Once someone realizes they have generated an overpayment, the first question they usually ask is, “What will Social Security do to me?” You will receive a Notice of Overpayment via mail from Social Security. When the overpayment is work related there will usually be a breakdown of the annual work activity and reported earnings included in the notice. If the notice recipient disagrees with any of the information Social Security is basing their decision on, they have the right to file a Request for Reconsideration regarding the issue. If the recipient agrees with the overpayment amount Social Security is claiming, then their next step would be to begin repayment negotiations.
Social Security usually attempts to recover overpayments within a 36 month period. This is just a “target” goal that Social Security has established. Usually, if someone is able to prove that repayment at this rate would cause them a substantial hardship, Social Security is able to extend the overpayment recovery period. Supplemental Security Income, (SSI) recipients are frequently able to negotiate very low payment rates; often as low as $10 per month. This is because it is automatically understood that SSI recipients have very limited income and assets. The individual negotiating their repayment rate for their overpayment , should always get the agreed upon rate in writing from Social Security as protection against any possible future disputes.
If someone is not willing to negotiate or attempt to repay their overpayment, Social Security may engage in the following legal options:
The best advice for an SSI or SSDI beneficiary in an overpayment scenario with Social Security, is to seek the guidance of a benefits counselor so that they can be prepared to negotiate effectively with Social Security for a prudent resolution.