SSA-1696 and Attorney Fees in 2026: How the $9,200 Fee Agreement Cap Works Under 42 USC 406(a), Section 206(a), and 20 CFR 404.1720

Published June 9, 2026 by Anthony Albert, Benefits Research Director

You hired an attorney to fight your SSDI denial. The case wins after 22 months. Your back pay check comes in at $39,600. Then SSA tells you they've already withheld 25 percent of that for your attorney, but they're only releasing $9,200 of it. What just happened? Where did the other $700 go? And why is your attorney telling you they could be paid more if they file a different form?

Welcome to the Social Security representative fee system, the most quietly confusing part of every disability award. It's governed by Section 206(a) of the Social Security Act (codified at 42 USC 406(a)), implementing regulations at 20 CFR 404.1720 through 404.1730 for Title II and 20 CFR 416.1520 through 416.1530 for Title XVI, the HALLEX manual at HA 01120 series, and the POMS at GN 03900 series. This piece walks through how attorneys and other representatives actually get paid in 2026, what the $9,200 cap really means, when the cap can be bypassed, and how the May 2025 partial rescission changed the system going forward.

The SSA-1696 Form: Where It All Starts

Before a representative can do anything on your behalf, you have to file Form SSA-1696, "Claimant's Appointment of a Representative." This is the form that tells SSA who you've hired and gives that person the legal authority to act for you. It's not optional. Without an SSA-1696 on file, SSA will not release records to your attorney, won't take their calls, and won't pay them out of your past-due benefits.

Form SSA-1696 captures: your name and SSN, your representative's name and credentials (attorney or non-attorney), whether the rep is an attorney eligible for direct fee payment, the type of claim (Title II SSDI, Title XVI SSI, or both), and the date of appointment. As of 2024, SSA also requires the SSA-1696 to indicate whether the representative is eligible for direct payment under the EDPNA program (Eligible for Direct Payment Non-Attorney) or as a licensed attorney in good standing.

Once filed, SSA-1696 stays in effect for the duration of the claim. If you fire your representative or hire a different one, you file a revocation and a new SSA-1696. SSA tracks every appointment on the Registration, Appointment, and Services for Representatives (RASR) system.

Two Separate Fee Processes (And Why It Matters)

Under Section 206(a) of the Social Security Act, there are exactly two ways a representative can get authorized to charge you a fee:

1. Fee Agreement Process. The standard path for most cases. You and your rep sign a written agreement before SSA issues a favorable decision. SSA reviews the agreement, and if it meets the statutory conditions, SSA approves the fee. The fee is capped at $9,200 in 2026.
2. Fee Petition Process. The alternate path. After the case is over, your rep files a detailed petition itemizing hours worked, tasks performed, and a requested fee. SSA reviews the petition under "reasonable fee" criteria and authorizes whatever amount they decide is fair. No statutory cap, but direct payment from your past-due benefits is still limited to 25 percent.

These two processes are mutually exclusive on a single claim. If your rep files a fee agreement and SSA approves it, that's the end of the fee process. If the agreement gets rejected, your rep must file a fee petition to be paid anything at all. Some reps file fee petitions intentionally on big cases because they expect more than $9,200 worth of work and want SSA to consider the full picture.

What the Fee Agreement Process Actually Requires

The statutory conditions for fee agreement approval come from sections 206(a)(2)(A) and 1631(d)(2)(A) of the Social Security Act. HALLEX HA 01120.012 lists them and the exceptions. To be approved, a fee agreement must:

• Be in writing and signed by both the claimant and the representative;
• Be filed with SSA before the date of the first favorable decision (initial determination, reconsideration, ALJ hearing, or Appeals Council decision, whichever comes first);
• Specify a fee that does not exceed the lesser of 25 percent of past-due benefits OR the fee cap ($9,200 in 2026);
• Not be unreasonable on its face;
• Not involve multiple representatives whose fee arrangement causes the case to fall outside fee agreement rules.

