Types of Payment Arrangements for Social Security Disability Lawyers

Contingency Fee Basis

Most Social Security Disability lawyers work on a contingency fee basis. This means that they only get paid if you win your case or settle it successfully. Here’s how the contingency fee works:

• Percentage of Back Benefits: The lawyer’s fee is typically a percentage of the back pay (also called retroactive benefits) that you’re awarded. This is the amount of money owed to you for the time between your disability application and the approval of your claim.
• Standard Contingency Fee: The standard fee is 25% of your back pay, but it cannot exceed a certain dollar amount set by the Social Security Administration (SSA). The maximum fee for legal representation is generally $6,000. If the back pay amount is higher, the lawyer’s fee will be capped at this amount.

For example, if you’re awarded $20,000 in back pay, your lawyer may receive 25% of that amount, which would be $5,000. If you’re awarded $50,000 in back pay, the lawyer’s fee would be capped at $6,000, even though 25% would be $12,500.

Fees for Appeal Cases

If you hire a lawyer after your claim has been denied and you are pursuing an appeal, the same contingency fee rules generally apply. The lawyer will take a percentage of the back benefits you are awarded after the appeal is successful.

• Appeal Success: If your claim was initially denied but later approved after a hearing or reconsideration, the lawyer will take the contingency fee from the retroactive benefits.
• No Upfront Fees: You won’t need to pay anything upfront when hiring a lawyer for an appeal. The fee is only deducted from the back pay you receive after your case is won.

Fees for Representation in Court

If your Social Security Disability claim goes to court before an Administrative Law Judge (ALJ), the same general fee structure applies. You won’t need to pay any hourly fees or retainers, and the lawyer’s fee will be deducted from your back pay.

Fee Approval by the Social Security Administration

Before any attorney receives a fee for handling your case, the SSA must approve it. The Social Security Administration has strict guidelines and caps on how much a lawyer can charge for handling SSD claims.

• Fee Agreement: The lawyer must submit a fee agreement to the SSA, outlining their percentage of the back pay and the total amount they intend to charge. The SSA will review the agreement and ensure it meets their fee regulations.
• Approval Process: If the SSA approves the fee, they will pay the lawyer directly from your awarded benefits. This means you don’t have to worry about paying the lawyer out of pocket.

No Fees for Routine Services

Social Security Disability lawyers generally do not charge for routine services, such as:

• Consultations: Many SSD lawyers offer free consultations to evaluate your case.
• Initial Advice: You may receive initial guidance and advice about whether you should pursue your case without any cost.
• Preliminary Paperwork: Some initial paperwork and filing tasks may not result in any charge unless the case progresses.

No Fees if You Don’t Win

One of the most significant advantages of working with a lawyer on a Social Security Disability case is that you don’t have to pay them if you lose your case. This arrangement reduces the financial risk for clients since there’s no upfront cost involved, and you only pay for services if your case is successful.