What Is It Going to Cost to File for Social Security Disability, and How Much Am I Going to Get?

Welcome to Season 1, Episode 7 of Winning Isn't Easy: Navigating Your Social Security Disability Claim. In this episode, we'll dive into the complicated topic of "What Is It Going to Cost to File for Social Security Disability, and How Much Am I Going to Get?"

Join host Nancy L. Cavey, an experienced disability attorney, as she breaks down two of the most pressing questions every Social Security Disability claimant has: "How much does it cost to file?" and "If I win, how much will I receive?" Understanding the financial aspects of disability claims can be overwhelming, but Nancy is here to provide clarity. Tune in to this episode of Winning Isn't Easy to get the answers you need.

In this episode, we'll cover the following topics:

1 -  The Costs of Filing for Social Security Disability

2 - The Monetary Rewards and Taxation of Social Security Disability

3 - Other Questions Regarding Social Security Disability Benefits

Whether you're a claimant, or simply seeking valuable insights into the disability claims landscape, this episode provides essential guidance to help you succeed in your journey. Don't miss it.


Listen to Our Sister Podcast:

We have a sister podcast - Winning Isn't Easy: Long-Term Disability ERISA Claims. Give it a listen: https://wiedisabilitypodcast.buzzsprout.com


Resources Mentioned In This Episode:

LINK TO YOUR RIGHTS TO SOCIAL SECURITY DISABILITY: https://mailchi.mp/caveylaw/your-rights-to-social-security-disability-benefits

FREE CONSULT LINK: https://caveylaw.com/contact-us/


Need Help Today?:

Need help with your Social Security Disability claim? Have questions? Please feel welcome to reach out to use for a FREE consultation. Just mention you listened to our podcast.

Review, like, and give us a thumbs up wherever you are listening to Winning Isn't Easy. We love to see your feedback about our podcast, and it helps us grow and improve.

Please remember that the content shared is for informational purposes only, and should not replace personalized legal advice or guidance from qualified professionals.

Transcript

Nancy Cavey [00:00:00]:
 Foreign hey, I'm Nancy Cavey, national and Florida based Social Security disability Attorney. Welcome to Winning Isn't Easy. Before we get started, I've got to give you a legal disclaimer. This podcast is not legal advice. The Florida Bar association says I have to say this, so I've done that. But nothing will prevent me from giving you an easy to understand overview of the Social Security disability claims process, the games that are played, and what you need to know to get the disability benefits you deserve. So off we go. In the last episode, I talked about the role of your doctor in your Social Security disability claim.
 
 Nancy Cavey [00:00:54]:
 Today I'm going to switch gears. I'm going to talk about what it costs to file a Social Security disability claim and what potentially you're going to get if you win. I'm going to talk about three things. First, the cost of filing for Social Security disability benefits. Two, monetary rewards and taxation of your Social Security benefits. And lastly, I'm going to answer some questions that I get about Social Security disability benefits. Got it. Let's take a break before we get into this episode.
 
 Speaker B [00:01:23]:
 Filing for Social Security disability or has your claim been denied already? Either way, you require a copy of your rights to Social Security disability benefits, which will cover everything you need to know about the Social Security disability claims process. Request your free copy of the book@kvlaw.com today.
 
 Nancy Cavey [00:01:48]:
 Welcome back to Winning Isn't Easy. Let's talk about the costs of filing for Social Security disability benefits Now. I'm often asked, what does it cost to file a Social Security disability application? And the great news is, nothing. Unlike filing a lawsuit in state or federal court. There's no filing fee for filing a Social Security disability application. If your initial application is denied, you're going to have to file an appeal called a request for reconsideration. You've got to do that within 60 days of the denial of your initial application. There's no filing fee to file a request for reconsideration.
 
 Nancy Cavey [00:02:27]:
 If your claim is denied a second time, which is not uncommon, you'll have 60 days in which to file a request for hearing. And that will put your case in front of an administrative law judge, a Social Security judge. And guess what? There's no filing fee to request a hearing in front of a judge. I'm often asked, are there any upfront attorney's fees to file a Social Security disability application? And the answer is no, it doesn't cost anything to file a Social Security disability claim. And there should be no upfront attorney fee retainer agreement. The Social Security disability attorney only gets paid if they win. And the attorney's fee is calculated by the Social Security Administration and is paid from your back Social Security benefits. So how much will the Social Security attorney be paid? The payment and the amount of the fee is regulated by the Social Security Administration at the initial application stage, the request for reconsideration stage and the hearing stage.
 
