How do social security lawyers get paid?

The process of applying for Social Security disability benefits is complex and stressful, and you could consider hiring a specialized lawyer to help you file a disability claim. Generally, working with a lawyer increases your chances of approval compared to when you are representing yourself. You should expect to incur legal fees when you hire a Social Security lawyer.

The amount paid to a Social Security lawyer is capped at 25% of the benefit amount, with a maximum limit of $6,000. You won’t be required to pay a retainer for the lawyer to represent you in the disability hearing. Your lawyer will only get paid if your disability claim is approved. However, if your disability claim is denied, the lawyer will not be paid.

How Social Security Lawyers get paid

Social Security lawyers work on a contingency basis, and they only get paid when your disability claim is approved. You can hire an attorney when applying for Supplemental Security Income (SSI) or Social Security disability benefits (SSDI).

When a lawyer takes up your case, they are not allowed to request upfront payments until the case is determined. An exemption to this requirement is when the lawyer requests a fee to cover the expected costs of the case such as postage, photocopy, and travel.

When a Social Security lawyer enters into a fee agreement with a client, they must deposit the fee agreement with Social Security. The fee agreement (PDF) cannot exceed 25% of the benefits payable or $6,000, whichever is less. If Social Security approves the fee agreement, and the claim is approved, Social Security will deduct your benefits and make payments directly to your lawyer.

For example, if Social Security pays you a backpay of $25,000, 25% of this award is $7,500. However, this amount exceeds the maximum fee that Social Security allows i.e. $6,000. This means your lawyer will receive the lesser of the two amounts i.e. $6,000.

The pay structure for a Social Security lawyer

When you hire a lawyer to represent you in a Social Security hearing, you can expect to incur two types of costs i.e. the lawyer fees and incidental fees incurred when handling your case.

Lawyer fees

The lawyer fee, also known as the attorney fee, is billed as a percentage of the amount you receive if you get approved for benefits. If the lawyer secures your application or wins your appeal for backpay benefits, the attorney fees are capped at 25% of the benefits or $6,000, whichever is less.

You won't be required to pay any fees upfront until after you have won the case and received benefits. The attorney fee must be agreed upon in the fee agreement and approved by Social Security. You will only pay the attorney fees after you have been awarded benefits after the first hearing, and you won't be required to pay additional fees when you receive ongoing benefits.

Other costs

Although Social Security lawyers are not allowed to charge upfront legal fees, they may be allowed to charge a reasonable fee to cover costs associated with your case. The fee can a couple of hundred dollars, and it covers the postage, filing, witness testimony, photocopying, securing medical records, travel, etc.

When these costs are paid upfront, they are held in an account known as a "trust account." The lawyer must inform you anytime they withdraw money from the account, and any balance left after the case ends must be refunded.

How can a Social Security lawyer help with your claim?

Hiring a Social Security lawyer to handle your claim can help speed up the claim process and receive backpay sooner. Here is how a lawyer can help with your claim:

Initial application

When filing a disability claim, a Social Security lawyer can help you complete and submit an accurate application. The attorney will help you gather the required documents, including medical records, which Social Security requires.

The evidence provided should prove your inability to work and the severity of your medical condition. The lawyer should recognize when the medical records require to be updated, or when additional evidence may be needed.

On the record decision

If your claim is denied at the application stage, you can request a disability hearing. Before the hearing date, your lawyer can file for an on-the-record decision if they believe the evidence provided supports a fully favorable decision.

The lawyer can help you get approval at this stage by presenting a concise argument on why you deserve a favorable decision as well as negotiating your disability hearing onset date. Also, your lawyer can help you gather additional medical evidence that proves the severity of your disability.

Disability hearing

If your request is rejected at the on-the-record stage, your case will proceed to the disability hearing. If the hearing date is far away, and you are applying for SSI benefits, your lawyer can write a letter to Social Security explaining why you need the hearing date sooner.

The lawyer will also prepare you for the disability hearing by bracing you for questioning and anticipating what the administrative law judge will focus on during the hearing. If you will need to present witnesses at the disability hearing, the lawyer help you choose which expert witnesses to present at the hearing and know how to cross-examine the witnesses to strengthen your case.

Appeals council

If your disability claim is denied at the disability hearing stage, your lawyer can proceed to file an appeal at the Appeals Council. The appeals council will review any new medical evidence that was not considered by the administrative law judge at the disability hearing. Your lawyer should demonstrate how the ruling at the disability hearing was made in error. Usually, you must file a request for appeal to the Appeals Council within 60 days after the administrative law judge’s ruling.