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How Far Back Can Social Security Go For Overpayment

How Far Back Can Social Security Go For Overpayment

SSDI Overpayments: What to Do if You Got a Notice of Overpayment from Social Security

Making a Payment Arrangement SSA can withhold all of your Social Security benefits to repay the overpayment. However, unless there is fraud involved, they will usually let you pay it back in smaller amounts. You will have to pay back at least $10.00 a month. SSA tries to get the money back within 3 years.

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If you receive a notice of overpayment from Social Security saying that it paid you too much disability benefits, review it carefully to understand why Social Security has issued it. If you disagree that you owe an overpayment at all, or if you think Social Security has calculated a larger overpayment than the one that you owe, then you should appeal the overpayment. If you think the overpayment is correct but you just can’t afford to pay it back, then you can ask Social Security to let you pay a smaller amount each month, or even to waive the entire overpayment.

How Do I Pay Back A Social Security Overpayment

This information is current as of March 10, 2022.

Social Security benefits help more than 69 million Americans stay afloat financially every year. But, occasionally, a system error can lead to a Social Security overpayment, which must be returned legally.

Here, well discuss answers to questions you may have, such as:

  • How Do I Pay Back a Social Security Overpayment?
  • Why Did I Receive a Social Security Overpayment?
  • Does Social Security Notify You of Overpayments?
  • What Happens If I Keep the Overpayment?
  • How Can I Legally Keep the Overpayment?
  • Who Is Entitled to Social Security?

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What Can I Do To Keep A Social Security Overpayment From Happening

To prevent a Social Security overpayment from happening, you should do the following:

  • Report all changes in your household within ten days of the event or no later than the tenth of the following month.
  • Try to report all changes to the particular Social Security worker assigned to your case.
  • Keep copies of all documents you receive from Social Security.
  • Keep a copy of all requests and reports you make to Social Security.
  • Make all requests and reports to Social Security in writing.
  • Always get proof from Social Security that you have reported a significant change to them. Have a copy of the report you submit dated-stamped by a worker at the Social Security office or send your report return receipt requested. While it does cost more than regular mail, it requires Social Security to sign for the document and the post-office sends you a receipt showing that Social Security signed for the document.

What Happens If You Overpay Social Security Tax

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Unfortunately, you cannot stop the withholding. However, you will get a credit on your next tax return for any excess withheld. Each employer is obligated to withhold social security taxes from your wages. The total they both can withhold may exceed the maximum amount of tax that can be imposed for the year.

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What Should You Do If You Receive An Overpayment From Social Security

If you know that you’ve received a check or direct deposit for more money than you should be getting, don’t cash the check or spend the extra money deposited in your account. Instead, you should call Social Security at 800-772-1213 and ask why the monthly amount is higher than usual. It’s better to catch the problem early so that the overpayment doesn’t grow and grow with more monthly payments. A Social Security representative can discuss your repayment options with you at that time.

What Can I Do If I Am Overpaid

The Notice of Overpayment will tell you how much you were overpaid. It will tell you to send the money back in 30 days.

Don’t panic! The first thing to do is read the Notice carefully.

  • Is the information on it correct?
  • Are the amounts and dates correct?

Try to figure out if you were really overpaid the amount SSA says.

After you have figured out what the Notice says, there are several different ways to deal with it. You can do any one of these things or more than one at the same time. Here are your choices:

  • Ask for Reconsideration. This is an appeal. It means you want SSA to look at your case again. Ask for a reconsideration if you think the amount of the overpayment is wrong or that the reason SSA gave for the overpayment is wrong.
  • Ask for a Waiver. If you agree that you were overpaid, you can still ask SSA to waive it so that you don’t have to pay it back. Ask for a waiver if you think that the overpayment was not your fault, and you can’t afford to pay the money back.
  • Ask for a Payment Arrangement. Do this if you think that the overpayment was your fault or you can afford to pay it back. You can tell SSA that you want to pay the money back a little at a time. That amount would be based on how much of your income you need for your basic necessities.

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Social Security Overpayments Can Be Discharged In Bankruptcy

Just because you owe a debt to the federal government does not mean that you can’t discharge it in bankruptcy. Certain debts owed to the government, such as recent unpaid taxes or criminal fines, are nondischargeable in bankruptcy. But a Social Security overpayment is not one of them.

In bankruptcy, Social Security overpayments are treated as unsecured debts similar to credit card debt and medical bills. So if you are unable to pay back your Social Security overpayment, filing for bankruptcy relief can allow you to discharge your obligation to the SSA. However, keep in mind that the SSA has the right to object to your discharge if it believes you were committing fraud by accepting the additional payments.

Why Did I Receive A Social Security Overpayment

SSI Overpayments: What to Do if You Got a Notice of Overpayment from Social Security

Social Security overpayments are when you receive more money one month than you should have received. They can happen with Supplemental Security Income payments or Social Security Disability Insurance benefits.

