The Social Security Administration has posted the official list of cost of living and other adjustments for 2020. Of interest to attorneys and others who represent claimants is the fact that the cap on the user fee goes up to $97 next year. Of course, there will be no increase in the cap that attorneys may charge.
I’m reminded of what happened with attorney fees for representing claimants for VA benefits. That fee was capped at $10 in 1864 and stayed at that level until 1988. Of course, it didn’t take long for all attorney representation to cease at VA. There may be some who envision such a future for Social Security.
15 comments:
If something isn't inflation-indexed, then its value will tend to decrease with time. Congress knows this, so that must be their intent in not including inflation adjustments. One case of this that I don't like is the taxation of Social Security benefits, which starts when non-Social Security income plus half of Social Security benefits reaches $25,000 (this taxation goes up when $34,000 is reached). These thresholds are not adjusted for inflation. This was intentional. When passed, only relatively high-income people paid these taxes, but because of inflation now more than half of people on Social Security do.
I understand the logic of taxation of these benefits, and of having the thresholds so lower income people do not have to pay them. However, it also creates high marginal tax rates. Over a range of income, each extra dollar of non-Social Security income causes an extra 50 cents of Social Security benefits to be taxable, and over another range it is 85 cents. So the marginal tax rates in these ranges is 50% or 85% above the tax bracket rate (so if you're in the 12% bracket, you would be paying an actual marginal rate of 18% or 22%). To avoid this, I plan to withdraw as much of my taxable savings as I can between retirement and when I start Social Security (as long as I can stay out of the high brackets). I really don't like tax avoidance, but once I'm retired I think I need to conserve my savings, so I guess I will.
We haven't got there yet as far as the user fee, but other things going on are making this work more difficult. I wanted to go to the NOSSCR conference to talk about these things, but I didn't make enough money to afford the conference.
Great! SSA needs to be totally removed from any attorney business.
Minimum wage in Washington D.C. is $14 an hour. $97 divided by $14 is right around 7. Thus it takes roughly the equivalent of a full-time worker's daily wage for SSA to produce a single attorney fee check.
I am concerned that the new OIS vocational system will list SSA attorney fee check writer as a job. You only need to write one check a day and you are not disabled. We will all go out of business. Help!
If given the choice between paying $97 for SSA to administer your payment to you or SSA bowing out of the fee payment process and letting you collect your fees directly from your clients like the vast majority of attorneys have to do in this country? What if SSA also eliminated the cap on benefits beyond the 25% ceiling? Would you be willing to start bill collecting then?
To 9:18
Social Security actually claims it costs 6.3% of the amount of the fee to calculate and pay the attorney fee. On a $6,000 fee that would be $378.00. That amount was later capped at $75 and has slowly increased to the $97.00 it is now.
Does it cost $97.00 or $378.00 to calculate the fee? Of course not. But the SSA and GAO have claimed that is the cost.
And, for those who want SSA out of the attorney fee business, can we then assume that you are in favor of doing what every other insurance company does when the case is closed, send the entire proceeds to the attorney and let them divide it up based on whatever their agreement with their client might be such as 25% or 33% or whatever a client agrees to pay?. My guess is no.
The fee provisions date back to 1967 and have a long convoluted history that involves a balance between unbridled fees and SS control of determining fees and the trade off of having the SSA withhold to pay the approved fee.
I have been to local SSAs all over the West. Never heard this much blatant isms like from this hearing office in Madison, Wisconsin. Something is going on with the employees they are hiring.
To 8:57
Congress did provide for a cost of living increase in the "fee cap" really the automatic fee approval cap, but made it permissive rather than mandatory.It has been increased twice from $4,000 (which at the time was the maximum amount an ALJ could authorize on their own) to $5,300 to the current $6,000. In the ten years or so since, the Commissioners of both parties have simply refused to increase the number in accord with the statute that permitted increases based on cost of living up to the amount of the increase in the average wage. Why not is a mystery story on its own, but one should not assume that Congress did not want to have an increase as opposed to just assuming, perhaps incorrectly, that there would be an increase from time to time as there was in the beginning.
The OHO I do most of my work has drastically reduced its wait times by roughly 10 mos in less than a yr. A fee that used to be $4,000 is now $2,000. Applications are down nationwide. National ave for approvals at the HRG level has been at/below roughly 50% for several years. I'm not a conspiracy theorist and think the lack of an increase has something to do with SSA wanting to get rid of atty reps. That being said, I can't find too many other logical conclusions why it has not been raised in so long.
Is there any chance this fee cap will actually be increased in the relatively near future?
"And, for those who want SSA out of the attorney fee business, can we then assume that you are in favor of doing what every other insurance company does when the case is closed, send the entire proceeds to the attorney and let them divide it up based on whatever their agreement with their client might be such as 25% or 33% or whatever a client agrees to pay?. My guess is no."
You guessed incorrectly. I assume most If not all state bars require IOLTAs. I see no issue with it. I might have an issue with uncapped fees (i.e, more than 25% of total back pay) because I don't believe the services warrant that level of payment, but I have no issue with allowing attorneys to handle the payments as they do in every other arena. Not sure what would happen to non-attorney reps unaffiliated with an attorney, though.
@10:20 am
In the most analogous cases (PI and Workers Comp) they just send the check with the client and attorney's name on it to the attorney. It goes through the attorney trust account and is divided appropriately. For some reason that gives SSA the horrors, even though it works fine in PI and Workers Comp and is rigidly policed by state bar associations. SSA, by not following the trend used by others, is definitely the strange outlier in this picture.
My guess is it's because there's a slew of non-attorney reps--not policed by those State bars and who surely don't want to get into that business for a group of folks who don't pay them dues--who are authorized for direct payment. SSA is probably scared to shut non-attorneys out of the repping game for fear of decreasing represented claims but doesn't want to give those folks such free reign over the checks.
The big trend I'm seeing now is waiting until hell freezes over to pay larger back payments to claimants and maximum attorney fees to reps. Calling the various offices over a period of months gets several different and contradictory reasons for the delay. Seems like agency is aiming for about a one year wait for large back payments. One of the big reasons I've been hearing lately is whether a payee is necessary or not which seems to get resolved about ten months after the favorable decision is made. Delay along with not keeping up with inflation can both be used to discourage filing and representation.
I'm seeing a trend with taking a long time to pay Social Security benefits and the attorney fee. I haven't waited a year, but I have waited many months and had to call numerous folks in SSA and finally my senator's office.
The excuses range from making sure there isn't an offset, (obvious from the most cursory review of the file) and needing the 1695 (faxed to 3 different numbers).
Not seeing an uptick in canceling those fee petitions or fee agreements in the future as a protest.
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