu- rity. Such notification shall also advise the claimant of the availability to qualifying claim- ants of legal services organizations which pro- vide legal services free of charge. (d) Assessment on attorneys (1) In general Whenever a fee for services is required to be certified for payment to an attorney from a claimant’s past-due benefits pursuant to sub- section (a)(4) or (b)(1), the Commissioner shall impose on the attorney an assessment cal- culated in accordance with paragraph (2). (2) Amount (A) The amount of an assessment under paragraph (1) shall be equal to the product ob- tained by multiplying the amount of the rep- resentative’s fee that would be required to be so certified by subsection (a)(4) or (b)(1) before the application of this subsection, by the per- centage specified in subparagraph (B), except that the maximum amount of the assessment may not exceed the greater of $75 or the ad- justed amount as provided pursuant to the fol- lowing two sentences. In the case of any cal- endar year beginning after the amendments made by section 301 of the Social Security Protection Act of 2003 1 take effect, the dollar amount specified in the preceding sentence (including a previously adjusted amount) shall be adjusted annually under the procedures used to adjust benefit amounts under section 415(i)(2)(A)(ii) of this title, except such adjust- ment shall be based on the higher of $75 or the previously adjusted amount that would have been in effect for December of the preceding year, but for the rounding of such amount pur- suant to the following sentence. Any amount so adjusted that is not a multiple of $1 shall be rounded to the next lowest multiple of $1, but in no case less than $75. (B) The percentage specified in this subpara- graph is— (i) for calendar years before 2001, 6.3 per- cent, and (ii) for calendar years after 2000, such per- centage rate as the Commissioner deter- mines is necessary in order to achieve full recovery of the costs of determining and cer- tifying fees to attorneys from the past-due benefits of claimants, but not in excess of 6.3 percent. Page 1940 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 406 2 So in original. Probably should be ‘‘non-attorney’’. (3) Collection The Commissioner may collect the assess- ment imposed on an attorney under paragraph (1) by offset from the amount of the fee other- wise required by subsection (a)(4) or (b)(1) to be certified for payment to the attorney from a claimant’s past-due benefits. (4) Prohibition on claimant reimbursement An attorney subject to an assessment under paragraph (1) may not, directly or indirectly, request or otherwise obtain reimbursement for such assessment from the claimant whose claim gave rise to the assessment. (5) Disposition of assessments Assessments on attorneys collected under this subsection shall be credited to the Fed- eral Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, as appropriate. (6) Authorization of appropriations The assessments authorized under this sec- tion shall be collected and available for obli- gation only to the extent and in the amount provided in advance in appropriations Acts. Amounts so appropriated are authorized to re- main available until expended, for administra- tive expenses in carrying out this subchapter and related laws. (e) Extension of fee withholding and assessment procedures to qualified non-attorney rep- resentatives (1) The Commissioner shall provide for the ex- tension of the fee withholding procedures and assessment procedures that apply under the pre- ceding provisions of this section to agents and other persons, other than attorneys, who rep- resent claimants under this subchapter before the Commissioner. (2) Fee-withholding procedures may be ex- tended under paragraph (1) to any nonattorney 2 representative only if such representative meets at least the following prerequisites: (A) The representative has been awarded a bachelor’s degree from an accredited institu- tion of higher education, or has been deter- mined by the Commissioner to have equiva- lent qualifications derived from training and work experience. (B) The representative has passed