What You Should Know About Overpayment of Social Security Benefits?

From 2004 through 2008 the Social Security Administration (SSA) paid $2.3 trillion in retirement and survivor benefits. Later, SSA decided that $3.7 billion were overpaid. During the same period, $6.3 billion of $454.8 billion in disability insurance benefits were incorrect. Under section 204 of the Social Security Act, SSA has the obligation to attempt recovery of these overpayments.

The Overpayment Notice

Upon detecting an overpayment, SSA sends you a Notice of Overpayment detailing the amount, dates and cause of the overpayment. The letter states the month SSA will start recovery by withholding benefits, or requests refund if you no longer receive benefits. The notice also explains the right to file a Request for Reconsideration or a Request for Waiver of Overpayment.

Appeal Timeframes

You have 60 days from the notice's date to file either a Request for Reconsideration or a Request for Waiver. However, you must file within 30 days to stop recovery action. All requests have to be made in writing.

Request for Reconsideration

You file a Request for Reconsideration--form SSA-561--if the facts are incorrect. For example, you did not receive the earnings used to figure the overpayment. Social Security will correct their records and approve the appeal. Form SSA-561 is available at SSA's website www.ssa.gov or by calling SSA at 1-800-772-1213.

Request for Waiver of Overpayment

If you are overpaid but believe you are not at fault and cannot afford to repay, you file a Request for Waiver of Overpayment Recovery--Form SSA-632--also available at SSA's 800 number and website. You must meet both criteria. Even if the overpayment was not your fault, SSA expects repayment if you have the funds in your possession or can afford to repay.

The Request for Waiver Form

The first two pages of the SSA-632 obtain information needed to decide if you were at fault. Pages three through eight obtain information about income, assets and expenses so SSA can determine your ability to repay the overpayment. Persons who receive cash benefits based on need such as Supplemental Security Income or certain pensions from the Veteran's Administration are assumed to meet the inability to repay requirement and complete only the first two pages.

The Waiver Conference

Before making a decision, Social Security schedules a personal conference, which can be held in person or by telephone with your local SSA office. The conference allows you to discuss your understanding of reporting requirements or misinformation received. If required, you must submit proof of income, assets and expenses.

Appealing Denials and the Repayment Rate

No overpayment recovery continues while your reconsideration or waiver request is pending. If denied, you have 60 days to appeal. To appeal a reconsideration denial, you file a Request for Hearing before an administrative law judge (Form SSA-501). However, overpayment recovery begins while awaiting the hearing. You appeal a waiver denial by filing a Request for Reconsideration, which prevents initiation of overpayment collection. If SSA denies appeals, you can make arrangements through your local office to repay by monthly payments and avoid withholding of all benefits.