Understanding Contingency Fees in Disability Cases

Most Social Security Disability (SSD) and Supplemental Security Income (SSI) lawyers charge a contingency fee, which means the lawyer takes a percentage of the back pay (the lump sum of retroactive benefits) you are awarded if your claim is approved. This is beneficial for individuals who cannot afford to pay legal fees upfront.

• No Win, No Fee: The lawyer only gets paid if you win the case and receive back pay. If you lose your case, you won’t owe your lawyer anything.
• Percentage of Back Pay: The typical fee structure for disability lawyers is a percentage of your back pay—the benefits you are entitled to from the time you first became disabled until the time your claim is approved.

What Is the Maximum Fee a Disability Lawyer Can Charge?

While it may seem like disability lawyers can charge anything they want, there are strict limits set by the Social Security Administration (SSA) to protect claimants from excessive legal fees.

• Standard Fee Limit: The maximum amount a lawyer can charge for a disability claim is 25% of your back pay, up to a cap of $6,000. For example, if your back pay is $40,000, the lawyer could charge 25%, which would amount to $10,000, but because of the cap, they can only charge $6,000.
• Exceptions: In rare cases, a lawyer may request a higher fee if it’s approved by the SSA, particularly if the case is exceptionally complex or if the attorney has to provide extra work, such as handling an appeal after an initial denial. However, these requests are subject to SSA approval.

Additional Costs and Expenses

While a disability lawyer’s fee is typically limited to the 25% or $6,000 cap, there may be additional costs and expenses associated with your case. These costs are separate from the lawyer’s fee and could include:

• Medical Records: You may need to pay for copies of your medical records, doctor’s reports, and other necessary documents to support your case.
• Expert Testimony: If expert witnesses (such as medical experts) are required to testify in your case, their fees may be added to the overall cost.
• Administrative Costs: There may be other administrative fees, such as postage, copying, and filing fees.

It’s important to ask your lawyer about these additional costs upfront so you can understand what to expect.

How Do Lawyers Get Paid?

The lawyer’s fee is typically deducted directly from the back pay awarded to you. This means that when your disability benefits are approved, the SSA will send the back pay to your lawyer and to you, and your lawyer will receive their fee directly from this amount.

• First Payment: The SSA generally issues a lump-sum payment that includes both past due benefits and your ongoing monthly payments. The attorney’s fee is deducted from this lump sum.
• Ongoing Benefits: After the lump sum is paid, the lawyer will not receive any portion of your ongoing monthly benefits, as those are yours to keep.

What Happens If Your Claim Is Denied?

If your claim is denied at the initial level, and you hire a lawyer, you generally won’t have to pay legal fees at that point. Disability lawyers only charge for services if you win your claim or receive a back pay award.

• Appeals Process: If your claim is denied, your lawyer can help you with the reconsideration or hearing process, and the fee structure will still apply. However, you would only owe the lawyer a fee if you win the case and receive retroactive benefits.
• No Fee for Denied Claims: If your claim is ultimately denied and you do not receive back pay, you do not owe the lawyer anything for their work.