As of November 30, 2024, the Social Security Administration (SSA) has set the fee cap for disability attorneys at $9,200 or 25% of your back pay, whichever is less. This cap is subject to annual adjustments based on the Cost-of-Living Adjustment (COLA) to keep pace with inflation.
Studies of past claims show that claimants applying for Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) benefits have higher approval rates than those who apply alone. This is why many applicants choose to enlist the assistance of a disability lawyer to guide them through the process. A common concern that arises is: How much do disability lawyers charge? This comprehensive guide aims to demystify the fee structures associated with hiring a disability attorney, ensuring you make an informed decision.
Understanding Contingency Fee Structures
Disability lawyers typically operate on a contingency fee basis. This means that their payment is contingent upon the successful outcome of your case. In simple terms, they only receive payment if you win your claim for benefits. This arrangement alleviates the burden of upfront legal fees, making legal representation accessible to those who might not afford it otherwise. The fee is deducted from the back pay or past-due benefits you are awarded, which are the accumulated benefits from the time you became eligible to the time you are approved
This fee structure ensures that legal representation is available without upfront costs. The fee is a percentage of your back pay—the money you are owed from when you became eligible for benefits to when your claim is approved. This arrangement prioritizes the lawyer’s commitment to securing the best outcome for your case.
Disability lawyer fees are set and structured by the Commissioner of Social Security. Standard fee agreements allow fees to be calculated at 25% of a client’s past-due benefits (also known as backpay). Fees cannot exceed a cap of $9,200 per client.
For example, if a client’s backpay is $24,000, the attorney fee would be 25% or $6,000. If a client’s backpay is $10,000, the attorney fee is $2,500. If a claim is successful but awards no backpay, the attorney doesn’t receive any fee for their services. And if a claim is not successful, there is also no fee for the attorney’s services.
The Omnibus Reconciliation Act of 1990 (OBRA) set the original cap on fees under standard fee agreements at $4,000. The Act also gave the Commissioner of Social Security authority to increase the cap. The Commissioner raised the fee cap four times in the last 22 years up to its current maximum of $9,200 per client.
The Role of the SSA in Approving Contingency Fee Agreements
The Social Security Administration (SSA) reviews and approves all contingency fee agreements. This oversight ensures that the fee structure complies with federal regulations and is fair to claimants. Before a lawyer can receive payment, the SSA must approve the agreement, offering an extra layer of transparency and protection.
How Back Pay is Calculated
Attorneys only receive payment if back pay is awarded, meaning you won’t face any upfront costs. The SSA is critical in determining your disability onset date, which directly affects your back pay. For example, if the SSA rules that you are disabled going forward but not as of your alleged onset date, you will still receive benefits. Still, your lawyer will not receive payment for the time spent on your claim related to earlier periods. This safeguard ensures fairness for clients throughout the process.
Example Scenarios:
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Scenario 1: If your back pay amounts to $20,000:
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25% of $20,000 = $5,000
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Since $5,000 is less than the $9,200 cap, the attorney’s fee would be $5,000.
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Scenario 2: If your back pay amounts to $50,000:
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25% of $50,000 = $12,500
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Since $12,500 exceeds the $9,200 cap, the attorney’s fee would be $9,200.
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This structure ensures that the attorney’s compensation is fair and proportionate to the benefits awarded.
Additional Costs and Expenses
While the contingency fee covers the attorney’s services, there may be out-of-pocket expenses associated with your case. These can include costs for obtaining medical records, postage, and other administrative expenses. Typically, these costs are minimal, often ranging between $100 to $350. Most attorneys will discuss these potential expenses upfront, and some attorneys waive them if your claim is unsuccessful.
Fee Approval Process by the SSA
The SSA plays a pivotal role in overseeing and approving fee agreements between claimants and their attorneys. Before any payment is made, the SSA reviews the fee agreement to ensure compliance with federal regulations and fairness to the claimant. This oversight provides an additional layer of protection, ensuring that claimants are not subjected to unreasonable fees.
Exceptions to the Standard Fee Structure
In certain circumstances, attorneys may petition for fees exceeding the standard cap
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Multiple Appeals: If your case progresses beyond the initial hearing to the Appeals Council or federal court, the attorney may request higher fees due to the increased workload.
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Multiple Attorneys: If you’ve had more than one attorney represent you during your case, each may file a fee petition, and the SSA will determine the appropriate allocation.
In these situations, the attorney must submit a detailed fee petition to the SSA, outlining the work performed and justifying the requested fee. The SSA will approve the fee only if it deems it reasonable.
Benefits of Hiring a Disability Lawyer
Engaging a disability lawyer can significantly enhance your chances of a successful claim. Benefits include:
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Expertise: Attorneys possess in-depth knowledge of SSA regulations and can navigate the complex application process effectively.
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Evidence Gathering: They assist in compiling and presenting compelling medical evidence to support your claim.
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Representation: Lawyers can represent you during hearings, articulating your case persuasively before administrative law judges.
Studies have shown that claimants represented by attorneys are more likely to be approved for benefits than those who file claims without legal representation.
Making an Informed Decision
When considering hiring a disability lawyer:
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Discuss Fees Upfront: Ensure you understand the fee structure, including any potential out-of-pocket expenses.
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Review the Fee Agreement: Carefully read the agreement before signing, and don’t hesitate to ask questions.
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Assess Experience: Choose an attorney with a proven track record in handling disability claims.
Remember, the goal is to secure the benefits you are entitled to while ensuring that the legal representation you receive is both effective and fair in cost.
Conclusion
If you’re considering applying for Social Security Disability benefits, hiring an experienced disability lawyer can help maximize your chances of approval. Contact us today to schedule a free consultation on your claim. There is no obligation to hire us and no fee unless we win your claim.