an exam- ination, written and administered by the Com- missioner, which tests knowledge of the rel- evant provisions of this chapter and the most recent developments in agency and court deci- sions affecting this subchapter and subchapter XVI. (C) The representative has secured profes- sional liability insurance, or equivalent insur- ance, which the Commissioner has determined to be adequate to protect claimants in the event of malpractice by the representative. (D) The representative has undergone a criminal background check to ensure the rep- resentative’s fitness to practice before the Commissioner. (E) The representative demonstrates ongo- ing completion of qualified courses of con- tinuing education, including education regard- ing ethics and professional conduct, which are designed to enhance professional knowledge in matters related to entitlement to, or eligi- bility for, benefits based on disability under this subchapter and subchapter XVI. Such con- tinuing education, and the instructors pro- viding such education, shall meet such stand- ards as the Commissioner may prescribe. (3)(A) The Commissioner may assess rep- resentatives reasonable fees to cover the cost to the Social Security Administration of admin- istering the prerequisites described in paragraph (2). (B) Fees collected under subparagraph (A) shall be credited to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, or deposited as miscellaneous receipts in the general fund of the Treasury, based on such allocations as the Com- missioner determines appropriate. (C) The fees authorized under this paragraph shall be collected and available for obligation only to the extent and in the amount provided in advance in appropriations Acts. Amounts so appropriated are authorized to remain available until expended for administering the pre- requisites described in paragraph (2). (Aug. 14, 1935, ch. 531, title II, § 206, 49 Stat. 624; Aug. 10, 1939, ch. 666, title II, § 201, 53 Stat. 1362, 1372; Aug. 28, 1950, ch. 809, title I, § 109(b)(1), 64 Stat. 523; Pub. L. 85–840, title III, § 309, Aug. 28, 1958, 72 Stat. 1034; Pub. L. 89–97, title III, § 332, July 30, 1965, 79 Stat. 403; Pub. L. 90–248, title I, § 173, Jan. 2, 1968, 81 Stat. 877; Pub. L. 98–369, div. B, title VI, § 2663(l)(1), July 18, 1984, 98 Stat. 1171; Pub. L. 101–239, title X, § 10307(a)(1), (b)(1), Dec. 19, 1989, 103 Stat. 2484, 2485; Pub. L. 101–508, title V, § 5106(a)(1), Nov. 5, 1990, 104 Stat. 1388–266; Pub. L. 103–296, title I, § 107(a)(4), title III, § 321(f)(3)(B)(i), (4), Aug. 15, 1994, 108 Stat. 1478, 1541, 1542; Pub. L. 106–170, title IV, § 406(a), (b), Dec. 17, 1999, 113 Stat. 1911, 1912; Pub. L. 108–203, title II, § 205, title III, § 301(a), Mar. 2, 2004, 118 Stat. 512, 519; Pub. L. 111–142, § 3(a), Feb. 27, 2010, 124 Stat. 38.) Editorial Notes REFERENCES IN TEXT Section 301 of the Social Security Protection Act of 2003, referred to in subsec. (d)(2)(A), probably means section 301 of the Social Security Protection Act of 2004, Pub. L. 108–203, which amended this section and enacted provisions set out as a note below. AMENDMENTS 2010—Subsec. (e). Pub. L. 111–142 added subsec. (e). 2004—Subsec. (a)(1). Pub. L. 108–203, § 205, inserted ‘‘Notwithstanding the preceding sentences, the Com- missioner, after due notice and opportunity for hear- ing, (A) may refuse to recognize as a representative, and may disqualify a representative already recog- nized, any attorney who has been disbarred or sus- pended from any court or bar to which he or she was previously admitted to practice or who has been dis- qualified from participating in or appearing before any Federal program or agency, and (B) may refuse to rec- ognize, and may disqualify, as a non-attorney rep- resentative any attorney who has been disbarred or suspended from any court or bar to which he or she was previously admitted to practice. A representative who Page 1941 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 406 has been disqualified or suspended pursuant to this sec- tion from appearing before the Social Security Admin- istration as a result of collecting or receiving a fee in excess of the amount authorized shall be barred from appearing before the Social Security Administration as a representative until full restitution is made to the claimant and, thereafter, may be considered for rein- statement only under such rules as the Commissioner may prescribe.’’ after ‘‘claimants before the Commis- sioner of Social Security.’’ Subsec. (d)(2)(A). Pub. L. 108–203, § 301(a), inserted ‘‘, except that the maximum amount of the assessment may not exceed the greater of $75 or the adjusted amount as provided pursuant to the following two sen- tences’’ after ‘‘subparagraph (B)’’ and inserted at end ‘‘In the case of any calendar year beginning after the amendments made by section 301 of the Social Security Protection Act of 2003 take effect, the dollar amount specified in the preceding sentence (including a pre- viously adjusted amount) shall be adjusted annually under the procedures used to adjust benefit amounts under section 415(i)(2)(A)(ii) of this title, except such adjustment shall be based on the higher of $75 or the previously adjusted amount that would have been in ef- fect for December of the preceding year, but for the rounding of such amount pursuant to the following sen- tence. Any amount so adjusted that is not a multiple of $1 shall be rounded to the next lowest multiple of $1, but in no case less than $75.’’ 1999—Subsec. (a)(4). Pub. L. 106–170, § 406(a)(2)(A), (b), struck out ‘‘(A)’’ after ‘‘(4)’’, substituted ‘‘subsection (d)’’ for ‘‘subparagraph (B)’’, and struck out subpar. (B) which read as follows: ‘‘The Commissioner of Social Se- curity shall not in any case certify any amount for payment to the attorney pursuant to this paragraph be- fore the expiration of the 15-day period referred to in paragraph (3)(A) or, in the case of any review conducted under paragraph (3), before the completion of such re- view.’’ Subsec. (b)(1)(A). Pub. L. 106–170, § 406(a)(2)(B), in- serted ‘‘, but subject to subsection (d) of this section’’ after ‘‘section 405(i) of this title’’. Subsec. (d). Pub. L. 106–170, § 406(a)(1), added subsec. (d). 1994—Subsec. (a)(1), (2)(A). Pub. L. 103–296, § 107(a)(4), substituted ‘‘Commissioner of Social Security’’ for ‘‘Secretary’’ wherever appearing, ‘‘before the Commis- sioner’’ for ‘‘before him’’ in two places, ‘‘Commis- sioner’s’’ for ‘‘Secretary’s’’ in two places, and ‘‘the Commissioner shall, if the’’ for ‘‘he shall, if the’’ in par. (1). Subsec. (a)(2)(C). Pub. L. 103–296, § 321(f)(4)(A)(ii), added subpar. (C). Former subpar. (C) redesignated (D). Pub. L. 103–296, § 107(a)(4), in subpar. (C) as added by Pub. L. 103–296, § 321(f)(4)(A)(ii), substituted ‘‘Commis- sioner of Social Security’’ for ‘‘Secretary’’ in two places. Subsec. (a)(2)(D). Pub. L. 103–296, § 321(f)(4)(A)(i), re- designated subpar. (C) as (D). Pub. L. 103–296, § 107(a)(4), in subpar. (D) as redesig- nated by Pub. L. 103–296, § 321(f)(4)(A)(i), substituted ‘‘Commissioner of Social Security’’ for ‘‘Secretary’’ in two places in introductory provisions. Subsec. (a)(3)(A). Pub. L. 103–296, § 321(f)(4)(B), sub- stituted ‘‘paragraph (2)(D)’’ for ‘‘paragraph (2)(C)’’ in introductory provisions. Pub. L. 103–296, § 107(a)(4), substituted ‘‘Commissioner of Social Security’’ for ‘‘Secretary’’ wherever appear- ing. Subsec. (a)(3)(B), (4), (5). Pub. L. 103–296, § 107(a)(4), substituted ‘‘Commissioner of Social Security’’ for ‘‘Secretary’’ wherever appearing. Subsec. (b)(1). Pub. L. 103–296, § 321(f)(3)(B)(i), des- ignated existing provisions as subpar. (A) and added subpar. (B). Subsec. (b)(1)(A). Pub. L. 103–296, § 107(a)(4), in subpar. (A) as designated by Pub. L. 103–296, § 321(f)(3)(B)(i), sub- stituted ‘‘Commissioner of Social Security’’ for ‘‘Sec- retary’’. Subsec. (c). Pub. L. 103–296, § 107(a)(4), substituted ‘‘Commissioner of Social Security’’ for ‘‘Secretary’’ in two places. 