I received a notice that the Social Security Administration made an overpayment to me, and now it wants the money back. Do I have to pay back the money even though the overpayment was not my fault?

Essentially, yes. You may have accidentally received an overpayment on your Social Security benefits for several reasons. However, just because the SSA accidentally gives too much money to you does not mean you can automatically keep it. Regardless of whose fault it is, Social Security has the right to collect any overpayment. 

Social Security may ask you to voluntarily return the overpayment. If you do not return the overpayment, SSA may deduct the amount of overpayment from your benefits. If the overpayment is not your fault, SSA can set up a program in which you pay it back in installments. SSA would only take out a portion of your monthly check until the overpayment is paid back. That way you are not hit with the whole amount at one time. 

In addition, if Social Security finds an overpayment, it can stop benefits to anyone who is receiving payments based on that person’s earnings. For example, say Social Security finds that there was an overpayment to your deceased spouse during his or her life. If you are receiving survivor benefits based on your spouse’s earnings, SSA can stop or reduce payments to you until the overpayment is returned. 

If you receive a notice of overpayment, you have a couple of options. One option is to ask for a reconsideration. (See http://www.ssa.gov/online/ssa-561.pdf (last visited June 8, 2015). This is a kind of preliminary appeal claiming that you did not get the overpayment or that you should not have to return it for some reason. This appeal should be made to your local Social Security Administration office. Social Security will review your case and see if there was in fact an overpayment. If you ask for an appeal within 10 days, your benefit payments will continue unaffected until a decision is made on the appeal. Even if you miss the 10-day deadline, you can still file an appeal but you must do it within 60 days of the time you receive the notice of overpayment.  

Another option you may consider is to request a waiver of recovery. (See http://www.ssa.gov/online/ssa-632.pdf (last visited June 8, 2015). The waiver of recovery will state that it would be too difficult for you to pay back the overpayment. There is no time limit on filing for a waiver. In fact, you can even request a waiver after you have paid off the overpayment. However, the sooner you file the sooner the situation can be resolved. You can request the waiver and the reconsideration at the same time. 

It is important to know that any overpayment that is less than $1000 is automatically waived the first time if you ask for it and you were not at fault. That means that Social Security can ask for it back, but if you request a waiver, it will be granted automatically. You simply have to call the Social Security Administration and the recovery should be waived. 

It is not usually worth the administrative costs for the Social Security Administration to pursue overpayments that are less than this amount. So, you can avoid the collection of $1000 the first time by simply asking for the waiver. However, if it happens a second time, the waiver is not granted automatically. Also, you cannot waive a $1000 portion of an overpayment. For instance, if you receive a $1500 overpayment, you cannot pay $500 and then waive the remaining $1000. 

For anything over $1000, the Social Security Administration cannot collect the overpayment if it would be against “equity and good conscience” and it was not your fault. With respect to fault, just because it was Social Security’s mistake does not mean that you are without fault. If you realized that you were getting too much and just kept it, then you are not without fault. You are required to report any overpayment to Social Security. 

If you are without fault, you must also show that collection of the overpayment would be against “equity and good conscience.” This means that you would not have enough money to live on if they collected from your benefits. You are entitled to an oral hearing to determine if this is true. If Social Security finds that you cannot afford to pay back the overpayment, then they cannot collect. 

If you receive a notice of overpayment, you must promptly request an appeal. Any request that you make by phone must be followed up with a written request. If you miss the 60-day deadline, you may be stuck with Social Security’s decision. If you need assistance appealing an overpayment, contact an attorney. 

For more information, see: 42 U.S.C. § 404 (2015); 20 C.F.R. §§ 404.502, 404.506-.509, 404.905, 404.909 (2015); 20 C.F.R. §§ 416.550-.558 (2015); Social Security Online, Chapter 19: Underpayments and Overpayments; Califano v. Yamasaki, 442 U.S. 682, 61 L.Ed.2d 176 (1979); Joan M. Krauskopf et al., Elderlaw: Advocacy for the Aging §§ 15.63-.67 (2nd ed. 1993, 2011-2012 Supplement); Social Security Online, Overpayments, http://www.ssa.gov/ssi/text-overpay-ussi.htm (last visited June 8, 2015).