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%, constituted overpayments, per AARP. An overpayment occurs when Social Security gives you more money in a month than you should have received.

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Reasons for a Social Security Overpayment

Overpayments usually happen either when the SSA relies on incorrect or old information to determine your benefits, or they accidentally make errors on their own.

Your Social Security payments may change if you have experienced life transitions or changes, such as:

• marital status
• changes in your living situation
• ability to work
• income

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 doesn’t get updated in time and needs correcting. This can lead to improper payment calculations for monthly benefits.

In other cases, the SSA may make a processing or calculation error that causes the overpayment at no fault of your own.

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Can You Keep the Money?

When you receive an overpayment, the SSA will attempt to recover their loss. If you spend the surplus benefit, you may 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 current expenses.

Although the SSA may waive repayment, in most cases, it will seek recovery even when it bears responsibility for the overpayment. The SSA has been known to attempt to recoup significant overpayments even when the mistake persisted for years and the beneficiary spent the income.

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Notice of Overpayment

How do you know if the SSA is looking into your overpayment? The SSA will notify you personally if it determines that it overpaid you. The notice you receive 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.

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Appealing an 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.

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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.

Form SSA-632, Request for Waiver of Overpayment Recovery, can be used 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.

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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.

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Consult With an Attorney

It might be helpful to seek the counsel of an attorney if you receive an overpayment notice. Working with the SSA can sometimes be confusing, and a local, qualified attorney can help you understand what happened and guide you to the best course of action.