Dear Rusty: Things have gone good for me until now. I got a job and have enjoyed going back to work after being retired. But I just got some bad news – a letter from Social Security saying I owe them $17,000 because when I went back to work, I earned more than allowed in 2021. They never mentioned that when I told them I was going back to work! They now say they can’t pay me benefits in 2022 because I am working. Good job SSA, since I told you when I went back to work!

Anyway, I can’t repay them all at once, I’m lucky to buy gas to get groceries. They list items for a waiver, but I am not sure what is best for me. I was planning on moving for health reasons, but if I paid them all at once I have nothing left for the move. I just started my research on how to handle this but hoped you would have some insight. Signed: Un-retired Worker

Dear Un-retired Worker: Sorry to hear of the Overpayment Notice you have received from Social Security. Here are my thoughts: The repayment options they offered you are probably a) remit the entire amount in full or b) have your SS benefits withheld until they recover what you owe, or c) ask for special payment terms because doing either of the above is a hardship. 

At this juncture, you can request a waiver of the Overpayment in either of two ways: 

• File form SSA-632, which essentially says you agree you’ve been overpaid but think you shouldn’t be required to pay it back because it wasn’t your fault (it was Social Security’s fault because you notified them when you returned to work). 

• File form SSA-634, which essentially says you agree you’ve been overpaid and want to pay it back, but you can’t afford to pay it back in the manner they’ve offered. 

I suggest you start by filing SSA-632, mainly because you notified them in August of 2021 that you had returned to work and they, nevertheless, continued to pay you thus causing the overpayment themselves (see Section 3, question.12 of SSA-632). While I can’t predict the probability of you having the entire amount waived, I think there’s a reasonably good chance they may provide you with some special accommodation because the overpayment was, indeed, a result of their own inaction after you notified them you had returned to work. 

I suspect what happened is that they simply neglected to act after you notified them, and then when they received your 2021 earnings data from the IRS, they found you had earned more than the 2021 limit, causing them to issue the Overpayment Notice. But their lack of action shouldn’t result in a financial hardship for you, which is why I suggest you seek a waiver. Be aware too that if your waiver request is denied you have the right to appeal that denial, including requesting a hearing by an independent Administrative Law Judge, or by the SS Appeals Council, or even in Federal court if desired. 

In any event, while your case is pending, they shouldn’t require you to repay them – they should temporarily suspend the repayment demand until your case is adjudicated. 

Assuming you are still working full time, it’s probable that your benefits are now suspended because your income is too high. FYI, you will later get credit for any months your benefits are suspended, which will result in your benefit amount increasing after you reach your full retirement age (FRA). Thus, you may be able to, over time, recover some of the SS benefits you’ve lost because of your earnings prior to reaching your full retirement age.

Russell Gloor is an Association of Mature American Citizens certified social security advisor.  To submit a question, visit amacfoundation.org/programs/social-security-advisory or email ssadvisor@amacfoundation.org.