The Social Security Administration (SSA) recently announced new policies for recovering overpayments.

If Social Security makes an overpayment to a beneficiary, they are legally required to recover the amount of the overpayment. If an overpayment took place over years, the total amount beneficiaries would be required to payback could be substantial.

Previously, if a beneficiary failed to respond to a notice of an overpayment, SSA would withhold 100 percent of a beneficiary’s social security benefits. Under the new policy, the default withholding rate will now be 10 percent of a beneficiary’s benefits.

SSA will also now offer more flexible repayment plans to beneficiaries. Under the new policy, beneficiaries will be able to extend their repayment periods to 60 months instead of the current limit of 36 months. To qualify for a repayment plan, beneficiaries need to submit a verbal summary of their income, resources, and expenses. This reporting requirement does not apply to SSI beneficiaries. Beneficiaries who are already under a repayment plan who want to take advantage of the more generous new rules can request a change in the repayment amount by filing form SSA-634.

SSA also pledges to make it easier for beneficiaries to request a waiver of repayment if the beneficiary either lacks fault for the overpayment or does not have the ability to pay the overpayment. To request either a full, or partial, waiver of repayment, beneficiaries must submit form SSA-632-BK.

Beneficiaries can also appeal the determination of an overpayment by filing form SSA-61-U2 to request a reconsideration.

For assistance with estate planning, wills and trusts, special needs planning, and related areas, please call Mitchell, Brown and Associates at (314) 962-0186.