If you have a Social Security Disability Income (SSDI) or Supplemental Security Income (SSI) claim you don’t pay your lawyer any fee unless you win your case.
Even when you win, you don’t have to pay your lawyer out of your future benefit benefits. The lawyer is paid a capped percentage of your back benefits.
Lawyer’s Fee is paid out of back benefits.
Most Social Security claims will involve back benefits. Back benefits are generally the amount of benefits that accrued from when Social Security says you became disabled, to when you were approved.
In essence, Social Security will owe you payment for the time it took to get you approved. For some people, approval only takes 3 to 5 months, but it could also take 3 to 5 years.
Your future benefits, those paid to you on an ongoing basis after you are awarded benefits are not “back benefits” and do not go towards your lawyer’s fee.
Lawyer’s Fee is capped at 25%.
In most cases the lawyer’s fee is the lesser of 25% of your back benefits, or $6,000 - whichever is smaller. So, if case is approved and Social Security says there are $4,000 in back benefits the lawyer would only get $1,000. Similarly, if your back benefits were $40,000, the lawyer would only receive $6,000 even though 25% would have been $10,000.
There are some exceptions. That cap can go away if your cases goes beyond the hearing stage. Meaning, if you lose your hearing but win at the Appeals Council or later then the lawyer’s fee can exceed $6,000. But the lawyer is still limited to 25% of your back benefit. Therefore, in the example where the back benefits are $40,000 then, the lawyer can receive $10,000 - but only if the fee is approved by the Social Security Administration.
If your appeal goes further, you can be charged up to another 25% - but usually the government pays something.
If your case is appealed to the federal courts and you win your claim, you can be charged another 25%. In theory, where the back benefits are $40,000 the lawyer could receive up to $20,000 of the total back benefits. However, as a practical matter there is a very good chance you will not pay that full amount to your lawyer.
Not only does the larger fee have to be approved, but often the Equal Access to Justice Act (EAJA) will pay some part of your lawyer’s fee in many cases won in federal court. Any dollar paid by the government to your lawyers fee is a dollar you do not have to pay them.
How does my lawyer get paid?
Most of the time Social Security pays the lawyer fee directly to your lawyer. Rarely would you even have to deal with it.
What if I’ve been charged up front?
Lawyers and representatives should only be charging social security disability clients a contingent fee as approved by the Social Security Administration. In fact, they can be penalized for collecting a fee that isn’t authorized. If think you’ve been charged an unauthorized fee, talk to your representative and if they can’t clear it up - talk to social security.
Can’t I do it myself? Why hire a lawyer?
- Better Chances. In general, your chances of winning your claim are about three times higher if you have a lawyer helping you.
- Faster Results. Some people would rather wait for until the hearing stage to hire a lawyer, however by that point it will take you around 2 years to get your benefits approved. Sometimes hiring a lawyer early will help you get your benefits earlier.
- Better Benefits. Even with claims where it is clear there is a disability, it can sometimes be difficult to prove when that disability started, called the “onset date.” Your onset date is important and could mean hundreds or thousand of dollars in benefits and back benefits. With a lawyer your more likely to
- It’s complex. If you’ve received more than one denial, ask a lawyer to help you with your appeal. Social Security’s rules are complex and it pays to have someone guide you through them. The lawyer’s fee is contingent, so what do you have to lose?
Where to get help:
- Use Disability Alabama’s disability calculator for an estimate of your benefit. While you do not need any special information to complete the calculation you may want to take a moment to think about your average yearly income and current household income before using the disability calculator; and
- If you’re in Alabama, give Disability Alabama a call or contact us online. As you know, we don’t get paid unless we win your claim.
- If you’re outside Alabama, contact the National Organization of Social Security Representatives (NOSSCR) for a referral to one of their member attorneys.