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Ask Rusty: How Do I Handle an Overpayment Notice from SSA?

By Russell Gloor


Dear Rusty: Things have gone well for me until now. I got a job and have enjoyed going back to work after being retired. But I just got some bad news — a letter from the Social Security Administration (SSA), saying I owe it $17,000 because when I went back to work, I earned more than allowed in 2021. The agency never mentioned that I told it I was going back to work. The SSA now says it cannot pay me benefits in 2022 because I am working. Good job SSA, since I told you when I went back to work. Anyway, I can’t repay it all at once; I’m lucky to buy gas to get groceries. The SSA lists items for a waiver, but I am not sure what is best for me. I was planning to move for health reasons, but if I paid the agency all at once I would have nothing left for the move. I just started my research on how to handle this but hoped you would have some insight.

Signed: Un-retired Worker

Dear Un-retired Worker: Sorry to hear about the overpayment notice you have received from the SSA. Here are my thoughts: The repayment options it offered you are probably: a) remit the entire amount in full, or b) have your Social Security (SS) benefits withheld until the agency recovers what you owe, or c) ask for special payment terms because doing either of the above is a hardship.

At this juncture, you can request a waiver of the overpayment in either of two ways: 

• File form SSA-632, which essentially says you agree you’ve been overpaid but think you shouldn’t be required to pay it back because it wasn’t your fault (it was Social Security’s fault because you notified it when you returned to work). 

• File form SSA-634, which essentially says you agree you’ve been overpaid and want to pay it back, but you can’t afford to pay it back in the manner SSA offered. 

I suggest you start by filing SSA-632, mainly because you notified the SSA in August 2021 that you had returned to work and it, nevertheless, continued to pay you — thus causing the overpayment itself (see Section 3, question.12 of SSA-632). While I cannot predict the probability of you having the entire amount waived, I think there’s a reasonably good chance the SSA may provide you with some special accommodation because the overpayment was, indeed, a result of its own inaction after you notified the SSA you had returned to work. 

I suspect what happened is that the SSA simply neglected to act after you notified it, and then when the SSA received your 2021 earnings data from the IRS, it found you had earned more than the 2021 limit, causing the agency to issue the Overpayment Notice. But its lack of action shouldn’t result in a financial hardship for you, which is why I suggest you seek a waiver. Be aware too that if your waiver request is denied you have the right to appeal that denial, including requesting a hearing by an independent administrative law judge, or by the SS Appeals Council, or even in federal court if desired. 

In any event, while your case is pending, the SSA shouldn’t require you to repay it — the agency should temporarily suspend the repayment demand until your case is decided. 

Assuming you are still working full time, it’s probable that your benefits are now suspended because your income is too high. FYI, you will later get credit for any months in which your benefits are suspended, which will result in your benefit amount increasing after you reach your full retirement age (FRA). Thus, you may be able to, over time, recover some of the SS benefits you’ve lost because of your earnings prior to reaching your FRA.  

Russell Gloor is a national Social Security advisor at the AMAC Foundation, the nonprofit arm of the Association of Mature American Citizens (AMAC). The 2.4-million-member AMAC says it is a senior advocacy organization. Send your questions to:

Author’s note: This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). The NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity.