You may have heard about projections showing that the Social Security Disability (SSD) trust fund is set to run dry by the end of 2016, potentially cutting benefits to millions of disabled Americans if a solution to this funding issue is not passed in time. However, there is another pressing issue that could also have the power to reduce your benefits. According to a recent analysis, nearly half of those receiving SSD benefits were overpaid, receiving an average of 3 percent more than they were entitled to collect, sometimes for years or even decades. With more and more legislators anxious to make names for themselves as tax reducers or waste eliminators, it's possible some of these benefits could be clawed back from recipients. What should you do if you're worried you've been overpaid? Can the Social Security Administration reduce your future checks? Read on to learn more about this process and what you should expect.
Why did these overpayments happen?
Most of these overpayments were discovered through routine audits and spot checks, and most related to the payment of benefits to those who were still working, or those who had died and whose family members had continued cashing their checks. To help prevent fraud and abuse of the program, the Social Security Administration (SSA) employs auditors to go through income tax records, death records, and sometimes even to observe recipients going about their daily lives. Although you're permitted to work (in a limited capacity) while receiving SSD benefits, one provision of your continued receipt of SSD must be that that you're too disabled to hold down any full-time job or to earn enough to support yourself.
If your income tax return shows that you've earned a relatively good income that year -- whether from working at home or in the office part-time -- your disability claim may be denied, and you could be required to pay back any payments made during a time when you weren't too disabled to work. This can also happen if it's determined that your prior income was over-reported to the SSA and your actual earnings record does not entitle you to the amount of SSD benefits you've been receiving.
What does this mean for your continued SSD benefits?
If you're worried you were overpaid due to working while receiving benefits, you may want to seek legal advice. An attorney experienced in Social Security's complex laws and regulations can help determine whether you were actually overpaid, or if your employment fell within the SSA's guidelines. In some cases, you may have received a letter or other notification just as a preventive notice measure, without having actually been overpaid. Your attorney will handle all correspondence with the SSA and -- if it's clear that you've been overpaid -- may be able to come up with a compromise or payment plan that is less of a blow to your monthly budget. By making repayment of any excess funds over an extended period of time pursuant to a repayment plan, the impact on your monthly SSD checks should be minimal.
However, you don't need to worry that your next SSD check will automatically be smaller -- you'll receive plenty of written notification from the SSA throughout this process, and should have ample opportunity to respond to any claims long before there's a reduction to or interruption in your benefits. By being proactive and gathering the information you'll need to defend your claim before being contacted by the SSA, you can reduce the odds that you'll suffer any change in your monthly income, even if you have been overpaid in the past. You can click here for more info on how a social security attorney can help you if you have any questions or concerns about your disability payments.