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01 Representative compensation and disability
claimant outcomes Cody Tuttle, Riley Wilson Abstract : Many claimants of Social Security Disability
Insurance (SSDI) retain legal representation to help with the approval process.
The Social Security Administration imposes strict rules on representative
compensation. Representatives are only paid if claimants are awarded
disability, and they are paid the lesser of 25 percent of the claimant’s past
due benefits or a pre-specified maximum fee ($7,200 since 2022). Because past
due benefits are a function of the number of months claimants wait to be
awarded, representatives face incentives to delay case resolution until past
due benefits push the representative fees past the fee ceiling. We use
difference-in-differences to evaluate how these incentives impact SSDI claimant
wait times. After the fee ceiling increased in 2002, average wait times
increased by 0.85 months among claimants for whom the fee threshold is more
binding, implying a 2.
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