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What to do if Social Security says you owe them money | Dollars & Sense

It happened to a woman in Elk Grove. She was told 10 years into her retirement she owed the government more than $30,000.

ELK GROVE, Calif. — Millions of Americans rely on Social Security to get by but imagine getting a letter in the mail saying you owe them money.

That happened to a woman in Elk Grove. She was told 10 years into her retirement she owed the government more than $30,000.

“I’ve been totally consumed by this since March,” said Vicki Estrada.

Estrada, 75, is a retired accountant collecting Social Security benefits. She was recently told she owes the Social Security Administration more than $33,000.

“I thought it was a mistake. I really didn’t think much of this letter,” she said.

It told her they overpaid her benefits over the last decade and they’d be reducing her benefits.

“I got the check before I got the letter and I was wondering why the check was so small,” she said.

The SSA websites say overpayments can happen when recipients don’t share updates on life changes like “ability to work, living situation, marital status or income.”

“This is typical for Social Security. They typically will send out notices that you can't really decipher very well and they're bad about calculations,” said Social Security disability attorney Joe Fraulob.

He took up Estrada’s case pro bono. He says the SSA’s error was miscalculating the difference between her deceased husband’s benefits and her own benefits, which were higher.

“Instead of just paying her at the higher rate, what Social Security did — and it makes no sense — they added the difference between the lower rate she was at and the higher rate on top of the higher rate. Basically, she was getting paid like $300 a month, too much for about 10 years,” he said.

He says Social Security overpayments are rare but being told to pay up can be devastating for vulnerable seniors.

“Most people that are on Social Security, for whatever reason, are pretty much just barely getting by,” said Fraulob.

The good news is that you have some options. The first is to appeal the overpayment with a request for reconsideration. If that doesn’t work…

“They overpaid you, that's been confirmed. If you can demonstrate a significant enough hardship… you do have the ability to appeal to Social Security to completely waive the overpayment that took place,” said financial planner Joseph Eschelman.

If the administration still demands repayment, a third option is setting up a payment schedule.

“Then we can also ask them to refigure the rate based on the fact that you barely have any money to pay the overpayment back, and the lowest they'll let you pay is like $10 a month,” said Fraulob.

However, hardships can remain.

“If you're on a fixed income, does it mean you cut something else? Does it mean you go out and seek part-time employment,” said Eschelman. “Not attractive choices. I mean… there's no way to sugarcoat that.”

From the jump Estrada followed some of those steps and hasn’t stopped fighting back by calling Social Security, writing letters to lawmakers, and filing requests for appeals and waivers.

“If I think I’m right — and I think I’m right here — I’m going to fight for it. I’m not going to sit back and the thing is they’re picking on the old people. The people that they think aren’t going to fight back, but I will. I think I’ve proven that by all the letters I’ve written. Next is a billboard,” said Estrada.

ABC10 contacted the Social Security Administration and last week Estrada said they waived her more than $33,000 overpayment, meaning she no longer owes that money.

Experts say there’s not much you can do to prevent an overpayment like hers from happening to you but being proactive can help.

Always report any life changes and if you do get a letter from Social Security, don’t wait to act. Missing deadlines could cost you money and headaches down the line.

Several members of Congress have spoken out against overpayments, criticizing the SSA about them. In response, the agency recently announced it’s appointed a team to review the overpayments.

In an October congressional hearing, the SSA’s acting commission said more than a million Americans were sent overpayment notices in 2022 and more than 980,000 in 2023.

ABC10 reached out to SSA's SF Regional Public Affairs Office and received this response:

"Please see our blog Learn about Overpayments and Our Process | SSA and our Press Release | Press Office | SSA announcing a comprehensive review of our overpayment policies and procedures.

Our payment accuracy rates are high, although overpayments can occur given the number of people we serve, the frequent changes in their circumstances, and the statutory complexity of the programs. Regarding the Social Security program itself, which includes payment to retirees, surviving spouses, and disabled workers, only one-half of one percent of paid amounts are overpayments – an extremely low percentage.

Getting an overpayment notice can be unsettling and we work with people to navigate the process. We inform people about the fact and amount of the overpayment, their right to appeal, and the options to repay or, in some cases, receive waivers of the debt.

People have the right to appeal the overpayment decision or the amount. They can also ask Social Security to waive collection of the overpayment, if they believe it was not their fault and can’t afford to pay it back. We do not pursue recoveries while an initial appeal or waiver is pending. We examine each waiver request to determine, among other factors, if the person caused the debt and their ability to repay. Even if they do not want to appeal or request a waiver, the notice says to contact us if the planned withholding would cause hardship. We have flexible repayment options—including repayment of as low as $10 per month. Each person’s situation is unique, and we handle overpayments on a case-by-case basis.

We do not have a projected timeframe for the completion of the agency overpayment review, as the newly established team is in the fact-finding stage. The review process will involve a holistic assessment of how our administrative procedures influence our overpayment process. It will involve the collection of information including input across all levels of the organization, especially front-line employees, to understand in greater depth the administrative factors that contribute to overpayments. It will also consider how people experience our interactions with them during the overpayment recovery process. We will examine our policies and procedures—including our regulations—to determine where administrative updates to the overpayment recovery and waiver process may reduce the complexity and burden for the people we serve.

Regarding your questions about the number of people, our overpayment systems were not designed to easily determine this information. As part of the review, we are looking at how best to inform the Agency, the public, and Congress about this workload."

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