Social Security Announces Overpayment Procedures: How To Ensure You Won’t Be on the Hook for a Surprise Bill
Written by
Ashley Donohoe
Edited by
Daria Uhlig
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Due to the size and complexity of the Social Security system, recipients sometimes receive the wrong benefit amount. Unfortunately, this can lead to a hefty surprise bill. On Oct. 4, the Social Security Administration (SSA) announced that it’s reviewing its procedures and policies to help reduce overpayment issues and eventually will automate wage information collection. It’s also seeking ways to better assist recipients facing repayment.
In the meantime, you can take some steps so you get the right benefit amount and avoid a surprise bill. First, you should contact the SSA if your benefit amount ever seems off. Next, you’ll want to keep the SSA informed of any changes that affect your particular benefits.
Overpayments can especially occur with Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) benefits, which heavily rely on your reporting. If you get SSI, the SSA must know about changes to your income, assets, marital status and living situation. You’ll also need to keep the SSA updated on your work status if you get SSDI since you may stop qualifying yet still receive checks you’ll need to repay.
And if you receive retirement benefits prior to the full retirement age, you’ll need to properly report your expected earned income to the SSA annually to avoid overpayments. That’s because the SSA reduces your retirement benefit amount if you exceed a yearly earnings limit.
While taking these steps will reduce your chances of getting paid too much, SSA errors could still lead to issues. If you do end up owing money, the SSA will send you a repayment notice that shows the amount, reason and options you have for repaying the funds.
You can simply pay back the amount if the information appears correct. If you still receive benefits, the SSA will usually take at least a portion of each benefit check until the overpayment is covered. Otherwise, the SSA will expect you to pay the amount in full or set up an installment agreement. Not repaying it can lead to both credit score damage and money taken from future tax refunds and benefit payments.
If you think the SSA made an error, you can try filing an appeal and use the form SSA-561 to explain your case. The SSA provides additional options for situations where a financial hardship makes it not likely you can pay back the money. You can use form SSA-632-BK to ask the SSA to waive the amount you owe or SSA-634 to negotiate a more affordable repayment arrangement. Check for any deadlines and documentation requirements.
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