The Social Security Administration (SSA) is implementing significant changes to the way it handles overpayments to beneficiaries. That’s because, in March, SSA Commissioner Martin O’Malley unveiled a detailed four-step plan aimed at providing help to those who have been receiving overpayments without being aware that their actual Social Security benefits have not increased.
Part of the plan is to make it clear to those beneficiaries that some of the money they have received is indeed an overpayment, and that that money could be claimed back. Normally, when a Social Security beneficiary receives more money than he should, the usual practice has been to demand the return of the entire excess amount.
This can be done using the SSA’s own payment system, by reductions in subsequent monthly payments, or by requesting a refund in the form of a lump sum. This process applies even when the error is attributable to an error on the part of the Social Security Administration.
You Got Overpaid by the SSA? Your Next Check Could Shrink
These reimbursements and adjustments can have a significant impact on the financial stability of beneficiaries, especially for those who rely heavily on their monthly Social Security payments to cover expenses such as housing and other vital bills.
An overpayment of Social Security can occur for several reasons, such as changes in income that were not reported to the SSA, that is, if a beneficiary incorrectly reports his income, such as skipping a job or additional income, this can lead to an incorrect calculation of his benefits and result in an overpayment.
In some specific cases, a change in marital status could lead to a change in the calculations that Social Security must make to pay benefits. Changes, such as marriage or divorce, can affect the amount of benefits a person is eligible to receive. If these changes are not properly reported, it could lead to an error and excessive payments.
Even administrative or electronic errors can occur in the SSA system that send additional money to people who do not correspond. In any case, when an overpayment is detected, the SSA notifies the beneficiary and establishes a plan to recover the funds in a fair and equitable manner.
Social Security to Introduce New Rules to Reclaim Overpayments
On March 20, 2024, Commissioner O’Malley announced a detailed four-step plan aimed at changing the way claimants who receive an overpayment can repay it, marking a significant shift in Social Security Administration (SSA) policies.
First of all, starting March 25, the SSA implemented an important modification: It will no longer recover 100% of Social Security benefits when an applicant does not respond to a demand for payment notice. Instead, a new default withholding amount of 10% was set. This bill seeks to provide initial relief to beneficiaries by reducing the immediate financial burden associated with overpayments.
Secondly, the obligation for claimants to provide evidence as to whether or not they were at fault in receiving the overpayment was removed. Instead, the onus is on the agency to determine if the beneficiary was at fault in the situation. This modification seeks to simplify the process and avoid possible disputes about the beneficiary’s guilt in receiving an excessive payment.
Thirdly, the deadline for repayment of overpayments was significantly extended. Previously, the term was 36 months; now it has been extended to 60 months. This longer payback period gives recipients more time to make repayments, which in turn reduces the amount deducted from their monthly checks and helps mitigate the immediate economic impact of overpayments.
Finally, the SSA will make it easier for beneficiaries to apply for a waiver if they can prove that they were not at fault in receiving the overpayment or if they cannot afford to pay the money back. This bill seeks to provide additional relief to those who find themselves in difficult financial situations and who might otherwise face difficulties in meeting repayment requirements. To request a waiver for this repayment claim, you’ll need to submit form SSA-632. Once you’ve completed it, you can either mail it or drop it off at your nearest Social Security office.