The "before the favorable decision" rule is the one that trips up the most people. If you sign a fee agreement after SSA has already issued an initial determination favorable to you, that agreement won't be approved. Your rep then has to file a fee petition.

The $9,200 Cap and the History Behind It

The fee cap isn't ancient history. It started at $4,000 when the fee agreement system was created on July 1, 1991, under Public Law 101-508. From 2002 to 2009 it was $5,300. From 2009 to 2022 it sat at $6,000. In late 2022, SSA raised it to $7,200 (per 87 FR 39157). Then in late 2024, SSA raised it again to $9,200 (per 89 FR 40523, effective November 30, 2024). Here's the full history per POMS GN 03920.006:

The $9,200 cap is current as of 2026 and remains in effect after the May 2025 partial rescission discussed below.

What the May 2025 Partial Rescission Changed

In May 2024, SSA published an FRN announcing the cap increase and a process for periodic future increases. That process tied future fee cap changes to a published methodology and timing. On May 6, 2025, SSA published a partial rescission of that FRN. The partial rescission did two things:

1. It kept the $9,200 cap in effect. The cap did not drop back down.
2. It walked back the automatic update process. Going forward, the cap stays at $9,200 until SSA publishes a new Federal Register Notice specifically raising it.

That means representatives and claimants should not expect annual or biennial fee cap increases on a predictable schedule. Increases will happen, but only when SSA publishes a new FRN. The Commissioner has discretion under Section 206(a)(2)(A) to set the amount.

The 25 Percent Past-Due Benefits Rule

Independent of the fee cap, federal law caps the amount that can be paid directly from your past-due benefits at 25 percent. This is in Section 206(a)(2)(B) of the Act and 20 CFR 404.1730. The 25 percent cap applies to both fee agreements and fee petitions.

Past-due benefits for fee calculation purposes means the lump-sum award SSA owes you for the period between your alleged onset date (with the 5-month waiting period for SSDI) and the month of your favorable decision. It does not include ongoing monthly benefits going forward.

When Reps File Fee Petitions Instead

Some cases generate way more than $9,200 worth of representative time. Federal court remands. Multiple ALJ hearings. Complex medical record disputes. Class certification work. When that happens, your representative may decline the fee agreement route and file a fee petition under HA 01120.053.

A fee petition has no statutory cap. POMS HA 01120.057 explains: "there is not a maximum fee amount that can be requested or authorized under the fee petition process." But there are still hard limits:

• Direct payment from past-due benefits is still capped at 25 percent.
• Fees authorized over $15,000 at the hearing level can only be approved by senior hearing office staff per HA 01120.006 B.2.
• The reasonable fee criteria in 20 CFR 404.1725(b) apply: complexity of the case, level of skill required, time spent, results obtained, fees customarily charged for similar services in the geographic area.

If a fee petition authorizes $14,000 but only $8,000 comes out of past-due benefits (because that's the 25 percent), your rep must look to you, the claimant, for the remaining $6,000. SSA will not collect it for them. That's something to think about hard before signing a fee petition agreement upfront.

Direct Payment Eligibility

Not every representative gets paid directly by SSA out of your past-due benefits. Direct payment is available to:

• Licensed attorneys in good standing with their state bar;
• Eligible for Direct Payment Non-Attorneys (EDPNAs) who have met SSA's testing and continuing education requirements under 20 CFR 404.1717.

If your rep is neither, SSA still authorizes a fee but doesn't withhold past-due benefits for them. Your rep has to collect from you personally. This rarely happens because most disability reps are attorneys or EDPNAs, but it's worth checking before you sign.

The User Fee

When SSA pays your attorney directly from your past-due benefits, the agency charges your attorney a "user fee" under Section 406(d) of the Act and 20 CFR 404.1715. The user fee in 2026 is $123, capped at 6.3 percent of the fee paid. So if your attorney gets $9,200 authorized, the user fee is $123 (because 6.3 percent of $9,200 would be $579.60, but the $123 statutory cap applies). Your attorney nets $9,077 after the user fee. This is the rep's cost, not yours. You still pay $9,200 from your past-due benefits.

