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Overpayment of Gov't Benefits

What To Do If You Discover The Overpayment

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If you discover an overpayment from Social Security, do not just ignore the situation.

  • Double check to make sure that it really is an overpayment.
  • Set the overpayment aside and don't think of it as yours to spend. It is not your money -- Social Security has not yet embraced the Finders-Keepers doctrine.
  • You don't need to put the money in a separate bank account unless it is substantial and you are concerned you might accidentally spend it.
  • Assemble what documentation you have to show that it is an overpayment. This would include a copy of the check itself, and any letters or other paperwork you have that shows it to be an overpayment.

For example: If you become eligible for Medicare, but Social Security neglects to withhold the Part B monthly premium.

  • Write a letter that:
    • Summarizes your position
    • Explains the overpayment and
    • Offer to return the money
    • Include:
      • A copy of your Medicare card showing the effective date of your coverage.
      • Copies of the first check after Medicare is effective
      • The check just before Medicare started to show that there was no withholding taken
  • Make a copy of the letter and the proof for yourself.
  • Personally go to your local Social Security office. Explain the situation, deliver the original of your letter and a copy of your proof.
  • Assuming Social Security agrees it is an overpayment, return the overpayment AND get a receipt.
  • Get a receipt for any documents you leave including the letter.

If Social Security Discovers The Overpayment

If Social Security believes you received more money than you were supposed to, the usual first step is to send you a "Notice of Overpayment."

Social Security is required by law to send you this notice. The notice must include:

  • The amount of the overpayment.
  • When and how the overpayment occurred.
  • A request for an immediate refund of the full amount, unless it is small enough to be withheld from the payment due you for the next month.
  • How Social Security proposes to adjust your future benefits if a full refund is not received within 30 days.
  • An explanation that you should notify Social Security if you wish to request a reconsideration, a waiver, a lesser rate of withholding, installment payments or any other adjustment from the original demand.
  • If the overpayment is due to your earning wages through work, Social Security will also provide you with a month-by-month breakdown of what your earnings are believed to be and when they occurred.

If you disagree with the claim of an overpayment, for the form to use see Forms To Use.

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