Getting a letter from SSA saying you've been overpaid is stressful. But many overpayments are preventable if you understand what causes them and how to stay compliant.
In this article, we'll cover:
- What causes SSI overpayments
- How to prevent overpayments
- What to do if you receive an overpayment notice
- Your options for repayment
- How to request a waiver
1. What Causes SSI Overpayments
Overpayments happen when SSA pays you more than you're entitled to. Common causes:
Income changes:
- Starting a job without reporting
- Getting a raise
- Receiving unreported income
Resource changes:
- Going over the $2,000 limit
- Receiving a gift or inheritance
- Tax refunds accumulating
Living situation changes:
- Someone moving in or out
- Change in who pays for expenses
- Moving without reporting
Late reporting:
- Waiting too long to report changes
- SSA continuing to pay old amount while processing
Important: Even if the overpayment wasn't your fault, you may still be required to pay it back.
2. How to Prevent Overpayments
Report everything promptly:
- Report changes within 10 days
- When in doubt, report it
- Keep records of what you reported
Track your resources:
- Know your bank balance at all times
- Watch for the first of the month
- Set alerts before reaching $2,000
Document your income:
- Keep pay stubs
- Track any money you receive
- Report all income sources
Respond to SSA requests:
- Answer letters promptly
- Attend scheduled appointments
- Provide requested documentation
Use the right tools:
- Balance tracking with Purple
- Alerts for approaching limits
- ABLE account for safe savings
3. What to Do If You Receive an Overpayment Notice
Don't panic. You have options.
Step 1: Read the notice carefully
- Understand why SSA says you were overpaid
- Note the amount they claim you owe
- Check the deadline for response
Step 2: Verify the information
- Is the overpayment calculation correct?
- Did SSA make an error?
- Do you have evidence that disputes their claim?
Step 3: Choose your response
- Pay the full amount
- Set up a payment plan
- Request a waiver
- File an appeal if you disagree
4. Your Options for Repayment
If you do owe money, you have choices:
Pay in full:
- Fastest way to resolve
- May not be possible on limited income
Payment plan:
- SSA can withhold a portion of future benefits
- Typically 10% of monthly benefit
- Can request lower amount if hardship
Benefit offset:
- SSA deducts from future payments
- Happens automatically unless you arrange otherwise
Cross-program recovery:
- If you now receive SSDI instead of SSI, they can recover from those benefits
5. How to Request a Waiver
You may be able to avoid repayment entirely with a waiver:
To qualify for a waiver, you must show:
- The overpayment was not your fault, AND
- Repayment would deprive you of necessary living expenses OR be unfair
How to request:
- Complete Form SSA-632 (Request for Waiver of Overpayment)
- Provide documentation of your financial situation
- Explain why repayment would cause hardship
While waiting for a decision:
- You can request SSA stop withholding benefits
- Ask for "good cause" to pause recovery
Important: Submit your waiver request within 30 days of the overpayment notice to stop automatic withholding.
How Purple Helps
- Balance tracking with $2,000 awareness
- Alerts when approaching limits
- Clear transaction history
- ABLE integration for safe savings
- Easy record-keeping for SSA