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Overpayments

Statement of Sue Augustus

 



The Social Security Administration (SSA) says you
have an overpayment. What should you do?

Overpayments in general: An overpayment is the total amount that an individual receives from Social Security over a period that is more than should have been paid for that period. Social Security does not consider the reason an overpayment occurs - thus, even if an individual is not at fault, Social Security will seek repayment. And, once the determination of overpayment is made, the overpaid amount is a debt owed to the United States Government. The rules are harsh.

Overpayments may occur for any of the following reasons:
SSI "Excess Resources" this occurs when SSA asserts that SSI benefits were paid to an individual during a period when the individual had excess resources. SSA will seek recovery of all SSI benefits paid during the period. For example, if a person had $2,300 in a bank for 12 months, SSA may seek recovery of an overpayment based on the amount of all SSI benefits paid during each month of the 12 month period. Thus, the overpayment could be $6000 (12 months x $500) because the person had $300 more in resources than allowed.

SSI or SSDI "excess income" - this occurs when SSA asserts that SSI benefits were paid to an individual who received excess earned or unearned income. This may happen when individuals return to work or begin working; SSA often fails to timely calculate the impact that wages have on SSI payment amounts. SSA will find an overpayment in an amount equal to the difference between the amount of benefits actually paid and the amount that should have been paid in light of earnings.

SSI non-disability eligibility rules - this occurs when SSA asserts that SSI benefits were paid to a person who was ineligible because of various SSI eligibility rules (e.g., the person was out of the U.S., in the hospital, incarcerated, etc.).

Social Security Disability substantial gainful activity (SGA) cessations - this occurs when SSA paid benefits to someone who SSA later finds has worked for nine or more months (the trial work period). The amount of the overpayment depends on the dates and amounts of work, as well as other factors.

SSI or SSDI medical cessations - this occurs when SSA paid benefits to an individual whom SSA later says is no longer medically disabled (i.e., who "medically improved."). The amount of the overpayment depends on the date that disability ended.

From Whom Does SSA Try To Collect Overpayments: SSA will attempt to collect the overpayment from the following individuals: (1) person who was overpaid; (2) that person's spouse if she or he is receiving benefits; (3) any other persons, usually children, receiving benefits on the earnings record of the overpaid person (Social Security only); (4) the estate of a deceased individual or spouse; (5) an immigrant's sponsor (SSI only); and (6) a representative payee if the overpaid money was used for the representative payee's benefit.

How Does An Overpayment Case Begin? - SSA must mail a notice telling the person that he or she has been overpaid. The notice should explain, among other things, the time periods in which the overpayment happened; how much the overpayment is; the reason for the overpayment; how to challenge the overpayment by appealing (also called requesting a reconsideration); and that the overpayment may be waived (the person does not have to pay the money back).

What can you do if you get a notice of an overpayment?

  • File an appeal to dispute the fact that you were overpaid (also called a request for reconsideration):
  • The appeal must be filed within 60 days, but the sooner the better (see below).
  • The appeal form is available at local Social Security offices or an appeal can be filed by calling 1-800-772-1213.
  • Collect evidence that supports your case and give it to SSA.
    AND--
  • File a request for waiver can be granted if you show that the overpayment was not your fault, AND EITHER you cannot afford to pay the overpayment back OR you relied on what the SSA told you and changed your position for the worse.

The waiver can be done at any time, even after overpayment has been recovered, but still, the sooner the better (see below).

The waiver form is available at local Social Security offices or a waiver request can be filed by calling 1-800-772-1213.

File both the appeal and the waiver.

Get both processes going so that the issue can be straightened out quickly, and, at the least, it forces SSA to double check their numbers.

File quickly-Generally, if waiver or appeal is filed within 30 days, payment will continue as is and will not be readjusted for overpayment until a decision is made.

For more information, you can contact the SSI Coalition (312-223-9600) or, for persons residing in Cook County, the Legal Assistance Foundation of Metropolitan Chicago (312-341-1070). You can also contact your local legal services office.

 

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