Changes are coming to the way the Social Security Administration handles overpayments. In March, SSA Commissioner Martin O'Malley laid out a four-step plan to help recipients who receive overpayments without knowing that their benefits have not actually increased.

If a Social Security recipient receives more money than they should, they typically have to pay it all back, either through reduced monthly payments or as a lump sum – even if it's an error by the SSA. These repayments can negatively impact people who rely on their monthly Social Security payments to pay for housing and other bills.

We'll explain what happens to Social Security overpayments and how this could affect you. For more information, see the Social Security payment schedule and the maximum amount of Social Security you can receive each month here.

How does Social Security overpayment occur?

According to the Social Security Administration, overpayments can occur for several reasons – for example, if you start a new job and don't report your work on time, or you continue to receive payments during an appeal process.

The SSA says it treats overpayments on a case-by-case basis. So if you receive a notification, it's best to contact the agency, especially if you think it's a mistake. In the event of an error, you can appeal.

How will the new rules affect Social Security repayments?

On March 20, 2024, Commissioner O'Malley unveiled a four-step plan to change how applicants who receive an overpayment can repay it.

First, starting March 25, the Social Security Administration will no longer take back 100% of Social Security benefits if a claimant does not respond to a request for repayment. The default withholding tax amount is now 10%.

Second, plaintiffs no longer have to prove whether they themselves caused the overpayments. Instead, this responsibility falls on the agency if it believes that the beneficiary is at fault for receiving the overpayment.

Thirdly, the repayment period is extended from 36 months to 60 months. This longer payback period gives beneficiaries more time to pay, so less money is taken out of their monthly checks.

Finally, the agency will make it easier for beneficiaries to apply for forgiveness if they are not at fault or cannot afford to repay the money.

How to Apply for Forgiveness of Social Security Overpayments or Appeal

If you believe you are not at fault for the Social Security overpayments you received, you can either apply for forgiveness or appeal. Find out how to do it.

Apply for an exemption:

If you agree that you overpaid but don't believe you have to pay back the overpayment because the overpayment wasn't your fault or you can't afford the repayment, you can apply for a waiver. There is no deadline for requesting a waiver, as long as you can prove that it was not your fault or that repaying the money would pose a hardship.

To request a waiver, you must submit Form SSA-632. Once you have filled it out, you can either mail it or drop it off at your nearest Social Security office.

Do not use this form if you believe there was no fault and your overpayment is $1,000 or less. Instead, apply for an exemption by calling 1-800-772-1213 or your local Social Security office. It may also be possible to process your request by telephone.

File an appeal:

If you don't think you overpaid or the amount stated in your cancellation is correct, you can appeal – here's how to do it.

Before filing, make sure you have the SSA notice and all supporting documents on hand. Once you're ready, go to secure.ssa.gov/iApplNMD/start and click Start an appeal, and then follow the on-screen instructions. Please note that you have 60 days from the date you received the original overpayment notice (five days after the date listed in the notice) to file your complaint.

For more information about Social Security, see how to apply for benefits here. You can also learn how to create a My Social Security account.