A recent Social Security rule change will make life easier for many people receiving disability benefits – especially those who receive, or worry about receiving, the dreaded overpayment notice.
Overpayments happen when Social Security pays a person more than he or she should have been paid. Overpayment notices are letters that explain how much was overpaid, how it happened and ask for the money back within 30 days. Some overpayments are small, but others can be hundreds or even thousands of dollars.
Beneficiaries can handle overpayments by appealing, asking for a waiver (forgiveness) or setting up a repayment plan. For more detailed information, view this SSA Overpayments Fact Sheet
Many people panic when they get an overpayment notice and either throw it away or ignore it, hoping the problem will go away. This can lead to Social Security automatically deducting 10% of a person’s monthly Supplemental Security Income (SSI) until the overpayment is repaid. In 2024, this is $94.30 per month, which is a lot for someone receiving only $943 per month. Acting quickly can prevent these deductions.
Previously, Social Security Disability Insurance (SSDI) recipients faced even harsher penalties: Social Security could withhold the entire SSDI payment for failure to respond to an overpayment notice.
- However, changes effective March 25 have introduced several improvements:
- Social Security can now withhold only 10% (or $10, whichever is greater) of a monthly SSDI payment, making SSDI rules the same as SSI.
- The repayment period for overpayments has been extended from three years to five years.
- Social Security is working on automating payroll information collection to reduce overpayments caused by delayed wage reporting.
- It will be easier to request a waiver if you believe the overpayment was not your fault and you can’t repay it.
These changes aim to reduce the fear of overpayment and encourage more people with disabilities to seek employment.
TIPS:
- During the transition period, Social Security may continue to use the old policy. If you have a new overpayment and Social Security withholds 100% of your Title II benefits, call 1-800-772-1213 to request the new 10% withholding rate.
- If you are repaying an existing overpayment and Social Security is withholding more than 10% of your benefits, contact the number above or your local Social Security office to request a lower withholding rate.