What About These Legal Fees?

Unlike many lawyer/client fee arrangements, fees for Social Security representation are highly regulated. Social Security claimants are protected in a variety of ways from unscrupulous attorney and non-attorney representatives.

The law provides an alternative to going through the fee petition process. The fee agreement process allows the attorney to voluntarily cap the legal fees at 25% of past due benefits, up to a maximum of $5.300. This approach spares the attorney from preparing a fee petition and the SSA from ruling on it.

For cases after January 1, 2000, attorneys who want SSA to withhold a fee from the claimant's past due benefits and pay it directly to them are assessed a 6.3% tax on the fee. This user fee is supposed to cover the government's cost to calculate the fee and issue the fee check. With the 6.3% tax, the $5,300 cap is now effectively $4,966, since the attorney cannot charge the tax to the claimant.  (Note: as of 7/1/2002, H.R. 4070 is pending in the Senate for consideration.  If passed, it would establish a set user fee of $100 rather than the 6.3% tax).

Remember, this fee withholding and fee withholding tax is only for SSD, not SSI. SSA does not withhold legal fees from past due SSI benefits. In SSI cases, the attorney depends on the claimant to pay the legal fees out of the past due benefit check.

Other considerations regarding legal fees include:


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