The Social Security Act regulates how attorneys can charge attorney fees when representing disabled people on their Social Security Disability claims. No matter what option the attorney chooses, there is no fee unless the attorney is successful in getting the disabled person benefits. Also, the Social Security Administration must approve the fee.
The first kind of fee agreement involves a petition for approval of the fee. Under this kind of fee agreement, the attorney, upon prevailing on a claim, prepares a petition outlining the time he or she has invested in the case, and submits that petition to the Administrative Law Judge for approval. This can be tedious, and result in some disability claimants paying much more of an attorney fee, depending upon the case’s complexity.
The other option is to provide a fee agreement that sets a percentage of the “retroactive” benefit as the fee. Again, the attorney does not get this fee unless he or she is successful in obtaining disability benefits. What is the "retroactive benefit.”
When a person applies for Social Security Disability, they allege a date that their disability began. This is referred to as the “alleged onset date.” If the disabled person appeals their case, and it goes to hearing, a Judge may decide that the disability claimant has been disabled since a certain date in the past. For example, a Judge may issue a Favorable Decision on June 1, 2012 finding that a Claimant has been disabled since June 1, 2009. In this case, the Claimant will be entitled to three years' of "retroactive" benefit. It is from this amount that the attorney may charge a fee.
There are limits to what the attorney can charge. The fee can only be 25% of the retroactive benefit, and it cannot go above $6,000.00. This is known as a fee cap. So, in this kind of fee agreement, the fee is 25% of the retroactive benefit, or $6,000.00, which ever is less.
Fee agreements will often address “costs.” The term “costs” refers to those items that an attorney will spend money on to prepare the case, and prove disability. In Social Security Disability cases, the most common costs involve obtaining medical records, or medical opinions. Some attorneys may require a client to deposit funds into the attorney-client trust account to cover costs. Other attorneys may offer to pay the costs an advance, and then collect those costs after the case is completed.
Our firm routinely advances costs on Social Security Disability claims, knowing full well that many Claimants are experiencing financial stress, and need to worry about more essential needs then financing a Social Security Disability claim.
If you have a denied disability claim, and are concerned about whether you can afford an attorney, call us at 503-325-8600. We can explain our fee agreement, and how we work with disability claimants.