How the SSDI contingency fee works
SSDI representation runs on a strictly regulated contingency. You and the attorney sign an SSA fee agreement at the start of the case. When your claim is approved, SSA calculates past-due (retroactive) benefits — the lump sum owed from your established onset date (subject to the 5-month waiting period) through the month of approval.
The attorney's fee is the lesser of 25% of that lump sum or the SSA fee cap ($9,200 as of late 2024) . SSA withholds the fee and pays it directly to the attorney. The remainder of the past-due benefits goes to you, and your ongoing monthly SSDI check is never reduced by the attorney fee.
A simple example
- Approved SSDI monthly benefit: $1,800
- Retroactive months (after waiting period): 24
- Total past-due benefits: $43,200
- 25% of past-due: $10,800
- Fee actually paid (capped at $9,200): $9,200
- To client: $34,000 plus $1,800/month going forward
Why fees are capped by law
Under 42 U.S.C. § 406, only SSA can authorize attorney fees in an SSDI case, and only for representation before the agency. 20 C.F.R. § 404.1720 forbids any attorney from charging or collecting a fee that SSA has not approved. Congress designed the framework this way so disabled Americans can afford quality representation without the fee eating up their benefits.
Two ways SSA approves attorney fees
There are two paths under § 406:
- Fee agreement. The standard route. The 25% / dollar-cap formula applies automatically as long as SSA approves the written agreement (§ 406(a)(2)).
- Fee petition. In rare, unusually complex cases (multiple hearings, remands, unusual issues), the attorney can file a fee petition asking SSA to approve a larger fee (§ 406(a)(1)). SSA weighs the time, complexity, and result before approving.
What about federal court?
If your claim reaches the U.S. District Court for the Eastern or Western District of Michigan on judicial review, two separate fee statutes apply:
- 42 U.S.C. § 406(b). Court-stage fees are capped at 25% of past-due benefits and are paid out of the back-benefit award.
- Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d). If the district court finds the government's position was not substantially justified, the court can order the government (not you) to pay attorney fees. If both fees are awarded, the smaller EAJA amount is refunded to the client.
Case costs vs. attorney fees
Case costs are the out-of-pocket expenses required to develop the record — medical records fees (Michigan providers charge a statutory rate under MCL 333.26265), expert-witness charges when needed, and copying costs. These are separate from the attorney fee and are not capped by SSA. At Jay Trucks & Associates we advance these costs and only recover them from a favorable award — if there is no recovery, we absorb the cost.
Why "free" nonlawyer help can cost you more
Nonattorney representatives can appear before SSA, and some advertise "free" or low-fee help. Two cautions: (1) nonattorneys cannot represent you in U.S. District Court, so if your case has to go up on judicial review you may lose your representative at the worst possible time; and (2) SSDI hearings turn on cross-examination of vocational and medical experts — a skill built by attorneys who do it every week. A settled 5-month win is cheaper than a 3-year fight through federal court.
No retainer. No hourly rate. No risk.
Call Jay Trucks & Associates. We'll review your work history, medical records, and prior denials at no charge and tell you honestly whether SSDI representation makes sense in your case.