What About Federal Court Work?

If your case gets appealed to federal court (Section 205(g) of the Act, 42 USC 405(g)), a separate fee structure applies. Federal court attorney fees are governed by Section 206(b) of the Act, not 206(a). Section 206(b) authorizes contingent fees up to 25 percent of past-due benefits for representation in federal court (Gisbrecht v. Barnhart, 535 US 789, 2002). These fees are separate from anything authorized under 206(a) for administrative proceedings.

A claimant who wins on remand from federal court may have one fee authorized under 206(b) for the federal court work, and a separate fee authorized under 206(a) for the post-remand administrative work. Both come out of the same past-due benefits pool, but the 25 percent cap applies to the combined administrative and federal court fees per Section 206(b)(1)(A).

What If You Want to Fire Your Rep?

You can fire your representative at any time. To do so, you write SSA a short letter stating you are revoking the appointment of the named rep, with the date and your signature. SSA processes the revocation and notifies the rep.

The catch: if you fire your rep after they've already done substantial work, they can still file a fee petition for the work performed before revocation. SSA evaluates the petition under reasonable fee criteria. So firing a rep doesn't necessarily mean they walk away with nothing. POMS GN 03970 covers the procedures.

What If Your Rep Wants to Withdraw?

Reps can withdraw too, under 20 CFR 404.1740. They have to notify the claimant and SSA in writing and explain why. If they withdraw mid-case for cause (claimant nonresponsive, unethical request, etc.), they may still file a fee petition for work done. If they withdraw without cause, fee petitions can still be filed but SSA evaluates whether any fee is reasonable given the partial representation.

A California Worked Example

A Texas Worked Example with Fee Petition

How to Pick a Representative

The fee structure is the same whether you hire a nationally advertised firm or a solo local attorney. What varies is the quality of representation. Here's what to look for:

• State bar status. Active license, in good standing, no recent discipline. Check the state bar website.
• Disability-specific experience. How many disability cases per year? How many ALJ hearings? Federal court work?
• Local presence. Representatives who appear regularly in your ODAR hearing office know the local ALJs' preferences. That helps.
• Communication. Do they return calls within a day or two? Will they tell you bad news as fast as good news?
• Written fee agreement. Always. Read every word. Make sure the 25 percent or $9,200 (whichever is less) language is there. Watch for any clause that says you owe additional money outside the fee agreement.

Common Mistakes Claimants Make

1. Signing the fee agreement after a favorable decision has issued. Too late. The agreement won't be approved. Sign before you file or before the first favorable decision.
2. Not filing SSA-1696. Without it, your rep has no authority and SSA won't talk to them.
3. Assuming the fee comes out of monthly benefits. It doesn't. The fee comes out of the past-due lump sum only.
4. Not realizing fee petitions can exceed the cap. If your case is complex and you've been told the rep is "doing this on contingency at 25 percent," ask whether they plan to file a petition. Petitions can mean a higher fee.
5. Hiring a non-attorney without verifying EDPNA status. Non-attorneys who haven't passed EDPNA testing can still represent you but can't be paid directly by SSA, which usually means you pay them out of pocket.

Putting It All Together

The Social Security representative fee system has stayed remarkably stable over 35 years. The two-track process (fee agreement vs fee petition), the 25 percent past-due benefits cap, and the statutory fee cap (now $9,200) form the structure that every disability rep operates within. The May 2025 partial rescission slowed down automatic cap increases but did not change the cap itself.

For most claimants, the math is simple: 25 percent of your back pay, capped at $9,200, paid directly from your award. You file SSA-1696. Your rep files the fee agreement before the first favorable decision. SSA does the rest. For complex cases that go to federal court or generate massive billable time, the fee petition route opens up higher payments but at the cost of more paperwork and more SSA scrutiny.

If you're starting a claim now, the cleanest approach is to interview at least two reps before signing, ask each one whether they plan to use fee agreement or fee petition, get the written agreement, and file SSA-1696 the day you sign. That's it.

Frequently Asked Questions