Social Security Disability Insurance (SSDI) supports people who are disabled and unable to work. This program is managed by the Social Security Administration (SSA). SSDI provides monthly benefits to people who qualify under the SSA’s guidelines. Sometimes, the Social Security Administration may grant beneficiaries more benefits than they are legally entitled to, and this creates confusion for those receiving overpayment benefits.
When the SSA gives a recipient of SSDI payments more in disability benefits than they are legally entitled to, this is known as an SSDI overpayment. It may happen due to inaccurate income reporting or changes in medical conditions that affect eligibility. Recipients who get an overpayment notice from the SSA must respond immediately since they might have to pay back the extra money.
This article will explain an SSDI overpayment, how it occurs, and what you should know if the SSA notifies you of having received an overpayment.
What is an Overpayment?
An overpayment occurs when you receive more benefits from Social Security than you were entitled to for that particular month. It is the discrepancy between the amount you were owed and the cash payment you received. You must reimburse Social Security if you received an extra payment.
Social Security determines your eligibility for Supplemental Security Income (SSI) or Social Security Disability Insurance based on the income you report. You can ensure that Social Security correctly calculates your SSDI cash payment or establishes your eligibility for SSDI by accurately reporting your income on time each month. Timely and accurate reporting is always helpful in helping avoid overpayment.
What Happens If You Receive an Overpayment?
If you believe you received an overpayment of benefits for a particular month, it’s important not to spend that additional cash. The Social Security Administration will send you a notification outlining the overpayment and requesting reimbursement within 30 days.
Unless you specify a lower withholding amount, Social Security will withhold the full amount of your benefit each month if you receive SSDI payments. In order to recoup the overpayment if you receive SSI, Social Security will deduct 10% of your monthly federal benefit amount.
If you get a Social Security benefit check each month and learn that there was an overpayment, it’s important to notify the SSA as soon as possible.
You can file Form SSA-561 for an appeal if you disagree that you have been overpaid or think the overpayment amount is wrong. You must explain in your appeal why you believe you have not been overpaid or why the amount of the overpayment is inaccurate.
You have 60 days from receiving the overpayment notification to file your written appeal.
You could also submit Form SSA-632, Request for Waiver of Overpayment Recovery, to state your case for why you should be granted a waiver and not be required to pay the overpayment amount back.
There is no deadline for requesting a waiver. Still, you must show that the overpayment was not your fault and that paying the money back would be unfair or cause financial hardship.
You might be required to meet with Social Security representatives and provide them with details of your income and documentation of your expenses if you want to file an appeal or request a waiver.
How Does a SSDI Overpayment Happen?
There are many reasons why you could have received an SSDI overpayment. One of the most common reasons is when a recipient’s income changes, they may lose eligibility for the same level of benefits if they begin earning more than the maximum allowed amount while receiving disability payments.
However, the recipient may continue to receive benefits at a higher rate if they do not notify the SSA of the increase in income. When the SSA realizes the mistake, they will send the recipient an overpayment notification. Consequently, the SSDI beneficiary might have to repay all the extra benefits they received.
SSDI overpayments might also happen if there are any changes in the beneficiary’s medical condition. The beneficiary may lose their eligibility for disability benefits if their health improves to the degree to which they are no longer impaired.
However, if the beneficiary does not inform the SSA of the change, they may still be deemed eligible for payments. When the SSA realizes the mistake, they will send the recipient an overpayment notification and also require them to reimburse all of the extra payments they received.
There are also situations when the overpayment is not due to any mistake on the beneficiary’s part. For instance, the SSA can unintentionally pay a beneficiary twice for the same month or make a mistake when calculating benefits. However, even in this instance, the SSA will send the beneficiary a notification outlining the overpayment and requiring them to pay it back.
What Can You Do If You Get An Overpayment Notice?
Inform the SSA if you are a minor receiving Foster Care benefits at the time you receive an overpayment and if the state serves as your representative payee. You can ask for a review if you think the overpayment was in error or you were not compensated.
Any payment that the Social Security Administration is currently making will continue until the agency issues a decision if you file an appeal within 60 days of receiving the notice.
If you think you may have received an overpayment from the SSA but don’t think it was your fault and are unable to pay them back, request Form SSA 632 (Request for Waiver of Overpayment Recovery), fill it out, and apply for a waiver of the overpayment. Anytime is a good time to request a waiver. If the SSA grants you a waiver, you won’t be required to repay the full or partial overpayment.
You must demonstrate the following for the SSA to grant you a waiver:
- You need the funds to cover your regular living expenses. Thus, you are unable to repay the overpayment.
- Demonstrate that all of your money is spent on your monthly costs and that it would be difficult for you to repay. You may need to show bills along with other documentation of your income.
