Q: When my husband passed away several years ago in 2013, I wasn’t working. I claimed a Social Security widow’s benefit based on his account that year at the age 62, receiving $1,420 per month. When I started my benefit I was told I could work and receive benefits at the same time. I was told that if I earned “more than the limit” the Social Security Administration would adjust my benefit to account for the earnings.
I later found a job. I earned less than $24,000 a year in 2014 and 2015. In 2016, I earned close to $26,400. Recently I received a letter from the Social Security Administration stating that due to my earnings I was not entitled to some of my benefits and that I was overpaid about $9,000 over 2014 and 2015. The letter stated that I must repay the money. This does not sound right and I can’t afford to repay that much money, what can I do?
A: Unfortunately unfamiliarity with Social Security rules is not considered an excuse if you wind up with an overpayment. “Defined as any time Social Security pays you more than you should’ve been paid,” it’s the responsibility of the beneficiary to make good on overpayments, even if the mistake was not made by you to begin with.
You did not mention whether you informed the Social Security Administration (SSA) of your earnings when you started your job, but failure to do so would undoubtedly be one factor affecting what you should have received in benefits. Because you were working while receiving benefits, and you had not reached your full retirement age (66 this year), you were subject to Social Security’s earnings restriction rules.
When you are under your full retirement age you are allowed to earn up to a certain amount — $15,480 in 2014 and $15,720 in 2015 and 2016. Since you earned more than that amount you would owe $1 for every $2 in excess of the exempt amounts. Here are some rough calculations of what you might have been overpaid, based on your earnings of $24,000 in 2014 and 2015:
- In 2014 you earned about $8,520 more than the exempt amount of $15,580. Thus you may have been overpaid by about $4,260.
- In 2015 you earned $8,280 more than the exempt amount of $15,720 and you may have been overpaid about $4,140.
Together that is roughly $8,400. This is just a ballpark to give you an idea of how the overpayment amounts are arrived at. Keep in mind that the same problem may have occurred in 2016 as well, and you just haven’t received a notice yet. Since you received $10,680 in excess of the annual earnings limit of $15,720, you may owe another $5,340.
The notice you received from Social Security should explain why you’ve been overpaid, and how the Social Security Administration estimated your earnings. If you believe that an error has been made or the overpayment amount incorrect, you can appeal. Follow the instructions on your notice carefully and promptly. We strongly recommend that you get copies of W2’s and tax returns to help document your earnings. If you need help, visit your local Social Security Administration to submit your appeal or if you want to set up a plan to pay back the amount in monthly installments. If you have problems working with the Social Security Administration, contact your U.S. Representative. Every Member of Congress has office staff that assist constituents when they have problems with their Social Security or other federal benefits.
To learn more, get the Social Security Administration publication “How Work Affects Your Benefits,” Publication No. 05-1069.
