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Social Security Sent Me Too Much Money. Am I Supposed to Pay It Back?

A Social Security overpayment notice could set a recipient back a couple hundred to a couple thousand dollars.

There are steps you can take to prevent overpayments from occurring. 
Zooey Liao/CNET

The Social Security Administration will sometimes mistakenly overpay beneficiaries, and when it does it issues an overpayment notice requesting that money back. If that happens to you, it could set you back anywhere from a couple hundred to a couple thousand dollars or more, unexpectedly. 

Martha Shedden, president and co-founder of the National Association of Registered Social Security Analysts, helps clients with overpayment inquiries on a regular basis. A few times, she's even seen clients receive notices that say the beneficiary owes the Social Security Administration over $30,000. That's a lot of money to pay back when you weren't expecting it, especially if you rely on these benefits programs for financial assistance and are strapped for cash. 

For more, here's when the administration sends your Social Security check each month and how to contact the Social Security Administration if you have questions.

What is a Social Security overpayment and how does it happen?

According to the SSA, an overpayment occurs when the agency sends you more money than you should've received. The reason for an overpayment varies, depending on the type of benefits you receive, whether they're old-age, survivors, disability or something else. Maybe you started a new job while collecting Social Security retirement benefits and failed to notify the agency about the change in your income. Or your disability status changed and you returned to work but continued to receive Social Security Disability Insurance (a program for people with disabilities who can no longer work). 

Overpayments can also happen to recipients of Supplemental Security Income (a program for the elderly and people with disabilities who make little to no income) for a number of reasons, like an increase in income or errors in the information you provided to the administration.

The most common reasons that overpayments happen, attorney Bethany K. Laurence writes in an All Law article, include: 

  • Marriage
  • A roommate moved in or out (this one applies to SSI recipients) 
  • A child moved out 
  • You began working
  • You earned more monthly income than previously estimated 
  • You began receiving additional benefits 
  • You began receiving child support
  • You received more income than an SSI recipient is allowed
  • You're no longer disabled
  • You were convicted of a crime 

Shedden explains that a lot of overpayments occur because a beneficiary failed to notify the Social Security Administration of a change that would affect their benefits amount. There's also the chance that a beneficiary was proactive and told the administration about these changes, but it didn't record the change in its system in time and still provided the same benefit amount month after month.  

How do I know if the SSA overpaid me?

You or your representative payee (the person responsible for collecting your benefits if you aren't able to do so) will receive a notice from the administration. The notice will tell you by how much you've been overpaid, why you were overpaid, how you can repay the overpayment and what your appeal and waiver rights are, according to the SSA (PDF). 

If you receive a notice, Shedden advises acting on it quickly. Read through the notice carefully and confirm that the information -- the amounts and the dates -- are correct. Keep reading for what to do if it is or if it isn't correct.

How can I clear up the overpayment?

If you agree with the SSA's overpayment claims, you have 30 days plus five mailing days to repay the agency. If you're receiving Social Security benefits, the administration will withhold the full amount of your benefits 30 days after it notifies you of the overpayment, unless you request a lower withholding amount and the SSA approves your request. 

For SSI recipients, the agency generally withholds 10% of the maximum monthly benefit rate. "If you can't afford this, you may ask that we take less from your benefit each month," the SSA says. It begins withholding 60 days after it notifies SSI recipients. You can also repay at a rate greater than 10% per month. 

If you no longer receive SSI but you are a Social Security beneficiary, you can have 10% of your monthly Social Security benefits withheld.   

What if I'm no longer a beneficiary?

If you don't receive any benefits anymore, you can contact the SSA to set up a repayment plan or send it a check to repay your benefits within 30 days of overpayment notification. 

What are my appeal and waiver rights for an overpayment notice?

If you want to dispute the SSA's claims of overpayment, you have appeal rights. Maybe you disagree with the SSA's statement that you were overpaid or you believe the overpayment amount is incorrect. 

An appeal is a reconsideration request for the SSA to look over your overpayment notice once more. You would request reconsideration if you believe the amount is incorrect or the reason for the agency issuing you the overpayment notice is incorrect. To submit an appeal, find form SSA-561 (PDF) online or call the SSA at 800-772-1213. If you file your appeal request within 30 days, the agency won't take the money out of your benefits until after it has reached a decision, according to Pine Tree Legal Assistance.

If you think the overpayment is not your fault and you can't afford to repay, or if you think it's unfair, you'll want to fill out form SSA-632 (PDF) instead. To change the amount of money you repay every month, fill out form SSA-634 (PDF).

How can I prevent an overpayment from occurring in the future?

For SSI and SSDI recipients, it's essential to report your work and wages within the first six days of the calendar month, and do so every month, so that the benefit amount you receive accurately represents your current earnings status, the SSA says. You can report your wages online through your My Social Security account, the SSI Wage Reporting app (if you receive SSI) or telephone wage reporting, or by taking your pay stubs to your local Social Security office and reporting in person, according to the SSA

For other Social Security recipients who want to prevent overpayments, it's imperative to regularly notify the SSA about any changes in work status, income or other factors that could change the amount of benefits you collect. 

Who can I reach out to for help?

If you need some additional support outside of the Social Security Administration, programs like Registered Social Security Analysts and the National Organization of Social Security Claimants' Representatives can assist beneficiaries with these sorts of disputes and help them further understand the complexities of their benefits.

For more, here's a cheat sheet to understand your Social Security benefits.