Overpayment Adjustments for Social Security Benefits, § 404.502

Overpayment of Social Security benefits can occur for various reasons.

In the event of an overpayment, the Social Security Administration (SSA) will take steps to recover the overpaid amount from the recipient or their estate. This blog post will help you understand the process of overpayment adjustments, as outlined in § 404.502.

1. Overpayment Adjustments for Living Individuals:

(a) If an individual has been overpaid and is currently entitled to a monthly benefit or a lump sum under title II of the Social Security Act, the SSA will withhold or refund the overpaid amount before any further benefits are paid.

(b) If another individual is entitled to benefits based on the same earnings as the overpaid individual, no benefits will be paid to them until the overpayment is recovered.

(c) If a representative payee receives a payment on behalf of a deceased beneficiary, they or their estate are solely responsible for repaying the overpayment.

2. Overpayment Adjustments after Individual’s Death:

(a) If an overpaid individual dies before the adjustment process is complete, no further benefits will be paid based on the deceased’s earnings until the overpayment is recovered.

(b) Recovery can be achieved through various methods, such as payment from the deceased’s estate, withholding amounts due under title II, or withholding benefits due to other individuals based on the same earnings.

3. Partial Withholding of Monthly Benefits:

(a) If withholding the full overpayment amount would cause financial hardship, the SSA may adjust the recovery by withholding a smaller amount, not less than $10, of the monthly benefit.

(b) This option is not available if the overpayment was caused by the individual’s intentional false statement, willful concealment, or deliberate failure to furnish material information.

4. Overpayment Adjustments for Enrollees Under Supplementary Insurance Plan:

(a) If the overpayment recipient is enrolled under part B of title XVIII (Medicare), the SSA will first apply their monthly benefit toward the supplementary medical insurance premiums and then toward recovery of the overpayment.

(b) Further adjustments may be made if the enrollee requests and meets the conditions mentioned in Section 3.

Example: John’s Overpayment Adjustment

John, a 68-year-old retiree, has been receiving Social Security benefits for the past three years. However, due to an error in calculating his benefits, John has been overpaid by $3,000. The Social Security Administration (SSA) determines this overpayment and takes the following steps to recover the amount:

1. John is currently receiving a monthly benefit of $1,500. The SSA decides to withhold his entire benefit each month to recover the overpayment. However, John submits evidence that this would cause financial hardship, as he relies on his monthly benefit to cover his ordinary and necessary living expenses.
2. After reviewing John’s financial situation, the SSA agrees to partially withhold his benefits. Instead of withholding the entire $1,500 each month, the SSA withholds $300 per month for ten months until the overpayment of $3,000 is fully recovered.
3. During the ten months of adjustment, John receives $1,200 per month in Social Security benefits ($1,500 – $300). After the overpayment is fully recovered, John’s monthly benefit returns to $1,500.

This example illustrates how the SSA can make overpayment adjustments while considering the financial well-being of the individual. By partially withholding John’s monthly benefits, the SSA is able to recover the overpayment without causing undue hardship.

Conclusion: Understanding the overpayment adjustment process for Social Security benefits is essential to ensure compliance with the SSA’s regulations. It is crucial to be aware of your obligations and rights in the event of an overpayment and to stay informed about the various adjustment options available.

https://www.ssa.gov/OP_Home/cfr20/404/404-0502.htm