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Common Questions about Social Security Overpayments

FAQ

Social Security said they overpaid me benefits.  Now what do I do?

If Social Security sends you a notice saying they have overpaid you benefits, you should look carefully at the notice and send an appeal letter or appeal form to Social Security if you think you haven't been overpaid.

Also, even if you don't appeal, you can file a request that the overpayment be waived at any time. Overpayment waiver requests are best made on an 8-page form (Form 632) that Social Security will send you (if you ask) or that you can download from the Internet ssa.gov web site. Click on the link below to find this form.

What is an overpayment?
An overpayment is money that you received from the Social Security Administration to which you were not entitled. Several common reasons why Social Security may claim you were overpaid: an error of some kind was made; Social Security did not know about something that should have reduced your benefits; or you reveived benefits while appealing a decision and you lost. There are many other reasons why an overpayment might have occurred. But no matter why the overpayment was made, Social Security, with only some exceptions (discussed below), can make you repay the overpaid money.
How does Social Security collect its overpayments?
If you are currently receiving benefits and you take no action, Social Security will "recoup" (or make up its loss) simply by taking money out of your benefits check until the money is repaid. If you were not on SSI and do not expect to receive benefits in the near future, Social Security will first ask you to repay the money. If you refuse, Social Securiy will try to make you pay the overpayment.
How do I know when Social Security made an overpayment?
Social Security is required by law to inform you in writing if it believes that you have an overpayment. Social Security cannot start to take any money from your check until you have been sent a notice of the overpayment in writing.
Can Social Security just start taking money out of my check?

NO! The law gives you certain rights when Social Security claims that you have received an overpayment. These rights include:

1.) The right to be told in writing how much money you owe and why, even if you have already agreed to repay the overpayment;

2.) The right to be told what action Social Security will take; and

3.) The right to challenge the overpayment and be told the amount of time you have to request a waiver or an appeal.

Is there anything that I can do when I receive my overpayment notice?

YES! There are four actions you can take:

1.) You can ask for a "Waiver" of the overpayment. This means you are asking Social Security permission not to pay back any of the money. Social Security will only waive and overpayment in certain situations which are discussed below. You can ask for a waiver even if you agree with Social Security that you were overpaid.

2.) You can request "Reconsideration" of the overpayment. When you ask for Reconsideration, you are saying that you don't agree that you were overpaid and want someone else to see if Social Security might have made some kind of mistake.

3.) You can ask for a "Reduced Rate of Repayment". A reduced rate of repayment allows you to repay the overpayment by having Social Security take as little money out of your check as possible.

4.) You can ask to "Compromise" your overpayment. If you feel that you cannot pay back the entire overpayment, you can ask Social Security to allow you to pay back some part of it instead.

What is the difference between a "Waiver" and "Reconsideration"?

A Waiver means that Social Security will not collect the overpayment because it would be a financial hardship for you to repay and that you were without fault in receiving the money in the first place. You may request a waiver at anytime.

On the other hand, when you request Reconsideration, you are "appealing your case" - saying that you don't agree with the reasons Social Security thinks you were overpaid. Your request for reconsideration must be made within 60 days of the date you received notice of overpayment.

How do I ask for a "Reduced Rate of Repaymnet"?
If an overpayment has been made, by law Social Security can deduct 10% of your benefit check until it collects its loss. A request for a Reduced Rate of Repayment asks Social Security to collect less than the 10% because that is as much as you can afford to pay every month. If you do nothing else, request a Reduced Rate of Repayment!!
What does it mean to "Compromise" my overpayment?
A "compromise" is when Social Security accepts your offer to pay back a sum of money that is less than the full amount of the overpayment. Sometimes this is also called "settlement". Social Security will accept a compromise only if your financial situation will not let it collect the full amount of overpayment and you were without fault in causing the overpayment.
Do I have to choose between these four actions?  What happens if I want to take all of them?
If you want to take all of them, you can. In most cases you can and should take all four actions. In some cases, especially if you agree that Social Security overpaid you, you may want to ask for a Reconsideration. Still, plan to ask for a Waiver and a Reduced Rate of Repayment. Whether you want to request a Compromise will depend on your financial situation.
Last Review and Update: Nov 30, 2004