Social Security Overpayments
Last updated on 10/11/2023 at 12:32 pm
What is a Social Security overpayment?
An overpayment occurs when the Social Security Administration (SSA) finds that your Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits for a certain month or months were higher than they should have been. This often happens if your income has increased or your expenses have decreased. For example, you may not have told the SSA that you started working, your child moved out of your house, or that your child began getting child support. In some cases, you may have reported the change, but SSA delayed in decreasing your monthly check.
How do I know if I have been overpaid?
SSA will send you a Notice of Overpayment. The letter will tell you how much you were overpaid. It will tell you to send the money back in 30 days.
What do I do if I get a Notice of Overpayment?
First make sure you read the Notice carefully. Make sure that they information on it is correct, that the amounts and dates are correct, and try to figure out if you were really overpaid the amount SSA says.
There are three ways to deal with the overpayment.
- Ask for Reconsideration. This means you want SSA to look at your case again, either by looking at your file or by meeting with you in a conference or hearing. Ask for a reconsideration if you think the amount of the overpayment is wrong, the amount owed is incorrect, or the reason SSA gives for the overpayment is wrong.
- Ask for a Waiver. If you agree that you were overpaid, you can still ask SSA to waive it so that you don’t have to pay it back. Ask for a waiver if you think that the overpayment was not your fault or you can’t afford to pay the money back.
- Ask for a Payment Arrangement. Do this if you think that the overpayment was your fault or you can afford to pay it back. You can tell SSA that you want to pay the money back a little at a time.
Whatever you decide to do, act quickly. Do not just put the notice aside. If you do not take care of the amount of money owed SSA will start taking money out of your future checks.
How do I file for any of these 3 options?
There are forms to submit for each of these options. It is best to submit these forms in person, but you can submit the forms to SSA by certified mail with a return receipt request from the post office. To find the nearest SSA office call 1-800-772-1213 or go here to find a location. The forms are also available on the SSA website here.
Do I need a lawyer to help me?
It is always a good idea to at least talk to a lawyer about your case if possible. You can also see if you are eligible for free legal assistance by applying for help from Legal Aid of West Virginia. Legal Aid advocates can’t go to court with everyone that qualifies for help, but we try to give information and advice to everyone who qualifies. Or you can try these other legal resources.
I don’t think I was overpaid or I don’t think the amount is right. What should I do?
You should file a Request for Reconsideration. You can appeal online or file a paper form.
Try your best to file this form within 30 days of your notice, but no later than 60 days. If you file your request within 30 days, SSA will stop taking the overpayment out of your benefits until after they reach a decision on your reconsideration, and in the meantime they will repay any benefits withheld after the notice.
You can request one of the following types of reviews:
- Case Review. A SSA worker will review the papers in your file and make a new decision based on this file review.
- Informal Conference. You meet with the person who will decide your case to go over your file, to give new information, and to tell your side of the story
- Formal Conference. You can bring witnesses to help present your case to the SSA worker, (This review is only used if your SSI or Special Veterans Benefits have been stopped or lowered for non-medical reasons).
The overpayment wasn’t my fault and I can’t afford to pay. What can I do?
You should file for a Request for Waiver of Overpayment. You can find the form here.
To get the overpayment waived, you will have to show that (1) the overpayment was not your fault and (2) that paying the money back to SSA would cause a financial hardship or would be against equity and good conscience.
1. Not your fault: Some examples it’s not your fault might include:
- You have trouble reading. You did not know what you had to report to SSA.
- You have trouble remembering or understanding directions.
- You believed you reported every change that might have cause an overpayment.
- You were not told the reporting requirement.
- You applied for SSI a long time ago and do no remember the reporting rules.
- You did comply with the rules, but SSA did nothing.
- You did not know the information you gave was incorrect
- You though the payments you received were correct.
If SSA believes you are without fault, then they look at the second part of your waiver request.
2. Financial Hardship: This is automatically proven if you receive some sort of public assistance (like SSI). It can also be shown by explaining to Social Security that repaying the overpayment will be a financial hardship on you by putting you into debt or making you unable to pay your ordinary living expenses. If you don’t receive public assistance, you will have to list all of your necessary expenses/bills on the waiver form to show that you can’t afford to pay SSA back. You may be asked to provide proof of the expenses/bills listed on the Waiver.
Against equity and good conscience can be shown by telling SSA that recovering the overpayment from you would be extremely unfair. For example, if you changed your position for the worse or gave up a valuable right because you relied on what SSA told you, then that would be unjust.
What are the steps in applying for a Waiver of Overpayment?
