Social Security sometimes overpays then demands repayment. How to avoid owing money
The Social Security Administration has overpaid beneficiaries, and is now demanding billions in repayment, a recent investigation revealed.
Cox Media Group and KFF Health News spoke with individuals across seven states and discovered that beneficiaries can be overpaid for years before the extra money is discovered, and before the SSA can demand any extra funds back, according to WFXT in Boston.
In 2022, the agency reclaimed $4.7 billion in overpayments, according to an SSA report published in November. At the time of the report, there was still an additional $21.7 billion in funds to recover.
Staffing losses and resource constraints have been a challenge for the agency, but their payment accuracy rates are still high, SSA regional communications director Patti Patterson told McClatchy News in a statement.
“Even small error rates add up to substantial improper payment amounts, given the magnitude of the benefits we pay each year,” Patterson said. “Our Social Security Retirement, Survivors, and Disability benefit payment accuracy is consistently high—less than 0.5 percent of Social Security payments are overpayments. For the Supplemental Security Income (SSI) program, overpayments also represent a small percentage of payments—about 7 percent—but are higher than our overall payment accuracy rate partially due to the complexity in administering income and resource limits and asset evaluations.”
Here’s what to know about overpayments, and how to avoid owing SSA money.
How do Social Security overpayments happen?
Social Security overpayments occur when a beneficiary receives more money than they are owed, according to the SSA. The overpayment owed is the difference between the amount received and the amount that was actually due.
Overpayment can be caused by mistakes by Social Security or beneficiaries failing to meet requirements. Several factors can cause an overpayment, including:
Your income is greater than estimated.
There’s a change in your living situation.
Your marital status changes.
You have more resources — things you own like cash, bank accounts, stocks, land, life insurance, property or vehicles — than what is allowed.
You are no longer disabled, but you are still receiving benefits.
You failed to report a change on time or at all as required.
You provided incorrect or incomplete information that led to a mistake in your benefits.
Beneficiaries can also be overpaid if they are convicted of a crime and held for more than 30 continuous days while still receiving their benefits, according to the Substance Abuse and Mental Health Services Administration (SAMHSA).
How to prevent overpayment
To prevent receiving extra funds, beneficiaries should immediately inform SSA of any changes, according to SAMHSA. These situations include:
Changes to income: Beneficiaries should let SSA know as soon as they start working and continue reporting their wages during the first six days of each month. Beneficiaries can report their earnings using automated wage reporting tools found here.
Changes to living situation or marital status: Even if it’s only for a few months, beneficiaries should keep SSA updated on any changes to their living situation, and they should keep their marital status up-to-date. Beneficiaries can report these changes using their online “my Social Security” account, by calling toll free at 1-800-772-1213 or by visiting their local social security office.
Be aware of resources: If a beneficiaries’ monthly resources exceed the limit outlined by SSA and they receive benefits, those payments can be counted as an overpayment. Some cash resources can be excluded if they are used for basic needs or other payments exempted by SSA. For more details about specific thresholds, check this outline.
Officials are working to smooth their processes to make it easier to prevent overpayments, Patterson said.
“We are making better use of data and technology to prevent some overpayments,” her statement said. “For instance, we are developing a new electronic payroll data exchange program that will automatically use wage information to adjust payment amounts when appropriate, which will help reduce improper payments and reporting responsibilities for beneficiaries.”
What to do if you have been overpaid
If you receive a notice of overpayment from SSA, there are three ways forward.
Appeal: If you think you were not overpaid or if you disagree with the amount due, you have 60 days after being notified to file a Request for Reconsideration.
Waiver: You are eligible to ask for a waiver at any time so long as you can prove that the overpayment wasn’t your fault and paying it back creates financial hardship or is unfair for another reason. If your waiver is granted, you will not be responsible for all or part of the overpayment due. If your waiver is denied, you can appeal and request a hearing.
Pay: If you do owe SSA funds for overpayment, you can pay back what you owe in full, or you can set up a payment plan. Plans typically involve withholding all or part of monthly checks from SSA until the amount due is paid off.
Officials are also working to streamline and simplify the waiver request form, according to Patterson.
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