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Legal Fees Exclusion from Workers Compensation Offset in Disability Cases

Social Security law requires that disability insurance benefits be offset by Worker’s Compensation benefits. See post from

However, the law also provides that legal fees that are consistent with federal, state, or local law be excluded from the offset.

See Social Security Ruling (SSR) 94-6; 20 C.F.R. 404.408(d).

This seems like a wise law, as the individual should not be penalized for seeking legal help in obtaining the benefits to which they are entitled.

SSR 94-6 sets forth the specific example of Workers Comp (WC) legal fees in the state of Washington.

At the time of the ruling’s enactment, Washington law provided that attorneys could charge a fee of no more than 30% of the increase in the award secured by the attorney’s services. This included securing an initial award, as the person’s award increased from zero to the amount awarded.

SSR 94-6 holds that an attorney fee of up to 30% of an initial WC award in the Washington is consistent with state law, and, therefore, is excludable from the worker’s compensation offset.

This ruling illustrates the application of the WC offset and the attorney’s fee exclusion. It often makes sense to hire an attorney to help navigate the intricacies of state worker’s compensation law and federal disability law. In such cases, it is good to know that the legal fees are excluded from the worker’s compensation offset.

This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.

Melvin Cook:
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