What Is a Social Security Overpayment?

The Social Security Administration (SSA) estimates that it overpaid beneficiaries $6 billion in benefits in the 2021 fiscal year. If the SSA notifies you that it paid you too much, you have options for how to respond^[0]

» MORE: What to do if you can’t afford Medicare

A Social Security overpayment occurs when the SSA pays a beneficiary too much. Overpayments happen for several reasons, such as a beneficiary neglecting to update their income, marital status or work situation, or the SSA miscalculating how much it should pay^[0]

Regardless of who is at fault, beneficiaries who receive overpayments from the Social Security Administration usually have to give back the money. Because taxpayer money funds Social Security benefits, the SSA is legally required to recover overpayments^[0]

» MORE: Is Social Security taxable?

The SSA mails an official notice to anyone who has received a Social Security overpayment. The notice will explain the reason the SSA believes you’ve been overpaid, how much you were overpaid, your options for repaying and your rights to appeal or request a waiver^[0]

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The type of Social Security benefit determines how you repay the money. Typically, you send the SSA a monthly payment, or the agency withholds some or all of your benefit until you’ve repaid the full amount.

Social Security retirement beneficiaries who are overpaid will no longer have their next monthly benefit check withheld, the agency announced in March 2024. The new overpayment withholding rate, which took effect in March, is the greater of $10 or 10 percent of the beneficiary’s Social Security payment.

• If you disagree with the SSA’s estimate of how much you owe or that you were overpaid in the first place, you can appeal the notice. 

• If you believe the overpayment wasn’t your fault and paying back the funds would keep you from affording basic necessities, you can ask for a waiver.

If you’re unclear about the repayment requirements, you can contact the SSA to ask questions.

» Estimate your benefits: NerdWallet’s Social Security calculator

You can file an appeal if you think one of these applies to you:

• You were not overpaid; you were entitled to all of the money you received.

• You believe the SSA overpaid you by less than what the notice says. 

Fill out Form SSA-561-U2 Request for Reconsideration and mail it or take it to your local SSA office (you can’t appeal online). When filling out the form, you’ll explain why you believe the SSA did not overpay you or why you disagree with the amount stated in the notice.

You must submit your appeal within 60 days of receiving the SSA’s overpayment notice.

If you don’t think the overpayment is your fault or if repaying the overpayment would cause you financial hardship, you can request a waiver by filling out Form SSA-632 Request for Waiver of Overpayment Recovery.

Be prepared to provide personal information about your income and assets, your monthly expenses and an explanation of why you are requesting a waiver. You’ll also have an opportunity to explain why an overpayment occurred (if you are at fault).

The SSA works to recover overpayments even if you don’t take action to pay the money back.

• The agency can seize money you get from other government agencies, such as your tax refund.

• The SSA can recover overpayments from benefits you haven’t collected yet, such as future Social Security retirement benefits.

• The agency can garnish your wages if you are working. It usually will only go that far if you’re not currently receiving Social Security benefits and have made no effort to repay, or you set up a payment plan but didn’t make regular payments. The SSA can take 15% of your net paycheck (your pay after payroll deductions such as taxes and health insurance premiums). It might take less if taking 15% causes you to take home less than 30 times the federal minimum wage per week (in 2024, that comes out to $516 a week) or your paycheck is being garnished for other reasons. You’ll receive a garnishment notice 60 days before the SSA begins deducting the funds.

• The SSA may report your debt to credit bureaus, which can affect your credit score.

» MORE: See the Social Security payment schedule

The SSA can’t do the following to recover an overpayment:

• Withhold your SSI benefits if you received an overpayment for Medicare benefits.

• Adjust payments to an eligible spouse of someone who was overpaid and then died.

• Seek full repayment from an eligible spouse or estate if an overpaid beneficiary dies before repaying all that they owe.

1. Pay attention to the requirements. The notice will tell you how much you owe and when you have to repay. If you wait too long or do not contact the SSA about your payment options, it may automatically withhold your monthly benefits, garnish your wages or seize other government payments you receive.

2. If you have questions that aren’t answered in the notice, call the SSA. Some information is on the SSA website, but call the SSA if you have specific questions about your case.

3. Keep your overpayment notice. You might need some information in the notice when you talk to the SSA or fill out an appeal or waiver application. Keep the notice somewhere that you can easily find it and ensure it won’t be damaged.

4. Learn about your rights. You have the right to appeal the notice if you believe you weren’t overpaid. You can also ask for a waiver to avoid repaying some or all of the overpayment in certain situations. 

» MORE: When to sign up for Medicare if you’re 65 and still working

Report any changes to your living situation. Information such as your monthly income, marital status and available resources can affect the size of your benefits. Update the SSA when those things change. You can call the agency to update your information or access your my Social Security account online^[0]

Pay attention to how your payments are calculated. If you’re not clear about how your benefits are calculated, contact the SSA to learn why you receive the amount you do each month. This will help you understand when your payments should increase or decrease instead of trusting that the SSA will know your life changed.