Negotiating a Repayment Plan for a Social Security Disability or SSI Overpayment

In most situations, Social Security must allow you to pay back an SSI or SSDI overpayment over a long period of time. Here's how to set up an overpayment payment plan.

By , J.D. · University of Virginia School of Law
Updated 6/12/2024

If you're getting Social Security disability insurance (SSDI) or Supplemental Security Income (SSI) disability benefits, and the Social Security Administration (SSA) pays you too much, you'll be expected to repay that overpayment. But if the overpayment wasn't your fault (you didn't forget to report income, for example), Social Security might agree to waive the overpayment or reduce it, if paying it would be a financial hardship for you. If the overpayment was your fault, you may at least be able to arrange a payment plan with Social Security.

What Should You Do if You Receive an Overpayment Notice?

If Social Security determines that you've been overpaid, the agency will send you an overpayment notice explaining how much you were overpaid and your rights, including the right to:

  • request a reconsideration (appeal) within 60 days
  • ask for a waiver, or
  • negotiate a payment plan.

This article discusses the third option, asking for a payment plan (read about appealing an overpayment notice or requesting a waiver).

How Do I Pay Back an Overpayment?

Social Security can ask you to repay up to two years of SSI overpayments or four years of SSDI overpayments, but not more than that.

If you're still receiving benefits, Social Security will withhold all or part of your monthly disability payment until you've repaid all of the overpayment. The amount that Social Security will ordinarily take from you each month depends on whether you're getting SSI or SSDI, and you can negotiate with the agency.

If you're no longer getting SSDI or SSI disability benefits, Social Security will request the full amount of the overpayment from you. And if you don't pay it back, Social Security can take your federal tax refund and take other measures (like withholding your future Social Security benefits). But again, you can negotiate a repayment plan to pay back the SSI or SSDI overpayment over time.

Do You Have to Pay Back SSI?

If you receive SSI disability benefits and Social Security says you have an overpayment to pay back, the SSA will generally keep 10% of your SSI checks until you've repaid the overpayment. But if your overpayment was the result of you or your spouse committing fraud or concealing information, Social Security can take all of your benefits each month to repay the overpayment.

Social Security will start to withhold money from your SSI check 60 days after you receive the overpayment notice. In some cases, you can negotiate to have a lesser amount taken out of your disability check (more on this below).

How Do I Repay an SSDI Overpayment?

If you receive SSDI and have an overpayment to pay back, Social Security will withhold 10% of your SSDI monthly benefit until the agency has recovered the overpayment amount. Social Security will start to withhold your SSDI check 30 days after the date of the overpayment notice.

(Before March 25, 2024, the SSA could withhold 100% of your SSDI checks, but you could negotiate to have only a portion of your disability check withheld.)

When Can Social Security Demand Immediate Repayment?

If you still have any of the overpaid funds in your possession or bank account, Social Security will expect you to turn those over immediately. You won't be able to negotiate a repayment plan that lets you keep cash from an overpayment while you pay the debt back in installments.

And if you caused the overpayment because you committed fraud or purposely misled Social Security, the agency will not negotiate a payment plan with you. In some cases, Social Security will refuse to negotiate a payment plan with you even if it was your spouse or a household member, and not you, who committed the fraud or misrepresentation.

Negotiating a Payment Plan for SSI or SSDI Overpayments

If you can't afford to lose 10% of your monthly SSDI or SSI payment, then you can ask for a different repayment schedule. You'll need to call Social Security at 800-772-1213 and ask for a different "rate of recovery."

Be prepared to show that you can't afford what Social Security calls "ordinary and necessary living expenses" unless the agency reduces the amount of your monthly repayment. Ordinary and necessary living expenses are things like:

  • rent or mortgage payments
  • food and clothing costs
  • transportation costs
  • utilities (including cell phones)
  • insurance (medical, life, accident)
  • medical expenses that insurance doesn't cover, and
  • the costs of supporting your dependents.

In negotiating a plan, know that Social Security prefers payment plans that will result in the overpayment being fully paid back within 12 months. In fact, if you offer a plan that will allow repayment within 12 months, Social Security must accept the plan. (But Social Security won't accept a payment plan with payments of less than $10 per month.)

If you can't repay the overpayment in 12 months, Social Security will see if you can complete repayment with a 60-month (five-year) plan. If you can repay the overpayment within five years, paying at least $10 per month, Social Security should accept your proposal.