 Nancy Cavey [00:03:28]:
 The amount of Your fee is 25% of your back pay with a maximum of $7200. Now this is going to go up as of November of 2024 to a max of $9200. Now let me do explain that. Lawyers can fee petition for time over the amount of the fee, the 25% of the back pay with a maximum of 7200 or 9200 with a COLA, but that has to be done in the form of a fee petition and approved by a judge. If the attorney takes a fee within this guideline fee, then it's routinely approved. So the fee is 25% of the back benefits and your back pay is the number of months of benefits that are due to you from the date you were found disabled through the date of the decision finding you disabled, less five months. So let me give you an example. Let's say you said that you were disabled as of January 1, 2022.
 
 Nancy Cavey [00:04:37]:
 The case gets adjudicated and decided in January of 2025. That's three years of benefits. Three times 12 is 36 months of benefits. But there is a five month waiting period in Social Security. You may be found to be disabled, but you don't get benefits for the first five months. So in my example, 36 months -5 is 31 months of back benefits. I don't know what your monthly benefits might be, but let's say for the sake of this example that it's $2,000 a month. 31 months times 2000 is $62,000.
 
 Nancy Cavey [00:05:17]:
 You take 25% of that and obviously that's more than the maximum fee of $7200 or $9200. So your fee would, the fee would be capped, if you will, based on whatever the max fee is at the time the case is decided. On the other hand, let me give you another example. Let's say the benefits are $10,000, 25% of that is $2,500 and the lawyer would be paid $2,500 unless they fee petition for more. And you need to understand that ultimately if your case is lost before the administrative law judging and you take an appeal to the Appeals Council, then there no longer is a cap at $7,200 or the $9,200 and your attorney can fee petition. You also need to understand that your attorney can charge you for securing medical records. And in addition to an attorney's fee, you can see that these fees are significantly less than what you see in the personal injury world where it's 33%, 40% if you go to trial. And I've even heard lawyers charging as much as 50%, which I think is outrageous.
 
 Nancy Cavey [00:06:38]:
 The Social Security fee is very reasonable and quite frankly, in my view, there is no reason not to hire a Social Security disability attorney because this is very complex area of law. In other words, the lawyer doesn't get paid unless they win. Right now it's taking two, maybe three years to get to a hearing if we have to go that far. And we're working two to three years paying bills, paying our staff, you know, working your case without getting it done. If we lose all that time and money that we invested in your case, we don't get back because we can't ask you under a contingency fee. Pay us if we lost your case. Got it. So we only win if you win.
 
 Nancy Cavey [00:07:25]:
 Let's take a break. Foreign welcome back to Winning Isn't Easy. What are the monetary rewards and taxation of Social Security disability benefits? So if you get a favorable Social Security decision, when can you expect to be paid? I know that you have waited forever and forever and finally gotten a favorable Social Security decision. You've robbed Peter to pay Paul. You may be in debt to your relatives. You may be hanging on a thread. You may actually be homeless. So how long will it take before you finally get a check? Unfortunately, I have to say it depends.
 
 Nancy Cavey [00:08:16]:
 It could take about 60 days or two months for back benefits to be paid and monthly benefits to begin. In a Social Security case, if there's no SSI application, if you have filed for SSI which is asset based and or awarded both is going to take longer because Social Security is going to look at the assets and determine whether or not you are still entitled to your SSI based on your assets and how much you're going to get in benefits. If you're receiving workers comp benefits or have been paid workers comp benefits in the past, Social Security can take an offset of those benefits and they're going to want from you or your attorney or your workers comp carrier a payout sheet to determine the period of time in which you got your workers comp benefits, the amount that you got whether or not there was a settlement, whether or not there were offset language in the settlement documents. And once again, they're going to do math to figure that out. They're not very good at the math and I get as frustrated as you do because they don't always talk to the lawyer at that math stage. They think we lawyers should be out of it. But in any event, you need to understand that if you generally haven't been paid within 90 days, you should go down to your Social Security office and talk to them. And if that doesn't work, contact the Social Security payment center if you can get through to talk with them.
 