Step One: Get a form called Request for Waiver of Overpayment Recovery. This form asks you questions about whether you reported the change and whether you knew you should report the change. It will also ask questions about your income. Remember, you must show both that the overpayment was not your fault and that you do not have enough money to pay back the overpayment.
If you do not get SSI, list all your income and expenses on the part of the form that asks for financial information. If you are getting SSI, you do not need to give financial information. The rules assume that you cannot afford to repay. Just write on that section: “I am currently receiving SSI. It would be a financial hardship for me to pay the money back.”
You may ask a SSA worker to help you if you need help filling out the form.
Step Two: If SSA does not give you a waiver and you receive Social Security Retirement or Disability benefits, proceed directly to Step Three to request an administrative hearing. However, if you receive SSI, you can ask for reconsideration. This means you want SSA to look at your waiver request again. Here are the rules:
- Ask for reconsideration of your waiver in writing at your local Social Security office.
- File the request within 60 days of being turned down for a waiver. If you file your request within 30 days, SSA will not try to recover the overpayment until after your case is reviewed.
- You have the three choices for the type of review you want: case review, informal conference, or formal conference.
Step Three: If a waiver is still denied, you can ask for an Administrative Hearing. Ask for the hearing in writing within 60 days after your reconsideration was turned down, or by filling out the Request for hearing by Administrative Law Judge form. This hearing is held by an Administrative Law Judge. At the hearing, you will have a chance to tell the judge your side of the story. You can have an attorney, paralegal, or other representative to help you at the hearing.
Step Four: If you lose your hearing, you can ask to have your case reviewed by the Appeals Council. Tell the local SSA office that you want to appeal the Administrative Law Judge’s decision. The Appeals Council is outside Washington, D.C. You do not have to go to the Appeals Council to have your case reviewed. They will look over the records in your case to see if the judge at your hearing made a mistake.
Step Five: If you lose at the Appeals Council level, you can take your case to court. You will need a lawyer to do this.
What if the amount I owe is very little?
SSA will waive overpayments of $50 or less. Where the overpayment is $1000 or less and you file a request for reconsideration or waiver, Social Security will waive any collection of the overpayment (unless you were at fault in creating the overpayment)
What if Social Security says that I have money in the bank or some property that I do not have or that is not valuable?
If you receive SSI, you are only allowed to have $2000 in the bank or $3000 if you are a disabled couple. You must show receipts or other documentation proving the money has been spent or is no longer available to you for some other reason. (You cannot just give the money to relative to hold for you). Remember to keep a copy of everything you submit to Social Security. In the case of property (for example, like owning a house in another country), you can provide documents showing that property’s value is lower than what Social Security claims.
What if I lose my request for waiver or reconsideration?
If you disagree with the waiver decision, the next step of appealing is reconsideration. (However, in some cases, you have a right to a conference at your local SSA office).
If you disagree with the reconsideration decision: You can Request a hearing with an Administrative Law Judge (ALJ). After completing the form submit it in person to the nearest Social Security Office or mail it certified with a return receipt request from the post office.
You can appeal the ALJ’s decision to the Appeal’s Council. After the Appeal’s Council appeals are heard in Federal Court.
Or you can try to set up a payment arrangement with the SSA.
What can happen after a final unfavorable decision?
For SSI recipients, SSA will recover the overpayment by taking up to 10% of your SSI each month. If this is a hardship on you, ask to take out less.
If you receive SSD or Disability Insurance, SSA can recover the overpayment amount by taking your entire check for a month or more. That is why you may request a modification due to hardship. For example, ask them to only take 10% or 5% or your check because more than that creates a financial hardship on you.
If you are not currently receiving benefits, overpayments may be taken from future benefits when they become due.
Remember, spending the money after receiving a notice of overpayment will not stop SSA from proceeding against you to recover the amount of the overpayment.
The SSA can make claims against you in civil court. Your IRS tax refunds can be seized. Credit reporting agencies can be notified. Private debt collection agencies may be used to collect the debt (overpayments) from you.
How do I set up a payment arrangement?
If you have lost all your appeals or have decided not to appeal any further, you must pay the money back. Tell SSA that you want to repay it in small amounts each month that you can afford. Otherwise, SSA may automatically take your whole Social Security disability check or 10% of your SSI check. Usually you will have to pay back at least $10.00 a month. SSA tries to get the money back within 3 years. However, they cannot take more than 10% of your SSI check, even if it takes more than 3 years.
How can I prevent overpayment problems?
Remember to report changes in your income or living arrangements to SSA in writing, if possible. If you call, make a note of the date and the person you spoke to. Also remember to report any changes which may reduce your expenses (if you are no longer seeing a doctor, for example). If you receive a check for an amount that is different than what you normally receive, call SSA to inform them.