Overpayments can be Overwhelming by Tom Margenau on Creators.com

Recently

What's Best for Mom in a Mom-and-Pop Business? Q: My wife and I are in our 30s. We're partners in a business that nets us about $80,000 per year. What's the best way to report our income on our tax returns to maximize our Social Security benefits? A: Even though you're asking about your future …Read more. Bleeding Hearts and Bootstraps Q: I was surprised by the woman who wrote to you and said that people living on a small amount of Social Security were just lazy. Let me share my story to help this callous woman understand why people like me don't get very much from Social Security.…Read more. Don't Base Critical Decisions on Prophets of Doom Q: I'm about to turn 66. I want to put off starting my Social Security until age 70 because if I do, I'll get an extra $600 or so per month in a delayed retirement bonus added to by Social Security checks. But my husband said I should take my Social …Read more. Geezers and Floozies Q: I'm part of a group of old geezers who gets together every week at the local coffee place. Social Security is a frequent topic of conversation. At our last meeting, the subject of benefits for divorcees came up. One of our geezers was married to …Read more.

Overpayments can be Overwhelming

Q: I started getting Social Security in 2008. But a couple weeks ago, I received a letter from the Social Security agency telling me that I have been "overpaid," and now they want me to repay about $5,000. I simply can't afford to do this — at least not all at once. What can I do?

A: When the Social Security Administration alleges you have been paid incorrectly, you have three options: 1) you can appeal their overpayment allegation; 2) you can pay it back; or 3) you can file for a "waiver" of the overpayment. The option you choose depends on your circumstances.

If you disagree with SSA's decision that you were overpaid in the first place, or if you think the amount of the alleged overpayment is wrong, you should file an appeal. By using this option, you are simply asking them in writing to review your case to make sure their calculations are correct. This would be a good choice if you have any doubts about the overpayment or if you are confused about the specifics of the case. Even if you lose the appeal — meaning that SSA satisfactorily explains to you why you were overpaid — you still have the other two options available to you.

If you agree with SSA's decision that they paid you too much money, or sent benefits when you were not due any, you can simply pay them back. If you are still eligible for Social Security checks, SSA will recommend withholding all your benefits until you have repaid the debt. If that would be a financial hardship, you can ask them to withhold a certain amount from your monthly Social Security checks until the overpayment is recovered.

If you are no longer receiving Social Security benefits, you can repay the debt by writing a personal check to the Social Security Administration. Or you may set up a repayment plan with SSA to repay your debt in monthly installments.

If you agree that you have been overpaid, but you cannot afford to pay back the debt, you can ask SSA to "waive" or write off the debt. To have a waiver approved, you must meet two conditions.

First, you have to convince SSA that the overpayment was not your fault. That would be easy to do in a situation where the government miscalculated your benefit.

That's obviously SSA's fault, not yours. But if you were overpaid because you failed to report some event that should have changed your benefit amount or even altered your basic eligibility for benefits, then you would be hard-pressed to claim it's not your fault. For example, if you went to work and started to make more than the earnings threshold after which benefits must be withheld (currently $14,160 per year), but didn't report that fact to SSA, you're in trouble!

And here is the second provision of the waiver process. Even if the overpayment was not your fault, you must also prove to SSA that repaying the debt would create a financial hardship for you and your family. To do this, you have to provide SSA with records of your income and your expenses. This could include wage statements or tax returns and rent receipts, mortgage statements, utility bills, grocery receipts, etc. An SSA representative will review your household budget and decide if the overpayment waiver can be granted.

Q: I am 67 years old and collecting Social Security. My wife just turned 62. She spent most of her life as a stay-at-home mom, but she has worked enough to earn a small Social Security check. Can she file for her own Social Security now and then switch to higher benefits on my record when she turns 66?

A: No, she can't. The law says if she files for reduced retirement benefits, she must also file for any other Social Security benefits she is due at the same time. So, she will get her own Social Security check, which will be supplemented with a wife's allotment up to about 30 percent of your full retirement benefit.

Q: I am 74 and still working full time. I have health coverage provided by my employer, so I have never taken Part B of Medicare. But I wonder if I should sign up for it now. Some people have told me that Medicare Part B provides better coverage than my employer's plan. What should I do?

A: You didn't say how much, if anything, you pay for your employer's plan. Medicare Part B would cost about $110 per month. If your employer's plan is free to you, or is much less than $110, then I think you would be wise to keep that coverage. But you need to check and can decide after weighing the costs versus the benefits. I assume that someday you will retire. When you do, you will lose your employer's health coverage and will have to switch to Medicare Part B.

If you have a Social Security question, Tom Margenau has the answer. Contact him at thomas.margenau@comcast.net. To find out more about Tom Margenau and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.