Social Security payments are the same each month, so it should be easy to notice if theres a discrepancy. The difference between what you should have gotten and the payment you received is the overpayment.

Overpayments can happen for a few reasons.

  • Your income is higher than you initially estimated. Perhaps you experienced an increase through a raise, bonus, new benefits, or new job. However, if your income increased, it may have caused your Social Security payment to rise incorrectly consequently.
  • Your marital status changed. If you have recently gotten remarried, married, or divorced, this could also cause an overpayment discrepancy.
  • Your living situation changed. Any significant changes in where youre living and/or what youre paying for living costs can spark a payment discrepancy.
  • You have more resources than the allowable limit. For example, suppose you have more assets than the Social Security Administrations limitations. In that case, your payment may be for more than youre qualified for.
  • You did not report a significant change to the SSA. Changes can be that youre no longer disabled or any financial change in your life. This should be reported to the SSA to avoid receiving an overpayment.
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    Promptly Report Changes In Income To Ssa :

    When beneficiaries begin working, they should let SSA know right away and continue to report their wages to SSA during the first six days of each month to decrease the chance of incurring an overpayment.

    SSI beneficiaries can report earnings using any of the following methods:

    • Using an automated wage reporting tool
    • SSI Telephone Wage Reporting System, which is a quick and easy way to report monthly earnings by phone
    • SSI Mobile Wage Reporting application, which allows reporting of the total gross monthly wages for the prior month using an Apple or Android mobile device
    • myWageReport, which allows beneficiaries to report their monthly earnings online via their mySocial Security account
  • SSI beneficiaries can also mail or bring copies of their pay stubs to their local SSA field office during the first six days of the month.
  • SSDI beneficiaries

    Requesting A Waiver Or Reduction Of The Overpayment

    If you agree that you received an overpayment from Social Security, and you think the agency has calculated the amount correctly, you can ask that Social Security to reduce or waive the overpayment in the following circumstances:

    • the overpayment was not your fault
    • you are unable to afford to pay back the overpayment, and
    • making you pay the overpayment would be unfair.

    To ask Social Security to reduce your monthly payment or waive the entire debt, fill out the Social Security Form 632, Request for Waiver of Overpayment Recovery or Change in Repayment Rate . There is no deadline to file Form 632 you can file it even after Social Security has already been collecting an overpayment from you for a long time. Once you file Form 632, Social Security should stop collecting the overpayment from you, for as long as it takes the agency to make a decision about your request.

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    So What Are Your Options For Repayment Of Disability Benefits

    If you remain eligible for the long-term disability insurance benefits, you can ask that the insurer apply your currently due amounts to the overpayment.

    While it is not ideal because you are losing out on much-needed funds, you may often have ancillary benefits dependent upon you remaining on long-term disability insurancesuch as medical, pension, or waiver of premium insurance.

    If the long-term disability insurance company is demanding repayment either because you are no longer on benefits or because they claim you need to repay to stay on benefit, you may be able to say Leave Me Alone and mean it.

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    Determining Whether You Can Afford To Repay The Overpayment

    The second section of Form 632 asks for your household income and expenses. You must show that you have no money left over after paying your regular monthly expenses that you could use to pay back the overpayment. Make sure that you list all of your expenses on the form and that it accurately reflects your monthly finances. If the form shows that you have some money left every month, Social Security will wonder why that money should not be used to pay back the overpayment.

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    When Is Repayment Reduced Or Cancelled

    The Department of Social Protection makes every effort to recover theoverpayment in full. The Department may reduce or cancel an overpayment if itoccurred because it:

    • Failed to act within a reasonable period of time on information it received about you
    • Made an mistake that you could not reasonably be expected to have noticed

    If you think that the Department has made an error, you should bring thematter to the Departments attention as soon as possible.

    What Happens If Your Overpaid Universal Credit

    Deductions from Universal Credit

    If you were overpaid Universal Credit as a couple and have now separated, you should each be expected to pay half of the overpayment. If money is being deducted from your Universal Credit to pay back the overpayment, how much will be deducted depends on your circumstances.

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    Request A Waiver Of Overpayment

    The first option should probably be to request a waiver from the Social Security Administration. This would waive or simply write off the overpayment. To have a waiver approved, you must meet two conditions.

    First, you have to convince SSA that the overpayment was not your fault. That would be easy to do in a situation where the government miscalculated your benefit. Thats obviously Administrations fault, not yours. But if you were overpaid because you failed to report some event that should have changed your benefit amount or even altered your basic eligibility for benefits, then youll have a hard time claiming its not your fault.

