Lawyers are typically paid in one of two ways: (1) by the hour at a set hourly rate and (2) on a contingency fee basis for a percentage of the recovery in a claim.
Disability lawyers are paid according to the contingency fee method. Social Security disability lawyers do not charge fees at the beginning of the claim or require a retainer to work on an SSDI or SSI claim. They will be paid a fee only if they win the case (this is the “contingency” that must occur.)
Contingency Fee Agreement
Whether you are filing for Social Security Disability Insurance (SSD or SSDI) or Supplemental Security Income (SSI), when you hire a disability attorney, you will likely sign a fee agreement that allows the Social Security Administration (SSA) to pay your attorney a fee if your claim is approved. As an extra precaution, the SSA will need to review the agreement to make sure it satisfies the fee agreement guidelines set out in the SSA’s regulations.
As stated above, most fee agreements are contingent, meaning the attorney will only be paid if you win your disability claim and are awarded past-due benefits.
How Much Is the Attorney’s Fee?
For Social Security disability lawyers, the fee is limited to 25% of the back due or “past-due” benefits you are awarded. Moreover, the maximum fee is set at $7,200. The attorney will be paid only out of any back pay or past-due benefits.
Here is an example: if your back-due benefits are calculated to be $4,000, your attorney will be paid $1,000 ($1,000 is 25% of $4,000), and you will receive $3,000 ($3,000 is 75% of $4,000).If no past-due benefits are awarded, your attorney will not receive a fee and should not ask you for one.
It should not cost you anything out of pocket to hire a disability attorney. The fee should be paid out of the disability award you will eventually receive after benefits are awarded.
When do you have to pay the attorney’s fee? You do not usually need to pay the attorney’s fee directly. The SSA should withhold the entire lawyer’s fee from your back pay before Social Security sends it to you.
Disability Back Pay
Once approved for disability benefits, the SSA will calculate the back pay it owes you.
In SSDI claims, your back pay will include all retroactive benefits you are owed from your established onset date (the date the SSA determined your disability began) to the date you were approved.
[Note: the retroactive benefits do not go back forever if you delay applying for benefits. The retroactive benefits cannot go back more than 12 months from the date of your application.]For SSI, your benefits are calculated from the date you applied for SSI benefits to the date you are approved for benefits.
(For more information, see our detailed article on disability back pay.)
Out-of-Pocket Costs
During your claim, your attorney must usually request your updated medical records, vocational reports, and school and work records. Sometimes, your attorney may order independent medical or psychological examinations, which can be expensive. The client must pay these costs separately and apart from the attorney’s fee. Other costs may include postage and charges for copying.
In most cases, the costs average between $100 and $200 and are based on actual costs.
Sometimes, an attorney will ask for money in advance to pay for such costs. However, the Ortiz Law Firm does not do so. We advance these costs for our clients and only ask that they reimburse us at the end of the claim.
Before hiring an attorney, 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.
Free Case Evaluation With a Social Security Disability Attorney
Nick A. Ortiz is a Social Security Disability Attorney. Call him today at (888) 321-8131 for a free case evaluation.