Getting extra money from Social Security probably sounds great -- until you learn that it was an error and the government intends to collect. You could lose up to 50% of your future checks until you've paid back the excess, unless you can pay it back in a lump sum right away.
But there's another option. You can request to keep the extra money, and the Social Security Administration (SSA) may let you if you meet certain criteria.
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How to ask the SSA to let you keep the extra cash
Social Security overpayments are rare, but they happen. As long as the overpayment wasn't a result of intentional fraud on your part, you may be eligible to keep the extra money if repaying it would cause you financial hardship.
The way you'll proceed depends on the amount of the overpayment. If it's $2,000 or less, the Social Security Administration asks that you call it or contact your local Social Security office. This is the fastest way to get a response.
When the overpayment is more than $2,000, you'll have to fill out a Request for Waiver of Overpayment Recovery form. This is a pretty in-depth form that asks you to provide details about yourself, your household members, resources, monthly income, and monthly expenses. The government will look over all this to decide whether to allow you to keep the extra funds.
If it approves your request, the extra money is yours to keep. However, you may still owe Social Security benefit taxes on it.
You only have 30 days to request a waiver, so act promptly once you get the overpayment notice. The SSA will not attempt to collect from you until it responds to your request.
What to do if your request is denied
If the Social Security Administration decides you're capable of paying back what you owe, you may be able to request a change in your overpayment recovery rate. This can reduce the amount you lose from future checks while you're paying back the excess. It will take longer to repay what you owe this way, but the toll on your monthly budget will be smaller.
You'll have to fill out another form detailing your financial situation, and the SSA will again review your request. As with waiver requests, if you ask for a change to your overpayment rate, the SSA won't attempt to collect from you until it rules on your request. Once you hear back, you can build a new budget based on what your future checks will look like.
