Sometimes Social Security pays people more benefits than they were supposed to. They call it overpayment. Overpayments can be caused by changes in your living situation, marital status, resource amount, disability status or you did not report any changes to Social Security on time or at all. Other reasons that you might have an overpayment are, your income is more than estimated or Social Security has incorrectly calculated your benefits because they had incorrect or incomplete information. It is always best to report any changes to the Social Security Administration in order to avoid overpayments.
When someone receives an overpayment notice, they have a few options to take care of the overpayment. The letter will say that they need the full refund within 30 days. If you cannot pay the full amount the letter will say that you can choose to have a percentage of your monthly benefit withheld until the overpayment is completely paid. This percentage is usually 10% or less of your monthly benefit amount. The letter will also state the month that the withholding begins.
In most cases, the beneficiary (the person who filed for and receives benefits) must pay back the overpayment, but there are exceptions. For example, in some cases, the Social Security Administration will waive any attempt to recover overpayment if an individual is without fault and recovery would defeat the purpose of the Supplemental Security Income (SSI) program (See, CFR § 416.553).
Appealing an Overpayment Notice
You can file an appeal if you think you were not overpaid, or if you think the overpayment amount is incorrect.You will have 10 days from the time that you receive the letter to file an appeal saying that you were not overpaid after you have received the notice. If you appeal within 10 days, then you will be able to keep your monthly payments until Social Security is able to make a decision.
Filing a Waiver
In addition to an appeal, you can file a waiver. This is when you admit that you were overpaid but that it wasn't your fault and cannot afford to pay it back. There is no time limit to requesting a waiver.
The Social Security Administration will probably ask for proof of income and expenses to prove that you can’t afford to pay back the overpayment. Otherwise, the overpayment could be taken over time from your monthly benefits, or federal income tax.
If your appeal for reconsideration or waiver are denied, you may continue to appeal the decision and request a hearing with the Administrative Law Judge. If your request continues to be denied, you will have to pay back the overpayment either in full or have a percentage withheld from your monthly benefits. There is also a way to request paying back the overpayment at a rate you can afford. You can submit the form SSA-634 Request for Change in Repayment Rate to ask that Social Security withhold less than the percentage that they suggest. If you no longer receive SSI, you can also make monthly payment arrangements with Social Security.
Remember, you do have the right to view the documents Social Security used to determine if you have an overpayment. You can always request those documents at your local Social Security Office.