How do Social Security Disability attorneys get paid for representing me in my disability claim and how can I afford a lawyer?
By Kay Derochie / August 31, 2017 / Applying for Social Security Disability & SSI Benefits / 429 Comments
Learn how Social Security lawyers get paid only if your disability claim is approved and about the maximum fees your attorney can receive for winning your case.
Disability Attorneys Are Paid Only If You Win
Social Security Disability attorneys who represent disability claimants get paid on a contingency basis. This means that they are paid for their services only if you are awarded benefits. For this reason when an attorney accepts your case on a contingency basis, it is an indication that he or she believes that you have a reasonable chance of being approved for disability benefits.
Appointing a Payee and Setting Up Payment Method
When you hire a Social Security attorney, you will sign the Social Security representation form, SSA-1696. The form consists of three parts. In the first, you appoint the attorney as your representative. Your attorney completes the second section accepting the appointment, agreeing to represent you. The third section asks the attorney by what method he or she wants to be paid—directly from your back pay and issued by the Social Security Administration (SSA), directly from you after you get your back pay, or by a third-party. The last option is for the attorney to waive receiving a fee. With the first two options, SSA must approve the fee request before fees can be paid. Most often, the attorney will opt for getting paid by SSA. If more than one person in a firm is to represent you, you must appoint all of them and all must sign the agreement.
How Much Will You Pay for Attorney Services?
In addition to the appointment papers, you will enter into a written fee agreement with the attorney, which specifies the maximum amount the attorney will receive for representing you. The fee agreement must be approved by the Social Security Administration unless a third party, such as an insurance company that is paying your long-term disability (LTD) benefits.
Your attorney can charge a fee up to 25% of your back pay or $6,000.00, whichever is less. However, the fee agreement does not have to specify up to $6,000. Accordingly, you might be able to negotiate a lower cap of $4,000 or $5,000, for example. Be aware that SSA will not approve a fee request, paid either by you or by Social Security on your behalf, if the agreement includes a minimum payment for professional services.
What the fee agreement does is to define the maximum possible fee payable without special petition even if that amount is not actually charged after benefits are awarded. The professional services fee limit does not include a specified amount for the attorney’s out-of-pocket expenses, which are discussed later in this article. Another exception to the fee agreement is the rare case in which an attorney petitions for more than $6,000. This could occur if the attorney expended an extraordinary amount of time on your appeal, for example, having to appeal your claim in federal district court outside the Social Security appeals process and follow you through a subsequent second hearing. SSA may or may not approve the petition.
Note that if your attorney(s) delegates tasks related to your claim to someone else in the firm and that person has not signed the fee agreement and the tasks involve significant decisions, that person’s services will not be compensated because you did not appoint the person to represent you. One example would be for someone other than the attorney you appointed to represent you at a hearing. (It is wise to ask who will attend the hearing with you and ask to meet that person to decide whether you want to appoint the individual to co-represent you.)
How Much Are Attorney Fees When More Than One Benefit Is Payable?
In almost all cases, you will pay one fee even though more than one benefit is paid on your account. If you have minor children and you have worked enough to be insured for dependent benefits, your children will receive benefits in addition to your benefit. If at least one of those children is under age sixteen, your spouse will be eligible for benefits if he or she is not and earning too much in wages or self-employment to be eligible.
Because these dependent benefits all stem from the same disability decision as your own benefit, the attorney is considered to have rendered just one service for the purpose of billing and one limit of $6,000 applies, not a $6,000 limit for each benefit; although all the benefits can be bundled for determining the 25% figure. Similarly, unless the attorney can show that additional work was needed for you to be medically approved for Supplemental Security Income (SSI) in addition to Social Security, in concurrent Title II (Social Security) and Title XVI (SSI) disability claims, the fee limit should be $6,000 for both benefits, not a $6,000 limit for each.
No ongoing monthly benefits are subject to reduction for attorney fees. If you subsequently have an increase in your benefit amount that results in an underpayment due to you (e.g., an increase due to workers compensation stopping), the underpayment is not subject to attorney fees because the “back pay” will be paid for a period after the disability decision was rendered.
Right to Appeal
You will be notified of the amount of the fee approval after your claim has been approved. If you disagree with the amount you can appeal it. The notification letter will tell you how to file an appeal. To be successful, you must be very specific as to why the fees that were submitted and approved are excessive. If you have not already received a breakdown of the fees from your attorney, you have a right to request an itemization, which could help you decide whether the fees are reasonable or not.
Out-of-Pocket Attorney Expenses
Typically, whether you are awarded benefits or you are denied after exhausting all appeals, you will be responsible for reimbursing your attorney directly for his or her out-of-pocket expenses related to your claim. Examples are district court filing fees and costs to obtain medical records and reports and expert opinions.
The Benefits of Attorney Representation
For a discussion of some of the ways disability attorneys can help with your Social Security or SSI disability claim, please see our articles When and How Do I Select an Attorney to Help with My Social Security or SSI Disability claim? And How Can a Social Security Disability Lawyer Help Me Get Social Security Benefits?