Attorneys fees for Social Security Disability claims are set by statute. The Federal government and the Social Security Administration have declared that an attorney is entitled to the lesser of 25%, or a maximum of $6,000, of any retroactive benefit award. Therefore, an attorney can only collect a fee if the claimant is awarded benefits. In order for the attorney to collect at least 25%, the claimant must also be entitled to retroactive benefits, or “past-due” benefits. An attorney is NOT entitled to any of the claimant’s monthly benefit going forward.
Here are a few examples of how attorneys fees work in Social Security Disability cases. Fees in Supplemental Security Income cases work the same way.
John is awarded disability benefits and because his case took several months to adjudicate, he is entitled to $100,000.00 in retroactive benefits. 25% of that award is $25,000.00, however, because attorneys fees are capped at $6,000.00, John’s attorney is entitled to $6,000.00 of the retroactive award. (Note: $100,000.00 is an unusually high retroactive award and this number was used to show the example of attorneys fees not exceeding $6,000.00)
Mary is awarded disability benefits and entitled to $10,000.00 in retroactive benefits. 25% of this award is $2,500.00. Since this amount is less than $6,000.00, Mary’s attorney is entitled to an attorneys fee of $2,500.00.
Mike has a disability hearing and the Judge presiding over his case rules that Mike’s disability began 5 months ago, instead of 2 years ago, as Mike alleged in his claim. Because there is a 5 month grace peroid where Social Security does not pay the claimant the first 5 months, Mike’s disability award will only entitle him to monthly benefits going forward, not a retroactive benefit. Since there is no retroactive benefit, Mike’s attorney is not entitled to a fee.
Hiring an attorney will not cost you anything unless you win your case. And even if you win, the money that is paid to your attorney comes out of a cash award that you might not have won without the assistance of an attorney. Having your legal rights protected is crucial in the disability world.