 Nancy Cavey [00:09:38]:
 Either way, it's more of a wait than should be. And in the worst case scenario, I tell my clients, look, they're not going to talk to me. They won't talk to me. They, they'll only talk to you. And they're not telling you the right thing or they're telling you different things. It's time to call your congressman. Got it. So then the question is going to be how much am I going to get? Well, you need to go to www.ssa.gov generally before you file and you can get into your account and find out how much your Social Security benefits are going to be.
 
 Nancy Cavey [00:10:15]:
 Those benefits are generally calculated on your contribution to the Social Security system. Sometimes there are mistakes because employers have not accurately or completely or even reported what your income was. And that's something you will have to deal with in terms of your local office providing them with documentation. I'm not in control of how much you get. You can find out by looking at your record. Now question I get is are my Social Security disability benefits subject to federal taxation? I tell my clients I'm a Social Security lawyer. I'm not a tax lawyer. I don't give tax advice.
 
 Nancy Cavey [00:10:54]:
 But the general answer is that it depends on your personal financial situation. SSDI payments can be subject to federal taxation and about a third of SSDI recipients find that their benefits are subject to federal tax because of their spouse's income on or other household income. And you can do a rough calculation of that on IRS form 1040, where you can use the Social Security tax calculator. Better yet, consult with your tax preparer, particularly if you've gotten a retroactive lump sum payment of benefits. Retroactive benefits that have been paid over the course of tax years. You're definitely going to need an accountant to deal with that one. So let me generally talk about federal taxation of Social Security disability benefits because remember, I'm not a tax lawyer, but I'm going to give you a bit of an overview. This all starts with your marital status.
 
 Nancy Cavey [00:11:49]:
 If you're single and have more than $25,000 in income per year, including half of your Social Security disability benefits, a portion of your SSDI could be subject to federal taxation and the tax rate is going to be the same rate of use for your personal tax return. However, if your monthly income is over $2,834 and your income is over $25,000, the maximum portion of your SSDI to be taxed is at 85%. And again, the tax rate is going to be based on your personal circumstances, and your tax preparer is going to have to calculate that. Now, if you're a married couple, the rules are different. If your monthly income is over $3,667 and your annual income is over $44,000, again, you're going to be taxed, but the tax rate is going to be depending on, again, your personal circumstances. So generally, this is a product of your marital status and your monthly income, other income that you have, and any other personal circumstances that impact the your specific tax situation. Now, I'm often asked, is there a retroactive Social Security disability pay? Is that subject to federal taxation? And it depends. Again, I'm not giving any tax advice.
 
 Nancy Cavey [00:13:11]:
 Each situation is different. Your marital status and household income can subject your Social Security disability benefits to possible taxation. If you're successful, you may be entitled to retroactive benefits over the course of several years, which could be subject to taxation, and that can create some problems. I'm going to give you a rough example, and it is nothing more than a rough example, but let's say that you became disabled on January 1, 2020. Social Security decides your claim in January of 2022, and they say, look, you were really disabled back to January 1st of 2020. Under the Social Security rules, you're not entitled to benefits for the first five months. So in this example, you wouldn't be paid for January, February, March, April or May, and your benefits would start June 1, 2020. Let's say your monthly benefits were $3,000.
 
 Nancy Cavey [00:14:03]:
 And for the year 2020, you would be paid seven months of benefits or $21,000. And in 2021, you would be paid $36,000. The total check for the back benefits is $57,000. So is this taxable and for what years? Potentially, it's taxable again based on your marital status and your household income for 2020 and 2021. The receipt of Benefits may bump you into a different tax bracket. I don't know. But you need to understand again, you need to be talking with an experienced tax preparer or accountant. The IRS will generally allow you to apply Social Security disability benefits owed from a prior year, prior tax returns, lowering your income for the year you got the retroactive benefits.
 
 Nancy Cavey [00:14:51]:
 And potentially you can amend your tax returns for 2020 and 2021. All complicated, all beyond my wheelhouse, but you need to talk again to a specialist. I'm also asked, are my Social Security disability benefits subject to state income tax? And again, maybe it depends on where you live and once again, your personal situation. Now, there are states that potentially will subject your Social Security disability benefits to state taxation. That's Connecticut, Colorado, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Got it. I'm just exhausted with all this tax stuff, so let's take a break. Okay.
 
