Social Security Overpayments: What Do I Do If the SSA Tells Me I’ve Been Overpaid For My Benefits?

Recently, a reader asked: “Is it possible to waive an overpayment in disability benefits if I have good cause? If yes, how do I do that?” This is a great question! We’ll explain why some people get overpayment letters from the Social Security Administration and how to deal with Social Security overpayments below.

The SSA administers payments for three different benefit programs each month, including:

• Retirement (i.e., regular Social Security payments)
• Disability Insurance, also known as SSDI
• Supplemental Security Income (SSI)

Anyone drawing these benefits can potentially receive an overpayment letter in the mail.

Social Security Disability Overpayment: Key Takeaways & How to Avoid Them

• Overpayments of Social Security benefits are primarily caused by changes in income and living situation, marital status, or disability status; an increase in resources that pushes you over the allowable limit; or your disability benefits being incorrectly figured due to incomplete information
• To avoid overpayment of Social Security benefits, alert the SSA to any changes in your living situation or disability as soon as they happen so your benefits can be recalculated
• When you receive a notice of overpayment, you can either appeal, request a waiver, or repay the money owed
• Working with a Social Security overpayment lawyer can help you navigate the process and protect your income

What Causes Disability Benefit Overpayment?

Most people who get these letters have allegedly received more benefit money than the SSA should have paid them. Some common reasons why this might happen include:

• Failing to report changes in your marital status, living situation, health or income in a timely manner (or at all). For example: Since your disabled ex-husband gets SSDI, you also receive monthly spousal benefits. Three years later, you marry someone else but don’t tell the SSA for another four months. Now, you must repay those four months of SSDI benefits you received after you no longer qualified for them.  
• You now have more income or resources than the maximum amount allowed to qualify for benefits. For example: You inherit some money from an aunt that passed away. After taxes, she leaves you with $5,600, which you deposit into your bank account. Because SSI rules say you can’t have more than $2,000 in assets, you no longer qualify for those benefits. You must now repay any SSI benefits you received after the date you deposited that inheritance money.
• Your health improved enough for you to start working again, so you’re no longer medically eligible for disability. Whether you’re working now or not is irrelevant to the SSA. If you receive disability benefits while you’re technically able to work, you still owe the overpayment amount that’s due.
• The SSA incorrectly calculated your benefit payments based on incomplete or inaccurate claim information. It doesn’t matter if you did this on purpose or by mistake, or whose fault it is that the calculations are wrong. Even if the overpayment is 100% the SSA’s fault, you must still pay the money back, regardless.

How to Avoid Overpayment of Social Security Benefits

In order to avoid a situation where the Social Security Administration informs you that you’ve been overpaid disability or retirement benefits, you will need to proactively report any changes in your circumstances to the Social Security Administration.

This includes promptly notifying SSA of changes in:

• Income, particularly for Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) recipients who start working
• Reporting income accurately and on time, typically within the first six days of each month
• Living arrangements or marital status

SSI beneficiaries have various reporting options such as automated tools, phone systems, mobile apps, or online platforms, while SSDI beneficiaries can report via phone, mail, in-person visits, or online methods.

Understanding the resource limits for SSI eligibility is equally important; beneficiaries must manage their resources within the prescribed limits to avoid overpayment. By staying informed about reporting requirements, promptly updating the SSA about any changes, and managing your resources responsibly, you can effectively prevent overpayment of Social Security benefits.

What Happens When the Social Security Administration Notifies You Of Overpayment?

When the SSA issues a notification that you’ve been overpaid for your disability benefits, you can either appeal, request a waiver, or pursue different repayment options for the money. Though it can be daunting to need to pay back a large sum of money unexpectedly, you aren’t without recourse. Take a look at those three options below to determine which approach is best for your unique situation.

Appealing the Overpayment Notice

If you disagree that you’ve been overpaid, or if you don’t think the amount listed in the overpayment notice is correct, you can appeal your SSD overpayment by filing Form SSA-561 to request reconsideration.

