If your last Social Security check was more than you anticipated or normally get, your first thought might be that it's your lucky day. And your second thought may be to set the extra funds aside in case the Social Security Administration asks for the money back -- or in case you get a smaller check next month. If you find yourself in this situation and you're wondering if you'll need to pay it back the answer is: Maybe.
Your monthly Social Security payment is based on an average of up to 35 years of your earnings. But sometimes the Social Security Administration miscalculates a payment amount. In the past, that meant you'd need to pay back the overage and even have your benefits cut off to cover the excess amount. But the administration this spring said it would halt its "heavy-handed practice" of recovering overpayments and adopt a "much more reasonable" to repayment.
I'll explain how Social Security overpayments happen and how they may affect you if you get one. For more, here's what to do if your Social Security payment is missing and here's four ways you could potentially lose your Social Security benefits.
How do Social Security overpayments even happen?
Social Security overpayments can happen in a few ways. If you start a new job while receiving benefits and report it to the administration, your monthly benefit check could be reduced -- and if you make over the yearly earnings limit, you may not get a check at all for that month.
But if you got a job and didn't notify the administration about it, you may receive an overpayment.
Another way overpayments could happen is if you've filed an appeal and are still receiving payments. More on appeals below.
What are the new rules surrounding Social Security overpayments?
In a blog post published on March 20, 2024, Social Security Administration Commissioner Martin O'Malley announced a new, four-step plan to address Social Security overpayments, which includes several updates to previous practices of handling the process.
- Previously, if a beneficiary was overpaid and notified to pay it back but never responded, the administration would keep 100% of the beneficiary's monthly Social Security benefit by default. As of March 25, 2024, the administration stopped this practice and in its place instituted "a more reasonable" 10% deduction of a beneficiary's monthly payment until the overpayment was covered.
- The administration updated its guidelines so that the beneficiary would not have to show proof that the overpayment was due to a fault of their own. Instead, the overpayment is investigated internally by the agency.
- In an effort to help beneficiaries with repayment, the repayment plan offered by the SSA extended the typical 36 months period to 60 months -- two extra years to pay back any overpayment.
- The SSA also made filing for a waiver of repayment easier for beneficiaries who are overpaid -- whether to claim they were not at fault for the overpayment or cannot repay the funds back to the agency. More details below.
How do I request a waiver for a Social Security overpayment?
If you've been overpaid by over $1,000 and you don't believe you should have to repay the overage -- either because you don't think it's your fault or do not have the ability to repay it -- you can request a waiver. There's no time limit as to when you were overpaid and when you need to request a waiver -- you'll just need to show that the overpayment wasn't your fault or it would create a financial hardship for you.
To request a waiver for a payment over $1,000, fill out a SSA-632 form and either mail it or drop it off at a local Social Security office.
If you were overpaid less than $1,000 and you believe you were not at fault for it, you can request a waiver by calling 1-800-772-1213 or by visiting your local Social Security office to have the request processed over the phone or in person.
When to file an appeal vs. when to request a waiver for overpayments
If you don't believe you were overpaid, or if you receive a notice and you think the amount is incorrect, you can file an appeal. Unlike requesting a waiver, an appeal has a time limit for when you can file: You have 60 days from when you originally received the overpayment notice.
Before you can file an appeal, you'll need to have a few things ready. This will include the overpayment notice you received, along with any legal forms, documents or written statements you have related to the situation. If you have a personal appointed representative, have their contact information handy.
To file an appeal, head to the Non-Medical Appeal page on the SSA website, and click Start an Appeal and go through the steps.
For more, don't miss the 2025 COLA predictions and the SSI Payment Schedule.