Monthly Social Security payments were once eagerly anticipated by retirees who heavily relied on them to cover their expenses.
However, following the Social Security overpayment scandal that occurred last year, seniors may have concerns regarding the potential repercussions of utilizing the funds they receive from the program.
In November 2023, the Social Security Administration released over $23 billion in overpayments, as well as the agency actively reaching out to recipients to collect the funds.
In the most recent year for which data are available, the SSA’s latest Agency Financial Report disclosed that the agency issued approximately $11.1 billion in new overpayments to Social Security beneficiaries.
The number has seen a significant rise of over 65% compared to the previous year. For the past few years, the SSA has consistently distributed around $6 billion to $7 billion in new overpayments annually.
Recipients who receive a letter from the SSA notifying them of an overpayment are requested to promptly return the excess funds within a 30-day period.
By October of last year, the SSA had already recovered approximately $4.7 billion in overpayments.
Social Security: Four Steps for Overpayment Notices
In the event that you receive a notification of overpayment, consider the following four steps to safeguard your funds:
- Appeal for Reconsideration: This involves requesting the Social Security Administration (SSA) to review your case again, as advised by the Pine Tree Legal Assistance website. A reconsideration should be pursued if you believe the overpayment amount or the rationale provided by the SSA for the overpayment is inaccurate.
- Apply for a Waiver: Even if you acknowledge the overpayment, you can petition the SSA to waive the repayment obligation. Pine Tree Legal Assistance suggests seeking a waiver if you believe the overpayment was not attributable to your actions and if repaying the amount would pose financial hardship.
- Arrange a Payment Plan: If you accept responsibility for the overpayment and possess the necessary funds but prefer gradual repayment over a lump sum, you can explore the option of establishing a payment arrangement. The recurring payment amount would be determined based on the portion of your income required for essential expenses.
- Seek Legal Assistance: For guidance on matters concerning overpayments or clawbacks, consider reaching out to The National Organization of Social Security Claimant Representatives, which comprises attorneys specializing in Social Security cases.