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What Percentage Gets Paid to a Disability Attorney?

Too many people who need disability fail to hire a lawyer for help because they think a lawyer will cost too much. The reality is that anyone can afford to hire a disability attorney since there are no up-front costs, and an attorney will not deplete your benefits. When you meet with a lawyer for free, you should fully understand their fee structure before you sign anything. The following is a general guideline regarding how disability attorneys get paid.

Contingency Fees

Many lawyers charge hourly rates, which means even an email or phone call can add to the bill. However, like personal injury lawyers, disability lawyers work on what is called a “contingency fee.” This means that you pay no fees up front and you pay nothing at all if the attorney is not successful in getting your benefits approved. If your benefits do get approved, the lawyer fees come directly from your back-payments from the SSA. This means you never pay anything out-of-pocket and you never pay anything if you do not win your claim.

How Much of Your Benefits Go to the Attorney?

Once your claim is successful, your lawyer will get paid a pre-determined percentage of your back benefits. You will sign a fee agreement when you hire the attorney, so you should be absolutely sure what percentage they will receive. The percentage is limited to 25 percent of your award up to $6,000, with some exceptions regarding federal district court appeals and other complex situations. These fees only come out of your past-due benefits. If you do not receive an award of any past-due benefits, the lawyer will not receive any fees.

You never have to write a check to your attorney. Instead, the agreement you sign will allow the SSA to pay your attorney directly (based on the agreed-upon percentage) and then pay you the rest of the past-due benefits.

Disability Back Pay

When you apply for Social Security disability, you may assume you are applying for future benefits only. However, the SSA will also determine how much backpay – or past-due benefits – you qualify for. Backpay can be calculated as follows:

  • SSDI = Retroactive benefits from the date your application was approved back to the date your disability started, as determined by the SSA. The maximum amount is 12 months’ worth of benefits from the time you applied.
  • SSI = Retroactive benefits from the date of your approval back to the month following your application.

If you sign an agreement to pay the maximum 25 percent, and you are awarded $10,000 in past-due benefits, the SSA will send $2,500 directly to your lawyer and $7,500 directly to you. It is important to remember that a lawyer can fight for more past-due benefits by negotiating the date of the onset of your disability with the SSA.

While 25 percent may sound like a lot to some people, understand that having a lawyer can often mean the difference between receiving benefits or being denied. In the end, it is often more than worth it to pay 25 percent of your backpay to ensure you receive the ongoing disability payments you need.

Other Costs

An attorney will incur incidental costs when handling your disability case. These usually include expenses for:

  • Obtaining medical and work records
  • Medical or psychological exams
  • Copying and postage

All-in-all, these costs may come to about $200 or less, depending on the complexity of your case. Reimbursement for these costs does not come from the SSA but will come directly from you. The policies of lawyers regarding out-of-pocket costs will vary, so you should make sure to discuss how your lawyer handles these costs before you begin your case. Generally, the prospect of such costs should not dissuade you from hiring legal assistance, as you may receive a much better outcome that more than makes up for these expenses.

Discuss Payment Openly with Your Attorney

As mentioned, a disability lawyer should always be completely transparent about how they are paid and how much they will receive. You should feel free to ask any questions you have about payment to make sure you fully understand the arrangement, and so there are no surprises down the line.

The contingency fee structure aligns a lawyer’s interests with your own, as they do not receive fee payments unless you win benefits. This win-win situation provides disability applicants with the help they need without making their financial situation any more stressful than it already may be. Contact a disability lawyer in California for a free case evaluation right away.