When someone applies for Social Security, odds are the person has little to no income and needs the monthly benefits as soon as possible.
One of the worries people have when hiring a lawyer to assist in the Social Security Disability application process is that the costs for legal fees will take away from what they are awarded through the Social Security Administration (SSA).
How will these fees be paid, and will they affect the disabled applicant’s monthly benefits?
We have asked attorney, Alaina Sullivan, and here is what she had to say:
How Are Lawyers Paid?
Disability or social security attorneys do not normally require a retainer to be paid before they begin representation. These attorneys are paid on a contingent fee basis, a lot like most personal injury attorneys.
A contingency fee agreement basically says that the attorney is paid only if the client’s case is successful.
The attorney receives his or her fee from the award of backpay issued by the SSA, and this check comes directly from the SSA and not the client.
Before the representation begins, the SSA will review the lawyer's contingent fee agreement to ensure that it meets with all requirements under the law, to protect the client from being taken advantage of by the lawyer for Social Security disability if that person tries to get more than is allowed.
Clients will occasionally need to pay a small amount of money upfront to cover additional legal costs that come from the representation. Most of the time this payment covers the cost to hire expert medical witnesses to testify on behalf of the applicant or to acquire medical records.
In comparison to the fee the attorney will receive in the end, however, this amount is significantly smaller and is only used solely to cover those out-of-pocket costs the attorney may incur because of the representation.
What Is Backpay?
Backpay includes Social Security Disability benefits that the client would have received had the claim been approved as soon as the disability began. Backpay is paid to the applicant once he or she is approved for SSI or SSDI benefits.
Because most claims are denied at least one time before approval is given, the backpay can add up and end up being quite a bit.
Backpay is determined by taking the date the applicant initially filed the disability claim and the date that the SSA says the disability began, otherwise known as the “established onset date.”
Sometimes SSI backpay is paid back only in increments so the applicant may not receive one lump sum for backpay, especially if the case has dragged on for years and years.
If the applicant is awarded both SSI and SSDI, he or she may have to wait longer for backpay than he or she would have if the application was only for SSDI benefits.
SSDI accrues either from the date of application or as far back as 12 months before the application, minus a five-month waiting period.
This five-month figure is an arbitrary determination made by the SSA. If it only takes five months for the application to be approved, which is rare, the applicant will not receive backpay.
How Much Will the Lawyer Receive?
Social Security law dictates that the lawyer will only receive up to 25 percent of the total past-due benefits the applicant is awarded, and this amount can be no more than $6,000. This amount is a “cap” on what the disability lawyer can receive.
The attorney’s fees will be paid directly from the backpay and will be issued directly from the SSA and not the client himself or herself. The attorney can, in very limited circumstances, file a fee petition to the SSA and request a higher fee.
These situations only tend to arise when a second attorney needed to be retained following the failure of an initial attorney or if the case has languished in the system for an unusually long period of time, due to no fault of the client.
The applicant can object to this higher fee request if it is made, and the SSA ultimately makes the determine.
Regardless of the fee amount, however, it does not come from the monthly disbursements the client will receive when all is said and done but will only come out of that initial backpay check.
Contact a Lawyer Today
If you are in the middle of a complicated social security disability dispute and have questions about how to proceed with your case, it is recommended that you contact a social security attorney to discuss your options. An attorney can listen to the facts of the case and can best advise you on how to proceed.
Contact a lawyer experienced in social security disability to schedule a consultation today.
