Legal Liability for Social Security Overpayments Page: 1 of 2
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. Congressional Research Service
Informing the legislative debate since 1914March 10, 2015
Legal Liability for Social Security Overpayments
Overview
Contingent Liability
Social Security provides monthly cash benefits to retired or
disabled workers and their family members and to the
family members of deceased workers. Payroll taxes paid by
covered workers and their employers primarily finance the
program.
An overpayment of Social Security benefits occurs when a
beneficiary receiving retirement, survivors, or disability
insurance benefits is paid more than he should have been
paid for a given period. 20 C.F.R. 404.501(a). The
beneficiary incorrectly reporting or failing to report a
change in circumstances that could affect his benefits
eligibility is the primary cause of an overpayment. For
example, a Social Security disability beneficiary's failure to
inform the Social Security Administration (SSA) that he has
begun to receive wages may result in an overpayment of
benefits more than the amount due.
Once the government has determined that an overpayment
has been made, the overpayment becomes a debt owed to
the United States government. SSA generally recovers this
debt through an adjustment of benefits payable, a full
refund payment by the overpaid beneficiary, or a reduction
in tax refunds.
This In Focus will examine who is liable for Social Security
overpayments, and thus who may be subject to these
recovery methods by SSA.
Primary Liability
The beneficiary, who received the overpayment, is
primarily (directly) liable for the overpayment. Thus, he is
the main person responsible for repaying the overpayment.
SSA will generally stop benefit payments to this individual
until an amount equal to the overpayment has been
withheld or refunded. This group of beneficiaries generally
includes those receiving benefits, such as retirement or
disability, based on his earnings record. 42 U.S.C. 404(a);
20 C.F.R. 404.502(a)(1).
Example of Primary Liability: Lauren works while
receiving disability benefits, but does not report her
earnings in a timely manner. She is primarily liable for
the overpayment because she received the benefits
overpaid based on her work record.Individuals who have received Social Security benefits
based on the same earnings record as the overpaid
beneficiary may be contingently liable for the primary
beneficiary's overpayment. While SSA generally first seeks
repayment from the beneficiary who is primarily liable,
SSA will not pay benefits to individuals contingently liable
until an amount equal to the overpayment amount has been
withheld or refunded. 20 C.F.R. 404.502(a)(2).
Individuals who may be contingently liable for
overpayments include spouses, widow(er)s, children or
parents of the overpaid beneficiary.
Example of Contingent Liability: Carol is currently
receiving a widow's benefit of $210.00 based on her
deceased husband's work record. SSA has determined
that it overpaid Carol's husband $980.00 due to an
incorrect reporting of earnings. Carol is likely to be
contingently liable for the repayment of $980.00 as
she is receiving the $210.00 widow's benefit based on
her husband's work record. SSA would likely propose
recovery by withholding the widow's benefit.
Joint and Several Liability
Joint and several liability means that two or more people
have equal responsibility for the repayment of an
overpayment. Each person may be primarily liable for the
repayment of the entire overpayment. SSA's Program
Operations Manual System GN 02205.007.
Example ofJoint and Several Liability: Alice is a
representative payee for Bob and receives $142.00 in
benefits for him each month. Bob married, making him
no longer eligible for benefits. If both Alice and Bob
knew of the marriage yet continued to receive the
benefits, both Bob and Alice would be jointly and
severally liable for the resulting overpayment.
Joint and several liability typically appears in the context of
a representative payee-beneficiary relationship. A
representative payee is an individual or organization
appointed by SSA to receive Social Security benefits for
someone who cannot manage, or direct someone else to
manage, his money. The primary responsibilities of a
representative payee include using the benefits to pay for
the current needs of the beneficiary and properly saving the
benefits not needed at the present time. Generally, a
beneficiary and the representative payee are jointly andwww.crs.gov I 7-5700
IN FOCUS
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Legal Liability for Social Security Overpayments, report, March 10, 2015; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc810510/m1/1/: accessed April 23, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.