Overpayments of Social Security Disability

There are several reasons you might receive an overpayment from Social Security. Here's how to avoid trouble.

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Once you are receiving a regular monthly disability check from the Social Security administration (SSA), it's possible the SSA might overpay you at some point. An overpayment is simply when you receive more money for a month than the amount you should have been paid. Sometimes an overpayment is result of a clerical error at the SSA, but more often an overpayment is your fault, for not notifying the SSA promptly of a change in your circumstances. You can't just keep the extra money you received form the SSA; you are liable to repay it to the SSA.

Why Overpayments Happen

The most common reason for overpayments is that your situation changed (and this change affects the amount of your monthly disability check), but you didn't notify the SSA of the change in a timely manner. Here are examples of when this can happen:

  • You got married.
  • A roommate moved in or out (if you collect SSI, Supplemental Security Income).
  • A child moved out.
  • You started working.
  • You made more income than you estimated for the month.
  • You started to receive other benefits, such as workers' compensation, black lung benefits, or a government pension.
  • You started to receive child support.
  • You received more resources or income than is allowed (if you collect SSI).
  • You are no longer disabled.
  • You were convicted of a crime.

In some cases, you may have reported the change, but SSA delayed in decreasing your monthly check. Note that you need to report all changes within 10 days of the month in which it happened. (If you report a change by telephone, write down the name and number of the SSA employee who took your information.)

What Should You Do If You Receive an Overpayment?

If you know that you've received a check for more money than you should be receiving, you should not cash the check and you should call the SSA at 800-772-1213.

What the SSA Will Do When an Overpayment Is Found

The SSA will send you a notice telling you how much you were overpaid and why you weren't entitled to the amount of money you received. The SSA will ask for a full refund within 30 days of the notice.

If you are currently getting SSI checks and you don't make a full refund, the notice will propose to deduct money from your SSI check in an amount equal to 10% of your total income and will state the date when the withholding will start (which should be at least 60 days from the date of the overpayment notice).

If you are currently receiving SSDI checks and you don't make a full refund, the SSA will stop your checks (that is, withhold the entire amount of your check) until the overpayment is paid off. The SSA would start holding back your checks 30 days after sending out the overpayment notice.

The notice will also explain how you can ask the SSA to review and reconsider (appeal) whether there was in fact an overpayment or ask for a waiver so that you might not have to pay all or some of the money back.

Your Options After Receiving a Notice

You can appeal the overpayment, request a waiver, and/or arrange a payment plan.

Request for Reconsideration

If you believe you were not overpaid and that you should not have to repay the SSA any money, you can request a "reconsideration," which is the first level of appeal. You have 60 days to file a request for reconsideration form SSA-561, but if you make the request within 10 days of the date on the SSA's overpayment notice, the SSA cannot stop or reduce your checks until the SSA makes a decision on the appeal.

Request for Waiver

If you agree that you were overpaid, but can't pay back the money and feel that the overpayment wasn't your fault, you can ask for a full or partial waiver of the repayment. You do this by filling out overpayment recovery waiver form SSA-632 and submit it to the SSA office.

Request for Payment Plan

You can ask the SSA to accept a small amount each month until the overpayment is paid back. If you are still receiving SSI or SSDI checks, the SSA will withhold this amount from your disability checks. If not, you can arrange to make monthly payments to the SSA.

Consequences of Not Paying Back an Overpayment

If you are still receiving disability benefits, the SSA will simply withhold part or all of your checks until the overpayment is fully repaid. But if you are no longer eligible for disability benefits (say you neglected to tell the SSA you had recovered and you continued to receive benefits unlawfully), the SSA can collect from you for the rest of your life. The SSA can collect monies from any future federal tax return you are supposed to receive or withhold money from your Social Security retirement benefits when you retire and try to claim benefits (or, of course, from future disability benefits if you qualify for disability again). The SSA can also try to collect the overpayment by garnishing your wages, and will report your delinquency to the credit bureaus.

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