Social Security Administration and Attorney Fees

When a claimant hires an attorney, Social Security actually governs how they are allowed to charge a fee. Social Security goes one step further and actually withholds the fees directly from the retroactive benefits that are due a client and sends the balance of those funds after they deduct the fees. For this service they charge a service fee to the attorney (never the claimant).

I am often asked what happens if Social Security makes a mistake and doesn’t withhold the fees from the retroactive benefits. I tell these people that there are times when Social Security does commit an error and does not withhold fees. When this happens, Social Security will ask an attorney to contact the client directly and make arrangements with that client for payment of the fees. If the client is unable (or in rare occasions, refuses to) pay the fees, Social Security will pay the attorneys’ fees and then issue an overpayment to the claimant’s claim, taking a percentage of their monthly benefit until the amount of the fees is completely reimbursed to the Social Security Administration.