How Attorney Fees Are Calculated And Paid

Most Social Security disability attorneys charge the same fees for representing claimants. This is because the Social Security Administration has set a certain standard for attorney fees, and all attorney fees must be approved by the Administration before the attorneys can be paid.

The standard fee for a "normal" Social Security disability claim that is concluded at or before the first administrative law hearing is 25% of the past-due benefits obtained for the claimant, with a maximum fee of $5300.

This is referred to as a "contingent" fee, and in simple terms, it means the client does not pay the attorney any money to begin the claim. The attorney is paid only at the end of the claim, and then only if the client receives past-due benefits.

Perhaps this is best explained through examples. For instance, a client may hire a lawyer to begin a claim for disability benefits. After going through the entire claim process, which can take many months, the client might be awarded $10,000 in past-due benefits, as well as future benefits for life. The attorney will be paid 25% of that $10,000 -- $2500. If the client had received $50,000 in past-due benefits, the attorney would only be paid $5300, because that is the maximum fee allowed, even though that is much less than 25% of $50,000.

The attorney fee is withheld by the Social Security Administration, and is mailed to the lawyer at about the same time as the rest of the past-due benefits is mailed to the client. Sometimes the lawyer receives the fee before the client receives the check for the past-due benefits. This is always embarrassing to us, and we would much prefer that the client be paid before the lawyer. However, we have no control over the Social Security Administration process.

Unfortunately, the Social Security Administration is notorious for miscalculating benefits, and for mailing letters that are confusing or just plain wrong. It is important for the lawyer to verify every detail of the award in order to be sure the client receives the correct amount of benefit money.

If you have a Social Security disability claim and receive a confusing letter, call your lawyer immediately, so the lawyer can explain the letter to you or can contact the Social Security Administration and get the matter resolved properly.

At Kraft & Associates there is no charge for the initial Social Security Disability or SSI consultation. We invite you to contact us with any question you may have regarding Social Security disability. For more information about Social Security disability benefits, please visit the Articles section of our Web site.