Please note that this post was updated on May 8, 2024 to reflect the March 2024 changes to overpayment recovery practices.

You thought your fight was finished when SSA approved your claim.  However, the Social Security Administration (SSA) has determined that it has OVERPAID you! 

Now what? Do not worry. You have options. Keep reading to learn more.

What is an overpayment?

An overpayment is a situation where SSA says that you have been paid more benefits than what you were entitled to receive.  The letter from SSA notifies you (and your representative payee, if you have one), that you have been overpaid and it will explain why you did not deserve the payments that you received.  The letter will explain your repayment options; and your appeal and waiver rights. 

You have the right to object to SSA’s determination.  You may also simply select an option for repayment and begin making payments.  Keep the following in mind:

• If you are still receiving monthly benefits, the SSA will withhold 10% of your monthly benefit or $10, whichever amount is larger.

• If you receive Supplemental Security Income (SSI), the SSA will usually withhold 10% of the maximum federal benefit rate.

• If you cannot afford the default 10% withholding, you can file form SSA-634 to request a different payment amount. Please note that the payments cannot be less than $10. In most cases the debt must be repaid within 60 months, but exceptions are made if you have resources below $3,000.

• If you are no longer receiving benefits, then you will be asked to begin making payments to SSA to repay the overpayment. 

• If your overpayment was due to fraud, you will NOT be approved for any alternate payment plan AND 100% of benefits will be held until the debt is repaid.

If you do not make a payment or you do not make a payment arrangement, your federal income tax refund (or wages if you have returned to work) may be garnished.  The debt and your failure to pay it could also show up on your credit report.

Appeal and Waiver Rights

You have the right to appeal the decision that you were overpaid.  You file an appeal by filing form SSA-561, or by writing a letter to SSA.  The letter should explain why you think you were not overpaid or why you believe that the amount is incorrect. Your appeal must be filed within sixty days of the date you received the original notice—not from the date it was mailed.

If you believe that the overpayment was not your fault or that you should not have to repay the overpayment, you can request a waiver on form SSA-632, asking that SSA waive the collection of the overpayment.  There is no time limit for requesting a waiver, but in order to be waived you must prove that:

•       The overpayment was not your fault;

•       The overpayment was not due to fraud; AND

•       That paying it back to SSA would cause you financial hardship or would be unfair for some reason.

Once you have asked SSA to waive the collection of the overpayment, the garnishment of your benefits or wages, if it has begun, will stop until a decision is made on your appeal or on your request for a waiver of collection.

When you will not have to repay the overpayment?

You will not have to pay the SSA back any overpayment if it can be proven that collecting the overpayment will be “against equity and good conscience.”  The Social Security Act explains this as a situation in which you have changed your position for the worse or given up a valuable right by reliance on your Award Notice or on the payment itself.   If it is determined that recovery of the overpayment is against equity and good conscience, you will not have to repay the money.

Does fault matter?  

Sometimes.  Do not be fooled.  The SSA will not consider your present financial situation in determining whether recovery of this overpayment would be against equity and good conscience! It does not even matter whether you were at fault for providing information that led to the overpayment!

The Social Security Act explains that: “The overpaid individual (and any other individual from whom the Social Security Administration seeks to recover the overpayment) is not relieved of liability and is not without fault solely because the Social Security Administration may have been at fault in making the overpayment.”  That sounds impossible, but it is true.

The SSA will consider the fault of the individual who was overpaid and will compare it with the fault of the individual who is requesting a waiver.  This is not always the same individual.  For example, an adult disabled child may be an overpaid individual, but has moved out of the house before the overpayment occurred and did not actually receive the overpayment.  Or a widow and her child may have collected benefits for a period of time after the death of a husband and father, then SSA later determined that the deceased individual was not even entitled to benefits! 

Some of the things that SSA does consider in determining if you were at fault include whether you understood that you were supposed to report an event that affected your eligibility, or whether you understood that you should return a check.  SSA will consider any physical, mental, educational, or linguistic limitations (whether you can understand and speak English).  You will be considered “at fault” in connection with the overpayment when the incorrect payment resulted from:

• Your failure to give SSA information that you knew you should;

• Your statement to SSA that you knew was not correct; OR

• Your failure to return a payment that you either knew or should have known was not owed to you

  

COVID-19 and Overpayments

Unfortunately, overpayments occur much more often than they should.  At the beginning of the COVID-19 pandemic, SSA changed many of its rules so that they might accommodate their employees’ working from remote locations.  Employees resumed their regular work schedules on August 31, 2020.  These changes affected which workloads could be completed and which could not, affecting whether overpayments occurred or were identified during this time.

On August 17, 2020, SSA published an “interim rule” streamlining the process for overpayments that occurred between March 1, 2020, and September 30, 2020.  If all or part of your overpayment qualifies for this “streamlined” process, then recovery of your overpayment will be waived.  This process applies only if you can prove BOTH that your overpayment:

• would have been discovered had the COVID-19 pandemic not forced SSA to make changes to its employees’ work schedules;

• AND that your overpayment was a direct result of SSA’s actions and rule changes.

If the streamlined process applies to your overpayment, SSA will:

• Presume that you were without fault in having caused the overpayment;

• Determine that recovery of the portion of the overpayment debt incurred during the pandemic period would be against equity and good conscience; AND

• Waive recovery of the portion of a qualifying overpayment debt incurred during the pandemic period.

 SSA has estimated that the total amount of overpaid benefits that will be waived due to the COVID-19 pandemic is $238 million dollars.



What are your chances that you will not have to repay the money? 

Fortunately, waivers of overpayment are often approved. In my experience, when cases proceed to a hearing, most Administrative Law Judges (ALJs) determine that requiring repayment is against equity and good conscience, leading to favorable outcomes for beneficiaries.

If you have received a Notice of Overpayment and you need help, simply click here to schedule a free consultation.

Have you been successful with getting your Social Security overpayment waived? Please share you success story or questions in the comments.

References:

SSA Streamlines Rules on Waiving Overpayments, Social Security Forum volume 42, no 8, 1, 10, 16 (August 2020). 

Against Equity and Good Conscience Defined, 20 C.F.R. 404.509, 53 Fed. Reg. 25483 (July 7, 1988).

Wavier of Adjustment or Recovery, 20 C.F.R 416.552, 40 Fed. Reg. 47763 (Oct. 10, 1975), as amended at 59 Fed. Reg. 1636 (Jan. 12, 1994).

GN 02250.000 - Waiver Provisions for Title II and Title XVIII, Procedural Office Manual System (POMS), May 1, 2021, http://policy.ssa.gov/poms.nsf/lnx/0202250001.