According to the Social Security Administration (SSA), 69.1 million people benefit from Social Security programs, such as Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI).
Of the $1.1 trillion Social Security payments the SSA made in retirement, survivors, and disability benefits in 2021, about $1.8 billion, or 0.17 percent, constituted overpayments, AARP reports. An overpayment occurs when Social Security gives you more money in a month than you should have gotten.
Reasons for a Social Security Overpayment
Overpayments can happen when the SSA relies on incorrect or old information or makes errors.
- If you have experienced life transitions such as changes in your living situation, marital status, ability to work, or income, you may see your Social Security payments adjust. While you must update the SSA about any changes affecting your benefits, sometimes these updates face delays, and the information on file at the SSA needs correcting. This can lead to improper calculations for monthly benefits.
- In other cases, the SSA may make a processing or calculation error that causes the overpayment.
Can You Keep the Money?
When you receive an overpayment, the Social Security Administration will attempt to recover their loss. If you spend the surplus benefit, you risk not having enough money to pay back the SSA. Or, if the SSA reduces your monthly payment to compensate for the mistake, you may not have enough to cover your expenses.
Although the SSA may waive repayment, in most cases, it will seek recovery even when it bears responsibility for the overpayment. The Chicago Tribune reports that the SSA attempts to recoup significant overpayments even when the mistake persisted for years and the beneficiary spent the income.
Notice of Overpayment
The Social Security Administration will notify you if it determines that it overpaid you. According to the SSA, the notice will state the reason for the mistake and how you can pay the SSA back.
The notice will explain the steps you can take, including:
- Asking the SSA to reconsider the decision if you believe the payment was correct
- Requesting a waiver for the overpayment, allowing you to keep it
- Entering a payment agreement to pay back the amount at a different rate
Once you request reconsideration, a waiver, or a different payment rate, the SSA will pause recovery until it makes a decision.
Appealing a Social Security Overpayment Decision
If you disagree with the SSA’s claim that you received an overpayment, you may appeal the decision and ask that the SSA reconsider it. You may appeal by filing Form SSA-561, Request for Reconsideration, with your local Social Security office.
The form requires you to explain why you have not been overpaid. Should you agree you have been overpaid but disagree about the amount, you must also provide your reasoning.
Requesting a Waiver: Social Security Hardship Form
For those experiencing financial hardship, waivers are available. You may apply for a waiver if the mistake was not your fault and you cannot afford repayment. Once the SSA gives you a waiver, you can keep the money without repaying the SSA.
Use Form SSA-632, Request for Waiver of Overpayment Recovery, to seek a waiver. When you fill out the form, it asks for your income, the income of your spouse and dependents, and your family expenses, which the SSA uses to determine whether you can afford to pay.
Repaying the SSA Gradually
In the notice letter, the SSA gives a repayment rate, setting a timeline for the repayment. For those who need more time, gradual repayment is available. You’ll need to provide financial information, including how much money is in your accounts, as well as your income and expenses. Paying back the SSA over time can help you make ends meet.