Social Security Disability Overpayments
Sometimes, however, the government is the creditor. The SSA reports that disability insurance overpayments increased from about $860 million in fiscal year 2001 to about $1.4 billion in fiscal year 2010. (Those were the ones detected. SSA suspects there are more.) Most of these were reportedly due to recipients who returned to work but were still collecting benefits.
Ginsberg says that the rules are confusing and can lead to overpayments. An example is the program that allows a disabled person to return to work in a trial work period for up to nine months and still receive benefits. On his blog he notes that “Sometimes, a disabled person may exceed his/her trial work months and not realize it.” He also notes that some workers return to work and continue to receive disability benefits, and keep them because they feel they “need the money.”
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Regardless of the circumstances, if you are notified that you have been overpaid for benefits, you can:
- Pay it back (often easier said than done if the money has been spent),
- Pay SSA back out of current benefits, if you are still receiving them. (SSA may reduce your benefits until the overpayment has been repaid),
- Apply for a full or partial waiver of the overpayment, or
- Discharge the overpayment in bankruptcy.
Moran adds that, if necessary, you may be able to discharge the claim against you for overpayment in bankruptcy without reducing payments that come due after the bankruptcy is filed. If you are notified of an overpayment you can’t repay, talk with a bankruptcy attorney.
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The Future of the Social Security Disability Program
No doubt, Congress will be looking at the future of the SSDI and SSI programs. Some experts believe the pressure is already on, with the result being fewer approvals for disability income applications. Ginberg has an active practice representing SSDI claimants and he says that, “Cases that I would have won two years ago are now being turned down—and this is after the claimant has waited 2-3 years to get to a hearing.”
According to Donald Coggan, owner of Accessible.org, “In the last two years, we have published 1600 stories of disabled people, nearly all of them in desperate financial straits. Their situation is often made much worse by waiting, years in some cases, for SSDI approval.” He has noticed that while many people wait for approval for their disability benefits, they use up their savings—including retirement savings—and often go into debt as well.
“Bottom line,” warns Ginsberg, “I get calls from people who are sick and injured and I tell them to hang on as long as they can because if they apply for Social Security, it may be three years to get to a hearing and even then, they are facing an uphill battle.”
In the meantime, 2017 is just getting closer.
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Gerri Detweiler Credit.com's Personal Finance Expert, Gerri focuses on financial legislation, budgeting, debt recovery and consumer savings information. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights, and Reduce Stress: Real-Life Solutions for Solving Your Credit Crisis as well as host of TalkCreditRadio.comTalk Credit Radio. Reach Gerri at creditexperts@credit.com.
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Can credit card co’s place a lein on your home?
Great question! No, not generally unless they get a judgment against you. But you would be taken to court before that happens. Have you been threatened with that?
Dec.16, 2011
I use to work as a Nurse, I injured my back along with a Par’s defect from Birth which i was not aware of until I had my back x-rayed. I have accurred credit cards debt over 3 years before. I qualified for Disablity in April 2011. Now I have bad credit because I have not been able to pay my bills. I have to move from my residents in 2 months. I have bad credit rating. How do I pass a credit check for a rental apartment with my situation? How can I improve my credit rating? I’m too young 54 to collect medicare and my Disability is too much to qualify for medicaid, but not enough to pay health insurance and pay my credit cards. I can only just get by with what I recieve. I would really appreciate some advice. Thank you.
Sherry – So sorry to hear what you are going through. I don’t have easy answers for you, but the first question that comes to mind is what you have done about the credit card debts. Are they still outstanding? Are you able to pay them or are they in collections?