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Fighting SSI Overpayments

By January 12, 20214 min read

In a previous article, we discussed how overpayments occur and what you can do if you are notified that you have received one or more overpayments. To recap, you have three options available to you: 1) reconsideration; 2) waiver; or 3) payment agreement.

You should ask for reconsideration if you think that the overpayment itself is wrong, the amount of the overpayment is wrong, or Social Security Administration’s explanation for the overpayment is wrong. You should request a waiver if you think that the overpayment was not your fault, and you cannot pay the amount back because you relied on that money to pay for ordinary living expenses. You should ask for a payment agreement if you agree with SSA that an overpayment occurred, and you have the financial means to pay it back, but possibly not all at once.

If you have received an overpayment on Supplemental Security Income (SSI) benefits, and you are still collecting them, SSA will withhold 10% of your monthly benefits going forward until the overpayment is repaid. The withholding generally starts 60 days after you receive notice of the overpayment. You can ask SSA to withhold less than 10% of your monthly benefits, and SSA will review your request, but they are not obligated to approve it.

As we have discussed before, experienced Social Security disability attorneys can prove invaluable at all stages of the application, hearing, and appeals process. With respect to overpayments, attorneys can help you request a waiver, appeal a denied waiver, or negotiate a repayment plan. But attorneys rarely take overpayment cases because of SSA’s rules on how attorneys get paid for disability cases.

There are only two ways that disability attorneys can get paid when they win their cases: 1) fee agreements; and 2) fee petitions. Fee petitions are used in overpayment cases. When a disability attorney first takes your case, he/she will enter into an agreement with you that will allow him/her to collect 25% of your disability backpay or $6,000, whichever amount is less. But if you win your overpayment case, there is no backpay to be awarded to your attorney.

To offset the backpay issue, disability attorneys who agree to take on your overpayment case will have you sign a fee petition under which you agree to pay him/her an hourly fee for the time that your attorney spends working on your case. This fee petition is subject to SSA’s approval when you win your case, and SSA can approve the fee petition, disapprove it, or modify it. SSA will consider many factors when deciding how to respond to the fee petition, including the amount of time it took the attorney to work on your case and the level of skill involved to handle it.

Disability attorneys know that many of their clients come from limited financial means, so they will often ask you to pay a retainer at the start of your overpayment case to ensure they will get paid. A retainer is an estimate of how much time it will take to work the case. If he/she ends up spending less time than originally estimated, your attorney will return money to you; in contrast, if the case takes much more time than estimated, you will owe him/her additional money.

When attorneys collect retainers, those funds are stored in a special bank account called a trust account. These funds cannot be accessed until the case is won, and the final calculations are made to determine whether the funds covered the legal work or if money needs to be returned to or additional funds collected from the client.