Social Security earlier announced the 1.3% COLA (Cost of Living Adjustment) for benefits for 2021. Tomorrow the agency will publish a more complete notice about all of the COLA adjustments in the Federal Register tomorrow. Perhaps the item on that list that will attract the most attention, at least from one group, is the increase in the maximum user fee charged to attorneys and others who represent claimants before the agency. That amount goes up to $98 beginning in December. The user fee is deducted from the fees that the attorneys receive.
Of course, no adjustment was made in the maximum fee that attorneys may charge their clients under the fee agreement process. My understanding of Social Security's position on that is that they will consider raising that amount once it is reliably reported to them that representation has disappeared. We may be in a situation comparable to that which once existed for representation of veterans. In 1864 Congress passed a $10 cap on attorney fees for attorney representation in veterans benefits matters. That may have been reasonable at the time. However, no adjustment was made in that cap for 120 years! That cap protected veterans so well that attorney representation in veterans benefits cases disappeared apart from pro bono representation. I imagine that there are those at Social Security who would be happy to see the same thing happen at Social Security.
6 comments:
If fee cap was tied to COLA, it would only be approaching $7000 now. Not a huge hit to a claimant and not a huge windfall to the attorney in a max fee case either but could be enough to help support a staff person in an office for the year and hedge against the rising costs of running a law practice generally.
Would only matter in a max fee case, whereas the increase in the user fee effects all favorable cases.
I always love that $7000 "not a huge hit to the claimant" but the blog drones on about how Claimants are drowning in debt and losing homes. Saying $7000 isnt a big hit is a telling sign that someone is out of touch with what poverty feels like and is making too much money.
8:25, if representing SS claimants is so lucrative, are you doing it?
When I started representing clients for SSD in 1979 every case involved a Fee Petition. The normal attorney fee contract stated that the fee was 25% of past due benefits. There were no maximum fees. At that time, the fees were not high because the claimant's PIA or SSI amounts were much lower then now.
During the first Clinton administration NOSSCR lobbied for the Fee Contract process. The initial deal was 25% or $4,000.00. The $4,000.00 amount was later amended to $5,300.00 and finally to $6,000.00. The $6,000.00 amount has been in place for a number of years.
Many or most attorneys keep track of the time involved in a case. In many cases, our time is in excess of $6,000.00. Also, in many of my cases I end up filing an Attorney Fee Petition because I use a two-tiered fee petition and when the case is successfully appealed and the claimant prevails at a 2nd, 3rd or even 4th hearing (7 hearings in one case was my record) then the $6,000.00 limit does not apply.
The question of $7,000 not being a huge hit to the claimant is not posed correctly. A better statement would be what did the claimant agree to in writing. Did the claimant get the benefit of the bargain.
I find that in many cases after a client wins, buyer's remorse sets in. Some clients will not communicate with their attorney after they are approved. Some clients decide that the attorney did not do anything for them. Some clients complain to SSA about the fee. Those situations are unfortunate. Also, bear in mind if an attorney fee is $7,000, then the client is receiving at least $21,000.00. I think clients in that situation has received the benefit of the contract.
8:25 you apparently do not understand how representative fees work. IF we are successful, we receive 25% of past due benefits with a maximum of $6000.00. For us to be paid more than $6000.00, our client receive more than $18000.00 in back benefits after they pay us. IF we changed it to $7000.00 it would mean that a claimant would receive at least 21,000.00 in back benefits.
We do not get anything if we are not successful. There are times when we get benefits for the claimant, but our fee is minimal because the Judge changes the start date. (I did a trial last week which was successful, but because of the change of start date, my fee is about $475.00. To put that in perspective, my client is getting $1900.00 in back benefits, but $1100.00 a month from here on out.)
On the other hand I have clients who are entitled to benefits at 2800.00 a month. We go to trial and they receive $50,000.00 in back benefits AFTER I get my attorney fee and they get $2800.00 a month for the remainder of their life.
The cap was first set in 1990 -- the year I became an attorney at 4000.00. In 2002 it was raised to $5300.00. In 2009 it was raised to $6000.00. $4000.00 in 1990 is worth $7,965.72 in 2020 due to the rate of inflation.
Tying the attorney fee to the COLA is necessary to make sure that attorneys can keep their doors open and represent claimants. It also means that attorneys can afford to take the harder to prove cases and claimants who are not entitled to maximum benefits where the attorney knows the fee will be less.
Unless you have actually done it, it's hard to appreciate working on a contingency fee basis. You can work many hours on a good case, do an excellent job, and still get paid nothing for it for a variety of reasons which are beyond your control. You have to allow representatives to get paid more than the going hourly market rate for attorney fees in cases they win in order to make up for that.
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