Social Security’s Rules on Inability to Repay

If Social Security has sent you a notice of overpayment, you can either appeal the overpayment or request a waiver. Even if the amount of the overpayment was correct, you can still ask for a waiver. When you file for a waiver, you are essentially asking the Social Security Administration to forgive the overpayment amount.

For your request for a waiver to succeed, you must first satisfy a basic two prong test:

  1. You must be without fault, AND you must be unable to afford to repay the overpayment, OR
  2. Recovery of the overpayments would be "Against equity and good conscience".

When the Social Security Administration assesses your ability to repay the overpayment, SSA will look to see if your income is needed for "ordinary and necessary living expenses" (like food, clothing, utilities, medical expenses, rent or mortgage, etc.). If you are receiving SSI or some other kind of welfare benefit, SSA will assume that that recovery of the overpayment will "defeat the purposes of the act" and you are presumed to be unable to pay back the overpayment.

However, if you still have any of the overpaid funds, then it is assumed that recovery of these funds is appropriate, and SSA will able to recoup these funds to reduce the overpayment balance. For example, if you have a case pending and are awarded a large amount of back pay, this can be used to repay your overpayment.

For other beneficiaries, SSA must consider a monthly budget picture. If the beneficiary uses substantially all of monthly income to meet "ordinary and necessary living expenses" then the inability to repay will be found. If not, the beneficiary must repay the overpayment.

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