Unlike many attorneys, disability lawyers do not charge up-front fees or require a retainer to work on a Social Security disability case. Most disability attorneys and advocates will be paid a fee only if they win the case (this is called a contingency fee.) Here's how it works.
Contingency Fee Agreement
When you first hire a disability attorney or advocate, whether you are filing for SSDI or SSI, you must sign a fee agreement that allows the SSA to pay your attorney if your claim is approved. The SSA will review the agreement to make sure it meets the fee agreement guidelines. This is to ensure that your attorney receives only what he or she is entitled to.
Fee agreements must be on a contingency basis (meaning the attorney will only be paid if you win your disability claim).
How Much Is the Attorney's Fee?
For Social Security disability lawyers, the fee is limited to 25% of the past-due benefits you are awarded, up to a maximum of $6,000. Note that the attorney will be paid only out of your past-due benefits, or "backpay." If no back-dated benefits are awarded, the attorney will not receive a fee. However, in this situation and a few others, the lawyer is allowed to submit a fee petition to Social Security to request a higher fee.
It doesn't usually cost you anything to hire a disability attorney; the fee will be paid out of the disability award you eventually receive. Some attorneys, however, will ask you to pay a nominal amount for costs (see below) at the beginning of your case.
When do you have to pay the attorney's fee? Usually, you don't. The SSA takes the entire lawyer's fee (up to $6,000) from your first disability check (your award of backpay), before the agency sends it to you.
Disability Backpay
Once you are approved for benefits, the SSA will calculate the amount of backpay you are owed. For SSDI, your backpay will include retroactive benefits you are owed from the date you were approved back to the date the SSA determined your disability began (for a maximum of 12 months back from the date of your application).
For SSI, your benefits are calculated from the date you are approved for benefits back to the month after you applied for benefits. (For more information, see our article on disability backpay.)
The maximum the disability attorney can charge is 25% of your backpay for his or her services, up to a maximum of $6,000. For example, if your back-dated benefits are calculated to be $10,000, your attorney will be paid $2,500 and you will receive $7,500. However, an attorney is likely to be able to get you more in backpay by negotiating your disability onset date with the SSA -- something you can't do without a hearing (in an "on-the-record" ALJ decision) if you're not represented by an attorney.
Out-of-Pocket Costs
During the course of representation, a disability attorney usually has to request a claimant’s medical, school, work records, and occasionally medical or psychological examinations; these can be expensive. The client must pay these costs separately from the attorney's fee (of 25% of their backpay). Other costs may include charges for copying and postage. It would be unusual in most instances for these costs to exceed two hundred dollars per case (and, usually, the out-of-pocket costs are lower).
Sometimes an attorney will ask for money in advance to pay for these items. This is permitted so long as the attorney holds the money in trust until it is needed. However, attorneys usually front these costs for their clients. Then, once the case has closed, regardless of whether you win or lose, the attorney will send the client a bill requesting reimbursement for any funds fronted on behalf of the client.
Before hiring a disability lawyer, you should ask whether you will be charged for out-of-pocket expenses in addition to the lawyer's fee, and what types of expenses might be included.
Finding a Disability Lawyer
I strongly encourage you to consider consulting a Social Security Attorney during the initial application process. An attorney will be able to help you throughout the application process. If your initial application for benefits is denied by the SSA, you do have a right to appeal the decision. Your disability attorney will be able to help you through the appeals process which have restrictive time guidelines but also provide with a smooth stress free process. After all the numbers suggest your chances for approval in the initial process to be much higher.
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What Are The Attorney Approval Rates?
The national denial rate is quite high at 65%, but I believe one big reason for this is that many people do not get representation until they have been denied.
I also believe many lawyers are partly to blame for this since it is very common for someone looking for a lawyer at application for their SSDI or SSI claim to be told to "apply and call back when you are denied". Some lawyers do this because an attorney's fee is based on past due benefits and if the lawyer wins a case at application they feel the fee does not cover the work involved in handling a case at this level.
I strongly disagree with this approach, because I feel it is very important that the case be handled properly from the beginning, not only to assure you have the best chance to win at application, but also to ensure that an application that was not properly done does not come back to haunt you at a later stage in the process.
If you are in a state that has reconsideration, the winning percentage at this stage is only 13% with a denial rate of 87% nationally. It is my belief that the extremely low winning percentage at reconsideration is due to the fact that many times very little is done to improve the claim between application and reconsideration.
I also believe, that some SSA employees find it easier to rubber-stamp previous decision rather than to change what was already decided. The highest winning percentage is at the hearinglevel which nationally has a winning percentage of 62%, with 25% losing, and the remaining 13% dismissed for one reason or another.
I believe and Social Security studies have shown that one reason for this is that more claimants are represented at the hearing level then the earlier stages of the Social Security Disability Process. It is also my opinion, that for the first time a claimant has an opportunity to tell his or her story to someone in person, and it puts a face on all the paperwork.
Keep in mind, these winning and losing percentages are national averages and some states have a much higher percentage of cases approved, while other states have a much lower percentage of cases approved than the national average. But over all denials are at 65% across the country. It is always suggested to contact an attorney in the initial application process to increase your chances of approval.
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