 Nancy Cavey [00:15:53]:
 Welcome back to Winning Isn't Easy. Let's talk about the laundry list of questions I normally get about Social Security benefits. One of the questions I get is, are Supplemental Security Income Benefits a supplement to Social Security disability benefits? Well, SSI Supplemental Security Income Benefits is a federal welfare program that pays a basic fixed benefit per month and that changes per year. But to get those benefits, you have to be poor with income and asset limitations, but you still have to meet that five step sequential evaluation. Individuals are only allowed at this point in time to have $2,000 in assets, or a couple is only allowed to have $3,000 in assets. And there are also limits on how much you can earn per month. On the other hand, Social Security disability benefits are based on withholdings from your paycheck. You have to work 20 out of the last 40 quarters, depending on your age, to be insured.
 
 Nancy Cavey [00:16:49]:
 And again, you have to meet the five step sequential evaluation. So we've set the parameters here. So the next question I get is, can you be eligible for both SSI benefits and Social Security disability benefits? And the answer is yes, and it's called a concurrent claim. However, before you draw your disability benefits, what will happen is they will do math. Social Security Administration will do math, and they can potentially reduce your SSI benefits or the SSDI benefits can make you ineligible for SSI. Why? Social Security considers SSDI and other income in calculating your SSI benefits. So as of 2022, you can't earn more than $841 as an individual and for a couple $1,261. Again, this changes every year, but it's important if you're getting a retroactive benefit to understand what the earnings were per month.
 
 Nancy Cavey [00:17:48]:
 So if you got an award that goes back to 2020 and it covers 20, 20, 21, 2022 for each year, Social Security is going to look at your assets and income and whether or not you've got countable income that exceeds the federally set threshold for that particular year and decide whether you're going to get your SSI and whether you're going to get SSI and SSDI combined and the amount. You do need to understand that there are some exemptions in terms of what's, what's considered income, what's considered expenses. It's rather complicated. And again, this is a situation where Social Security is not going to have a lawyer such as myself get involved in the calculations. Sometimes we'll give our clients some suggestions and advice about how to go about that. But you need to get the math from Social Security and potentially speak to a lawyer who would be willing to try to figure out these calculations. Now, the other question I get is can I get medical benefits if I'm awarded Supplemental Security Income SSI benefits? And the answer is yes. If you're found eligible for ssi, you automatically become eligible for Medicaid.
 
 Nancy Cavey [00:19:03]:
 Medicaid is a federally health federal health insurance program for poor people. It's managed by each state. Some states are more generous. Some states are less generous, like the state of Florida. But again, your income and assets are going to be considered to determine if you qualify for Medicaid. And depending on your circumstances, you might be eligible for Medicare and Medicaid. You can learn more about your eligibility for Medicare or Medicaid by contacting your state health insurance program counselor. You can go to www.shiphelp.org shiphelp.org to learn more about your rights for both Medicaid and Medicare and what's right for you.
 
 Nancy Cavey [00:19:45]:
 Next question I get is, do I get medical benefits if I'm awarded Social Security disability benefits? And the answer is yes. If you're awarded Social Security disability benefits, you're eligible for Medicare. Now, Medicare is a federal health insurance program for people who are 65 years or older or younger, people under 65 who are getting Social Security benefits. It doesn't matter if you're rich or poor. You can get Medicare benefits even if you're collecting Social Security disability benefits. Now, there is a catch here. Social Security requires that you meet the five step month period where you get no benefits and then you have to get 24 months of Social Security benefits. So after 29 months, you become eligible for Medicare.
 
 Nancy Cavey [00:20:31]:
 Another question I get is, can you receive Social Security disability benefits and workers comp benefits at the same time? Now, if you're injured on the job, you may be eligible for workers comp. And each state has their own workers compensation system that pays different types of compensation benefits. Most workers comp status will pay temporary total benefits if you're unable to work before you reach maximum medical improvement. If you do return to work, you might be entitled to something called temporary partial or wage loss benefits once you reach maximum medical improvement. In a work comp case, benefits will normally change to some form of benefits for loss of earning capacity, permanent loss of wages, or maybe even permanent total disability benefits. When I handle a workers comp claim, because I'm also a workers comp attorney and we settle a claim, we put in our settlement documents language that says that the carrier has considered their right to offset the receipt of workers compensation benefits in coming up with the amount of this money. We in the state of Florida are what's called a reverse offset state, which means that in Florida, the work comp carrier can take the offset or Social Security can take the offset. And sometimes one will take it and then the next one will take it, but at some point it's going to revert back to Social Security administration.
 
 Nancy Cavey [00:21:50]:
 What we say in that document is, look, we considered the impact of the workers comp money benefits and by the way, on the medical benefits in coming up with the amount of this settlement. And you, the Social Security people, can't offset the receipt of this compensation benefit. This is really complicated. And if you have a serious work related injury and your disability is expected to result in at least 12 months, you can also qualify for Social Security disability benefits in addition to your workers comp case. In fact, the state of Florida, for a long time, the determination of whether you were permanent totally disabled for work comp benefits was in part Social Security standard of disability. So you need to be talking to your workers comp attorney about the impact of Social Security on your workers comp claim and worker's comp on the impact of a Social Security claim, considering that you might have both. So I'm often asked, well, how much am I going to get in Social Security disability benefits if I'm receiving workers comp. As I explained, Social Security can offset or reduce the amount of your Social Security disability benefits by the receipt of workers comp.
 
 Nancy Cavey [00:23:02]:
 And according to Social Security rules, the combination of your Social Security disability benefits plus state workers comp benefits plus workers comp benefits in Other words, if your state pays disability Benefits can't exceed 80% of your average monthly earnings. So in other words, they're going to add up your Social Security disability benefits, any state disability insurance benefits like those in California, New York or New Jersey, plus your workers comp benefits. And it can't exceed 80% of your monthly earnings if you don't have state disability insurance benefits. Still, the sum of your Social Security disability and your workers comp can't exceed 80% of your average monthly earnings for Social Security purposes. Now, when you reach age 62, only 25% of your Social Security disability benefits can be used as an offset. This is really complicated, and I will tell you, as a workers comp attorney, I have a calculator where I plug in the average weekly wage in your workers comp case, your average current earnings, your ace, your PIA primary insured numbers, and this computer will spit out what the offset is going to be. But you do need to understand if you're collecting workers comp benefits and Social Security benefits, you have a legal obligation to notify Social Security that you're receiving workers comp benefits. And you don't want to be in a situation where Social Security discovers that you've gotten workers comp and say, hey, you got an overpayment of your Social Security benefits, pay it back to us now.
 
 Nancy Cavey [00:24:30]:
 And again, as I've explained in your workers comp settlement documents, you want to make sure that there is offset language that says that the comp carrier has taken into consideration their right to offset. Not only the right for an offset for money benefits, but for medical benefits. Got to work with your comp lawyer on that. I'm often asked, when should I file for Social Security disability benefits? Now, if you're getting workers comp benefits, you don't have to wait until your case is settled before you apply for Social Security benefits. It's taking three years potentially to get your Social Security benefits. If you've got a significant medical condition that's going to keep you out of work for at least a year. I tell clients, apply for your workers comp benefits. Apply for your Social Security benefits if you're represented.
 
 Nancy Cavey [00:25:15]:
 Discuss that with your attorney. And that's important because you don't want to lose what's called your insured status if you're out of work too long, you can lose your insured status for Social Security purposes and lose your right to get Social Security disability benefits. So you need to understand that this is something that you want to be working with together with your workers comp attorney and an experienced Social Security disability attorney. In my situation, I do worker's comp and Social Security disability, so I'm coordinating that as part of handling the claim. So in my view, if you can find a work comp attorney or who works closely with a Social Security attorney, that's what you should be doing. Got it. I hope that you have enjoyed this week's episode of Winning Isn't Easy. Please like our page, leave a review, share it with your family or friends, and subscribe to this podcast.
 
 Nancy Cavey [00:26:07]:
 Please tune in next week for another insightful episode of Winning Isn't Easy, where I'm going to talk about the initial application process and the mistakes that you can make that can result in a claim denial. Talk to you then.