An overpayment happens when the Social Security Administration (SSA) determines that you have been paid more than you should have. This can occur for a number of reasons. Examples include:
- Working and earning more than the SSA allows;
- Continuing to receive a benefit after the SSA has determined you are no longer disabled;
- A change in your financial situation, i.e., receiving an inheritance, a Worker’s Compensation settlement, or a settlement from a lawsuit or divorce (if you receive Supplemental Security Income (SSI) benefits); or
- The SSA discovers that an asset or resource was not disclosed when you were approved for benefits (if you receive SSI benefits).
If you receive a notice from the SSA that you have been overpaid, you have options. If you believe the overpayment was not your fault, you can file an appeal. This can be requested from your local Social Security office or found online at www.ssa.gov. Your appeal should include information regarding why you feel you are not at fault for being overpaid. The appeal must be filed within 60 days from the time you receive the notice of overpayment. If you do not feel that you should repay the SSA, or if you have a financial hardship, you can fill out a Waiver of Overpayment form. The SSA, most likely, will ask you to complete a form regarding your monthly income and expenses and/or provide proof of these expenses to determine whether repayment would cause a financial hardship for you. They may ask you to come to their office for an in-person meeting. The SSA will not continue to attempt to collect your overpayment while a decision is pending regarding the appeal or waiver of overpayment. It is important to note that, although there is a 60-day deadline to appeal a decision, there is no time limit for requesting a waiver of overpayment.
If you agree that you were paid too much, the SSA may withhold your entire monthly benefit if you are still receiving a benefit. This money will start to be collected after 30 days from the notice of overpayment. If you are receiving SSI, the Social Security Administration may withhold up to 10 percent of your monthly benefit. You can ask that more than 10 percent be withheld or, if you feel that withholding 10 percent of your benefit would cause financial hardship, you can request that less be withheld. SSA will not withhold any funds until 60 days after you receive the notice of the overpayment. If you are no longer receiving a disability benefit and agree that you were overpaid, you should repay all monies due to SSA within 30 days. If you cannot do this, you should contact the SSA to work out a repayment plan.
If you fail to repay the SSA, then they may withhold money from your federal income tax refund or garnish your wages if you are working. They also may collect money from your future Social Security retirement benefit. Delinquency of repayment to the SSA also will negatively affect your credit score.