Few things are more stressful than opening a letter from Social Security saying you've been overpaid—and that you owe money back. Overpayments are one of the most common (and most feared) issues for people receiving SSI or SSDI, and they can happen even when you've done nothing wrong. The good news is that with the right knowledge and habits, you can significantly reduce your risk.
In this article, we'll cover:
- What a Social Security overpayment actually is and why they happen
- The most common triggers for SSI and SSDI overpayments
- How reporting requirements differ between SSI and SSDI
- Practical steps you can take to protect yourself
- What to do if you receive an overpayment notice
- How tools like Purple can help you stay compliant
What Is a Social Security Overpayment?
An overpayment occurs when Social Security pays you more than you were entitled to receive for a given period. Once the agency discovers the error, it will send you a notice demanding repayment—sometimes for thousands of dollars going back months or even years. For someone living on a fixed income, an unexpected repayment demand can feel impossible to manage.
Overpayments can happen on either SSI or SSDI, but the causes tend to differ because the two programs have different rules. SSI is a needs-based program with strict income and resource limits, while SSDI is based on your work history and focuses primarily on whether you're engaging in substantial gainful activity.
Why Overpayments Happen
The most common reasons for overpayments fall into a few categories, and understanding them is the first step toward prevention.
Unreported or late-reported income is one of the biggest culprits. If you start working, pick up a side job, or earn more than expected, Social Security needs to know right away. For SSI recipients, even small amounts of earned or unearned income can change your monthly payment. For SSDI recipients, earning above the substantial gainful activity (SGA) limit of $1,690/month in 2026 can trigger a loss of benefits—and if payments keep coming after you've crossed that threshold, you'll owe the difference.
Exceeding the SSI resource limit is another frequent trigger. SSI recipients must keep countable resources below $2,000 for individuals or $3,000 for couples. If your bank balance, investments, or other countable assets creep above that line—even briefly—Social Security may determine you were overpaid for every month you were over the limit. This can happen surprisingly easily, such as when a tax refund, back pay, or gift temporarily pushes your account balance too high.
Changes in living arrangements also affect SSI. If someone starts paying less for housing, moves in with a partner, or has their living expenses covered by someone else, their SSI payment can decrease. If you don't report those changes promptly, overpayments accumulate.
Processing delays on Social Security's end cause a significant share of overpayments too. Even when you report changes on time, it can take Social Security weeks or months to adjust your payment. During that lag, you may continue receiving the old (higher) amount, and you'll be expected to pay it back.
How to Protect Yourself from Overpayments
While you can't control Social Security's processing speed, there's a lot you can do on your end to minimize your risk.
Report changes immediately. Don't wait for your annual redetermination. If your income, resources, living situation, or marital status changes, report it to Social Security as soon as possible. For SSI, you're required to report changes by the 10th of the month following the month the change occurred. For SSDI, report any work activity promptly. You can report by calling your local Social Security office, visiting in person, or using your my Social Security account online.
Keep detailed records. Every time you report something, write down the date, the method (phone, in person, online), and the name of anyone you spoke with. If Social Security later claims you didn't report a change, your records can be your best defense.
Monitor your bank balance closely. This is especially critical for SSI recipients. Know your countable resources at all times and be mindful of when deposits hit your account. A direct deposit arriving on the last day of the month can push you over the resource limit, even if you spend the money the next day. Social Security can check your balance on any given day of the month.
Understand what counts as a resource. Not everything you own counts toward the $2,000 limit. Your primary home, one vehicle, household goods, and certain other items are generally excluded. But bank accounts, cash, stocks, and additional property typically do count. Knowing the difference helps you plan.
Set aside money you think you may owe. If you suspect your payment is too high—say you've reported a change but your check hasn't decreased yet—consider setting that extra money aside rather than spending it. That way, if Social Security asks for it back, you'll have it available.
What If You Get an Overpayment Notice?
If you do receive an overpayment notice, don't panic. You have options.
First, review the notice carefully. Make sure the dates, amounts, and reasons are accurate. Social Security makes mistakes, and if the overpayment was calculated incorrectly, you can file an appeal called a reconsideration within 60 days.
Second, if the overpayment is correct but you can't afford to pay it back, you can request a waiver. To qualify, you generally need to show that the overpayment wasn't your fault and that repaying it would deprive you of money needed for ordinary living expenses. Waiver requests are evaluated on a case-by-case basis.
Third, if you can't get a waiver, you can request a different repayment plan. Social Security may agree to smaller monthly deductions from your benefits rather than demanding a lump sum.
Throughout this process, keep copies of everything you submit and note every conversation you have with Social Security.
How Purple Can Help
Staying compliant with Social Security's rules is much easier when you have the right tools. Purple's checking account is built specifically for people receiving SSI and SSDI, with features that help you monitor your resources, track your spending, and keep your finances organized. Instead of guessing whether you're close to the resource limit, you can see where you stand in real time—giving you one less thing to worry about.
Overpayments don't have to catch you off guard. Purple's checking account is designed to help SSI and SSDI recipients stay on top of their finances and avoid compliance surprises.