By Michelle Wrona-Fox, Managing Attorney
Overpayments to those receiving Social Security benefits have been in the news recently as the federal government has revised the repayment requirements multiple times for beneficiaries in the past year. This is a good time for a refresher on what overpayments are, clarifying repayment rules, and how recipients can avoid problems relating to them.
When the Social Security Administration (SSA) pays beneficiaries more than they should have in a given period, that’s an overpayment. This can affect those who receive Old-Age, Survivors, and Disability Insurance (OASDI), which is standard retirement Social Security or SSDI disability payments, and Supplemental Security Income (SSI).
Overpayments are not uncommon. In fiscal years 2020 through 2023, SSA estimated that it issued around $32.8 billion in OASDI and SSI overpayments. These overpayments vary from very small amounts to substantial sums.
So, how does an overpayment happen, and who’s at fault? In some cases, the overpayment happens because SSA wrongfully calculated a benefit amount. Once the error is caught, the agency will contact a recipient, sometimes many years later, to say they must return the money. This is a challenge, as most recipients have a monthly budget they must stick to, and reducing someone’s benefits, plus asking for repayment, can cause financial hardship.
In many cases, the overpayment happens because a recipient did not report changes in eligibility promptly or did not know to report the change. SSA programs vary greatly, and it can be confusing for a recipient to know which program they are on and what the requirements are. For instance, someone on SSI, which is needs-based, can only receive benefits if they are disabled or over 65. Because it is needs-based, they have to report changes in their living arrangements, and SSA also takes into consideration if anyone is helping them financially every month, among many other rules that could potentially reduce benefits or create overpayments.
If recipients are working, they also must report their wages monthly. This can be done online and by telephone, but if they aren’t computer or technology savvy, they must report this by regular mail, and that can sometimes cause a delay in updating their records. Understaffing in the SSA can also lead to delays.
What to do if you have an overpayment
Getting a notice that you have been overpaid might be a shock and upsetting. The notices can be confusing and unclear. If you think it’s incorrect, you should file an appeal within 60 days (ideally within 30 days so there is no interruption of benefits in most cases). An appeal should automatically stop collection of an overpayment. But there are cases where the collection of the overpayment wrongfully starts even though an appeal has been filed. You may need to call several times to ask SSA to stop collecting.
If you aren’t sure if the overpayment notice is a mistake, it’s a good idea to file an appeal as you research the problem. Again, once you file an appeal, the collection should stop.
If it is determined that the overpayment must be repaid, but it was not your fault and doing so would be a financial burden, you can apply for a waiver in writing. For that, you must show that you are not at fault and cannot afford to pay it back. If your overpayment is under $2,000, you can ask for an administrative waiver verbally by calling SSA.
If you can’t get the overpayment waived or if it’s determined in a reconsideration process that the overpayment must be repaid, you can negotiate a repayment agreement, in which the payment is taken from your monthly check. The default collection for SSI is to reduce their monthly benefits by 10 percent. If you are on any of the other programs, SSA will take 50% of your check. That’s why it’s important to file an appeal, waiver, or request for a more favorable repayment agreement ASAP.
Be aware to avoid overpayments
Not all overpayments can be avoided, but there are ways that SSA recipients can avoid a problem or lessen the sting.
- If you notice a change in your monthly check and don’t know why, contact SSA.
- It’s important to keep good records. Make a habit of keeping every letter or communication you receive from SSA, even if you think it doesn’t apply to you. You can also keep a journal in which you include all your interactions with SSA.
- Signing up for an online account, if you are able, is an easy way to report changes and monitor your payments.
- You should also report any changes with your household, wages, and any lump sums you receive, such as an inheritance, lawsuit payment or lottery winnings.
- Know what program you are on because each program has different rules.
Keep in mind that overpayment issues can be complicated, and it often takes time to resolve them. It’s not unusual to take a year or more to have some resolution.
If you feel stuck and can’t seem to get anywhere with SSA, you may need the help of an attorney. Community Legal Aid provides free help to low-income people who qualify.
We continue to advocate for changes to SSA to help those affected by overpayments. Improved communication is a first step. Navigating an overpayment is aggravating and can cause a lot of anxiety for our clients. Making it easier for them to find out the status of their case would help.