The Social Security Act is a complex piece of legislation that outlines various scenarios where an individual might receive more or less than the correct payment due under Title II of the Act.
This blog post aims to simplify and explain Section 204 of the Act, which addresses overpayments, underpayments, and adjustments. We will also discuss the term “pandemic period,” its relevance to the waiver authority, and various scenarios involving erroneous payments.
Section 204 of the Social Security Act:
Section 204 of the Social Security Act provides for adjustments in cases where an individual has received more or less than the correct payment due. Overpayments can occur in various ways, such as a payment in excess of the amount due under Title II of the Act, failure to impose deductions or to suspend or reduce benefits, payment resulting from the failure to terminate benefits, and payment where no amount is payable under Title II of the Act.
The term “pandemic period” refers exclusively to the period from March 1, 2020, to September 30, 2020, and is used in the context of the waiver authority in § 404.506(b).
Underpayments refer only to monthly insurance benefits and include nonpayment where some amount of such benefits was payable. An underpayment may be in the form of an accrued unpaid benefit amount for which no check has been drawn or an unnegotiated check payable to a deceased individual.
Scenarios involving adjustments:
Adjustments apply in cases where, through error:
- A required reduction, increase, deduction, or suspension is not made, or made in an incorrect amount.
- A payment in excess of the amount due under Title XVIII of the Act is made to an individual entitled to benefits under Title II of the Act.
- A payment of past due benefits is made to an individual without reducing the amount of attorney’s fees payable directly to an attorney under section 206 of the Act.
Payments made on the basis of an erroneous report of death:
Any monthly benefit or lump sum paid under Title II of the Act based on an erroneous report of death by the Department of Defense is deemed a correct payment for any month prior to the month the Department notifies the Administration that the individual is alive.
Payments made by direct deposit to a financial institution:
When an excessive payment is made by direct deposit to a financial institution on behalf of a deceased individual and the financial institution credits the payment to a joint account, the amount of the payment in excess of the correct amount will be considered an overpayment to the other person.
Example: Overpayment and Adjustment Scenario
Imagine Jane, a retired individual, is receiving monthly social security benefits based on her earnings record. In June, Jane starts working part-time, which results in her earning an income that exceeds the allowable limit under the Social Security Act.
As per the Act, Jane’s social security benefits should be reduced due to her increased earnings. However, due to an administrative error, her benefits are not reduced, and she continues to receive her full monthly benefits despite her part-time income.
In this case, Jane has received an overpayment as she has been paid more than the correct amount due under Title II of the Act. Once the Social Security Administration (SSA) becomes aware of the error, they will need to adjust Jane’s benefits to correct the overpayment.
The SSA will notify Jane about the overpayment and inform her of the amount she needs to repay. Jane can either repay the full amount immediately or request a payment plan. If Jane believes the overpayment decision is incorrect, she can also appeal the decision through the SSA’s appeals process.
Conclusion: Understanding Section 204 of the Social Security Act is essential for individuals to be aware of their rights and obligations regarding social security benefits. By knowing the scenarios that can lead to overpayments, underpayments, and adjustments, individuals can better navigate their social security benefits and ensure they receive the correct amount.
https://www.ssa.gov/OP_Home/cfr20/404/404-0501.htm
At Hugo Fierro & Michael Perez, we are a team of committed professionals with a comprehensive comprehension of the intricacies involved in Social Security disability claims. We take great pride in utilizing our expertise to provide personalized guidance and support to our clients. Our proficient team excels at navigating the intricate details of each case, ensuring that our clients receive invaluable insights and customized assistance to meet their unique needs.