OVERPAYMENTS!!!!! But who is liable?

OVERPAYMENT is a dirty dirty word in my profession. Much of my time is dealt with dealing with and attempting to quell the collection of overpaid SSDI funds.

In cases involving a representative payee...the matter of "who" should the overpayment be collected from becomes a bit grey.

The following is a quick write-up about joint/several liability as is pertains to SSDI overpayments -- and as you will read...it's not always the beneficiary who can be caught holding the stick.

This should become a point of interest for anyone who utilizes a rep. payee and has an overpayment - and also to those rep. payee's who are responsible for someones SSDI monies.



A beneficiary entitled to Social Security Disability Insurance (SSDI) benefits and the representative payee receiving the SSDI benefits on his or her behalf may be equally liable for repaying any overpayment of the benefits, as follows:

A. The beneficiary is liable if he or she received the benefit of the monies;
B. The representative payee is personally liable if he or she:
1. Was at fault in creating the overpayment; or
2. Did not apply the monies for the beneficiary's use and benefit.

Note that liability for repaying an overpayment and waiver of recovery of the overpayment are separate matters.

A beneficiary who is liable for repaying the overpayment because he or she had the benefit of the monies may nonetheless have recovery of it waived if the following conditions exist:

A. He or she is without fault in connection with the overpayment; and
B. Recovery or adjustment of the overpayment:
1. Would defeat the purpose of the program involved (i.e. recovery would deprive him or her of income required for ordinary and necessary living expenses); or
2. Would be against equity and good conscience.

A representative payee who is without fault in causing an overpayment of benefits is not liable for repaying it and thus has no reason to request waiver on his or her own behalf. A representative payee who is liable for repaying the overpayment due to being at fault in causing it does not meet the criteria for waiver even if he or she cannot afford to repay.

Source: Social Security Handbook, sections 1906.1 and 1914.2.


Any questions may be directed to: rsi5@srt.com