Millions of Americans rely on Social Security benefits for the bulk of their income, but sometimes, the Social Security Administration makes mistakes in calculating payment amounts. As a result, you might receive a Social Security overpayment, and the natural question to ask is whether you have to pay back money you received in error. The usual answer, unfortunately, is yes. But you can still ask the SSA for relief by filing a request using Form SSA-632. In some cases, you might be able to keep your Social Security overpayment rather than paying it back.
How Social Security overpayments happen
Overpayments occur when the SSA pays you more money than you should have received. This can happen for a number of reasons, including a change in your marital status, incorrect estimates of your actual income, or your recovery from a disabling condition that allows you to return to work. In essence, if you no longer deserve the full benefits that you've been receiving, then the SSA has the ability to declare an overpayment.
If the SSA finds that it has made an overpayment, it will send you a notice that explains what happened. The notice typically asks for a full refund of the overpaid amount within 30 days. If you don't repay, the SSA typically proposes withholding the overpayment from future benefit checks. The default proposal is to withhold 10% of the overpaid amount from each monthly check, or simply taking away your entire check if it's smaller than 10% of the outstanding amount owed.
What you can do about an overpayment
If you get an overpayment notice, you have several options. If you disagree with the notice, you can request an appeal for reconsideration. In that event, any payment made will continue until a final determination is reached. However, if that determination goes against you, then those extra payments will get added to the overpayment amount due.
Even if you agree that the SSA overpaid you, you can still ask to keep the money. Form SSA-632 is a request for waiver of an overpayment, and if it's granted, you won't have to repay the full amount. In order to have the waiver granted, you need to show that it wasn't your fault that you received the overpayment and that you need the money you were overpaid in order to meet your ordinary living expenses. In order to document this, you might need to send the SSA copies of bills and other proof that repaying the SSA would cause a financial hardship because of your current income and financial obligations.
If you find that your Social Security checks are bigger than you expected, don't just assume it's a windfall. Make sure that you're getting the right amount. Otherwise, you could end up getting an overpayment notice at some point in the future and having to pay it all back.