Recently I posted an article on this blog about working after being approved for Social Security disability. I pointed out that SSA’s “work incentive” programs are very confusing and extremely hard to navigate.

For example, SSA uses different earnings limit tables for its Trial Work Period program than it does for determining Substantial Gainful Activity.

You can have non-SGA earnings but at the same time exceed the Trial Work Period limits. In such a situation you could easily use up your Trial Work Period months and find yourself in “overpay” status very easily.

Further, since SSA does not monitor your earnings in real time, you may not find out that you are in overpay status for months or years after you cross the line. If you have received a letter from SSA stating “you have been overpaid – please send us $35,000 in the enclosed envelope within 10 days” you know what I am talking about.

You can also find yourself in overpay status if SSA has moved to terminate your benefits due to medical improvement, and you lose your appeal of the cessation action.

So, let’s assume that you have been overpaid – what can you do about it?

Do Not Delay Taking Action

First and foremost, you must not ignore the notice – if you do nothing, your monthly checks will stop and SSA will grab your tax refund.

Request that Benefits Continue While You Appeal – but Strings are Attached

Second, you do have the option of asking SSA to continue sending you monthly payments while you appeal. But your request for on-going benefits must be filed within ten (10) days from your receipt of the notice of overpayment.

SSA assumes that you received the notice of overpayment five days after the notice was mailed so your request that benefits continue must be filed within 15 days from the date of the overpayment notice.

To request that benefits continue, use SSA form 795 (https://www.ssa.gov/forms/ssa-795.pdf) and write the following: “I have received a notice of overpayment of disability benefits and I plan to appeal this determination. I hereby request that my monthly disability benefits continue while I appeal.”

Sign this form and deliver it to Social Security. You can mail it, fax it or hand deliver. Go to https://www.ssa.gov/locator/ to find the address and fax number for your local SSA office.

Understand, however, that if you choose to have your benefits continue, you will not be able to hire a lawyer to represent you in the overpayment case unless you are prepared to pay your lawyer up front money.

Disability lawyers usually represent disability clients under a “no fee unless you win” contingency fee contract whereby the lawyer is paid 25% of past due benefits. If you ask SSA to continue with payments, there will be no accrued or past due benefits.

Therefore in an overpayment case you have two very unappealing options:

1. you can ask that benefits continue but if you want legal help you will have to pay out of pocket (and this could mean hundreds or thousands of dollars, depending on the help you need); or
2. you can forego on-going benefits, hire a lawyer under a contingency fee, but expect to wait 12 to 18 months with no money coming in before you can take your case before a judge

How to Appeal the Overpayment Determination

Third, regardless of what you decide about receiving or not receiving on-going benefits you need to appeal SSA’s decision to terminate benefits within 60 days from receipt of the notice. You (or your lawyer) would do this by filling out Form SSA 561 – Request for Reconsideration. This form is here: https://www.ssa.gov/forms/ssa-561.pdf.

You may also be able to file your appeal electronically here: https://secure.ssa.gov/iApplsRe/start

Statistically the odds of winning your appeal at the reconsideration level are very low. More likely than not, your reconsideration appeal will be denied and you will have to request a hearing before an administrative law judge. Here is a link to HA-501 which is the form you would use to request a hearing: https://www.ssa.gov/forms/ha-501.html.

How to Request a Waiver of Overpayment or a Payment Plan

You can also choose to ask for a waiver of overpayment and/or a reduction in the payment amount.

If the claimed overpayment is $1,000 or less you should call or fax your local SSA office and ask for a waiver form.

If you can’t get the waiver form or if the overpayment is more than $1,000 you can file Form SSA-632-BK: Request for Waiver of Overpayment or Change in Repayment Rate.

On this form you can argue that the overpayment was not your fault (this is a difficult argument) or that repaying the overpayment would cause financial hardship (this is an easier argument but often results in a payment plan).

A final option would be to file a personal bankruptcy to eliminate the overpayment as overpayments are generally dischargeable in bankruptcy.

As you can see, there are no easy options if you have been overpaid. Despite SSA’s stated goal of encouraging disabled claimants to try to return to work, it is far too easy for an honest and motivated claimant to find himself or herself with a huge overpayment and no way to get legal help.