Supplemental Security Income (SSI) Overpayments

Introduction

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.

SSI Overpayment Recovery Methods

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:

  • For not responding to the overpayment notice, Social Security will determine the repayment rate and will begin deducting the amount directly from the recipients monthly benefit check.
  • In cases where the recipient has died, Social Security can withhold survivors’ benefits and the recipients estate can become liable for the debt. As of 1992, Social Security is authorized by Congress to offset delinquent Title II (SSDI) benefit overpayments with Federal Income Tax Refunds. This option is only available if the recipient’s cash benefits have ceased, and they are refusing to make regular repayments to Social Security.
  • A final option that Social Security may utilize as of 1996, is to report unrecoverable Title II (SSDI) overpayments to recipients credit bureaus. Cases are only reported when a claimant’s benefits have ceased. An automated system selects which cases are to be reported to the credit bureaus. The recipient is notified by mail prior to being reported and they have a right to appeal if they feel the information being reported is incorrect.

Advice

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.