Social Security 2023: Can You Be Asked To Pay Back Past Benefits?

Senior man is standing in the kitchen of his home with bills in one hand and a cup of tea in the other.
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Many Americans rely on Social Security benefits to make ends meet, but what happens if the Social Security Administration asks for its money back?

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In a post for Forbes, Larry Kotlikoff, a professor of economics at Boston University, wrote, “I receive emails on a routine basis from people who, out of the blue, received a letter from Social Security demanding, with no clear explanation, that they pay back previously paid benefits within 30 days.”

Receiving such a notice may be alarming, especially if you’ve already spent the funds in question. Here’s a closer look at why this might happen, and what you can do if it happens to you.

Why the Social Security Administration May Ask for Money Back

The Social Security Administration can ask for money back if it determines it has been overpaying your benefits.

“There are some common reasons the Social Security Administration may ask you to pay back benefits due to overpayment,” said Krisstin Petersmarck, Retirement Income Certified Professional (RICP) and investment advisor representative at Bridegriver Advisors in Bloomfield Hills, Michigan. “One reason may be because you didn’t report certain income to the Social Security Administration. Another reason may be an error in calculating the benefit amount due to inaccurate or incomplete information within the Social Security Administration.”

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“Some less common ways you could receive an overpayment are changes in marital status, changes in your living situation and having more resources than the allowable limit,” she continued.

Martha Shedden, president and co-founder of the National Association of Registered Social Security Analysts, said that there are two particular scenarios that are common reasons for overpayment. The first is “working while claiming early benefits (between age 62 and full retirement age),” she said. “There are specific limits on earnings allowed in this age group, and Social Security benefits will be withheld if over those amounts. If the SSA does not know of your income, when they eventually see it reported, they will send an overpayment notice.”

Another common reason is that you are receiving a “non-covered” pension — received from an employer that did not contribute payroll FICA taxes — while also collecting Social Security benefits from work at another employer(s), Shedden said.

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What To Do if You Receive a Notice of Overpayment

If you receive notice that you owe the SSA money and you are not sure why, the first step is to find out the reason you are being asked to pay it back.

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“Call and set up an appointment at your local Social Security office to discuss your situation and find out why you received the overpayment notice,” said Jennifer Dickinson, a lawyer and associate consultant at Structured Consulting.

If you believe there has been a mistake, you can send a letter stating that you believe the Social Security Administration has made an incorrect assessment, and request a reconsideration or an appeal.

What To Do if You Owe the SSA Money

If your appeal is rejected, or if you don’t believe an error was made, don’t panic. Dickinson notes that there is usually a resolution that all parties can agree to.

“It is important to note that clients should not stress about the overpayment notice, as in many cases, it is due to a change in benefits or a failure to report something,” she said. “By being reasonable with the claim adjuster, clients can usually find a reasonable solution to their situation. However, it is crucial to respond to the overpayment notice within 30 days to avoid any potential reduction in benefits.”

If you truly cannot afford to repay the SSA, it’s possible that you will not be forced to pay.

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“In my experience, I have seen cases where the overpayment was ruled to be correct, but the entire amount was waived due to hardship,” Dickinson said. “It is always worth appealing or trying to resolve the situation quickly to ensure that clients do not have their benefits reduced.”

However, if the overpayment is ruled to be correct and you can afford to pay the SSA back, you likely will have to, Petersmarck said.

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About the Author

Gabrielle joined GOBankingRates in 2017 and brings with her a decade of experience in the journalism industry. Before joining the team, she was a staff writer-reporter for People Magazine and Her work has also appeared on E! Online, Us Weekly, Patch, Sweety High and Discover Los Angeles, and she has been featured on “Good Morning America” as a celebrity news expert. 
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