Clients depend on their monthly benefit checks from the Social Security Administration (SSA) to meet their basic living expenses. When clients receive a Notice of Overpayment from SSA, their monthly income is in jeopardy of being reduced for reasons they may not agree with or understand. As an advocate, it is important to understand the reasons why overpayments happen, the requirements for SSA notices, the SSA's appeals process, and SSA's collection methods for recouping an overpayment debt in order to answer your client's questions.

Overpayments

What is an Overpayment?
Why Overpayments Happen
Overpayments and Work
Notice of Overpayment: Basic Requirements
Getting a Copy of Your Client's Notice

SSA's Appeals Process

Appealing Overpayment Notices
Request for Reconsideration
Hearing Before Administrative Law Judge
Appeals Council Level

Collection of an Overpayment

SSA's Collection Methods

What is an Overpayment?

Sometimes, SSA tells people they have received more Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) benefits than they were entitled to receive. This is called an overpayment. Usually, SSA will require the beneficiary to pay back any overpaid benefits, and SSA will reduce the beneficiaries current benefits until the money is paid back.

Why Overpayments Happen

An overpayment of benefits occurs for many reasons. Beneficiaries who receive SSI or SSDI payments often do not know what needs to be reported to SSA; assume SSA knows what is happening; or otherwise do not report to SSA changes in their circumstances. Many beneficiaries also receive medical assistance, cash assistance, or food assistance from state agencies such as the Illinois Department of Human Services (IDHS), and they do not understand that SSA and the IDHS do not communicate with each other or share information. Finally, SSA is a vast bureaucracy with an inadequate system for keeping track of changes in its beneficiary's files and implementing its rules despite repeated complaints by Congress and the public. Reporting wages to SSA every month helps avoid overpayments. 

Overpayments and Work

SSA encourages disability beneficiaries to return to work in hopes that they will leave the disability rolls. However, work earnings impact the amount of benefits SSA pays a beneficiary ain Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs.

SSA defines work to exclude jobs in which a person’s gross monthly wages or salary are less than $1470 (or $2460 if blind) in 2023. See the SSA webpage for more information. Thus, many SSDI and SSI beneficiaries who are disabled work part-time jobs.

Notice of Overpayment: Basic Requirements

Notice in Writing

SSA must issue a written notice to the current or former recipient when it asserts that the person has been overpaid benefits. 20 C.F.R. §§ 404.502a, 416.558.

Notice Must Explain Basis for Overpayment

The Notice of Overpayment is required to explain the basis of SSA’s decision. 20 C.F.R. § 404.502a provides the notice must include “[t]he overpayment amount and how and when it occurred.” (Social Security). 20 C.F.R. § 416.558(a) requires notice of the correct and incorrect amounts for each month in the period will be sent to the individual against whom adjustment or recovery [is sought].” (SSI).

Notice Must Include Certain Rights

The Notice must inform the person who has been overpaid of the right to file a request for reconsideration to challenge the finding of an overpayment or the overpayment amount as well as the ability to file a request for waiver of collection of the overpayment. 20 C.F.R. §§ 404.502a(SSDI); 416.558 (SSI).

Getting a Copy of Your Client's Notice

If the client does not have copies of the Notice of Overpayment(s), then the advocate needs to follow up with a Social Security District Office. Generally, advocates should start by contacting the Attorney Liaison for the District Office handling the claimant’s neighborhood and ask to be provided with copies of the notice(s).

SSA Forms for Advocates

Advocates will have to provide either a Consent for Release of Information signed by the client or a signed Appointment of Representative form.

Appealing Overpayment Notices

There are two basic approaches to challenging an overpayment. If you believe the overpayment is erroneous, then you file an appeal. If, on the other hand, the person has a legitimate overpayment but was not at fault in causing the overpayment, then you request a waiver of the overpayment. Sometimes, you can file both an appeal and a request for a waiver, depending on the facts of the case. Both of these options will be discussed in detail in the following sections.

