PATRICK E. HIGGINBOTHAM, Circuit Judge:

This case concerns the type of judgment for which a district court can grant attorneys' fees to the attorney of a prevailing social-security claimant under the Social Security Act, 42 U.S.C. § 406(b). The district court determined that § 406(b) does not authorize attorneys' fees when a district court remands a case to the Social Security Administration ("SSA"), even when the SSA grants benefits on remand. On appeal, both parties agree that the district court's construction of § 406(b) is erroneous.1 We reverse.

I.

In 2004, Samuel Jackson filed a claim for disability-insurance benefits and supplemental-security-income benefits under Titles II and XVI of the Social Security Act. The SSA denied Jackson's claim and Jackson appealed to the Northern District of Texas. On February 15, 2011, a magistrate judge recommended reversing the SSA's denial of benefits and remanding Jackson's claim to the SSA for further proceedings. On March 8, 2011, the district court entered an order adopting the magistrate judge's recommendation. In light of this favorable judgment, Jackson's counsel sought an award of attorneys' fees under the Equal Access to Justice Act, 28 U.S.C. § 2412 ("EAJA"). The district court granted counsel's request and awarded him $4,685.53 in fees.

On remand, the SSA determined that Jackson was disabled and awarded him past-due benefits. Thereafter, Jackson's counsel filed a motion asking the district court for attorneys' fees under 42 U.S.C. § 406(b) in the amount of $17,921.25, representing 25 percent of Jackson's benefits award.2 The district court denied the motion, concluding that under a literal interpretation of § 406(b), it was not authorized to award the requested fees. The sole issue presented by this appeal is whether the district court erred by concluding that it lacked the legal authority to award § 406(b) fees.

II.

Section 406(b) provides that "[w]henever a court renders a judgment favorable to a [social-security-benefits] claimant ... who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment."3 In this case, the district court reasoned, Jackson did not receive benefits "by reason of" the district court's remand order, but by virtue of the SSA's subsequent determination that Jackson qualified as disabled. Consequently, the district court concluded, it lacked the statutory authority to award § 406(b) fees to Jackson's counsel.

We disagree. The district court's interpretation of § 406(b) is too narrow. As the Tenth Circuit has observed, "in a broader sense, it easily can be said that an award of benefits made after a court-ordered remand is an award made `by reason of' the court's judgment; after all, if it were not for the order of remand continuing the proceedings, there would be no benefits award."4 In Jeter v. Astrue, we implicitly adopted the Tenth Circuit's reasoning, observing that "[f]or purposes of § 406(b), a successful decision on remand is considered a favorable decision before the district court."5 The district court dismissed our statement in Jeter as dicta, observing that "the parties in [Jeter] did not challenge or brief the applicability of § 406(b)(1)[ ] and the Fifth Circuit's statement is not accompanied by any analysis." We hereby reaffirm Jeter's understanding of § 406(b) and take this opportunity to explain our reasoning.

As we observed in Dawson v. Finch, Congress intended § 406(b) "to encourage effective legal representation of claimants by insuring lawyers that they will receive reasonable fees directly through certification by the Secretary."6 The district court's narrow reading of § 406(b) risks undermining this congressional policy. Under the district court's approach:

In this regard, it bears mentioning that between 1995 and 2005, roughly half of disability appeals adjudicated on the merits resulted in remand orders.8

The district court expressed confidence that its understanding of § 406(b) did not conflict with Congress's desire to "encourage attorneys to take social-security cases," observing that attorneys who succeed on remand can still recoup fees under § 406(a) and the EAJA. We are not persuaded by the district court's reasoning. First, § 406(a) fees are only available to compensate attorneys for representation before the SSA, not for work performed to obtain a remand order from a district court.9 Second, though EAJA awards may be available to compensate attorneys for appellate representation, they are subject to a number of limitations that have no analogues in § 406(b).10 For example, whereas § 406(b) fee awards are permissive, EAJA fees are limited to circumstances where the government's litigation position was not "substantially justified." Moreover, whereas § 406(b) permits attorneys to calculate their fees as a percentage of benefits obtained, the EAJA awards fees on a per-hour basis. Finally, whereas § 406(b) fees are paid directly to the successful claimant's attorney, EAJA fees are paid to the claimant, who may or may not tender the award to counsel.11 In short, the district court's construction of § 406(b) unavoidably reduces the likelihood that an attorney who undertakes a disability benefits representation will receive reasonable compensation for his work.

For substantially the reasons set forth above, all five circuits to consider the question have determined that § 406(b) fees are authorized in cases where an attorney obtains a favorable decision on remand.12 The SSA has not opposed such fees for over 25 years and now urges this Court to reaffirm our position in Jeter. We take the agency's invitation.

III.

We REVERSE the district court's denial of attorneys' fees and REMAND this case for further proceedings consistent with our opinion.