    Even if the Social Security overpayment was not your fault, you must also prove to SSA that repaying the debt would create a financial hardship for you and your family. To do this, you have to provide SSA with records of your income and your expenses. This could include wage statements or tax returns and rent receipts, mortgage statements, utility bills, grocery receipts, etc. A Social Security representative will review your household budget and decide if the overpayment waiver can be granted.

    The key points to remember are:

    • Sometimes the Social Security Administration is wrong. Challenge them!
    • Expect the appeal process to take several weeks.
    • File your appeal within 30 days.
    • Dont be embarrassed to request a waiver.
    • If you must pay it back, set up your own payment terms.

    The Ssa Can Object To Your Discharge If You Commit Fraud

    How Social Security Works

    Debts acquired by false pretenses or other fraudulent means can’t be discharged in bankruptcy. If a creditor believes that you committed fraud when you obtained the debt, it can file a complaint in your bankruptcy to have the debt declared nondischargeable.

    Just like your other creditors, the SSA has a right to object to your discharge. But fraud is typically very difficult to prove in bankruptcy. So the chances that the SSA will object to your discharge are slim. However, if the SSA believes you accepted payments knowing that you were not entitled to them, it may have more incentive to file an objection to your discharge.

    If you received a large Social Security overpayment and are not able to pay it back, consider talking to a knowledgeable bankruptcy attorney in your area to discuss all of your options.

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    Who Can Repay The Overpayment

    It is not uncommon to encounter a circumstance where an SSI beneficiary has a small withholding each month and a parent or other concerned individual wishes to satisfy the overpayment on behalf of the recipient so that the full benefit amount can be restored. In other circumstances, trustees of Supplemental Needs Trusts have asked if they can payoff an overpayment on behalf of the Trust beneficiary. This is allowableâthird parties may indeed satisfy the overpayment on behalf of the SSI recipient.

    Do I Have To Pay Back Ssi If I Get An Inheritance

    SSI and Social Security Benefits They are not means-tested. If you pay into these programs, you are eligible to receive benefits. Income from working at a job or other source could affect Social Security and SSDI benefits. However, receiving an inheritance won’t affect Social Security and SSDI benefits.

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    How Do Overpayments Occur

    • Increases in earned or unearned income that isnt reported to SSA
    • Changes in living situation or marital status
    • Having more resources than the allowable limit
    • An error in calculating the benefit amount due to incorrect or incomplete information at SSA

    Request A Social Security Payment Plan

    If you agree that you were overpaid, but you can’t afford to repay Social Security at the rate described in your overpayment notice, you can ask the SSA to accept a smaller amount each month until the overpayment is paid back. You’ll need to file a Request for Change in Overpayment Recovery Rate with Social Security.

    Once Social Security sets a new payment amount, if you’re still receiving SSI or SSDI benefits, the SSA will withhold the payment amounts from your disability checks. If you’re no longer receiving benefits, you can arrange to make monthly payments to Social Security.

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    Can Overpayments Be Avoided

    Yes, many overpayments can be avoided. For example, if an overpayment results from a circumstance described in Jacobâs case when he received a direct inheritance from his father, it was caused by poor planning. Had Jacobâs father sought proper advice from a competent special needs planning attorney, he could have left Jacobâs inheritance to a trust for Jacobâs benefit without adversely impacting his SSI benefits because SSA could not have classified the trust assets as a countable resource.

    That said, given the complexity of the SSI rules and the definitions and exclusions that apply to income and resources, it is fair to say most individuals, including, frankly, most attorneys, donât fully understand the applicable rules and regulations that apply to an SSI recipient. As result of that complexity, overpayments will necessarily occur and may very well be difficult to avoid. Being aware of the need to report a change in circumstance and, when possible, evaluating a potential change in circumstance before it occurs will help to mitigate the likelihood of an overpayment or other adverse impact on SSI benefits in the future.

    How Can I Legally Keep The Overpayment

    You may believe that the SSA notice is an error and that you were not overpaid, or you may not be able to afford to pay back the payment. If this is the case, you can request to keep your overpayment legally.

    If you are unsure which request method to choose, you can ask to see a copy of your file, which contains the information the SSA considered when sending out your notice.

    Your Social Security payments will continue uninterrupted until the SSA decides on your case.

    There are two main requests you can make:

  • If you disagree that there was an overpayment, you may file a request for reconsideration.
  • If you agree that there was an overpayment but feel it wasnt because of your error and that you should not pay it back because of your economic circumstances, you may file a request for an overpayment waiver.
  • You have ten days to receive your first overpayment notice to request these options.

    If you dont think you were overpaid, you can request a waiver of the overpayment by completing Form SSA-561, the Request for Reconsideration. In this request, you must explain why you believe you were not overpaid and/or why you believe the SSAs requested amount is incorrect.

    If you agree that you have received a Social Security overpayment but feel it was not your fault and that you cannot afford to pay it back, you should complete Form SSA 632, the Request for Waiver of Overpayment Recovery.

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