If your Social Security check has recently been larger than usual, the Social Security Administration (SSA) may no longer require you to repay the extra amount. Thanks to a set of new rules governing Social Security overpayments, introduced by SSA Commissioner Martin O’Malley in March, you may be able to keep the extra amount. All of these regulations are included in a four-step plan, designed to help beneficiaries who unknowingly receive larger payments, thinking it is an increase in their benefits.
Usually, when a Social Security beneficiary receives more money than appropriate, he or she is required to pay it back in full, through reductions in monthly payments or a lump sum payment, even if it was an SSA error. These refunds can negatively impact those who rely on their monthly Social Security checks to cover the cost of their housing and other expenses.
How Does an Overpayment of Social Security Happen and How Does It Affect You?
According to the SSA, there are several reasons that can lead to overpayments: for example, starting a new job and not giving timely notice about it, or continuing to receive payments during the appeal process.
The SSA says it handles overpayments on an individual basis, so if you receive a notification, it’s a good idea to contact the agency, especially if you think it could be an error. If it is a mistake, you can file an appeal.
How Will the New Rules Affect Social Security Refunds?
On March 20, 2024, Commissioner O’Malley proposed a four-step plan to modify the process by which claimants who receive an overpayment can repay it. First, starting March 25, the Social Security Administration will no longer withhold 100% of benefits when an applicant fails to respond to a refund notice. The standard deduction will now be 10%.
Second, applicants will no longer be required to prove whether they were responsible for the overpayment. This burden now falls on the agency if it determines that the recipient was at fault for receiving the additional payment. Third, the period to return the money will be extended from 36 to 60 months. This longer term allows beneficiaries to return less money from their monthly checks. Finally, the agency will make it easier for beneficiaries to request a waiver if they are not responsible or unable to repay the money.
How to Apply for a Social Security Overpayment Waiver or File an Appeal
If you believe you are not responsible for the Social Security overpayments you received, you can request a waiver or file an appeal.
How to request an exemption:
If you recognize that you have received a payment greater than your benefits, but believe that you should not pay it back because it was not your fault, or you cannot do so, you can request an exemption. There is no set time frame to apply for an exemption, as long as you can prove that it was not your fault or that repaying the money would cause you hardship.
To apply for the exemption, you will need to complete Form SSA-632. Once completed, you can mail it or drop it off at the nearest Social Security office. Do not use this form if the overpayment is $1,000 or less and you believe it is not your fault. In this case, apply by calling 1-800-772-1213 or your local Social Security office. It may be possible to do this over the phone.