Opening a letter from Social Security that says you owe money back is scary. You may picture your monthly check shrinking, or wonder how you’ll cover rent and groceries on a fixed income. Take a breath. An overpayment notice isn’t the final word; you have real options to challenge it or request relief.
The short answer: An SSDI overpayment means Social Security paid you more than you were entitled to receive, often because of unreported earnings, a change in your disability status, or an agency error. Ignore the notice, and the SSA will usually begin recovering the money by withholding a portion of your future monthly benefits. You have two main ways to push back: request a reconsideration if you believe the overpayment is wrong, or request a waiver if it wasn’t your fault and repaying it would cause hardship.
Our experienced South Carolina social security disability lawyers explain what an SSDI overpayment is, what the notice means, and how you can respond:
– What an SSDI overpayment is.
– What happens after you receive an overpayment notice.
– How to respond with a reconsideration or a waiver.
– The deadlines you need to know.
– Answers to common overpayment questions.
What is an SSDI overpayment?
An SSDI overpayment happens when the SSA decides it paid you more than you were entitled to. The Social Security Administration (SSA) reports that substantial gainful activity (SGA) is a leading cause of Social Security overpayments, because returning to work above certain limits can affect your eligibility. But SSDI eligibility can turn on a range of factors, including earnings, marital status, and disability status. A change in any of these may affect your continuing eligibility for benefits.
Here’s the part that surprises many people: an overpayment doesn’t mean you did anything wrong. It may stem from a beneficiary not reporting on time (or at all), or from the agency’s failure to take appropriate and timely action. Sometimes the mistake is entirely the agency’s. Either way, the balance shows up as money the SSA wants back.
What happens after you receive an overpayment notice?
Once the SSA decides you’ve been overpaid, it mails a written Notice of Overpayment. If you don’t respond, it begins recovering the money by withholding your future benefits. If the overpaid individual doesn’t contact SSA, the agency uses available collection methods to recover the overpayment; if the person is currently receiving benefits, the agency can withhold all or part of those benefits. That withholding starts roughly 60 days after SSA sends the overpayment notice.
There’s good news on how much they take. On March 25, 2024, SSA reduced the default withholding rate from 100% of the monthly benefit to 10% (but no less than $10, except in special situations), excluding cases involving fraud convictions or a similar fault determination. The new default rate is automatically applied to overpayments created on or after April 15, 2024, so for most people, the entire check is no longer swept away. And if the overpaid individual’s benefits end, SSA can recover overpayments through authorized external debt-collection methods, such as federal tax return offsets.
If a notice has you worried about losing part of your check, you don’t have to sort it out alone. Call our disability team at 1-833-FILESSA to talk through your options.
How can you respond to an SSDI overpayment notice?
You have two main options, and in many cases, you can use both. Request a reconsideration if you disagree that you were overpaid or with the amount, and request a waiver if you accept that an overpayment occurred but believe you shouldn’t have to repay it.
Requesting a reconsideration
File a request for reconsideration if you believe no overpayment occurred or that the amount is incorrect. Overpaid beneficiaries (or their representatives) may appeal determinations by requesting reconsideration if they dispute the facts or the amounts of the overpayments. Generally, you must request reconsideration within 60 days of receiving the overpayment notice. You do this in writing on Form SSA-561. If the individual responds within 30 days of the overpayment notice, SSA must take action to ensure that benefit payments are not interrupted, so acting quickly helps protect your monthly check while your case is pending.
Requesting a waiver
File a request for waiver (Form SSA-632) if the overpayment wasn’t your fault and repaying it would cause financial hardship or be unfair. Under current law, SSA will waive recovery of an OASDI overpayment if the overpaid individual is without fault in causing the overpayment and the recovery would (1) defeat the purpose of the OASDI program or (2) be against equity and good conscience (see 42 U.S.C. § 404(b)). The same standard appears in 20 C.F.R. § 404.506. There’s no rush on this one. An individual may request a waiver at any time, including after we have fully recovered the debt. SSA also waives an overpayment if the person requests a waiver and the total amount is at or below a certain threshold, unless there is some indication that the person may be at fault. That threshold increased to $2,000 starting May 20, 2024.
What deadlines do you need to know?
The number to remember is 60. You generally have 60 days from the date you receive the notice to request reconsideration, and benefit withholding begins roughly 60 days after SSA sends the overpayment notice. Acting within the first 30 days is even better because a prompt reconsideration or waiver request generally pauses collection until the SSA makes a decision. A waiver itself has no filing deadline, but the sooner you file, the sooner you can protect your benefits.
Frequently asked questions about SSDI overpayments
Can Social Security take my entire SSDI check?
Usually not anymore. The default withholding rate is now 10% of the monthly benefit, rather than 100%, except in cases of fraud or a similar fault determination. This rate applies automatically to overpayments created on or after April 15, 2024. You can also request that the rate of recovery be set at no less than $10 per month if you’re unable to meet ordinary and necessary living expenses.
What if I cannot afford to repay the overpayment?
You have options. You can request a waiver if the overpayment wasn’t your fault and repaying it would cause hardship, or you can request a lower recovery rate by providing a summary of your finances. The key is to respond, not ignore the notice.
Does filing an appeal or waiver stop collection?
Often, yes. If the individual responds within 30 days after the date of the overpayment notice, SSA must take action to ensure that benefit payments are not interrupted. If the 30-day period cannot be assured, SSA must postpone any proposed recoupment for a longer period. Anytime a waiver is requested, SSA stops recovery. A timely reconsideration works much the same way, which is why acting within 30 days matters.
Do I have to pay back money I never received?
If you believe you never received the payment the SSA is describing, reconsideration is the right path. Reconsideration is how you dispute the facts or amounts of an overpayment, allowing you to challenge both whether an overpayment occurred and the amount the agency claims.
Getting an overpayment notice is stressful, but you have more control than it might feel like right now. With 30 years of experience, the disability team at McCravy, Newlon, & Clardy can review your notice, walk you through your options, and handle the paperwork so you can focus on your health. If you’ve received an SSDI overpayment notice, contact us today at 1-833-FILESSA.
