What Happens if Social Security “Overpays” Me?

 Posted on February 09,2017 in Social Security Disability

Mistakes happen. For instance, overpayments and underpayments to beneficiaries in Social Security disability insurance cases may occur. When an overpayment is made, Social Security may not seek to recover the excess amount if the recipient is “without fault” and such recovery “would be against equity and good conscience.”

Social Security Forgets to Tell Disability Recipient He Is No Longer Disabled

So what constitutes “fault” on the part of the disability recipient? Social Security regulations state it is any of the following acts:

• “An incorrect statement made by the individual which he knew or should have known to be incorrect”;
• “Failure to furnish information which he knew or should have known to be material”; or
• Accepting a payment that the recipient “knew or could have expected to know was incorrect.”

Of course, there are cases where a disability recipient is genuinely unaware of an overpayment because of Social Security's neglect or failure to communicate. This can have potentially devastating consequences if Social Security turns around and tries to blame the recipient for its own mistakes.

A recent case in Illinois offers a helpful example. In this case, a man started receiving Social Security disability benefits in 2007. The following year, the recipient informed Social Security he was working full-time at a grocery store, so his disability payments ceased. However, by 2009, Social Security had resumed payments, even though the recipient continued to work 4 to 5 hours per week at the grocery store.

Three years later, in 2012, the recipient again told Social Security he was capable of full-time work. Social Security then declared all of the disability benefits sent to the recipient from 2008 forward—nearly $32,000—constituted an overpayment. Social Security demanded recovery on the grounds the recipient was at fault for not properly informing the agency about his employment status.

In January 2017, a federal magistrate judge ordered Social Security to reconsider its order. The magistrate said that while the agency “decided to terminate benefits in November 2010, they kept that a secret from [the recipient] and kept sending him checks” until 2012. The recipient was never notified he was no longer eligible for disability benefits until Social Security demanded immediate repayment. Furthermore, the recipient regularly updated Social Security on his changing work hours and his hourly wage. The magistrate said Social Security could easily determine the recipient's continuing eligibility based on that information.

Fighting for Your Rights

Curiously, the recipient in this case won his appeal without making any effort. The magistrate said the recipient never appeared in court or filed a response, and his mother filed the initial complaint. The magistrate therefore ruled based on the existing record and what he described as a “sketchy and unilluminating” brief filed by Social Security.

Obviously, such a passive approach is usually not the best course of action. If you are faced with a hostile demand from Social Security to repay benefits, your first call should be to a qualified Chicago Social Security Disability attorney. Contact Pearson Disability Law, LLC if you would like to schedule a consultation right away.