Social security disability applicants are often represented by attorneys who review the relevant medical records to evaluate the merit of the case. They provide legal counsel on whether the applicant is likely to be granted benefits. Federal law regulates the fees for all attorneys representing claimants applying for social security disability benefits. The statute states that the attorney is to receive 25% of the claimant’s retroactive benefits or a flat fee (at present it is set at $6, 000), whichever is less. The attorney cannot receive any money from the claimant’s monthly checks paid by the SSA (Social Security Administration).
The attorney can claim the representation fee only if the disability case is won. This means that the claimant has no initial costs basically. Once the claim is approved and the amount of retroactive benefits is calculated, Social Security sends the attorney his/her fee check. Claimants need not pay any part of the fee out of their own pockets.
Now let us talk about the expenses that a social security attorney or representative may charge the claimant. Only the actual representation fee is regulated. Attorneys can charge for “incidental expenses” that may include charges for copying, obtaining medical records, travel and postage for mailing documents. However, most attorneys charge only to be reimbursed for the cost of collecting the medical records relevant to the case. Social security does not reimburse the attorney for his/her incidental expenses.
Claimants have to sign a SSA-1696 form designating the person he/she has chosen as representative. In addition to this, they will also have to sign medical release forms and a fee agreement. It is important that you specifically indicate all expenses you will charge for in the fee agreement. As a claimant’s attorney, you can bill the claimant for all incidental expenses after the claimant receives a favorable or unfavorable decision from the SSA. The claimant is required to pay the attorney’s expenses whether or not he/she has been successful at getting benefits from Social Security.
Government statistics show that claimants represented by an attorney at an SSDI or SSI hearing are 50% more likely to win a case at the hearing level compared to those who are not represented.
