Supplemental Security Income (SSI) Overpayments Due to Earnings

Supplemental Security Income (SSI) Overpayments Due to Earnings

June 21, 2024
Supplemental Security Income (SSI) Overpayments Due to
Earnings
Supplemental Security Income (SSI)
SSA instructs SSI recipients and wage reporters to keep all
SSI is a means-tested federal assistance program that
pay stubs to report:
provides monthly cash payments to older adults and
individuals with qualifying disabilities who have income
• the total gross monthly wage amount for the prior
and resources (e.g., assets) within prescribed limits. The
month,
program is administered by the Social Security
Administration (SSA). In May 2024, approximately 7.4
• the name of the wage earner,
million people received SSI payments, with a monthly
average payment of about $697.
• the wage earner’s Social Security number, and
Overpayments
• the name and Social Security number of the person who
An SSI overpayment is a payment made to an individual for
receives SSI.
at least one month that was more than the amount SSA
should have paid. SSI payments are dependent on a number
Tools
of factors, a change in any of which may affect SSI
SSA has several methods for self-reporting wages and
eligibility or payment amounts. These changes include
instructs SSI recipients to consult their local Social Security
income and/or financial resources, marital status, living
office on which wage reporting option is best for them.
situation, and disability status. Overpayments may happen
when the agency does not impose deductions; the agency
Certain SSI recipients and wage reporters can use different
does not suspend, reduce, or terminate payments; or there is
electronic tools to report gross monthly wages for the prior
a technician error. This may be due to recipients not
month:
reporting changes timely (or at all) or agency failure to take
appropriate and timely action. In FY2022, SSA paid $57.6
• The SSI Telephone Wage Reporting system is a toll-free
billion to SSI recipients. An estimated $4.6 billion
automated system using the telephone.
(approximately 8%) were overpayments.
• The SSA Mobile Wage Reporting application is free and
Earnings as a Source of Overpayments
can be installed on Apple or Android mobile devices.
SSA reports that wage discrepancies have been one of the
leading causes of SSI improper payments (which include
• The myWageReport tool is an online wage reporting tool
both overpayments and underpayments), accounting for
available to use on a computer or mobile device through
more than one-fifth of SSI improper payments in recent
the my Social Security portal.
years. Wage discrepancies occur when SSI recipients fail to
report changes to their earnings timely or the agency fails to
If using electronic wage reporting tools is not an option,
make changes to payments in a timely manner.
SSA instructs SSI recipients and wage reporters to report
their monthly wage information to their local Social
After applicable exclusions, including the $65 earned
Security office via fax, letter, call, or in-person visit.
income exclusion and $20 general income exclusion, SSI
benefits are reduced by $1 for every $2 of earnings received
Other Sources of Earnings Data
in a month. As a result, relatively small changes in work
SSA’s employees verify wages and detect unreported work
activity and earnings from month to month could cause
through matches with data from multiple state and federal
over- or underpayments if not reported and acted on timely.
agencies.
Earnings Self Reporting
SSA considers sources in a priority order based on
SSI recipients or other required wage reporters (spouses,
reliability. Primary sources include original and unaltered
parents, and representative payees) must report to SSA all
photocopies of wage stubs, wage verification from an SSA-
earned income (from wages or self-employment), beginning
approved wage-verification company, and oral or written
with the date they filed their SSI application. SSA requires
statement from the employer.
that SSI recipients report changes in work activity each
month no later than the 10th day of the following month and
SSA indicates that if earnings are not reported through
encourages electronic reporting by the sixth day to avoid
wage stubs or an approved wage-verification company, it
incorrect payments. Changes to work activity include
will seek earnings data from a secondary source: queries of
starting/stopping working, changes to work hours or rate of
federal or state databases, such as the National Directory of
pay, and expenses paid for work because of disability.
New Hires (NDNH); tax records, including SSA’s Master
https://crsreports.congress.gov

