During 2014 at age 64, I began to receive social security benefits (approx. $2,100 per month). In 2014, I also was working part-time and earned income unevenly during the year. Some months I had no income, and several others I exceeded the earned income limit. Work was based on an as needed basis, and it was not known what hours may be needed in advance to support an engineering consulting firm.
My earned income was $27,540 for 2014. The SSA earnings limit to avoid any overpayment was $15,480. During 2015, and as recent as June 2017, the SSA had calculated an overpayment of $5,421.00. Note that a waiver had been pending a final determination based against equity and good conscience since 2015. However, in July 2017, the SSA service center issued a letter stating the 2014 overpayment was $11,834.60. There was no explanation as to the change. Even though I forwarded letters to the service center for an explanation, to date they had not responded. Meanwhile, my waiver request apparently was denied by the local SSA office, but SSA had not informed me in writing and has not explained my appeal rights or options to pay back an overpayment. SSA now wants to stop my SSA monthly payment to recover the $11,834.60 overpayment, which I believe is in error.
Can you explain how SSA would calculate an overpayment for a given year? Is it based upon the annual earned sum, or can they look at each month where the earnings threshold may of been exceeded?
I was of the understanding that they could recover or withhold $1 for every $2 dollars that exceeded the annual limit. For SSA to want the larger sum would basically take all the the earned money that exceeded the earnings limit for 2014.
Please let me know your suggestions and insight.
If 2014 was your initial year of receiving benefits then you could be paid for that year based on either a calendar year earnings test or a monthly earnings test, whichever is more advantageous to you.
Under the calendar year test, you would lose $1 of benefits for each $2 that you earned in excess of $15480 in 2014. Using the monthly test you could be paid only for months in which you were eligible for benefits and earned no more than $1290.
Based on your stated 2014 earnings I would say the most that you could have been overpaid that year was $6030 (i.e. $1 for each $2 that your earnings exceeded $15480). So, if Social Security is now saying that your overpayment is almost twice that amount the only explanation I can think of is that you also earned more than the earnings limit is 2015 and/or 2016. Or maybe it's a mistake.
I would suggest contacting Social Security to ask for an explanation if you haven't already done so. You may also still have appeal rights, although there is a time limit for requesting appeals ((https://www.ssa.gov/pubs/EN-05-10041.pdf). Even if you're beyond the time limit, though, you may have good cause for late filing if you failed to receive notice of Social Security's determination(s). You could also re-file for a waiver of the overpayment.