April 12, 2024
Social Security Overpayments: Debt Recovery
Introduction
earnings record as the overpaid beneficiary (e.g., a
The Old-Age, Survivors and Disability Insurance (OASDI)
dependent family member), or a representative payee who
program, commonly known as Social Security, is
has received a payment on behalf of the overpaid
authorized under Title II of the Social Security Act (42
beneficiary under certain conditions. Overpayment notices
U.S.C. §§401 et seq.). Social Security is a work-based
explain why the individual has been overpaid, the
social insurance program that provides monthly cash
overpayment amount, repayment options, and appeal and
benefits to retired or disabled workers and their family
waiver rights (see 20 C.F.R. §404.502a).
members, as well as to the family members of deceased
workers. Benefits are derived from a worker’s career-
Appeal and Waiver Rights
average earnings in covered employment. The program is
Overpaid beneficiaries (or their representatives) may appeal
administered by the Social Security Administration (SSA)
determinations by requesting reconsideration when they
and pays about $119 billion in monthly benefits to over 67
dispute the facts or amounts of overpayments. An
million beneficiaries each month (see SSA, Monthly
individual generally has to request reconsideration within
Statistical Snapshot, February 2024, Table 2).
60 days of the date the individual received the overpayment
notice.
A Social Security overpayment occurs when the SSA pays
a Social Security beneficiary more than the agency should
Overpaid individuals may also request that SSA waive
have paid (i.e., more than the beneficiary was entitled to
recovery of the overpayments if they believe they should
receive). Of the approximately $1.3 trillion paid to OASDI
not have to pay the money back. SSA does not impose a
beneficiaries in FY2022, SSA estimated that $6.5 billion (or
time limit for filing a waiver. Under current law, SSA will
0.5%) were overpayments (see SSA, Annual Financial
waive recovery of an OASDI overpayment if the overpaid
Report, Fiscal Year 2023, p. 177).
individual is without fault in causing the overpayment and
the recovery would (1) defeat the purpose of the OASDI
Social Security overpayments can occur for a variety of
program or (2) be against equity and good conscience (see
reasons stemming from actions on the part of either the
42 U.S.C. §404(b)). Without fault means that facts show
beneficiary or the agency. Major causes of OASDI
that the individual did not cause the overpayment (see 20
overpayments are changes in marital status and child
C.F.R. §404.507). Recovery of an OASDI overpayment
relationships, increases in beneficiaries’ earnings, and
defeats the purpose of the program if recovery would
SSA’s computation errors (see SSA, Annual Financial
deprive the overpaid individual of the income and resources
Report, Fiscal Year 2023, p. 178). For example, an
required for ordinary and necessary living expenses (see 20
overpayment can occur if a beneficiary fails to timely notify
C.F.R. §404.508). Recovery of an overpayment would be
SSA of a change in marital status or an increase in current
against equity and good conscience for either of two
earnings. An overpayment can also occur if SSA
reasons (see 20 C.F.R. §404.509):
miscalculates the amount of benefits a beneficiary is
entitled to receive.
• The overpaid individual relinquished a valuable right or
put himself or herself in a worse financial position
The recovery of Social Security overpayments is authorized
because of the receipt of Social Security overpayments.
under Section 204 of the Social Security Act (see 42 U.S.C.
For example, an individual purchased a more expensive
§404). SSA recovered $3.1 billion in OASDI overpayments
home in light of the awarded amount of the Social
during FY2023 and had $4.5 billion in OASDI
Security benefit but was unable to afford the home after
overpayments scheduled for repayment at the end of
the discovery of a Social Security overpayment.
FY2023 (see SSA, Agency Annual Overpayment Waivers
Report, FY2023). This In Focus describes the debt recovery
• The individual was receiving benefits on the same
requirements for OASDI overpayments, as well as the
earnings record as the overpaid beneficiary, was living
recent changes in SSA’s overpayment recovery policy.
in a separate household from the overpaid beneficiary at
the time of the overpayment, and did not receive the
Overpayment Recovery
overpayment.
Once SSA has determined that an overpayment has been
made, the overpayment becomes a debt owed to the federal
Internal Collections
government. The agency notifies the liable beneficiary
If the overpaid individual does not request reconsideration,
immediately by mail if the address is available (see SSA,
request a waiver, or repay in full, SSA usually recovers the
Overpayments Fact Sheet). The liable beneficiary may be
overpayment through one of several options.
the beneficiary who has been overpaid, an individual who
received Social Security benefits based on the same
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Social Security Overpayments: Debt Recovery
For current beneficiaries, SSA generally recovers this debt
months and 36 months. The overpaid individual had to
from the overpaid beneficiary (or the representative payee)
complete Form SSA-634—including a detailed breakdown
through an adjustment to ongoing OASDI benefit
of income, expenses and assets—if the requested rate of
payments. SSA withholds a portion or all of the
recovery resulted in a repayment plan of more than 36
beneficiary’s ongoing OASDI payments each month until
months.
the debt has been fully repaid. The benefit withholding
begins approximately 60 days after SSA sends the
The request for a new rate of recovery is not granted for
overpayment notice.
individuals who have been convicted of fraud or who have
similar fault determinations.
