Overpayments
by Terri Uttermohlen
Available formats: Word
Q: What happens when the young person is trying to keep up with house payments and payment of utilities and there are continual overpayments?
A: Overpayments happen, and they create stress and confusion for beneficiaries who don't expect them. So let's talk about them from two perspectives, proactive and reactive.
Proactive steps:
- The best thing you can do to help is to have a good understanding of how income and resources affect benefits, and share that understanding with the beneficiary involved. Help the student learn how benefits are affected in a way that the student can anticipate changes in payment and plan for them. This is particularly important when the student is working, and has income that fluctuates a lot.
- Make sure the student understands the need to keep pay stubs, and any receipts that may be deductible under IRWE or PASS. Also teach the student that income received in a month counts for SSI, and work performed in a month is used for Social Security benefits. Depending on what the student receives, show him or her how to keep track of these earnings in a systematic way, like writing the amounts on a calendar.
- Find out how the local SSA office prefers work reports and make sure the student knows when and how to report income and deductions.
- If the student receives SSI, teach the student the benefit calculation. Give him or her computation sheets, and help the student approximate what benefits should be paid. Remember to teach the beneficiary that for SSI there is a lag between the month the income is received, and the month the payment is affected. This is called Retrospective Monthly Accounting (RMA) RMA means that as long as the student is eligible for some SSI payments, income received in one month affects payments two months later. Thus income in June affects August's payments…etc.
- If you give the student an understanding of what is going to happen, he or she should often be able to anticipate what income he or she is due in a given month.
So, what happens when there is an overpayment?
Reactive steps:
Overpayments occur more frequently under the SSI program, but they are usually much smaller than the overpayments that occur under the Social Security disability programs. Here are some things to keep in mind:
- Under the SSI program, no more than 10% of the Federal Benefit Rate may be withheld to recover an overpayment.
- An individual may appeal any overpayment if the person does not feel the benefit was overpaid.
- If a beneficiary agrees that he or she is overpaid, but can't afford to repay the overpayment at the rate SSA requests, the amount may be reduced by showing the SSA the individual's income and expenses.
- If the person agrees with the overpayment, but is without fault and unable to repay, the beneficiary may request that the overpayment be waived, or forgiven.
- Overpayment recovery will be suspended while the SSA is deciding if the overpayment is correct, or deciding if it can be waived.
The bottom line is that overpayments can and will happen. The beneficiary should take reasonable measures to avoid overpayments by reporting income and changes in his or her situation. If, in spite of these precautions, an overpayment happens anyway, the beneficiary needs to understand that there are steps he or she can take to minimize the negative impact.
Overpayments are an issue of accounting for the benefits—they aren't a moral judgment or a reason to panic. Finally, be sure the student knows who can provide support, whether it is a family member, you, a local BPAO specialist, or someone else.
Terri Uttermohlen
Virginia Commonwealth University
Youth Transition Demonstration Technical Assistance Office
tluttermohle@vcu.edu
410-467-4630