Overpayments may be appealed using the Social Security administrative appeal process. 20 C.F.R. §§ 404.902(j ), (k) and 404.905; 416.1402(c) and 416.1405.

Appeal Deadlines

Appeal deadlines are short--appeals of adverse decisions must be filed within 60 days of the date that the claimant receives the decision. SSA assumes that a claimant receives the decision within five days after the date that the SSA decision is dated. Thus, SSA will consider an appeal to be filed timely if it is filed within 65 days of the date on the SSA decision that denied benefits.

What to Appeal

The administrative appeal process applies to most determinations, e.g. decisions about disability, benefit amounts, overpayments, etc. 20 C.F.R. §§ 404.900 (SSDI) and 416.1400 (SSI).

Levels of Appeal 

When advocating on behalf of your client, it is important to know the different levels of SSA's administrative appeal process, how and when to file an appeal, the decision-maker, the standard of review, and if new evidence will be accepted.

SSA's administrative appeal process includes three levels of review: Reconsideration, Administrative Law Judge Hearing; and Appeals Council. The decision of the Appeals Council is considered SSA's final administrative decision. Once the claimant exhausts SSA's administrative appeal process, the claimant may seek review by filing a complaint in federal district court. 42 U.S.C. §§ 405(g), 1383(c)(3).

Request for Reconsideration 

Reconsideration is the first level of review in SSA's administrative appeal process. 20 C.F.R. §§ 404.907; 416.1407.

Filing Deadline

A claimant has 60 days from the date of the decision to file a request for reconsideration. Because SSA gives time for mailing, it assumes that a decision is received by the claimant within 5 days of the date on the decision. As a result, a claimant actually has 65 days from the date on the decision to file a request for reconsideration. 20 C.F.R. §§ 404.909(a)(1) and 404.901; 416.1409 and 404.1401.

How to File Appeal

The Request for Reconsideration is filed at a Social Security District Office. It can be mailed (use certified mail to have proof of receipt) or hand-delivered. While not required, it is usually advisable to file the appeal at the Social Security District Office that is closest to the client’s home. If you know your client’s zip code, you can find their Social Security District Office locator. You can also file a Request for Reconsideration on the SSA's website. This is an efficient way of filing for reconsideration.

Decision-making

Generally, staff at the Social Security District Office make the decision on reconsideration requests involving overpayment appeals, requests for waiver, and requests to negotiate an overpayment amount. The standard of review is de novo. The claimant may submit additional evidence.

Hearing before an Administrative Law Judge (ALJ)

If the claimant’s Request for Reconsideration is denied, he or she can ask for a hearing before an ALJ. . The request for a hearing is submitted to a Social Security District Office. All requests should be hand-delivered or mailed by certified mail or another service that provides proof that SSA received the appeal. You can also file an appeal requesting a hearing before an ALJ on the SSA's website. 

The request for a hearing is initially processed at the District Office, and then the file of the appeal and all evidence is sent to the appropriate Office of Disability Adjudication and Review (ODAR). There are four ODARs that handle cases in the Chicago metropolitan area: Evanston, Chicago, Oak Brook, and Orland Park. Once the appropriate ODAR receives the case (based on the claimant’s address), it will be assigned to an Administrative Law Judge and set for hearing. Advocates should be warned that there are long delays in getting hearings with ALJs at the four ODARs in the Chicago area. Most cases take at least a year to be resolved once the case is received by the appropriate ODAR.

Filing Deadline

A claimant has 60 days from the date of the decision to file a request for an ALJ hearing. Because SSA gives time for mailing, it assumes that a decision is received by the claimant within 5 days of the date on the decision. As a result, a claimant actually has 65 days from the date on the decision to file a request for a hearing. 20 C.F.R. §§ 404.933(b)(1) and 404.901; 416.1433 and 416.1401.

How to File an Appeal

The Request for Hearing is filed at a Social Security District Office or online. As with Requests for Reconsideration, it can be mailed (use certified mail to have proof of receipt) or hand-delivered, or you can appeal on the SSA website.

