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Do Not Let Overpayments Overwhelm You

The Overview You Need To Read

Have you ever received a notice from the Social Security Administration saying that you owe them money? If so, you are not alone. I have lost count of the number of Seniors I have had come to me with a ‘bill’ from the Social Security Administration. Some have owed a couple of hundred dollars, others, several thousands. Regardless, the same questions are asked: “How did this happen?” and “What am I supposed to do now?”

Due to the frequent number of Overpayments and their ability to put you in financial harms way, you should become aware of what Overpayment means to you. This way, you can do your part to avoid it, as well as cope with the situation if you should receive a ‘bill’ in the mail.

What is an Overpayment?

First, an Overpayment occurs when the total amount of Supplemental Security Income you have received for any period is more than you should have received. Generally it will occur after you have had a change in your status that affects your eligibility or benefit level that you previously reported. When your eligibility has not been corrected before your next check is sent to you, it can result in an Overpayment.

How can you avoid an Overpayment?

To avoid this mistake, make sure your eligibility information is correct and update all necessary information immediately. For example, report a change in income, the acquiring of additional resources, that your spouse has passed away, there is a change in your living arrangement, or that your medical condition is no longer disabling. The Social Security Administration needs to know this information as soon as the change occurs.

What can you do if you receive notice of an Overpayment?

If, however, you still end up receiving a ‘bill’ from the Social Security Administration it should state why it was sent, how much money you owe, and your options for a request for Reconsideration, Waiver, and setting up a repayment plan. There are time limits, which may affect your options, so it is important to act as soon as you receive notice from the Social Security Administration of an Overpayment.


Overpayment appeals must be made within 30-days to prevent you from losing any of your benefits during the appeals process. There are two types of appeals available, and you may file for either and/or both. Unless you are certain that an Overpayment does exist, you should make a request for Reconsideration in addition to a Waiver request.

Reconsideration of Overpayment

First, you may make a request for Reconsideration at your local Social Security Administration office. This allows you to dispute the fact that an Overpayment exists, or the amount owed. Reconsideration requires the Social Security Administration to review your documents, file, and pertinent information. The Social Security Administration will not take your benefits until a decision is made on the Reconsideration request.

If, after reviewing all of your information during the Reconsideration, the Social Security Administration still believes that an Overpayment exists, you will have the opportunity to appeal through an Administrative Law Judge hearing. However, the Social Security Administration may start taking your benefits 30-days after an Overpayment is affirmed by Reconsideration, regardless if you appeal or not.

Waiver for Overpayment

You may also fill out a Waiver form at your local Social Security Administration office. The basis of this appeal is hardship. Waiver of an Overpayment requires that you show you are without fault and that if you have to pay the Overpayment, recovery would defeat the purpose of the Supplemental Security Income program. It will be necessary to provide your income and resources such as food and clothing, mortgage or rent, utilities, medical expenses, and the like during this time. The Social Security Administration will look at your written appeal and decide if you knew or could have known that you should not have been receiving the amount of benefits received. They will also consider whether or not paying the Social Security Administration back would deprive you of your needed income for ordinary living expenses. The Social Security Administration will inform you of their decision on your Waiver request in writing.

A couple of important and final notes: if the Overpayment for a period is less than $500.00 it may be possible to have the Overpayment waived based on an impediment of efficient or effective administration. In other words, you may be able to have the recovery waived because the handling of your Overpayment case is going to cost the Social Security Administration more than they can recover from you.

Repayment of Overpayment

If, in the end, you do have to pay the Social Security Administration back, there is no need to pay them up-front, if you cannot afford to do so. Do not pay the Social Security Administration for an Overpayment with your credit card. Although they will accept payment by credit card, this is not advantageous to you since payments made directly to the Social Security Administration are not subject to interest charges. Instead, try to work out a monthly repayment agreement or allow the Social Security Administration to adjust your Supplemental Security Income check until the Overpayment is repaid.

Malissa L. Walden, Esq.   © 2006

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