It sounds like a good thing until you have to pay it back.
Most people would be thrilled to get a larger-than-average Social Security check, but if it’s due to a clerical error, it could be the beginning of a financial headache. You might be tempted to keep the extra money for yourself, but the Social Security Administration will almost certainly come looking for what it’s owed.
What happens next depends on several factors, including your financial situation and whether you already receive Social Security benefits or Supplemental Security Income (SSI). Here’s what you need to know to get the matter resolved as quickly as possible.
How to repay the Social Security Administration
When the Social Security Administration becomes aware of an overpayment, it will send you a notice indicating why you were overpaid, how much you were overpaid, and your repayment options. It will also explain your appeal and waiver rights, which we’ll discuss below.
If you’re already receiving Social Security benefits and agree you were overpaid, the Social Security Administration will withhold the full overpaid amount from your future Social Security checks 30 days after it notifies you of the overpayment. It’s also possible to request that it withhold a smaller amount from each check if this suits you better, but then it will take longer to sort out the matter.
The Social Security Administration will generally withhold 10% of the maximum federal benefit rate each month for those on SSI. You have the option to reduce or increase this repayment rate if you choose by contacting the Social Security Administration. It won’t begin deducting money from SSI checks until 60 days after you receive the overpayment notice.
If you get a Social Security check but haven’t actually signed up, you can do one of the following to pay back the funds:
- Use your credit card, debit card, or bank account to pay back the money you received via Pay.gov.
- Make a payment to the Social Security Administration using your bank’s online bill-pay feature.
- Send the Social Security Administration a check for the full amount within 30 days.
- Contact the Social Security Administration to set up a monthly installment agreement to pay what’s owed.
Whatever you do, don’t skip your repayments. If this happens, the government will withhold the money from your next federal tax return and report your payments as delinquent to the credit bureaus, which will hurt your credit score.
What to do if you disagree about the overpayment
If you don’t believe you were overpaid or believe the amount is incorrect, you can file an appeal within 60 days of receiving the overpayment notice. Your appeal must be in writing and explain why you believe you weren’t overpaid or why the amount is incorrect. The Social Security Administration will review your claim and decide whether to stop seeking repayment or amend the amount you owe.
You can also request a waiver of collection of overpayment, as long as the overpayment wasn’t your fault and paying it back would cause you financial hardship or would be unfair for some other reason. There’s no time limit to file this waiver, but you’ll be asked to provide proof of your income and expenses to help the Social Security Administration make its decision. If it approves your request, you won’t have to pay back the extra money, even if it was a true overpayment.
If you have any questions about the notices you’ve received or what your next steps should be, contact the Social Security Administration for further information. You can do this online, by phone, or by visiting your local Social Security office.