Supplemental Security Income (SSI) Overpayments Due to Earnings
Earnings File (MEF), Form W2 (Wage and Tax statement),
Security or SSI payments for a recipient who is not capable
or other federal or state tax forms; wage information from
of managing his or her own payments). An overpayment
the Internet Ticket Operations Provider Support System
notice explains why the individual has been overpaid, the
(iTOPSS); or wage information from a non-SSA approved
overpayment amount, repayment options, and appeal and
wage-verification company if the wage earner requests the
waiver rights.
information from the verification company.
SSA generally recovers overpayments through an
Wage information obtained from NDNH, iTOPSS, and
adjustment of benefits payable, a full refund or installment
some federal and state databases is considered third-party
payments by the overpaid recipient, or other methods. SSA
information and may only be used as wage evidence when
has recently announced changes to overpayment policies,
the worker agrees with the information on the query. SSA
including extending repayment plan lengths and making it
requires additional documentation for these sources.
easier for beneficiaries and recipients to request waivers.
National Database of New Hires
Consequences for Repeated Failure to
The Office of Child Support Enforcement (OCSE) and SSA
Report Earnings
have a memorandum of agreement that allows a file match
SSA may consider the use of punitive actions to deter future
and authorized SSA employees to query the NDNH. This
overpayments when individuals repeatedly fail to report
database contains quarterly new hires, quarterly wages, and
earnings as required, though an SSA Office of the Inspector
unemployment information reported by the states and the
General’s report from 2017 noted that SSA had not used
District of Columbia to OCSE. Wages are posted quarterly
this authority in the cases it studied. The report lists the
to the database based on when the earnings are paid to the
actions available to the agency as:
recipient. For the file match, SSA systems generate an alert
when the quarterly wage file shows there is significant
Similar fault provisions grant SSA the authority to
unreported or underreported wages compared to SSA’s
withhold the full monthly payment from an
records. SSA uses the database when investigating and
individual who knowingly makes an incorrect or
verifying potential earnings.
incomplete statement or conceals information
material to a determination.
Master Earnings File
Annual wage and self-employment data from the Internal
Administrative sanctions may be applied when an
Revenue Service (IRS) are stored in the MEF. The match
individual makes a false statement, misrepresents a
compares the annual earnings amount reported on IRS
material fact, or fails to disclose information that is
Form W-2 or Schedule SE to the total amount of earnings
material to a determination. When sanctions are
(if any) reported to SSA for SSI recipients for the tax year.
applied, payments are withheld as a penalty for
The MEF data may constitute wages, net earnings from
improper actions and are not used to reduce or
self-employment, or sheltered workshop payments. When
recover an overpayment.
the MEF data indicate significant unreported or
underreported earned income, SSA field offices must
Penalties may also be applied to capable adult SSI
resolve the discrepancy, update the SSI records, determine
recipients who fail to report in a timely manner any
past and continuing SSI eligibility, and pursue overpayment
change that causes a reduction, suspension, or
recovery.
termination of payments.
Payroll Information Exchange
For Additional Information
Section 824 of the Bipartisan Budget Act of 2015
CRS In Focus IF10482, Supplemental Security Income
authorizes SSA to enter into information exchanges with
(SSI)
payroll data providers to obtain wage and employment
information. In September 2019, SSA awarded the Payroll
CRS Report R44948, Social Security Disability Insurance
Information Exchange (PIE) contract to Equifax Workforce
(SSDI) and Supplemental Security Income (SSI): Eligibility,
Solutions. In its February 15, 2024 Notice of Proposed
Benefits, and Financing
Rulemaking, individuals would authorize SSA to receive
their wage and employment information from their
CRS In Focus IF12632, Social Security Overpayments:
employer(s) through a participating payroll provider.
Debt Recovery
Individuals providing wage and employment data through
the PIE would have reduced reporting requirements because
SSA, Understanding SSI, “Reporting Responsibilities,”
SSA would obtain that information directly from the payroll
https://www.ssa.gov/ssi/text-report-ussi.htm
data provider.
SSA, Understanding SSI, “Overpayments,”
Recovery of Overpayments
https://www.ssa.gov/ssi/text-overpay-ussi.htm
The recovery of SSI overpayments is authorized under
Section 1631(b) of the Social Security Act. Once SSA has
T. Lynn Sears, Analyst in Social Policy
determined that an overpayment has been made, the agency
notifies the liable recipient or representative payee (a
IF12693
person or an organization that receives and manages Social

https://crsreports.congress.gov

Supplemental Security Income (SSI) Overpayments Due to Earnings

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF12693 · VERSION 1 · NEW