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, we’ll 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?
Why Did I Receive a Social Security Overpayment?
Social Security overpayments are when you receive more money one month than you should have received. They can happen with Supplemental Security Income (SSI) payments or Social Security Disability Insurance (SSDI) benefits.
Social Security payments are the same each month, so it should be easy to notice if there’s 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 you’re living and/or what you’re 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 Administration’s (SSA) limitations. In that case, your payment may be for more than you’re qualified for.
- You did not report a significant change to the SSA. Changes can be that you’re no longer disabled or any financial change in your life. This should be reported to the SSA to avoid receiving an overpayment.
- The SSA incorrectly processed your information. Sometimes, the SSA may have a technical glitch or human error that results in a Social Security overpayment.
Does Social Security Notify You of Overpayments?
Overpayments can be easily missed if you receive your Social Security through direct deposit. However, if you haven’t noticed your overpayment, you’ll likely find out about it within one month. The SSA will send you a notice explaining the overpayment within 30 days and request that you pay it back in full.
Paying Back a Social Security Overpayment
When or if you’ve received a Social Security overpayment, you can pay it back one of three ways. Paying back a social security overpayment can be made either in one lump sum, via monthly reductions of your upcoming Social Security payments, or through a different rate.
Paying it back online in one lump sum is only offered to those no longer receiving Social Security benefits. This can be done through Pay.gov or your bank. Billing notices will give information about this process, including a Remittance ID number that you will need to make an online payment.
To pay online, you will:
- Go to Pay.gov
- Type “Social Security” in the search bar
- Under “Repay Your Social Security Overpayment Online,” click “Continue”
- Follow the instructions and click “Continue to Form”
- Enter the Remittance ID located on your billing form
- Enter the payment amount
- Enter your details
- Follow the prompts and confirm your payment
- Receive your receipt via email
To pay through your bank, use the online bill pay feature. You will:
- Search for the “Social Security Administration” as the payee
- Enter your Remittance number and mailing address
- Indicate the amount
- Follow the remaining prompts
If you’re still receiving benefits, the overpayment notice will propose withholding the overpayment from your future Social Security payments. This will be done at either 10% of your payment or the entire monthly payment – whichever is less.
If you feel you cannot afford to pay back the money through the SSA’s offered rate, you can request to pay it back at a different rate. To do so, you’ll need to file a Form SSA-634, which is the Request for Change in Overpayment Recovery Rate. This is a request so that the SSA withholds less than the proposed amount each month.
In the case where you’re no longer receiving payments and cannot pay out of Social Security, you can arrange monthly payments instead.
What Happens If I Keep the Overpayment?
Suppose you decide to keep your overpayment even though the SSA requested a refund. In that case, an SSA notice may state that they will withhold your overpayment at the rate of either the lesser of 10% or the entire monthly payment. The SSA will determine what month this hold begins and explain your rights to request an appeal.
If you no longer receive Social Security benefits, the SSA will withhold your payment from your Federal Income Tax refund and/or any future SSA eligible benefits.
Want to appeal or ask for a review of your overpayment legally? The notice will dictate how you can request a reconsideration of the SSA decision, waive the overpayment, or pay back the overpayment at a different rate. Following through with one of the first two options is best to keep your overpayment without repercussions.
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 wasn’t 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 don’t 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 SSA’s 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.
You must prove that the overpayment wasn’t your fault within your form. You must also prove that you cannot repay the overpayment to SSA because the money went towards your everyday living expenses.
For the former, this means that the overpayment was not caused by you misinforming or not informing the SSA of your actual economic status. You may submit proof of income and copies of your monthly bills for the latter.
Once you have completed these forms, you can mail them to your local Social Security office. For questions, call the SSA toll-free at 1-800-772-1213.
What Happens If My Request Is Denied?
If you submit a Request for Reconsideration and it is denied, you can file an appeal.
Suppose you submit a Request for Waiver of Overpayment Recovery, and it’s denied. In that case, you can file a Request for Reconsideration. If this is also denied, you can file an appeal.
You have 60 days from the day you receive your “denied” notice to begin your appeal. After that, you initiate the process by requesting an appeal in writing. Further details will be provided on your notice, so keep this handy. You can also find more information on the SSA website.
You may appoint a representative to help you appeal or do it yourself. The SSA is happy to help folks navigate the appeal process, so don’t hesitate to contact your local office. If you are appealing an SSI decision, see here.
Who Is Entitled to Social Security?
If you qualify, Social Security payments can be sent as a check or directly deposited into your bank account every month.
Lifeline Free Monthly Wireless Service
If you qualify for government assistance, like SSI, you may be eligible for Lifeline service. This federal benefits program gives low-income consumers free or massively discounted communication services. Lifeline helps subsidize the cost of wireless cell phones and internet services. Click here to find out more and apply for this valuable benefit.