How to Pay Back Overpayment of Social Security Benefits

The default method the Social Security Administration uses to recoup overpayments is to withhold the owed amount from your monthly benefits. Depending on the size of the overpayment, this could mean multiple monthly benefit checks being seized, leading to financial trouble for many beneficiaries. However, the SSA also provides options for you to make smaller payments, or to pay the full amount using funds from a credit card or bank account.

By Payment Plan or Compromise Settlement

Determine how much you can afford to put toward repayment by adding your total monthly income from all sources, including job wages, pensions, investments and social service program benefits. You then should subtract your monthly expenses, such as rent or mortgage, utilities, food and medical costs.

Next, contact your local SSA office at the number on the overpayment notice or your SSA benefit statement. Tell a representative that you want to set up a payment plan for an overpayment or that you want to offer a compromise settlement. If you are still receiving payments, and do not pay the overpayment in full within 30 days, the SSA will withhold the overpayment "at the rate of lesser of 10 percent or the entire monthly payment", unless you make other arrangements.

State the monthly payment or settlement amount you can afford. If you offer a payment arrangement, suggest an amount that is less than your total disposable income to ensure you can cover any emergencies or other unexpected expenses while in your payment plan. The representative will submit your request and tell you what documents you need to provide to your local SSA office. This usually includes bills and receipts to prove expenses, as well as income documentation such as pay stubs, bank statements and social service benefit statements.

Submit the required documentation to your local SSA office in person or by mail. The SSA will process your request and provide an answer within 30 days. It will usually agree to the amount you request unless there is a discrepancy with your income or expenses. The SSA will deduct the payment from your monthly benefits or you can make the payment by credit card, debit card or check.

By Direct Payment

Call your local SSA office to pay back an overpayment by debit or credit card. Give the representative your payment information, including the name on the card, the card number, the expiration date and the three-digit security code on the back of the card at the end of the signature line. Go to your local SSA office to submit payment by check or money order. Make the check or money order payable to the Social Security Administration. Submit money order and check payments by mail if you are unable to go to the SSA office. Do not send payments to the local SSA office. Mailed payments must go to the Social Security Administration, P.O. Box 3430, Philadelphia, PA 19122-2992.