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Mistaken Social Security payments are rare, but with the Social Security Administration (SSA) delivering monthly benefits to nearly 70 million people, they do happen.
In the 2021 fiscal year, Social Security paid out around $1.1 trillion in retirement, survivors and disability benefits. That included about $1.8 billion in overpayments to beneficiaries, or 0.17 percent of total outlays, according to SSA's most recent payment-integrity report to the federal Office of Management and Budget (OMB).
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If you believe you were either overpaid or underpaid by Social Security, tell the SSA as soon as possible. Failing to report the error in a timely way can lead to months of incorrect payments along with the eventual hassle of sorting it out.
Incorrect payments happen for a number of reasons:
- The SSA might be at fault — a computational error, or a failure to obtain or act on information relevant to a recipient's eligibility or benefit amount.
- A beneficiary might have neglected to notify Social Security of, or provided incorrect data about, a life event that can affect benefits, such as a change in income or a death in the family.
- Your case might not be finished. If a beneficiary appeals a loss or reduction of benefits, the SSA is required in some instances to keep paying the amount in question until the case is decided. If the appeal fails, then the beneficiary was getting the “wrong” amount during this time.
Mistakes are most prevalent in Social Security Disability Insurance (SSDI) and, especially, Supplemental Security Income (SSI), the benefits that serve people with disabilities.
Eligibility for these programs is subject to strict limits on work activity and, in the case of SSI, ceilings on income and financial resources. Unreported or unidentified income and assets are leading causes of payment errors, according to Social Security, which reported to OMB that overpayments accounted for nearly 9 percent of the approximately $57 billion in SSI benefits sent out in fiscal year 2021.
If you've been overpaid
If Social Security paid you too much, you generally have to pay the money back. You will receive a notice explaining the error and outlining your options and rights.
Typically, SSA withholds some or all of your corrected monthly payment until the debt is settled. If you no longer are receiving benefits, the agency seeks a lump sum refund, which you can repay online using the Treasury Department's Pay.gov service. You'll find information on using Pay.gov on your billing notice.
SSA has the authority to garnish wages or income tax refunds if you don't comply. But it also can work with you to set up a monthly payment plan you can afford.
You can request an outright waiver of the debt by filing Form SSA-632. You'll have to demonstrate that the overpayment was not your fault and that repayment would cause financial hardship.