Attorneys who handle Social Security disability cases are entitled to compensation for their services just as any lawyer is compensated for services. However, there are federal regulations governing the amount of compensation to be paid. An attorney can either file a fee agreement with the Social Security Administration (SSA) or petition the Agency for payment.

Attorney Compensation Under a Fee Agreement

A fee agreement authorizes the SSA to compensate your lawyer for an amount equal to an established percentage of your claim if and when your counsel settles your claim. Under a fee arrangement, federal regulations limit the amount of compensation that your representative can earn to no more than 25 percent of your retro disability benefits or $6000. A signed agreement of costs must be submitted prior to a favorable decision. You or your legal guardian must provide signature to the agreement along with your lawyer. Fee arrangements are only approved once you win your claim and in arrears benefits are due and owing to you. If you are not entitled to retroactive benefits, the agreement is voided.

Attorney Compensation Under a Petition

If there is no valid fee proposal submitted to the Security department in reference to your case, your counsel may petition the Administration for payment of services rendered. There is no established limit for the amount that a lawyer may petition the Agency for. A fee petition is generally filed if you fire your counsel, your lawyer withdraws from the case before it is favorably decided, you don’t have a valid fee concurrence or the fee agreement was not approved. If multiple attorneys have been hired to work on your case, each legal representative must file a petition for payment or waive the fee.

If the agreement between you and your counsel clearly indicates that he or she will earn ONLY in the case a favorable decision and no fee understanding is filed, then your representative may petition the Administration and be compensated from your retroactive benefit amount. The petition must specify the services rendered and include a copy of all supporting documents. The SSA will then determine a reasonable fee based on a number of factors. However, if the decision of the Administration is unfavorable, your attorney will not be paid the petitioned amount.

Payment to Your Attorney

Your lawyers’ compensation may be paid directly to him or her, in full or in part, under a fee accord or petition. As such, the Department will withhold 25% of your past due disability benefits for payment to your legal representative. In turn, the SSA will assess a service charge against your attorney that is equal to 6.3 percent of the fee paid as compensation for services. If you are entitled to past due benefits, you are not required to pay this fee amount and attorneys are prohibited from seeking recovery of the fee from you. If it is found that you are not entitled to past due benefits and your attorney’s petition is approved, the fee charged to your counsel by the SSA will be paid out of your monthly benefits.

Federal regulation governing payment for services rendered by your legal counsel applies to legal fees, such as the cost of paralegal services and in-house experts. Federal regulation does not require SSA authorization for your lawyer’s out-of -pocket expenses. Your attorney’s out-of-pocket expenses will be repaid out of your monthly benefits. However, if the Administration determines that the out-of-pocket expenses being charged to you are excessive or otherwise not warranted, the Agency may require that the attorney provide proof of the out-of pocket expenses being claimed.