Here are a few situations in which you can appeal your SSD overpayment:

• If the Social Security Administration says you got money you didn’t actually get
• The overpayment amount listed by the SSA is incorrect
• The SSA claims you were working when you weren’t
• The Social Security Administration says you got Workers’ Compensation when you didn’t
• The Social Security Administration says you earned more money than the Trial Work Period amount or Substantial Gainful Activity (SGA) amount allows, but you didn’t

If one of the following situations are true, you have 65 days to file for reconsideration from the date on the Notice of Overpayment. If you file within 35 days, you can continue to receive SSDI payments while the Social Security office is making its decision.

Requesting an Overpayment Waiver

If you get an overpayment letter in the mail but absolutely cannot repay the money, you can request a waiver. You must appeal within 10 days after your overpayment letter arrives to keep your benefit payments at the same amount. To appeal your overpayment, fill out Form SSA-561-U2, Request for Reconsideration and then mail it back to the SSA. (Your overpayment letter should list the address and date to mail in your written request for reconsideration.)

Once you do that, fill out Form SSA-632-BK, Request for Waiver of Overpayment Recovery. In order to get your overpayment waived for good cause, you must show that:

1. You have good reason to believe the overpayment isn’t your fault, AND
2. You cannot afford to pay the money back and cover necessary living expenses (i.e., rent, food, utilities), OR
3. Giving back the overpayment money is unfair to you for some other reason.

If you don’t appeal or request an overpayment waiver within 30 days, the SSA starts automatically reducing your benefit payments. Typically, they’ll deduct up to 10% from your disability benefits each month to cover the cost of your overpayment. Once the SSA recovers the full overpayment amount owed, your benefits will go back up again the very next month.

Repaying the Overpayment Amount

If you can’t appeal or request an overpayment waiver, you have no choice but to repay the balance owed. There are a few options for repaying the money.

1. Making a lump-sum repayment: If you have the means, you can pay back the entirety of the amount owed at once.
2. Following the SSA-recommended repayment plan: On the notice of overpayment, you will receive a schedule of withholdings from your SSD benefits letting you know how much they will withhold each month.
3. Creating a custom repayment schedule with the SSA: If you can’t afford the rate of repayment on the overpayment notice while maintaining your cost of living, you can set up a new repayment plan at a lower rate.

Is There a Statute of Limitations on Long-Term Disability Overpayment?

Yes. The SSA limits the statute of limitations on previous determinations to four years for SSDI cases and imposes a two-year limit on SSI overpayment.

In limited circumstances such as fraud, the Social Security administration may be able to pursue the overpayment beyond the time limit. Additionally, if they make a determination of overpayment within the appropriate timeframe, they may pursue recovery of the funds at any point thereafter, no matter how far past the statute of limitations.

Work With a Social Security Overpayment Attorney

Navigating the complexities of Social Security Disability (SSD) overpayment can be overwhelming, especially for individuals already grappling with disabilities. While the prospect of overpayment may seem daunting, it’s important to remember that legal assistance is available to ensure fair treatment and protect your rights.

Working with a knowledgeable disability overpayment lawyer can provide invaluable guidance and support throughout the process, helping you navigate the intricacies of SSD regulations and negotiate with authorities.

Don’t face SSD overpayment challenges alone—reach out to a trusted disability overpayment lawyer today to help you work with the Social Security Administration today.

Social Security Overpayments: Frequently Asked Questions (FAQ)

What if Social Security makes a mistake?

If Social Security makes a mistake resulting in an overpayment, they may request repayment, but you have the right to appeal the decision and request a waiver or repayment plan.

How much can Social Security take for overpayment?

The amount Social Security can withhold for overpayment depends on various factors such as your current benefits, financial situation, and the reason for the overpayment. Generally, they withhold around 10% of your earnings per month, but you can request accommodations to pay less.

How can I win an SSI overpayment case?

Winning SSI cases typically involves providing evidence to support your claim, demonstrating that you were not at fault for the overpayment, or proving that repayment would cause financial hardship.

What happens if you don’t pay back disability overpayment?

If you don’t pay back a disability overpayment, Social Security may withhold a portion of your current or future benefits until the overpayment is recovered.