How can I be overpaid Supplemental Security Income (SSI) when my work earnings and my spouse’s work earnings never change?
Learn when and how Social Security counts income in calculating Supplemental Security Income (SSI) monthly benefit payments.
Supplemental Security Income (SSI) benefit amounts are based on income received within a month. When income is within the SSI limits, income in one month counts in determining your benefit two months later. This is called prospective accounting because it uses your income in one month to figure out your payment amount two months later. For example, income that is within the limits and is received in March determines your SSI payment amount in May.
The reason for this accounting method is to reduce or eliminate overpayments (being paid more than you are due) and underpayments (being paid less than you are due). If you report your earnings and other income received in one month by the tenth of the following month, as is required, that gives the Social Security Administration (SSA) time to process your report and enter the earnings into your computer record and allows time for the computer to calculate, generate, and deliver a payment to you two months later.
There are two principle exceptions to retrospective accounting. The first is when you first become eligible for benefits. At that time, all your income in the first payment month counts in that month. Then during the next two months any recurring (ongoing) income received in the first payment month counts again in the second and third months’ benefit calculations. After that retrospective accounting begins and the income you received in the second month counts in the fourth. For example, you apply in April and benefits start in May. May’s income counts in determining your benefits for May, June and July; then June’s income determines August’s benefit. Even this exception has an exception! If you had income the first month May in this example that was a one-time payment, that one-time income would count only in May.
The second primary exception occurs when you have been receiving benefits and have an increase in income that raises your countable income above the SSI limits. When that occurs, the income counts to determine your benefit for the month in which the excess income is received and you would be ineligible in that month. Then in the following month, the calculation is the same as it was when you started to get SSI, that is, income received the first month after ineligibility counts for three months. Here’s an example: you have been getting benefits for the past eight months and then in March 2018, you receive extra income that puts your income over the SSI limit. You are not eligible in March and when your income drops within SSI limits in April, your April income determines your SSI benefit for April, May, and June before you return to having your income in one month count two months later.
So this gets us to the question of how an overpayment can occur when a person is working the same amount and being paid the same rate of pay all along.
Here’s the underlying answer: people who are paid weekly or bi-weekly (every two weeks) are periodically paid an “extra” paycheck. Weekly-paid employees receive five instead of four paychecks every three months; bi-weekly-paid employees receive three instead of two paychecks every six months. This occurs because there is an extra payday (Friday, for example) in the month every three months for weekly employees or every six months for bi-weekly employees.
If the extra paycheck makes your or your spouse’s or your child’s deemed income over the SSI limits, the disabled person can expect to be ineligible that month. To avoid this situation, you can ask to have more than one future estimate put on the SSI computer record, that is, your regular income input for two (or five) months and the higher income input to the record at the same time for the third (or sixth) month. Then make the same request for two estimates at the end of that cycle.
If you are unable to arrange that or need the SSI payment on the first of the month, even in extra paycheck months, to avoid future overpayment collection and months of income shortages due to collection, you can plan to set back part of each work paycheck in the extra-paycheck month to repay the overpayment, that is save an amount equal to your usual SSI payment so that you can routinely refund the overpayment that you know will occur. Note that I say “an amount equal to” your usual SSI payment. I suggest this because you may need the actual SSI payment to meet first-of-the-month obligations. The reason you need to plan on repaying is that after you are overpaid once due to increased income and the same thing occurs again, it is unlikely you will be granted a waiver of repayment because you would be at fault in keeping the SSI money you knew you were not eligible for.
Even if your extra paychecks do not cause you or your spouse or child to be ineligible, the extra paychecks will cause a reduction two months later. You can minimize the impact of the lower SSI payment similarly by saving some of the extra paycheck to use two months later.
In summary, you should be able to avoid overpayments and underpayments as long as your income is within the SSI limits and you report prior-month income changes on time by the tenth of the month and possibly by setting up advance estimates for months with known higher income. You can also strategize as described to minimize the impact of repaying overpayments and irregular SSI benefit amounts by using income from the high-income month to repay the overpayment or by saving it for use in the later lower-benefit month.