Although my Social Security disability practice is primarily concerned with helping my clients obtain disability benefits, I do receive a fair number of calls and emails from men and women who have received benefits but who have received a “Notice of Overpayment” and demand for repayment from Social Security.
Overpayments usually happen if you return to work, exhaust your 9 month trial work period, and continue to work and collect benefits. More often than you might think, Social Security does not match W-2 or 1099 records with the disability rolls and individuals may collect tens of thousands of dollars of benefits that should not have been paid because the claimant was working.
In other instances Social Security may have calculated benefits incorrectly, and caught their error two or three years later. There are also some cases of double payment, or collection by a family member of a deceased claimant’s monthly benefits.
Whatever the reason, you may find yourself facing a demand for repayment of hundreds or thousands of dollars. It is wise to address problem – if you do not, Social Security will take action against you – seize your future tax refunds, take action to garnish your wages, and in extreme cases, attempt to put you in jail for fraud. Here is a link to the Social Security Handbook with extensive information about overpayment issues.
What to do About an Overpayment
Assuming that you do not have the cash sitting around to issue Social Security a check, you can take one of two actions:
- ask for reconsideration of the repayment demand – this would be appropriate if you disagree with SSA’s determination that you were overpaid, or if you acknowledge that you were overpaid but disagree with SSA’s calculations about how much you owe.
- ask for a waiver of the overpayment – this would be appropriate if you acknowledge that you owe SSA money, but you just don’t have the funds and you want a full or partial waiver of your obligation to repay.
You can file both at the same time. The form to request a reconsideration or a waiver can be found at SSA’s web site, which you can access by clicking on the link.
My experience has been that a good argument for a waiver of overpayment is to argue that asking you to repay will “defeat the purpose of the Social Security disability program.” Essentially you would argue that paying back SSA would create an overwhelming hardship for you and your family.
Attorneys like me do handle overpayment issues, but because there are no past due benefits at stake, I can only handle these cases on an up front fee basis. In cases where a hearing is involved, the fee for representation in an overpayment case can cost $3,000 or more. Needless to say, very few people with overpayment problems have the funds to hire me on an hourly basis to assist them so you will probably have to deal with the overpayment issue on your own. At least now you have links to the forms and resources you can use to present your case.