Some current and former OASDI beneficiaries who have
low income and assets also receive benefits from the
Length of Repayment Plan
Supplemental Security Income (SSI) program, which is a
On February 15, 2024, SSA changed its instructions in
means-tested program administered by SSA. Under certain
Program Operations Manual System (POMS) to extend the
circumstances, a former OASDI beneficiary’s Social
length of repayment plan that requires the completion of
Security overpayment may be recovered by withholding a
Form SSA-634 from 36 months to 60 months (see POMS
portion of ongoing monthly SSI benefits. This is referred to
GN 02210.030). That is, an overpaid individual can request
as cross-program recovery.
a lower rate of recovery by providing a verbal summary of
financial information if SSA can recover the debt between
External Debt Collection
13 months and 60 months.
If the overpaid individual’s benefits end, SSA offers the
person the option to repay the debt in full or in monthly
Default Rate of Benefit Withholding
installments. The debt is typically considered delinquent
On March 25, 2024, SSA issued an Emergency Message
when the individual has made no voluntary repayments or it
EM-24011 SEN (with a retention date of October 25,
has been 30 days since the last voluntary repayment.
2024), titled “Change in Title II Overpayment Default Rate
of Benefit Withholding” that reduces the default
For delinquent debt, SSA can turn to authorized external
withholding rate from 100% of the monthly benefit to 10%
debt collection tools for enforced repayment, including, for
(but no less than $10 except for special situations),
example, the Treasury Offset Program that can offset
excluding cases of fraud convictions or similar fault
money from federal tax refunds and other federal or eligible
determination. An overpaid individual can request a
state payments (i.e., administrative offset), as well as
recovery rate greater than 10% of the monthly benefit
administrative wage garnishment.
payment.
In some cases, SSA may terminate its debt collection efforts
This new default rate will be automatically applied to
if the overpayment is temporarily unrecoverable. The
overpayments created on or after April 15, 2024. For
overpayment will remain on the benefit record for
overpaid individuals who are currently repaying at a rate
collection when a future recovery method is available. For
greater than 10%, they have the option to request a recovery
example, a former childhood beneficiary may not be aware
rate as low as 10% (but no less than $10). Both the new
of an overpayment if the overpayment was found when the
default rate and the new request for a lower rate will take
individual was a minor and the notice was addressed to the
priority over the procedural change in the length of
representative payee. SSA may resume its collection efforts
repayment plan discussed earlier. In other words, the
through voluntary repayment plans, external debt collection
recovery rate is defaulted (or granted) at 10% of monthly
tools, and adjustment of future OASDI benefits if the
benefits regardless whether the amount collected will
overpaid individual becomes entitled to benefits again at a
facilitate an overpayment recovery within 60 months.
later time (see SSA, Recovering Title II Overpayments
Made to Childhood Beneficiaries).
This policy change in the default (or requested) recovery
rate will reduce the financial hardship for some affected
Recent Changes in Overpayment
overpaid individuals. It will also likely take the agency
Recovery Policies for Current OASDI
longer to recover the overpayment debt.
Beneficiaries
In the past, SSA generally withheld the full monthly benefit
Waiver of Recovery
to recover a Social Security overpayment. The overpaid
Before March 2024, an overpaid individual had to request a
individual might request to change the rate of recovery—
waiver of recovery by submitting Form SSA-632 (version
but to an amount no less than $10 per month—if he or she
updated in September 2023), a 10-page form including the
was unable to meet his or her ordinary and necessary living
reasons for the waiver request and information about
expenses because the entire Social Security monthly benefit
income, expenses, and assets.
was withheld (see 20 C.F.R. §404.502).
Beginning in March 2024, SSA offers a process option by
The procedure to request a new recovery rate depended on
phone for an overpaid individual who is not at fault in
the length of the repayment plan. The overpaid individual
causing the overpayment and the overpayment amount is
did not have to provide information about income,
$1,000 or less (see SSA, Overpayments Fact Sheet).
expenses, and assets if the debt could be collected within 12
months. A verbal summary of that financial information
Zhe Li, Analyst in Social Policy
was needed if the debt could be recovered between 13
IF12632
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Social Security Overpayments: Debt Recovery


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