A woman in her seventies has been told she must repay $35,000 after the US Social Security Administration said it had overpaid her for four years — despite her insisting she did nothing wrong.
The case highlights the financial shock faced by beneficiaries who receive a demand for repayment after errors in the administration of retirement or disability benefits. The woman, who has not been named, said she was informed in August that she had 30 days to repay the sum or face a major reduction in her monthly payments.
Her benefit had already been cut by about $600 in February, leaving her with roughly $2,700 a month after tax, Medicare deductions and voluntary withholding. If the debt collection goes ahead, she was told her payment could be reduced by 50 per cent for two years from December, leaving her with about $1,350 a month.
“I’m alarmed,” she said. “I’m trying to sort out what I should do next at this point because I was already underway with a plan.”
The woman said the administration had not explained why she had been overpaid. The disputed period began when she started claiming her own Social Security benefits, and she said she had no reason to believe she had breached any rules.
“I started calling Social Security to figure out what happened and [to share] why I was upset about it,” she said.
She is now working with an adviser to challenge the decision. The appeal has paused the collection process for the time being, but she said the uncertainty had disrupted plans to reduce her workload and move towards retirement.
“Now I’ve lost income. Now they want money back,” she said. “I don’t know what my retirement, if I go forward with it, what it looks like.”
Why Social Security payments are reclaimed
Social Security overpayments can occur when the administration receives incomplete or incorrect information, or when changes in a recipient’s circumstances are not recorded quickly enough. Changes in income, marital status, work or living arrangements can affect the amount a person is entitled to receive.
But advocates say beneficiaries can also be caught out even when they report changes promptly. Nancy Altman, president of the campaign group Social Security Works, said the administration was so understaffed that information was not always entered in time to prevent payments being made incorrectly.
One common source of overpayments involves people who claim benefits before reaching full retirement age while continuing to work. Their payments may be reduced if their earnings exceed the annual limit, but delays in reporting or processing earnings can result in too much money being paid out.
Errors can also arise when the administration calculates an initial benefit incorrectly or when a person receives more than one type of Social Security payment, according to Martha Shedden, president of the National Association of Registered Social Security Analysts.
The administration told reporters it was committed to treating beneficiaries fairly, particularly when they had not caused the mistake. However, under US law, the agency is generally required to seek repayment of money it determines was paid incorrectly.
The agency sends about two million overpayment notices each year across its benefit programmes, according to figures previously given to the CBS News programme 60 Minutes.
Current rules for retirement and other Social Security benefits allow the administration to withhold up to 50 per cent of a monthly payment to recover an overpayment. That default rate took effect for new Title II overpayment notices issued from April 25 2025. For Supplemental Security Income, the standard withholding rate remains 10 per cent.
In its financial report for the 2024 fiscal year, the administration said it had recovered about $4.9 billion in overpayments, while approximately $10.3 billion was scheduled for repayment. About $302 million was waived.
How beneficiaries can challenge a repayment demand
An overpayment notice is not necessarily the final decision. Beneficiaries can ask the administration to reconsider whether an overpayment occurred or whether the amount is correct.
A Request for Reconsideration, using Form SSA-561-U2, normally has to be filed within 60 days of receiving the notice. To stop collection while the case is reviewed, the appeal or a waiver request should generally be made within 30 days.
People who accept that they were overpaid but believe the debt should not be recovered can apply for a waiver using Form SSA-632-BK. This may apply where the recipient was not at fault and repayment would cause financial hardship or would be unfair.
The administration says it will suspend collection while considering a waiver request. Beneficiaries who cannot afford the proposed deduction can also request a lower repayment rate, with payments potentially reduced to as little as $10 a month where a larger deduction would prevent them meeting ordinary living costs.
An Office of the Inspector General review found that the handling of waiver applications varied sharply between local offices. Some offices approved 96 per cent or more of the requests they received, while others approved 30 per cent or fewer.
Experts advise recipients not to ignore the notice, even if a deadline has passed. They should keep copies of forms and letters, record telephone calls and make requests in writing wherever possible. Legal aid organisations, members of Congress and specialists who deal with Social Security appeals may also be able to help.