You can request a review, a waiver, or both if you’re unsure what led to the overpayment. You can request a copy of your file to see the data the SSA used to determine the overpayment. As you review your documentation, you can ask them to explain the cause of the overpayment.
What Happens If You Don’t Return the Overpayment?
Let’s say you’ve just been notified that you’ve been overpaid in Social Security Disability Insurance payments. What does this notice indicate, and what happens if the difference isn’t repaid?
Failure to repay an SSDI overpayment may result in severe penalties. It’s possible that the Social Security Administration will put a hold on your regular payments for a while. Your credit scores, federal tax returns, and paychecks will all be at risk. However, before returning any alleged overpayment, it might be helpful to discuss the matter with an attorney, if you believe the overpayment is not a mistake.
It’s possible that the SSA miscalculated something, and you received an overpayment notice from the SSA in error. If this is the case, then it’s possible that you don’t owe the SSA anything at all.
Time is of the essence when responding to a Social Security Administration notification of an overpayment for SSDI benefits. If you owe the SSA money and don’t pay it back, you could face serious consequences. It’s possible that your future disability benefits will be affected first.
The Social Security Administration may deduct money from your tax return or paycheck. In extreme cases, the SSA may inform credit bureaus about the beneficiaries’ failure to make reimbursement payments.
Discontinued Benefits
Your future SSDI benefits could be at risk if you fail to reimburse any overpayment to the Social Security Administration. When an overpayment remains unresolved, the Social Security Administration typically stops sending out SSDI payments.
This might have a devastating effect on those who rely on their Social Security Disability Insurance payments to make ends meet. If you get a notice of overpayment, a disability attorney can assist you in responding immediately so that you are not denied temporary or permanent access to your SSDI benefits.
Reduced Amount of Your Federal Refund Check
Overpaid SSDI beneficiaries risk having a portion of their annual federal refund withheld if they don’t repay the SSA. When you submit your taxes and are eligible for a tax refund, the federal government will normally send you a check.
The Social Security Administration is a federal entity; therefore, it can legally take money from your refund to pay back SSDI benefits that were wrongfully awarded in the past.
Decreased Income
Some people who are receiving Social Security Disability Insurance benefits continue to work part-time so that they can bring in additional money without exceeding the substantial gainful activity (SGA) allowed maximum.
The Social Security Administration may deduct money from your paycheck if you get a disability payment that is more than you were entitled to and you now owe the SSA money.
Effects on Your Credit
Refusing to repay the Social Security Administration for an SSDI overpayment could negatively affect your credit score. If you fail to pay back your Social Security benefits, the Social Security Administration may inform a credit reporting agency. This could have negative consequences for your financial health and your access to certain resources.
In the event of an overpayment, a disability advocate can assist you in identifying the problem and preventing further damage to your credit.
What to Do If the SSA Does Not Grant You a Waiver
If Social Security rejects your request for a Waiver, you can request a review. You have the right to request a hearing if they still reject your waiver request after reconsideration. Your overpayment may need to be repaid or deducted from your monthly payments if the agency finally rejects your request for a waiver.
If you want the SSA to withhold less money each month than requested, please complete form SSA-634 Request for a change in Repayment Rate. If you are no longer receiving Supplemental Security Income benefits, you can also make arrangements to make monthly payments.
If you stop receiving SSI, they may deduct any excess payments from any future Social Security benefits you might get, your Federal Income Tax refund, or both. They may even deduct your excess payment from future SSI payments if you qualify.
What to Do If You Haven’t Repaid an Overpayment
It is a very serious matter if an overpayment of SSDI benefits is not repaid to the Social Security Administration after they have sent you a request for repayment. Get in touch with the SSA, your local SSA office, or an advocate if you find yourself in this position. In order to help you avoid any potential consequences, they can guide you through what steps you need to take in order to make a prompt repayment to the SSA.
If you get a notification of overpayment from the Social Security Administration, you must respond within 30 days. This is not a lot of time, particularly for those who receive monthly payments but fail to keep track of them.
You may have waited to respond to the SSA because of problems with the mail or because you recently moved. In order to avoid the repercussions of not paying back an SSDI overpayment, make sure to contact your local SSA office.
A disability advocate from the SSA local office can assist you in gathering the necessary evidence of an overpayment and scheduling a timely repayment plan with the Social Security Administration that will not affect your life. If the Social Security Administration has overpaid you and you want to keep receiving benefits, you should repay them right away or work out a plan to do so.
Conclusion
SSDI overpayments can occur for several reasons, including changes in income, health issues, or SSA mistakes. It is crucial to reply immediately to any overpayment notices and, if required, obtain assistance from a knowledgeable advocate or attorney.
Timely and accurate reporting of income and medical conditions is essential to preventing SSDI overpayment. You can appeal the decision or obtain a waiver if you overpaid. Still, it is important to provide evidence to support your claim.
