Did you get a letter saying Social Security overpaid you? Here's what to know
The Social Security Administration (SSA) will now withhold up to 50 percent of benefits from those who have received overpayments from the agency. Overpayment can happen when a beneficiary has mistakenly been issued an incorrect amount or when the beneficiary is not entitled to benefits because Social Security doesn't have the incorrect information.
'This can happen if you don't tell us about changes in your life, such as your ability to work, your housing situation, your marital status, or your income,' says the SSA website where you can find instructions on how to deal with an overpayment.
Notices sent on or after April 25 include instructions and the withholding of benefits takes effect after about 90 days and remains in place until the overpayment is repaid.
This withholding applies to retirement, survivor, family, and disability benefits.
Last year, the SSA began withholding only 10% of payments from people who needed to return funds due to overpayments. This amount was decided after several media reports highlighted cases of people who lost their homes as a result of their benefits being cut.
The withholding half of the payment is a compromise over a previous SSA decision, which sought to withhold full benefits from those who owed money due to overpayments.
Those who already had a payment agreement with the agency will not see their withholdings affected; the percentage will remain the same.
Supplemental Income Support (SSI) recipients who owe overpayments will pay only 10% to cover their debt, regardless of when the overpayments were made.
How to respond to a Social Security overpayment
Those who receive an overpayment notice should respond to the SSA, indicating whether it was an error, or if not, make arrangements to begin repaying their debt. They have these options:
▪ Request an exemption or waiver of the overpayment if you believe it was not your fault and you are unable to pay the debt. To do this, you must use Form 632 (there is one from 2025, which is the correct one). There are no deadlines for filing it.
▪ If you believe the overpayment is not your fault and it was less than $2,000, you do not need to fill out the form above. You can request an exemption by calling 1-800-772-1213 or a local office, and the issue can be resolved over the phone.
▪ If you think the SSA made a mistake when it decided you received an overpayment, or if you disagree with the overpayment amount, you must file Form 561, called the Request for Reconsideration. You have 60 days to file it.
▪ If you want to make a change to the monthly amount you send to cover an overpayment, you must file Form 634.
In August of last year, the agency estimated that it made nearly $72 billion in improper payments – most of them overpayments – between 2015 and 2022.
To avoid receiving overpayments from Social Security, immediately report to the SSA any changes in your life that affect your income.
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