Before an attorney or third party representative can earn a fee for representing a Social Security claimant, the attorney must have a fee agreement in place or have their fee approved by the Social Security Administration.
Most fee agreements are in essence contigency award agreements. That is, the attorney does not get paid unless the claimant recieves a benefit award. However, there are further restrictions on how much an attorney can get paid. For example, even if there is a contingency fee agreement in place and approved by the Social Security Administration the amount of the award upon which the fee is determined is limited by a dollar or percentage cap. In addition to the percentage cap, an attorney can only charge his or her fee based upon the past-due benefits. Past due benefits represent the amount of any award for the months between the onset of the disability and the determination of a claiment’s qualifiying disability.
The Social Security Administration has published specific language that if contained in a fee agreement will be approved by them. The SSA suggests that the following language be placed in a fee agreement.
“We agree that, if SSA favorably decides the claims, I will pay my representative a fee equal to the lesser of [insert a number less than or equal to 25 percent] percent of the past-due benefits resulting from my claim(s) or [insert a number less that or equal to the applicable specified dollar limit established prusuant to section 206(a)(2)(A) of the Social Security Act.”
The current cap is $6,000. This arrangement makes it an otherwise good deal to retain an attorney. Clearly the limitations place on Representative fees establishes the clear policy that attorneys are encouraged to help, but not consume the award. The idea being that if an individual who suffers from a qualifying disability should put in their pocket as much of the back benefit possible and preserve the future for their individual needs.