Hi Larry,

I cannot get a straight and accurate answer from Social Security to save my life.

I took early retirement in 2019 at age 63, in March. I thought I understood the earnings limit, and had no idea that Restricted Stock Units (given in 2017) would be included in my W2 as total wages, as well as past earned vacation pay and sick time carried over from 2018 to 2019.

I applied for Waiver of Overpayment due to the incomplete answers I was given from SSA employees, no way to pay it back, and whether the income I received in the months PRIOR to me filing for benefits would be counted. In other words, I was working full time from Jan to March, and then reduced my hours from 40+ to 18 a week relying on what SSA told me of the benefit amount I would receive monthly. I then calculated my gross income each month (paid bi-weekly) plus SSA benefit to see if I could survive. Bear in mind, that by reducing my employment status to part-time and giving up full-time benefits I cannot get my full time position back even if I wanted to.

Apparently they denied my waiver , but I have not received the written notice. I am literally in shock that they denied me for $4,163 over. I provided 44 pages of documentation and gave names, dates and agent numbers to them of whom I spoke to, and the difference in answers.

Now, I still can't get a straight answer of what to do moving forward to estimate my earnings for 2021.

Questions:

(1) Do they count Gross annual earnings from Jan 1 to Dec 31, or is it monthly? With $18,960 is earnings limit for 2021, that means $1,580 a month. It makes a difference if you are paid bi-weekly versus every two weeks etc. Can't get a straight answer from them. How in the heck can I report what I think I am going to earn if they can't even tell me what to do, and when I am supposed to do it. I am assuming I should do this by January 1 of 2021?

(2) RSU's were given ages ago (2017, 2018) before I started my early retirement, and follow a vesting on 3 to 5 years. I have no idea how much that will be at the time of vesting next year, and whether or not I will sell them.

(3) I will literally be homeless if SSA does not work with me on this current Waiver. I never misrepresented any facts, and relied on information that SSA gave me to calculate my earnings. I received two different answers about the income prior to taking benefits not being counted. They should listen to the recordings. And, I provided clear information in that 44 pages of documentation that I cannot make ends meet, not at fault and getting misinformation from SSA. Will I have any recourse when they schedule me for a telephone conference?

Thanks so much for your advice.

Hope this background helps.

Hi,

The only year in which monthly earnings can be considered for earnings test purposes is the first year of a person's entitlement. So, if you started drawing your benefits in 2019 then only the annual earnings limit could be used for years after 2019. Unless you'll reach your full retirement age (FRA) before the end of 2021, then if your gross wages exceed $18,960 for the calendar year of 2021 then Social Security would need to withhold $1 of your benefits for each $2 that you earn in excess of that amount.

A request for waiver of an overpayment can only be approved if the overpaid individual is a) without fault in causing the overpayment, AND b) if they're either financially unable to repay the overpayment even in installments, or if recovery of the overpayment would be against equity and good conscience (https://secure.ssa.gov/apps10/poms.nsf/lnx/0202250150). I don't have enough information to know whether or not you might meet the requirements for a waiver, but if your waiver request is disallowed you can file an appeal.

I'm assuming that your overpayment relates to your first year of entitlement, which was apparently 2019. If that's the case then you could have been paid for that year based on either the annual earnings test or the monthly test. Whichever of the 2 tests is more advantageous to you could be used. The annual earnings limit in 2019 was $17,640, and the monthly limit was $1,470. If you only drew benefits for March through December of that year and if you didn't earn more than $1,470 in any of those months then you should have been due all of your benefits for those months.

Payment for vacation and sick leave that was earned in an earlier year can usually be excluded from counting for earnings test purposes if the vacation/sick leave is paid after the person retires. However, if you continued to work for the same employer then any sick or vacation pay that you collected would likely be counted effective with the month you received the payment.

I'm not familiar with Restricted Stock Units (RSU), nor are they mentioned in Social Security's operations manual. Therefore, I can't give you a definite answer on whether or not those payments should count for earnings test purposes in the year of receipt, or for an earlier year. Again, though, if those are included on a W-2 form for a year that you continued to work for that employer then I believe that they would likely count as earnings for the year received.

If you believe that any of your earnings in 2019 or subsequent years should have been counted as prior year earnings, you can ask Social Security to exclude them from the earnings test as a special wage payment (SWP). You can find more information about SWPs in the following section of Social Security's operations manual: https://secure.ssa.gov/apps10/poms.nsf/lnx/0302505025. There is a specific form (https://www.ssa.gov/forms/ssa-131.pdf) that Social Security would need your employer to complete if you allege that an SWP is involved.

Best, Jerry