If you are like many SSI recipients, you dread seeing a letter from Social Security. The letter arrives in an official looking envelope…you open and sure enough there is another overpayment.
Overpayments on your SSI record arise for a variety of reasons; however, they all have one factor in common: other income. If you receive income from your spouse’s employment, your employment, child support, an insurance settlement, inheritance, or even if you win money won at the casino, this income will most likely create an overpayment with your SSI benefits.
If you are working and receiving SSI benefits, Social Security excludes only $85 of what you earn from the job each month when counting your income. After excluding the first $85 (pre-tax or gross earnings) they will deduct $1 for every $2 you earn over the $85 limit. When you report that you are working to Social Security they will base your monthly SSI payments off an estimate of your work earnings. This estimate is usually higher than what you actually earn to prevent you from being overpaid. You will need to submit copies of your pay stubs to the local Social Security office to ensure that you are being paid correctly.
If you are working and receiving SSI benefits or if your child receives SSI benefits and you or your spouse starts working, you need to notify Social Security as soon as possible. If you don’t call Social Security to let them know, the IRS will notify Social Security of your earnings and you will have a hefty overpayment to deal with. Social Security could even stop your SSI benefits because of your earnings.
This is true for any other income you receive. Insurance settlements, casino or lottery winnings, and family inherences all affect your SSI payment amounts. You might think Social Security won’t know, but they always find out. It’s best to notify them in advance than to receive that nasty overpayment letter later.
When you receive an overpayment letter from Social Security you have 60 days to file an appeal. At the end of the 60 day timeframe Social Security will usually start withholding ten percent of your SSI benefits for the overpayment. If you don’t agree with Social Security’s reason for your overpayment there are two ways to file an appeal. If the overpayment is not your fault you can file for reconsideration on the overpayment. This could be if Social Security made a mistake and paid you too much. If paying your overpayment back would create a financial hardship for you where you would not be able to pay your rent, food, and medical expenses, you can request a waiver. You can even file both reconsideration and waiver requests. To request reconsideration or a waiver call Social Security at the toll-free number below.
If your overpayment was caused by cashing two checks for a given month Social Security generally will not waive the overpayment unless you can prove it wasn’t you that cashed both checks. To prove this you will have to submit signature samples and the Treasury Department will conduct an investigation. Some people who receive SSI cash the check they receive on the first of the month, and then call Social Security to report that they did not receive the check. Social Security is very trusting until you give them a reason not to be; they will send out a replacement check for the one you didn’t receive. If you cash both checks this is called “double check negotiation.” Social Security frowns on this and people who do this can be prosecuted for fraud.
If you receive an overpayment letter from Social Security the best thing to do is call the toll-free number to clarify the reason for the overpayment and how it will affect your check. Social Security is notorious for poorly written letters and a representative should be able to answer your questions and tell you how the overpayment will affect your SSI payments. To speak to a representative, call Social Security at 1-800-772-1213.