SSA Overpayment Relief

I worked with both Linda and Sharon—and other beneficiaries—trying to piece together records that might account for the overpayments that racked up when they temporarily returned to work and the SSA continued to make benefit payments. The SSA is notorious for waiting years before sending overpayment letters. In the meantime, the benefit amounts received were spent and records were lost. After spending time with some of these beneficiaries, I found that locating copies of letters—the ones beneficiaries said they sent the SSA reporting the times they returned to work—was a lost cause.

I typically settled on a practical solution and made Requests for Waiver of Overpayment Recovery or a Change in the Repayment Rate. An SSA-contracted benefits consultant was skeptical about the SSA’s willingness to reduce the monthly repayment amount any lower than $75 a month. He marveled when I negotiated $50 per month withholding for Linda and $25 for Sharon.

            Almost 15 years later—under the direction of newly appointed Commissioner of Social Security, Martin O’Malley—the SSA announced that, effective March 25, 2024, it will decrease the default overpayment withholding rate for Social Security beneficiaries to ten percent (or $10, whichever is greater) from 100 percent. The goal is to ensure SSA overpayment policies are fair, equitable, and do not unduly harm anyone. O’Malley described it as “unconscionable that someone would find themselves facing homelessness or unable to pay bills, because Social Security withheld their entire payment for recovery of an overpayment.” (Limited exceptions to this change, such as when an overpayment resulted from fraud.)

The change applies to new overpayments.  If beneficiaries already have an overpayment withholding rate greater than ten percent and want a lower recovery rate, they too should call the SSA at 1-800-772-1213 or their local SSA office to speak with a representative.

Beneficiaries retain the right to appeal the overpayment decision or the amount.  They can ask the SSA to waive collection of the overpayment, if they believe it was not their fault and can’t afford to pay it back.

And O’Malley has brought even more good news. The burden of proof for a clawback of an overpayment will shift from the beneficiary to the SSA! Oh how Linda and Sharon would have benefited from this rule. And other reforms are being considered, such as a statute of limitations on clawbacks.

This post is based on a condensed version of Chapter 19, Social Security Benefits Representation in “ALWAYS AN ADVOCATE[MOU1] : Champions of Change for People with Dwarfism and Disabilities” by Angela Muir Van Etten and a March 29, 2024 announcement by Jeffrey Buckner, Acting Deputy Commissioner for Communications, reducing the Overpayment Recovery Rate to 10 Percent.