Avoiding Benefit Overpayments & How to Report Changes
An overpayment occurs when the Social Security Administration (SSA) pays you more benefits than you were entitled to receive. This can happen for many reasons—unreported income, a change in living situation, excess resources, or even SSA's own processing errors.
When SSA discovers an overpayment, they'll send you a notice demanding repayment of the entire amount. For someone living on a fixed disability income, receiving a notice that you owe thousands of dollars can be devastating. That's why understanding how overpayments happen and how to prevent them is so important.
The good news: most overpayments are preventable through timely reporting of changes. And if you do receive an overpayment notice, you have options.
Common Causes of Overpayments
For SSI Recipients
- Excess resources: Your countable resources exceeded $2,000 (individual) or $3,000 (couple) on the first of any month. This is one of the most common causes.
- Unreported income: You earned wages, received gifts, or had other income that wasn't reported.
- Living arrangement changes: You moved in with someone, started receiving free food or shelter, or changed your living situation without reporting.
- Marital status changes: Getting married, divorced, or separated affects SSI eligibility and payment amounts.
- Leaving the United States: Being outside the U.S. for 30+ consecutive days affects SSI eligibility.
For SSDI Recipients
- Substantial Gainful Activity (SGA): You earned above the SGA limit ($1,620/month for non-blind individuals in 2025) after your Trial Work Period ended without reporting.
- Medical improvement: Your condition improved enough that you no longer meet the disability definition.
- Incarceration: You were incarcerated for more than 30 days without SSA being notified.
- Workers' compensation: You received other disability payments that should have reduced your SSDI.
For Both Programs
- Failure to report changes: Any change that affects eligibility or payment amount.
- SSA processing delays: Sometimes you report changes correctly, but SSA doesn't process them fast enough.
- Estimate errors: When SSA estimates your upcoming year's income, the estimate might differ from reality.
What You Must Report and When
Report These Changes for SSI (Within 10 Days)
Income changes:
- Starting or stopping work
- Changes in wages or self-employment income
- Receiving any money (gifts, inheritance, legal settlements, tax refunds)
- Changes in in-kind support (someone starts/stops paying your bills)
Resource changes:
- Opening new bank accounts
- Receiving property, vehicles, or valuables
- Selling property or other assets
Living situation changes:
- Moving to a new address
- Someone moving in or out of your household
- Entering or leaving a nursing home, hospital, or other institution
Personal and other changes:
- Marriage, divorce, or separation
- Death of spouse or family member
- Leaving the United States (even temporarily)
- Being arrested or incarcerated
Report These Changes for SSDI (Promptly)
- Starting or stopping work and changes in earnings
- Becoming entitled to other disability benefits (workers' comp, etc.)
- Entering or leaving a nursing home, hospital, or institution
- Marriage or divorce (may affect dependent benefits)
- Being arrested or incarcerated
- Leaving the United States
- Medical improvement or ability to work
How to Report Changes
- Online: Create or log into your my Social Security account at ssa.gov. You can report many changes directly online.
- By phone: Call SSA at 1-800-772-1213 (TTY 1-800-325-0778). Phone reporting creates a record, but follow up in writing for important changes.
- In person: Visit your local Social Security office with documentation supporting the change.
- In writing: Mail a signed letter to your local office explaining the change, with supporting documents. Keep a copy for your records.
- Wage reporting (SSI): Use the SSI Mobile Wage Reporting app or call the automated wage reporting line if you work.
Best practice: Report changes through multiple channels (for example, call AND send a letter) and keep detailed records of when and how you reported.
When You Receive an Overpayment Notice
If you receive an overpayment notice, don't panic. Read the notice carefully—it will explain the amount SSA says you were overpaid, the reason, and your options.
Your Options
- Pay the overpayment. If you agree and can afford to repay, you can pay in full or set up a payment plan. SSA typically withholds a portion of ongoing benefits if you don't pay in full.
- Request a different repayment rate. If the standard withholding rate causes financial hardship, you can request a lower monthly repayment amount.
- Request reconsideration. If you believe the overpayment amount is wrong or that you weren't actually overpaid, you can appeal within 60 days.
- Request a waiver. Even if you were overpaid, you can request that SSA waive the requirement to repay if the overpayment was not your fault AND repayment would deprive you of necessary living expenses or be "against equity and good conscience."
- Request a personal conference. If you disagree with SSA's decision on reconsideration or waiver, you can request an in-person conference.
You have 60 days to request a waiver with protection against benefit withholding during the appeal; after that, you can still request a waiver, but SSA may begin withholding.
Waiver Requests: Key Points
"Not your fault" means you didn't cause the overpayment through willful misrepresentation, failure to report, or accepting payments you knew were incorrect. If SSA made an error and you reported everything correctly, the overpayment isn't your fault.
"Defeat the purpose" or "against equity" relates to your ability to pay. If repaying would leave you unable to afford food, housing, medical care, or other necessities, repayment may be waived.
Waiver requests require documentation of your income, expenses, and financial situation. Be thorough—the more clearly you demonstrate hardship, the stronger your case.
Strategies to Avoid Overpayments
- Track your resources (SSI): Monitor your bank account balance throughout the month, especially as month-end approaches. If you're getting close to $2,000, consider paying bills early or contributing to an ABLE account.
- Report changes immediately: Don't wait. As soon as a change happens, report it. It's better to over-report than under-report.
- Keep detailed records: Document dates you reported changes, names of SSA employees you spoke with, copies of letters and forms you submitted.
- Verify SSA's records: Request a benefit verification letter or check your my Social Security account periodically to confirm SSA has your correct information.
- Respond to SSA correspondence promptly: If SSA sends you a questionnaire or request for information, respond quickly. Delays can lead to estimated payments that cause overpayments when corrected.
FAQs
How fast should I report changes?
Within 10 days after the month the change occurs.
What happens if I don't report?
You may owe the excess back and risk suspension of benefits.
Can SSA forgive an overpayment?
Yes—if you weren't at fault and repayment would cause hardship, you can request a waiver.
What if I disagree with the overpayment?
You can appeal within 60 days if you disagree with the cause or calculation.
Purple Helps You Stay on Track
Unexpected overpayment notices can throw your finances into chaos. Purple's checking account is designed for SSI and SSDI recipients, with tools to track your resources and help you avoid the kind of mistakes that lead to overpayments.
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