1990—Subsec. (a). Pub. L. 101–508 designated existing provisions as par. (1), substituted ‘‘Except as provided in paragraph (2)(A), whenever’’ for ‘‘Whenever’’ in fifth sentence, substituted pars. (2) to (4) for ‘‘If as a result of such determination, such claimant is entitled to past-due benefits under this subchapter, the Secretary shall, notwithstanding section 405(i) of this title, cer- tify for payment (out of such past-due benefits) to such attorney an amount equal to whichever of the fol- lowing is the smaller: (A) 25 per centum of the total amount of such past-due benefits, (B) the amount of the attorney’s fee so fixed, or (C) the amount agreed upon between the claimant and such attorney as the fee for such attorney’s services.’’, and inserted ‘‘(5)’’ before ‘‘Any person who’’. 1989—Subsec. (a). Pub. L. 101–239, § 10307(a)(1), inserted at end ‘‘The Secretary shall maintain in the electronic information retrieval system used by the Social Secu- rity Administration a current record, with respect to any claimant before the Secretary, of the identity of any person representing such claimant in accordance with this subsection.’’ Subsec. (c). Pub. L. 101–239, § 10307(b)(1), added subsec. (c). 1984—Pub. L. 98–369 substituted ‘‘Secretary’’ and ‘‘Secretary’s’’ for ‘‘Administrator’’ and ‘‘Administra- tor’s’’, respectively, wherever appearing. 1968—Subsec. (a). Pub. L. 90–248 provided for fixing of attorneys fees for claimants and for certification of amount for payment out of past-due benefits. 1965—Pub. L. 89–97 designated existing provisions as subsec. (a) and added subsec. (b). 1958—Pub. L. 85–840 struck out provisions which re- quired attorneys to file a certificate of their right to practice. 1950—Act Aug. 28, 1950, substituted ‘‘Administrator’’ for ‘‘Board’’ and ‘‘Administrator’s’’ for ‘‘Board’s’’. 1939—Act Aug. 10, 1939, substituted the provisions of this section for former provisions relating to overpay- ments during life, now covered by section 404 of this title. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111–142, § 3(c), Feb. 27, 2010, 124 Stat. 39, pro- vided that: ‘‘The Commissioner of Social Security shall provide for full implementation of the provisions of section 206(e) of the Social Security Act [42 U.S.C. 406(e)] (as added by subsection (a)) and the amendments made by subsection (b) [amending section 1383 of this title and provisions set out as a note under this sec- tion] not later than March 1, 2010.’’ EFFECTIVE DATE OF 2004 AMENDMENT Pub. L. 108–203, title III, § 301(b), Mar. 2, 2004, 118 Stat. 519, provided that: ‘‘The amendments made by this sec- tion [amending this section] shall apply with respect to fees for representation of claimants which are first re- quired to be certified or paid under section 206 of the Social Security Act [42 U.S.C. 406] on or after the first day of the first month that begins after 180 days after the date of the enactment of this Act [Mar. 2, 2004].’’ EFFECTIVE DATE OF 1999 AMENDMENT Pub. L. 106–170, title IV, § 406(d), Dec. 17, 1999, 113 Stat. 1913, provided that: ‘‘The amendments made by this section [amending this section and enacting provisions set out as a note under this section] shall apply in the case of any attorney with respect to whom a fee for services is required to be certified for payment from a claimant’s past-due benefits pursuant to subsection (a)(4) or (b)(1) of section 206 of the Social Security Act [42 U.S.C. 406] after the later of— ‘‘(1) December 31, 1999, or ‘‘(2) the last day of the first month beginning after the month in which this Act is enacted [Dec. 1999].’’ Page 1942 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 406 EFFECTIVE DATE OF 1994 AMENDMENT Amendment by section 107(a)(4) of Pub. L. 103–296 ef- fective Mar. 31, 1995, see section 110(a) of Pub. L. 103–296, set out as a note under section 401 of this title. Amendment by section 321(f)(3)(B)(i), (4) of Pub. L. 103–296 effective as if included in the provisions of the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101–508, to which such amendment relates, except that amendment by section 321(f)(3)(B)(i) applicable with re- spect to favorable judgments made after 180 days after Aug. 15, 1994, see section 321(f)(5) of Pub. L. 103–296, set out as a note under section 405 of this title. EFFECTIVE DATE OF 1990 AMENDMENT Amendment by Pub. L. 101–508 applicable with re- spect to determinations made on or after July 1, 1991, and to reimbursement for travel expenses incurred on or after Apr. 1, 1991, see section 5106(d) of Pub. L. 101–508, set out as a note under section 401 of this title. EFFECTIVE DATE OF 1989 AMENDMENT Pub. L. 101–239, title X, § 10307(a)(3), Dec. 19, 1989, 103 Stat. 2485, provided that: ‘‘The amendments made by this subsection [amending this section and section 1383 of this title] shall take effect June 1, 1991.’’ Pub. L. 101–239, title X, § 10307(b)(3), Dec. 19, 1989, 103 Stat. 2485, provided that: ‘‘The amendments made by this subsection [amending this section and section 1383 of this title] shall apply with respect to adverse deter- minations made on or after January 1, 1991.’’ EFFECTIVE DATE OF 1939 AMENDMENT Act Aug. 10, 1939, ch. 666, title II, § 201, 53 Stat. 1362, provided that the amendment made by that section is effective Jan. 1, 1940. NATIONWIDE DEMONSTRATION PROJECT PROVIDING FOR EXTENSION OF FEE WITHHOLDING PROCEDURES TO NON-ATTORNEY REPRESENTATIVES Pub. L. 108–203, title III, § 303, Mar. 2, 2004, 118 Stat. 521, as amended by Pub. L. 111–142, § 3(b)(2), Feb. 27, 2010, 124 Stat. 39, provided that: ‘‘(a) IN GENERAL.—The Commissioner of Social Secu- rity (hereafter in this section referred to as the ‘Com- missioner’) shall develop and carry out a nationwide demonstration project under this section with respect to agents and other persons, other than attorneys, who represent claimants under titles II and XVI of the So- cial Security Act [42 U.S.C. 401 et seq., 1381 et seq.] be- fore the Commissioner. The demonstration project shall be designed to determine the potential results of extending to such representatives the fee withholding procedures and assessment procedures that apply under sections 206 and section [sic] 1631(d)(2) of such Act [42 U.S.C. 406, 1383(d)(2)] to attorneys seeking direct pay- ment out of past due benefits under such titles and shall include an analysis of the effect of such extension on claimants and program administration. ‘‘(b) STANDARDS FOR INCLUSION IN DEMONSTRATION PROJECT.—Fee-withholding procedures may be ex- tended under the demonstration project carried out pursuant to subsection (a) to any non-attorney rep- resentative only if such representative meets at least the following prerequisites: ‘‘(1) The representative has been awarded a bach- elor’s degree from an accredited institution of higher education, or has been determined by the Commis- sioner to have equivalent qualifications derived from training and work experience. ‘‘(2) The representative has passed an examination, written and administered by the Commissioner, which tests knowledge of the relevant provisions of the Social Security Act [42 U.S.C. 301 et seq.] and the most recent developments in agency and court deci- sions affecting titles II and XVI of such Act [42 U.S.C. 401 et seq., 1381 et seq.]. ‘‘(3) The representative has secured professional li- ability insurance, or equivalent insurance, which the Commissioner has determined to be adequate to pro- tect claimants in the event of malpractice by the rep- resentative. ‘‘(4) The representative has undergone a criminal background check to ensure the representative’s fit- ness to practice before the Commissioner. ‘‘(5) The representative demonstrates ongoing com- pletion of qualified courses of continuing education, including education regarding ethics and professional conduct, which are designed to enhance professional knowledge in matters related to entitlement to, or eligibility for, benefits based on disability under ti- tles II and XVI of such Act. Such continuing edu- cation, and the instructors providing such education, shall meet such standards as the Commissioner may prescribe. ‘‘(c) ASSESSMENT OF FEES.— ‘‘(1) IN GENERAL.—The Commissioner may assess representatives reasonable fees to cover the cost to the Social Security Administration of administering the prerequisites described in subsection (b). ‘‘(2) DISPOSITION OF FEES.—Fees collected under paragraph (1) shall be credited to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, or deposited as mis- cellaneous receipts in the general fund of the Treas- ury, based on such allocations as the Commissioner of Social Security determines appropriate. ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—The fees authorized under this subparagraph shall be collected and available for obligation only to the extent and in the amount provided in advance in appropriations Acts. Amounts so appropriated are authorized to re- main available until expended for administering the prerequisites described in subsection (b). ‘‘(d) NOTICE TO CONGRESS AND APPLICABILITY OF FEE WITHHOLDING PROCEDURES.—Not later than 1 year after the date of enactment of this Act [Mar. 2, 2004], the Commissioner shall complete such actions as are nec- essary to fully implement the requirements for full op- eration of the demonstration project and shall submit to each House of Congress a written notice of the com- pletion of such actions [Such notices submitted Feb. 28, 2005.]. The applicability under this section to non-at- torney representatives of the fee withholding proce- dures and assessment procedures under sections 206 and 1631(d)(2) of the Social Security Act [42 U.S.C. 406, 1383(d)(2)] shall be effective with respect to fees for rep- resentation of claimants in the case of claims for bene- fits with respect to which the agreement for represen- tation is entered into by such non-attorney representa- tives during the period beginning with the date of the submission of such notice by the Commissioner to Con- gress and ending with the termination date of the dem- onstration project. ‘‘(e) REPORTS BY THE COMMISSIONER; TERMINATION.— ‘‘(1) INTERIM REPORTS.—On or before the date which is 1 year after the date of enactment of this Act [Mar. 2, 2004], and annually thereafter, the Commissioner shall transmit to the Committee on Ways and Means of the House of Representatives and to the Com- mittee on Finance of the Senate an annual interim report on the progress of the demonstration project carried out under this section, together with any re- lated data and materials that the Commissioner may consider appropriate. ‘‘(2) TERMINATION DATE.—The termination date of the demonstration project under this section is the date which is 5 years after the date of the submission of the notice by the Commissioner to each House of Congress pursuant to subsection (d). The authority under the preceding provisions of this section shall not apply in the case of claims for benefits with re- spect to which the agreement for representation is entered into after the termination date.’’ GAO STUDY REGARDING THE FEE PAYMENT PROCESS FOR CLAIMANT REPRESENTATIVES Pub. L. 108–203, title III, § 304, Mar. 2, 2004, 118 Stat. 523, directed the Comptroller General of the United Page 1943 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 408 States to study and evaluate the appointment and pay- ment of attorney and non-attorney claimant represent- atives appearing before the Commissioner of Social Se- curity in connection with benefit claims under titles II and XVI of the Social Security Act (42 U.S.C. 401 et seq., 1381 et seq.) and to report to the appropriate com- mittees of Congress not later than 3 years after the date of the submission by the Commissioner of Social Security to Congress pursuant to section 303(d) of Pub. L. 108–203 (set out above) of written notice of comple- tion of full implementation of the requirements for op- eration of the demonstration project under section 303 of Pub. L. 108–203. GAO STUDY AND REPORT Pub. L. 106–170, title IV, § 406(c), Dec. 17, 1999, 113 Stat. 1912, directed the Comptroller General of the United States to conduct a study, and to submit a report on the study’s results to the appropriate committees of Congress not later than 1 year after Dec. 17, 1999, that examined the costs incurred by the Social Security Ad- ministration in administering 42 U.S.C. 406(a)(4), (b)(1) and itemized the components of such costs; identified efficiencies that the Administration could implement to reduce such costs; examined the feasibility and ad- visability of linking the payment of, or the amount of, the assessment under 42 U.S.C. 406(d) to the timeliness of the payment of the fee to the attorney as certified by the Commissioner of Social Security pursuant to 42 U.S.C. 