Recently on our disability hearing a user asked, “I have been trying to win SSDI benefits for three years. My case was finally heard by the Appeals Council and I was awarded benefits. When I received my back pay check, however, I noticed the SSDI attorney had charged me more than $6,000. How is this possible. I thought the regulatory limit was 25% of my back pay up to $6,000. Am I reading the statute wrong?”
Fee limits for SSDI lawyer
Congratulations on finally winning your SSDI case. Understandably it might be frustrating to receive your disability back pay check after several years only to realize that your lawyer has taken a large part of it.
So, let’s take a look at your question. It’s true that federal regulations set a limit for legal fees charged by disability lawyers. Under federal law the standard amount is what you suggested: 25% of your back pay up to a maximum of $6,000.
What you might not have realized, however, is that under specific conditions a SSDI lawyer is allowed to petition the court to charge a fee higher than the standard statutory amount. This most commonly occurs when a lawyer has had to perform more work than normal.
For example, if your case dragged on for years with multiple hearings and an Appeals Council hearing. This could also occur if you had a lawyer and fired them and hired a second attorney. In this case, the first lawyer may not have waived his fee, allowing the SSA to divide the fee between the two lawyers (and often allowing for a fee which is higher than the standard $6,000 rate).
How does the SSDI lawyer get more than $6,000?
It’s important to note that the SSA will only approve a fee higher than the standard amount if the disability lawyer submits a fee petition to the SSA and they approve it. The SSA does not take this action on their own unless the attorney initiates the request.
So, how do you know if this is possible? You will need to review your fee agreement. Most fee agreements will have some type of provision within the agreement, referred to as a two-tier agreement, which specifically outlines when additional fees will be charged.
Consider also, a disability lawyer is generally only paid if they win your case. In fact, most agreements are contingency fee agreements and spell out this contingency. If you and your disability lawyer did not sign a contingency fee agreement, however, they may request a fee (even if they lost the case) by submitting a fee petition to the SSA.
Are there any other fees that you must pay?
It doesn’t sound like this is your issue. But some disability claimants also complain that they were charged additional fees for out of pocket expenses the SSDI lawyer paid. Although many lawyers will waive these fees, it is legal for them to charge for a variety of expenses not related to the fees. For example, they may charge for requesting your medical records, sending you to see a medical specialist, copying costs or paid postage expenses.
It is possible that a disability lawyer could legally get paid more than the standard $6,000.
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