An overpayment occurs when Social Security improperly paid a recipient benefits they were not entitled to for some reason or another. Unfortunately, it usually takes Social Security months or years to catch their mistake. A recipient will get a letter in the mail that they owe Social Security a certain amount of money back. Obviously, receipt of such a letter can cause great distress. I classify overpayments into two categories.
The first category is where Social Security has made a mistake about the overpayment and the recipient is actually entitled to that money. These types of cases are rare. More often than not, even if Social Security is at fault and has paid benefits they shouldn’t have, the recipient will be required to pay back the money. Most Social Security attorneys do not handle overpayment cases because they are difficult to win.
Additionally, Social Security will find it hard to believe that one has the money to pay an attorney to fight the overpayment, but they don’t have the money to pay Social Security back. In these cases, I find that Social Security will normally work out very favorable re-payment terms. The best thing to do is to be proactive and work out a re-payment plan with Social Security that fits within your budget, rather than having Social Security withhold part of your benefits to repay the overpayment.