Section 406(b) Fee Petitions: Maximizing and Defending Your Fee

You won the remand, the case went back, and your client was finally found disabled. Now comes the part that pays for the federal-court work: the Section 406(b) fee petition. It is a different animal from the administrative fee you're used to — different cap logic, a different decision-maker, and a reasonableness standard the Supreme Court rewrote in Gisbrecht.

Done right, a 406(b) petition compensates you for the court litigation that turned a denial into an award. Done sloppily, it gets cut by the district judge or bounced for timing. Here's how the pieces fit.

406(a) vs. 406(b) — administrative vs. court fees

The statute splits representation fees by forum. Section 406(a) governs fees for work before the agency — the application, reconsideration, and hearing. That's the track that runs through the fee-agreement process and the administrative cap (currently $9,200 for agreements approved on or after 11/30/2024). Section 406(b) governs fees for work before a court, and it's authorized separately under 20 CFR 404.1728.

The practical point: the $9,200 fee-agreement cap is an administrative number. It does not cap your 406(b) court fee. When you litigate a case in district court and win a remand that produces an award, 406(b) lets you petition the court for a fee out of past-due benefits — separate from, and on top of, whatever you were authorized administratively.

The 25% past-due-benefits pool and the single-pool rule

Section 406(b) caps the court fee at 25% of past-due benefits. That's a ceiling, not an entitlement — the court still has to find the requested fee reasonable. Past-due benefits are the retroactive accrual through the favorable decision; the longer the case sat in the pipeline, the bigger the pool.

The number that trips people up is the single 25% pool. SSA's longstanding position is that 406(a) and 406(b) fees together generally draw from the same 25% of past-due benefits — you don't get 25% for the administrative work and another 25% for the court work. Courts have split on whether 406(a) and 406(b) are strictly aggregated, but the conservative drafting assumption is one pool: structure the combined administrative-plus-court fee so it stays defensible against the 25% ceiling.

Gisbrecht reasonableness review (no lodestar)

Gisbrecht v. Barnhart is the case every 406(b) petition lives under. Its holding: the contingent-fee agreement is the starting point, and the court's job is to test that agreed fee for reasonableness — not to rebuild the fee from a lodestar (hours × rate) calculation. The lodestar is a cross-check, not the engine.

That reframes what your petition needs to show. The court is asking whether the 25% contingent fee is reasonable for this case, and it looks at factors like:

• The character of your representation and the result — did you do the work that produced the award, or ride a thin record to a windfall?
• Delay — did the lawyer cause the case to drag, inflating the past-due pool?
• Proportionality to time spent — a very large fee against very few hours invites a "windfall" reduction, even though hours don't set the fee.

Use your time records as the cross-check the court expects, then argue the Gisbrecht factors that justify the contingent fee over a mechanical hourly number.

Timing the petition after the favorable decision/award notice

Timing is where otherwise-good petitions die. The 406(b) fee comes out of past-due benefits, so you generally can't quantify it until SSA issues the Notice of Award computing the retroactive amount. But district courts also expect reasonable promptness once that figure exists.

Practical sequence:

1. Win the remand; the case returns to the agency and a favorable decision issues.
2. Wait for the Notice of Award that states the past-due benefits and the amount SSA withheld (typically up to 25%) for fees.
3. File your 406(b) motion in the district court promptly after the award notice, attaching the fee agreement, the award notice, and your time records.

Check your district's local rule and any deadline the court set in its remand order — several circuits apply Rule 54(d)(2)(B)'s 14-day clock to 406(b) motions, triggered by the award notice rather than the judgment. Calendar it from the notice, and document when you received it.

Coordinating the EAJA offset refund to the client

If you also recovered fees under the Equal Access to Justice Act for the same court work, Gisbrecht requires the offset: when an attorney is awarded fees under both EAJA and 406(b), the lawyer keeps the larger and refunds the smaller to the client. EAJA is paid by the government; the 406(b) fee comes out of the claimant's back pay. The offset prevents a double recovery for the same litigation.

Mechanically, you don't net them in the petition — you collect the 406(b) fee and then refund the EAJA amount to the client. Track both awards per case so the refund is clean and documented, and make sure your engagement letter explains the offset so the client isn't surprised when the EAJA check effectively flows back to them.

For the EAJA side of this — eligibility, the substantial-justification standard, and the hourly-rate math — see the companion piece on EAJA fees in Social Security cases. And if you're deciding which remanded or court-stage cases are worth the litigation investment in the first place, the Lead Scorer and appeal-decision tool help you weigh expected fee against the odds before you commit.