406(a)(4), (b)(1); determined whether 42 U.S.C. 406(a)(4), (b)(1) should be applied to claimants under title XVI of the Social Security Act (42 U.S.C 1381 et seq.); determined the feasibility and advisability of stating fees under 42 U.S.C. 406(d) in terms of a fixed dollar amount as opposed to a percentage; determined whether the dollar limit specified in 42 U.S.C. 406(a)(2)(A)(ii)(II) should be raised; and determined whether the assessment on attorneys required under 42 U.S.C. 406(d) impaired access to legal representation for claimants. § 407. Assignment of benefits (a) In general The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execu- tion, levy, attachment, garnishment, or other legal process, or to the operation of any bank- ruptcy or insolvency law. (b) Amendment of section No other provision of law, enacted before, on, or after April 20, 1983, may be construed to limit, supersede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section. (c) Withholding of taxes Nothing in this section shall be construed to prohibit withholding taxes from any benefit under this subchapter, if such withholding is done pursuant to a request made in accordance with section 3402(p)(1) of the Internal Revenue Code of 1986 by the person entitled to such ben- efit or such person’s representative payee. (Aug. 14, 1935, ch. 531, title II, § 207, 49 Stat. 624; Aug. 10, 1939, ch. 666, title II, § 201, 53 Stat. 1362, 1372; Pub. L. 98–21, title III, § 335(a), Apr. 20, 1983, 97 Stat. 130; Pub. L. 105–277, div. J, title IV, § 4005(a), Oct. 21, 1998, 112 Stat. 2681–911.) Editorial Notes REFERENCES IN TEXT The Internal Revenue Code of 1986, referred to in sub- sec. (c), is classified generally to Title 26, Internal Rev- enue Code. CODIFICATION In subsec. (b), ‘‘April 20, 1983’’ substituted for ‘‘the date of the enactment of this section’’, which was translated as meaning the date of enactment of this subsection, as the probable intent of Congress. AMENDMENTS 1998—Subsec. (c). Pub. L. 105–277 added subsec. (c). 1983—Pub. L. 98–21 designated existing provisions as subsec. (a) and added subsec. (b). 1939—Act Aug. 10, 1939, amended section generally, in- corporating provisions of former section 408 of this title. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1983 AMENDMENT Pub. L. 98–21, title III, § 335(c), Apr. 20, 1983, 97 Stat. 130, provided that: ‘‘The amendments made by sub- section (a) [amending this section] shall apply only with respect to benefits payable or rights existing under the Social Security Act [42 U.S.C. 301 et seq.] on or after the date of the enactment of this Act [Apr. 20, 1983].’’ EFFECTIVE DATE OF 1939 AMENDMENT Act Aug. 10, 1939, ch. 666, title II, § 201, 53 Stat. 1362, provided that the amendment made by that section is effective Jan. 1, 1940. § 408. Penalties (a) In general Whoever— (1) for the purpose of causing an increase in any payment authorized to be made under this subchapter, or for the purpose of causing any payment to be made where no payment is au- thorized under this subchapter, shall make or cause to be made any false statement or rep- resentation (including any false statement or representation in connection with any matter arising under subchapter E of chapter 1, or subchapter A or E of chapter 9 of the Internal Revenue Code of 1939, or chapter 2 or 21 or sub- title F of the Internal Revenue Code of 1954) as to— (A) whether wages were paid or received for employment (as said terms are defined in this subchapter and the Internal Revenue Code), or the amount of wages or the period during which paid or the person to whom paid; or (B) whether net earnings from self-employ- ment (as such term is defined in this sub- chapter and in the Internal Revenue Code) were derived, or as to the amount of such net earnings or the period during which or the person by whom derived; or (C) whether a person entitled to benefits under this subchapter had earnings in or for a particular period (as determined under sec- tion 403(f) of this title for purposes of deduc- tions from benefits), or as to the amount thereof; or (2) makes or causes to be made any false statement or representation of a material fact