Understanding Attorney Fees in Social Security Disability Claims

Navigating the complexities of Social Security Disability (SSD) claims can be daunting. One critical aspect that often confuses applicants is how attorney fees work in these cases. In this article, I will attempt to demystify this process and provide clarity on what you can expect when seeking legal representation for your SSD claim. 

The Basics of Attorney Fees in SSD Cases 

When you hire an attorney for your Social Security Disability claim, you typically enter into a contingency fee agreement. This means that the attorney only gets paid if you win your case and receive disability benefits. The fee is contingent upon the successful outcome of your claim. My clients will frequently ask me, at the beginning of their case, whether I think they have a good chance of getting approved. The reality is that I would not agree to represent them unless I felt like we would be successful because I don’t get paid unless we win! 

Standard Fee Structure

The Social Security Administration (SSA) regulates the fees that attorneys can charge in disability cases. The standard fee agreement allows the attorney to receive 25% of your past-due benefits, also known as back pay, up to a maximum of $7,200. This cap is set by the SSA and ensures that fees remain reasonable for claimants. On November 30, 2024, the cap on attorney’s fees goes up to $9,200. 

How Social Security Back Pay is Calculated 

Back pay is the amount of money you are owed from the time you became disabled until the time your claim is approved. The date you became disabled is called your onset date. If you filed your claim two years ago and claimed an onset date of January 1, 2022, here are some examples of how the fees would be calculated. There are two things that are important to keep in mind when calculating your backpay:

1. There is a 5-month waiting period from your onset date before your SSD will begin and 
2. SSD backpay benefits will go no further back than 12 months prior to your application date.

Example Scenarios 

Initial Claim Approval:

• • Jim files for SSD benefits on January 1, 2022 and lists January 1, 2022 as his onset date
  • His claim is approved on January 1, 2023. The 5-month waiting period means benefits start June 1, 2022
  • Jim is entitled to 7 months of back pay. (June 1, 2022, to January 1, 2023)
  • His monthly benefit amount is $1,200

Calculation:

• • 7 months x $1,200 = $8,400 (total back pay)
  • Attorney's fee: 25% of $8,400 = $2,100

In this case, the attorney receives $2,100, and John receives the remaining $8,400 in back pay. 

Appeal Hearing Approval:

• • April files for SSD benefits on January 1, 2022 and lists January 1, 2022 as her onset date
  • Her initial claim is denied as well as her appeal, so she requests a hearing
  • Her claim is approved at the hearing on July 1, 2024. The 5-month waiting period means benefits start June 1, 2022
  • April is entitled to 25 months of back pay (June 1, 2022 to July 1, 2024)
  • Her monthly benefit amount is $1,200

Calculation:

• • 25 months x $1,200 = $30,000 (total back pay)
  • Attorney's fee: 25% of $30,000 = $7,500 however, the max attorney fee is $7,200 

Here, the attorney receives the maximum fee of $7,200, and April receives the remaining $22,800 in back pay. 

Other Considerations 

Fee Petitions: In rare cases, an attorney may request a higher fee by filing a fee petition with the SSA. This is typically only approved in complex cases requiring extensive work. 

Out-of-Pocket Costs: While the attorney's fee is contingent on winning, there may be out-of-pocket costs associated with your case such as the collection of medical records These are generally minimal but should be discussed with your attorney upfront. 

The Value of Legal Representation 

Having an attorney can significantly increase your chances of success in an SSD claim. Attorneys understand the intricacies of the system, can gather and present the necessary evidence, and advocate on your behalf.

A government study found that disability claimants with attorneys were three times more likely to get approved than those without!

While the fees might seem substantial, the benefits of having professional representation often outweigh the costs, especially given that fees are only payable upon a successful outcome.

Understanding how attorney fees work in Social Security Disability claims can help you make an informed decision about seeking legal representation. The contingency fee structure ensures that your attorney is motivated to win your case, aligning their interests with yours. If you have any questions about fees or the SSD process, don't hesitate to reach out to our office to schedule a free consultation.