Decision-making

An Administrative Law Judge makes the decision at the hearing level. The hearings are non-adversarial and not bound by most rules of evidence. A record is made of the hearing and the ALJ must issue a written decision. 20 C.F.R. §§ 404.944-404.955 (SSDI); and 416.1444-416.1455 (SSI). The standard for review is de novo and the claimant may submit additional evidence.

Appeals Council Level

The Appeals Council is the third and final level of review in SSA's administrative appeals process.  20 C.F.R.§§ 404.967; 416.1467.

Time Limit for Appeal 

A claimant has 60 days from the date of decision to file a request for review by the Appeals Council. Because SSA gives time for mailing, it assumes that a decision is received within 5 days of the date on the decision. As a result, a claimant actually has 65 days from the date on the decision to file a request for hearing. 20 C.F.R. §§ 404.968(a)(1) and 404.901; 416.1468 and 416.1401.

How to File Appeal

The Request for Review of Hearing Decision can be filed at a Social Security District Office. It can also be mailed directly (use certified mail to have proof of receipt) to the Appeals Council office in Virginia. Any evidence for the Appeals Council to consider should be included with the Request. 20 C.F.R. §§ 404.968, 416.1468.

Decision-making

The Appeals Council in either the Falls Church, Virginia or Baltimore, Maryland office will handle the review of the ALJ decision. The Appeals Council will review cases where: 1) there appears to be an abuse of discretion by the ALJ; 2) there is an error of law; 3) the actions, findings, or conclusions of the ALJ are not supported by substantial evidence; or 4) there is a policy or procedural issue that may affect the general public interest. §§ 404.970, 416.1470. The claimant may submit additional evidence as long as it only applies to the time before the ALJ hearing. The Appeals Council typically acts without a hearing, but an oral argument may be requested. If the Appeals Council decides that the claimant’s case raises an important issue of law or policy that would be furthered by oral argument, they will provide notice at least 10 days before the scheduled hearing. §§ 404.976, 416.1476. The Appeals Council may affirm, modify, or reverse the decision of the ALJ and must issue a written decision. 20 C.F.R. §§ 416.1479, 404.979.

Federal District Court

The Appeals Council is the final stage of administrative appeal through SSA. The decision of the Appeals Council may be reviewed by filing an action in federal district court. §§ 404.981, 416.1481.

SSA's Collection Methods

For both programs, SSDI and SSI, federal law requires that SSA collect all overpayments made, regardless of cause.

Recoupment from Monthly Benefits

For persons currently receiving benefits, SSA will recoup from monthly benefits checks. For SSDI checks, SSA takes 100% of each check until recovery is completed. For SSI, assuming no fraud, only 10% of SSI amount ($91.40 in 2023) can be recouped monthly.

Collecting from other Government Payments

In certain circumstances, SSDI and SSI overpayment debts can be collected from other federal government payments, including income tax refunds, and federal salaries.

Income Tax Refunds

SSA may request the Department of Treasury to offset income tax refunds due to taxpayers who have outstanding Social Security and SSI overpayments. 20 C.F.R. §§ 404.520-404.526; 416.580-416.590. Such offsets are authorized by 31 U.S.C. § 3720A. The Department of Treasury follows certain procedures for recovering repayments. 31 C.F.R. § 285.2.

Cross-Program Recovery

In certain circumstances, overpaid SSDI benefits can be collected from SSI payments. 20 C.F.R. §§ 404.530-404.545. In addition, in certain circumstances, overpaid SSI benefits can be collected from SSDI payments. 20 C.F.R. §§ 416.572-416.575.

Administrative Wage Garnishment 

In certain circumstance, SSA may garnish a person’s wages to collect Social Security and SSI overpayments. 20 C.F.R. § 404.527. However, the situations under which garnishment can be done are limited and there are several steps that can be taken by individuals to avoid this garnishment altogether.