Social Security Disability overpayments can be the result of a change in your circumstances or insufficient reporting of certain information. Occasionally, someone in Social Security Administration (SSA) may also make a mistake which leads to an overpayment. Whatever the reason for the overpayment, if Social Security does discover the mistake this can cause quite a headache for the recipient.
Once the overpayment is discovered, SSA will send a letter called a “notice of overpayment”. This letter will state the amount of the overpayment, the reason it occurred, and an explanation of repayment options. The recipient will also be notified of his or her right to request a waiver or appeal.
For SSI recipients, 10 percent of each monthly benefit check will be withheld until the amount owed has been repaid in full. SSDI recipients will see their entire check withheld each month until the overpayment has been corrected. Those who are no longer receiving benefits for any reason must contact SSA to set up a repayment plan, or mail a check in the full amount of the overpayment to SSA within 30 days of the notice.
Failure to repay an overpayment can result in garnished wages, seizure of federal income tax money, a negative credit report, or loss of future SSI or SSDI benefit checks.
If the recipient of an overpayment believes SSA has made a mistake in calculations, or that the overpayment did not actually occur, they may file a letter of appeal. The letter must explain in detail why the overpayment amount is wrong or did not occur.
If the overpayment is indeed accurate but the recipient does not believe he or she should have to repay the money, a request for waiver may be filed with SSA. The waiver will only be approved if the recipient can prove that the overpayment was not their fault and that repaying the debt would cause significant financial hardship. If a waiver or appeal is filed, no money will be collected until SSA makes a decision on the case.