Impacted by a Social Security Clawback? Here's What You Can Do.

Over the past year, millions of Americans have seen their Social Security benefits shrink. If you’re among those whose Social Security benefits have been cut, it’s likely because the Social Security Administration (SSA) overpaid you and wants its money back.

If you’ve received a notice from the SSA that your payments are being cut or withheld and haven’t found a solution yet, here’s what you can do:

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Repay the overpaid portion of your benefits

As you planned for retirement, you probably never imagined you’d be asked to repay Social Security benefits you’ve already received. While there are several reasons the SSA may ask for money back, it’s up to you to decide what to do next.

The first and most obvious resolution is to repay the benefit amount that was higher than it should have been.

Request a waiver

If you can’t afford to pay the entire amount back or feel that repayment is unfair or not your fault, you can request a waiver to avoid repaying. Filing a waiver isn’t a guarantee that you’ll be off the hook, but it does give you a way to present your case.

File an appeal

A request for repayment may, in fact, be a mistake. For example, if you weren’t overpaid or the amount the SSA claims you were overpaid is wrong, you can file an appeal. According to the SSA, an appeal should only be filed if you disagree with how much it says you owe.

How the SSA collects

The SSA collects in different ways, depending on the specifics of your case. For example, if you:

• Don’t repay within 30 days of the date on your notice: The SSA will automatically withhold up to 50% of your benefits or 10% of your SSI payment each month until the overpayment is repaid.
• No longer receive benefits: The SSA may withhold your tax refund or garnish wages.
• Die before fully repaying: The SSA may seek repayment from beneficiaries who receive benefits based on your work record.
• Request a waiver or appeal within 30 days: The SSA won’t collect money until it decides on your request.

How to prevent future overpayments

Generally, overpayments occur when the SSA has incorrect information about you. Here are some of the changes in your life that should be reported to the SSA to prevent overpayment:

• You become disabled and can’t work.
• You move.
• You get married, separated, or divorced.
• You take a new job.

You can be confident that if the SSA overpays you, it will want the money back. But unlike the taxes you expect to pay in retirement, notification that you owe money to the SSA may come out of the blue.