Social Security Overpaid Me $18K & Now Wants It Back

What if someone owes $18,000 to Social Security from overpayment and now the SSA wants the money back?

What if someone owes $18,000 to the Social Security Administration from overpayment from when they were younger and now the SSA wants the money back? What can the government do if they don't repay it? They are not disabled and work a normal, minimum-wage job. They can't afford to pay it back.

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  • The Social Security Administration routinely overpays beneficiaries.
  • The SSA will ask a beneficiary to return overpayment.
  • Beneficiaries can appeal overpayment requests.

Overpayment of Social Security benefits is not uncommon. Mistakes can be made by either person receiving the benefits or by the Social Security Administration (SSA).

Because of the complex formulas used to calculate benefits, and the huge number of beneficiaries in the system, the SSA inevitably makes mistakes in benefits payments. Errors can also result from the applicant not informing the SSA of some important change in their situation.  Some common errors include:

  • A person earning income and not informing SSA.
  • The SSA recalculating benefits it already paid.
  • A change in a person's living situation, such as  a reduction in housing costs, that affects the benefits award.

Request for Repayment

When the SSA realizes it has overpaid a beneficiary, it will send the individual a letter requesting that recipient pay back the money that he or she received in error. However, the SSA knows that some of the people who it has overpaid in the past are not financially capable of compensating the SSA for the overpayments, which can be substantial, especially if the error was not caught and corrected quickly.

Quick tip:   

If repaying Social Security is causing you to struggle with other bills, get a no-cost, no obligation analysis of your debt options from a pre-screened debt relief provider.

Repayment Waiver

The SSA has a whole section on its Web site discussing overpayment issues and what you can do if you either think that you were not overpaid, or if you cannot afford to pay back the money. You can visit Understanding Supplemental Security Income Overpayments for more information. Also, the forms you need to complete are available at Request For Waiver Of Overpayment Recovery Or Change In Repayment Rate - Form SSA-632-BK.

If you claim inability to repay the debt due to financial hardship, you will need to submit the appropriate form (see SSA Web page mentioned above) along with proof of your inability to pay, such as your pays-tub, rent receipts, and utility bills, receipts for medications and other medical care, and any other documentary evidence supporting your claim that you do not have enough money to repay the SSA after meeting your family's basic living expenses.

The SSA will review your request, and if it approves the request, it may entirely or partially waive the overpayment obligation. If the SSA rejects your request, you do have the option to file an appeal; depending on the amount of money in question, it may be wise to hire a lawyer to assist you with the appeals process.

Many legal aid and other pro bono legal services can assist with SSA overpayment disputes (for an example of the types of help you may be able to receive through legal aid, you can visit Pine Tree Legal Assistance's page How to Cope with Social Security Overpayments).

In a worst case scenario, the SSA may be able to garnish your wages and seize other assets, such as money in your bank accounts, to collect this debt. This extreme action is only likely to happen if you ignore the problem and do not communicate with the SSA to work out some type of solution, either a waiver, deferment or repayment, or an affordable payment plan.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

40 Comments

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  • TG
    Apr, 2012
    Terry
    We had an agreement with s.s.d.i. for the supposed overpayment. We have it in writing, now they stopped his pay saying they are going to take it all until it is p.d., or he retires. I thought an agreement was a agreement,especially where we have it on paper. Can they do this?
    0 Votes

    • BA
      Apr, 2012
      Bill
      Consult with a lawyer who can read the contract you signed with the Social Security Administration, and can take appropriate action if the Social Security Administration is in violation of your contract.
      1 Votes

    • TG
      Apr, 2012
      terry
      There was no contract. We made a verbal agreement at the SSI office. They sent us two letters to confirm that they would take $100 per month out for 427 months. Then in September, we received a different type of letter, no SSI heading, just SSI publications, saying that because of the overpayment they would be taking $1,000 per month. That is his whole check.
      0 Votes

  • DV
    Mar, 2012
    Danielle
    My husband was injured as a child and apparently began receiving benefits in 1996 when he was 8.Because he was a minor his mother's name was on all the checks. He never personally received any money. He had a terrible childhood so he left when he was 17. Now he is 23 and they are saying that he owes over $18,000.We have already filed to have it waived and explained that he has not lived at the address they sent everything since 2006 and never signed any of the checks so his mother must have it, but they told us that he is still responsible because he should've had her name removed after turning 18. Can they hold someone who received benefits as a minor responsible when they turn 18 even if they had no idea that the checks were being sent? Please help.
    0 Votes

    • BA
      Mar, 2012
      Bill
      You spouse needs more assistance than someone like me can offer in an e-mail message or Web posting. Consult with a lawyer who has experience in litigating issues with the Social Security Administration.
      0 Votes

  • DM
    Feb, 2012
    Devona
    The amount of people that get overpaid (lots of them), seems like social security is just throwing the money out the windows, I think they should have a law suit thrown on them to straighten up there act. They dont know what they are doing and didnt even realize they were overpaying me, I had to tell them. I am demanding that they stop overpaying me, it takes them forever to do anything. Its ridiculous how they run this business. They dont know what they are doing, different answers from each one of em. I would suggest you get a receipt every time you turn info into them saying what it was you turned into them. They are telling me I didnt notify them of BWC payments, I did! Its ridiculous how they operate. Somebody needs to check them. I would be glad to help out if there is a lawsuit, not for the money but to make the country run better!
    1 Votes

  • JP
    Nov, 2011
    James
    Hi, I am currently going through a problem with social security and need help. I recieved a letter saying I owe $14,161 because I was overpaid for 18 months when I was not supposed to recieved dissability. When I called and asked why I am still collecting payments, they said it is from SSI and not dissability. I asked why I wasn't receiving SSI during the payments of dissability, and they said because you can't receive SSI while getting Disability. I have no idea what to do, I just finished college so I have to start paying back student loans. I work a temp job that barely gets me by and I really don't want to become homeless again. I have had 5 different addresses (including my car) due to bad living arrangements and have struggled to stay alive over the last 8 years. Social Security said they sent me multiple letters, but I never received them and this is the 1st I heard of it. Why would they make the mistake of continueing to put direct deposit payments into my bank account for 18 months when I am not supposed to receive them anymore? More importantly, why do I have to be the one to pay for their mistake?
    0 Votes

    • BA
      Nov, 2011
      Bill
      Contact the Social Security Administration at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office and ask about the overpayment. They will examine each overpayment individually and will follow established procedures governing overpayments, appeals, and waivers. They will aid you in filling out the correct forms. If they are not helpful then look for local free legal counseling.

      Unfortunately, when it comes to the government, when they make a mistake in your favor, you are still responsible.
      0 Votes

  • SM
    Oct, 2011
    Shirleen
    I have a question, My husband is on Social Security Income and has been for 10 years. He worked and made over his amount, He contacted SS and they worked out a plan by which $100 per month is currently being taken from his check. He originally owed a total of $24,000. If he should pass away, do I, as his wife have to repay that? I am getting up there to collect my own SS, will they take it from mine? Thank you.
    0 Votes

    • BA
      Oct, 2011
      Bill
      I am not aware of any Social Security Administration rule making a surviving spouse liable for a deceased spouse's overpayment, or the spouse's repayment agreement. Readers, please comment below if you have information to the contrary.
      0 Votes

    • CB
      Feb, 2012
      Christine
      In response to the question of who is reponsible for repayment of an overpayment in the event of death of beneficiary, see Social Security publication SI 02201.021. Short answer: yes, the spouse may be liable.
      0 Votes