Social Security overpayments of disability benefits can occur due to changes in your circumstances or giving Social Security insufficient information. If Social Security overpays you and discovers its error, you will receive a notice of the overpayment. If you have a lawyer or nonlawyer representative, he or she will also be notified of the overpayment.
The notice of overpayment will include an explanation of why you have been overpaid, your repayment options, and your appeal and "waiver" rights.
How Social Security Collects Overpayments
The repayment options available to you are dependent upon the type of benefit you are or were receiving.
- SSDI. If you were overpaid Social Security Disability Insurance (SSDI) benefits and are currently receiving SSDI benefits, the SSA will withhold the full amount of your benefit check each month until the overpayment is paid off. The withholding will start 30 days after you receive the notice of overpayment. You can contact the SSA to request that less than the full amount be withheld; such requests have to be approved by the SSA to be implemented.
- SSI. If you were overpaid Supplemental Security Income (SSI) benefits and are currently receiving SSI benefits, 10% of your monthly benefit will be withheld each month to repay the overpayment. (The 10% withholding is usually calculated on the federal maximum benefit rate (currently $721), even if you normally receive more or less than that.) This withholding will start no earlier than 60 days after you receive the notice of overpayment and will last until the overpayment is paid off. You can contact the SSA to request that more or less money be withheld; such requests must be approved by the SSA to be implemented.
- SSDI and SSI. If you were overpaid SSI benefits but you currently only receive SSDI benefits, only 10% of your monthly SSDI benefits will be withheld to repay the overpayment.
- No longer receiving benefits. If you are no longer receiving any benefits, you must:
- send a check for the full amount to the SSA within 30 days of receiving the notice of overpayment, or
- call the SSA to set up a monthly repayment plan.
Consequences for Not Repaying a Social Security Overpayment
If you don't repay the overpayment that is owed to the SSA, there are several steps that the agency can take to get the money that is owed to it. Some of the actions the SSA may take include:
- Taking your federal tax refund check
- Taking a percentage from your work paycheck before you get it
- Taking future SSI or SSDI benefits, or
- Report your nonpayment to the credit bureau.
Your Appeal and Waiver Rights
If you receive a notice that you have been overpaid and you do not believe you have been, or you disagree with the amount of overpayment that was stated in the notice, you can file an appeal. The appeal must explain why you believe you have not been overpaid or that the amount of overpayment is wrong.
If you receive an overpayment notice and believe that, although the overpayment notice was accurate, you should not have to pay the money back to the SSA, you may file a waiver. The waiver must prove that the overpayment was not your fault and that paying back the overpayment would cause financial hardship or be unfair. If you file an appeal or waiver, no money will be taken out of your monthly Social Security benefits or money collected for repayment of overpayment until the SSA decides whether the appeal or waiver will be granted. For more information, including the appeal and waiver forms, see our article on how to respond to a overpayment notice.
If your waiver request or appeal is denied, contact a Social Security overpayment attorney.