Overpayments from the Social Security Administration
April 22, 2025
Imagine receiving a letter from the Social Security Administration (SSA) saying you were overpaid and now must repay $59,000 in benefits you thought were rightfully yours. Unfortunately, situations like this are not uncommon, and they can be confusing and stressful.
Here’s an overview of how Social Security overpayments can happen—and what to do if you receive such a notice.
Why Overpayments Occur
One case involved a person receiving spousal benefits, not knowing that when their spouse suspended their own benefit in 2019, the spousal benefit eligibility ended as well. This rule stems from the Budget Act of 2015, which eliminated certain claiming strategies. Under the updated rules, spousal benefits cannot be paid if the primary worker suspends their benefit after April 29, 2016. In some cases, SSA mistakenly continued paying benefits, only discovering the error years later.
In another example, a retired individual receiving a pension from non-covered employment also received divorced-spouse benefits. Those benefits were not properly reduced under the Government Pension Offset (GPO) provision. When SSA reviewed the case, they determined an overpayment had occurred and requested repayment of approximately $50,000.
SSA also issues overpayment notices when earnings are underreported. If someone receiving early retirement benefits earns more than expected and fails to notify SSA, this can trigger an overpayment once accurate income data is reported.
What if you get a Notice of Overpayment?
A Notice of Overpayment may not always explain why the overpayment occurred. It typically requests that the full amount be repaid within 30 days. If you believe the notice is incorrect—or if repayment would cause financial hardship—you do have options:
1. Request Reconsideration (Appeal)
If you disagree with the overpayment notice, you can ask SSA to review your case. This is called a Request for Reconsideration (Form SSA-561-U2), which can be submitted online or at a local office. Filing within 30 days can prevent SSA from withholding benefits during the review process.
2. Request a Waiver
If the overpayment was not your fault and you cannot afford to repay it, you may request a waiver using Form SSA-632-BK. SSA considers factors such as:
Whether you were aware of incorrect information
Whether you relied on SSA’s determination to your detriment
Whether repayment would create financial hardship
3. Propose a Payment Plan
SSA often accepts repayment in installments, especially if the overpayment can be repaid within 36 months. In some cases, SSA will also consider lump-sum settlements for less than the full amount owed.
How SSA Collects Overpayments
The most common method is by withholding future benefits. If the individual is no longer receiving benefits, SSA may collect through tax refund offsets, wage garnishment, or other means.
Takeaway
Overpayment notices from SSA can be unsettling, especially if they stem from complex rules that aren’t widely understood. While most interactions with SSA go smoothly, it’s important to respond quickly to any notices and understand your rights.
Helpful Resources
Request for Reconsideration: Form SSA-561-U2
Request for Waiver: Form SSA-632-BK
Sources:
https://hmlink.co/reader.aspx?a=ar-overpayments&e
Disclosures:
This material is for informational and educational purposes only. It is not intended as tax, legal, or investment advice, nor should it be considered a recommendation for any specific strategy. You should consult your financial advisor, attorney, or the Social Security Administration for guidance specific to your circumstances.
The examples provided are hypothetical and for illustrative purposes only. They do not represent actual clients and should not be interpreted as typical outcomes.
The views expressed are those of the article’s original author and do not necessarily reflect the views of Advisory Services Network, LLC.
