Social Security Announces Changes to their Overpayment Process

An overpayment occurs when the Social Security Administration (SSA) pays an individual more benefits than what they are eligible to receive.  These overpayments most commonly occur when SSA incorrectly calculates the benefits owed to a claimant.  They can also occur if SSA obtains new information that results in either a reduction in what should have been paid, or renders a claimant ineligible for a period for which they already received benefits. 

These overpayments cause a substantial hardship on claimants who are relying on their benefit payments just to get by.  By law, SSA is required to collect these overpayments back from a claimant.  Unfortunately, in many cases, claimants do not realize they have been paid incorrectly and spend the benefits immediately to avoid foreclosure, pay off credit cards, or pay medical bills.  Once SSA realizes they have overpaid an individual, they will start collecting that money back.  If the claimant cannot pay the full amount immediately, SSA can take a claimant’s entire monthly benefit.  This results in disabled Americans facing the same financial hardship that led to them filing for benefits in the first place. 

We are excited to hear that SSA has now changed their overpayment policies to be much more favorable to claimants.  Instead of withholding a claimant’s entire benefit amount to recover an overpayment, SSA is now defaulting to recovering no more than 10% of a claimant’s monthly benefit.  Their agency is also extending the period they will approve payment plans by an additional two years (from 36 to 60 months).  Finally, claimants who request overpayment waivers no longer have to prove they are not at fault for the overpayment.  That burden is now on the agency. 

There is nothing more frustrating for our firm than to see a disabled person who desperately needs financial support have their benefits taken merely because a calculation error occurred.  The changes to SSA’s overpayment collection process are a welcome change that we are excited to see going forward. 

By: Devon Brady of Premier Disability Services, LLC