What Happens If You Don't Pay Back Your Social Security Benefits Overpayment?

Social Security requires notification of changes that affect your benefits. If you continue to receive Social Security payments you no longer qualify for, the Social Security Administration has overpayment procedures in place--and it expects you to acknowledge the overpayment and return the money. You can appeal if no overpayment exists, or if you have justification of your entitlement to the overpayment. Ultimately, the federal government takes proven overpayments from future Social Security payments or other sources.

Reporting

If you qualify for Social Security benefits, whether disability, survivors or retirement, you must notify the Social Security Administration if your conditions change so you no longer qualify. Report if your disability improves or if you are earning income with a disability. Report to Social Security if you no longer care for a child of a deceased worker. Notify Social Security if a retiree dies. These conditions affect benefits and may cause the Social Security Administration to overpay you.

Notification

The Social Security Administration will notify you that overpayment requiring repayment has occurred. The notice has information about the overpayment and instructions on how to appeal or pay the money back. You have 30 days to repay the money. If you continue to receive Social Security benefits, the Social Security Administration will withhold the full benefit to repay the overpayment. It reduces SSI benefits by 10 percent a month until it completes repayment. You can request to have the Social Security Administration withhold a smaller amount and wait for approval.

Reconsideration or Appeal

Appeal the overpayment if you do not believe you were overpaid. You must appeal within 60 days of receipt of the overpayment notice, and Social Security assumes you received the notice five days after mailing. SSA-561 is the appeal form to use. Once the reconsideration appeal decision arrives, you may appeal again if it is not in your favor.

Waiver

Request a waiver of repayment by filing Form SSA-632. You must assert that the overpayment was not your fault and payback would cause undue financial hardship or be unfair for some other reason. The Social Security Administration suggests you file both Form SSA-561 and SSA-632 at the same time. If it determines you were overpaid, you have a waiver request in place; if it denies your waiver request, you can ask for a personal conference.

Results

Filing an appeal or waiver will stop the Social Security Administration from recovering the overpayment temporarily until it makes a decision on your case. Social Security can withhold overpayments from any Internal Revenue Service tax refund due you or can garnish your wages to reclaim funds. You cannot use some federal services if you have outstanding federal debt--for example, you cannot get a reverse mortgage through the U. S. Department of Housing and Urban Development.

References

• Social Security Online: Request For Waiver Of Overpayment Recovery Or Change In Repayment Rate - Form SSA-632-BK: Jan. 2010
• Indiana Disability Benefits and Work: Overpayment of Benefits
• Social Security Online: Overpayments: Oct. 2007
• Disability Rights Network of Pennsylvania: Social Security Overpayments: Feb. 2007
• U.S. Department of Housing and Urban Development: FHA Reverse Mortgages (HECMs) for Consumers: Oct. 2010

Resources

• Social Security Online: Request for Reconsideration Form 561-U2