In a few situations, your overpayment may be so large that you can't afford to pay it back in 60 months and still have money for your living expenses. In that case, Social Security will look at how much you can afford to pay each month and still be able to afford your ordinary and necessary living expenses, and the agency might negotiate a payment plan that lasts longer than 60 months.

How to Show You Can't Pay Ordinary and Necessary Living Expenses

When Social Security wants to know if you can afford a particular payment plan, and you're asking for a repayment plan that lasts longer than 60 months, you'll be asked to fill out a form called "Request for Change in Overpayment Recovery Rate" (Form SSA-634). The form asks financial questions about everyone in your household, not just yourself.

Section 1 asks for some identifying information and how much you think you can afford to pay each month.

Section 2 (the beginning of "Your Financial Statement") asks about your assets, like the following:

  • cash
  • real estate
  • vehicles, and
  • bank accounts.

But not everything you own counts as an asset to Social Security. For example, your family home and car aren't counted toward the asset limit.

Social Security won't require you to put any assets toward repayment of the overpayment if you have no more than $3,000 in assets (for a person with no dependents). That number goes up depending on the number of dependents.

Number of Dependents Amount of Assets Ignored
One $3,000
Two $5,000
Three $5,600
Four $6,200
Five $6,800
Six $7,400
Seven $8,000

If you have countable assets worth more than those limits, Social Security will expect you to use them to pay your overpayment.

Section 3 asks you to add up all of the monthly income of every household member, including things like SNAP benefits, child support, and SSDI or SSI payments.

Section 4 is your chance to tell Social Security what your "ordinary and necessary living expenses" are. This section asks you to list and add up all of your monthly household expenses, such as rent, utilities, food, and clothing. Don't include expenses that are withheld from your paycheck, such as medical premiums.

Section 5 asks you to calculate the total amount of money left over each month after all expenses are paid. That number should match the amount you put in Section 1, and it will need to support your request for a repayment plan.

For instance, if you write that your household has $300 left every month after you pay all of your expenses, then Social Security isn't going to accept a repayment plan of $10 per month. Don't try to mislead Social Security about your income and expenses. But you should be sure to include everything you and your other household members pay for so you can give the SSA a realistic picture of your household finances.

If your monthly expenses exceed your monthly income, be prepared to tell the SSA how you've been paying your monthly bills.

Section 6 asks you if you'll be receiving an inheritance in the next six months or if there's a reason you can't sell some of your assets to pay the overpayment.

Finally, sign the form and submit supporting documents such as:

  • recent lease or rent receipts
  • recent utility bills
  • recent bank statements
  • current pay stubs, and
  • your last tax return (if you filed one).

The SSA doesn't require proof of costs like food and miscellaneous household expenses. If you need assistance filling out the form, call the SSA or go to your local field office.

Will Social Security Compromise on SSI or SSDI Overpayments?

In some cases, Social Security will accept an offer to reduce the total amount of the overpayment that you must repay, if you offer to pay part of it in one lump sum. If you have the resources available to pay back a significant portion of your overpayment at one time, you can offer to pay that reduced amount. The SSA calls this a "compromise settlement."

Offers to compromise must be made in writing and signed. You can use Form SSA-795 ("Statement of Claimant or Other Person") or just write Social Security a letter describing the terms of your offer. To qualify for a reduction in the SSI or SSDI overpayment owed, you'll need to show one of the following:

  • You're unable to pay off the entire overpayment in a reasonable time.
  • The costs of collecting the money from you exceed the amount to be recovered.
  • There are factual or legal problems with Social Security's overpayment case that might keep it from being able to win in court.

If you can show that one of those criteria applies to you, then Social Security will look at the terms of your offer.

In general, Social Security is more likely to accept an offer to pay at least 60-80% of the total SSI or SSDI overpayment amount. In most cases, you must pay the entire proposed amount (60-80% of the overpayment) back to Social Security within 30 days from the date the offer is accepted.

How Can I Get the SSI or SSDI Overpayment Waived?

In some situations, you can request that Social Security cancel the overpayment, and if the agency agrees, you won't have to repay the SSI or SSDI overpayment. For more information about requesting a waiver, see our article on what to do if you receive a Social Security overpayment notice. (And if Social Security denies your request for a waiver, you can appeal.)

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