Handling Overpayment Due to Government Pension (WEP) Impact on Social Security

A client worked for the city for 35 years. He receives a sizable government pension.  Client just received a letter indicating that he is overpaid due to the government pension (WEP). Do you have any suggestions regarding repayment to SSA?. Client is 71 years old.

Your client’s overpayment issue with Social Security stems from the Windfall Elimination Provision (WEP) related to his government pension. Here are some options to manage the repayment:

1. Understanding the Overpayment:

   • WEP Impact: The overpayment occurred because the Social Security Administration (SSA) was likely unaware of your client’s government pension, which triggered a reduction in his Social Security benefits under WEP. Now that SSA has been informed, they are requesting repayment of the excess benefits received.

2. Repayment Options:

   • Withholding Social Security Checks: One straightforward option is to allow SSA to withhold your client’s Social Security checks until the overpayment is fully repaid. This method requires no additional paperwork and ensures the debt is repaid directly from future benefits.
   • 36-Month Repayment Plan: Alternatively, your client can arrange to repay the overpayment over a period of up to 36 months. SSA typically allows this repayment schedule without requiring further documentation or financial assessment.
   • Extended Repayment Period: If the 36-month period is insufficient, your client can request a longer repayment plan. In this case, SSA will require your client to submit a financial statement to assess his ability to repay the debt over an extended period. This may involve filling out a form detailing his financial condition.

3. After Repayment:

   • Adjusted Benefit Payments: Once the overpayment has been fully recovered, SSA will resume sending your client the correct benefit amount, adjusted for the WEP reduction.

In summary, your client has a few options for managing the repayment of his Social Security overpayment due to the WEP. He can either have SSA withhold his benefits until the debt is repaid, opt for a 36-month repayment plan, or negotiate a longer repayment period with additional financial documentation. Let me know if you need further assistance or specific guidance on the next steps!

The content on this blog is for informational purposes only and is not legal, financial, or professional advice. Social Security rules change periodically, so some information may become outdated. For the most accurate advice, consult a certified National Social Security Advisor (NSSA®). Social Security Professionals, LLC, and NSSA® are not responsible for any errors, omissions, or actions taken based on this blog's content. Use of this blog does not create a client relationship, and all information is provided "as is" without guarantees. By using this blog, you agree to hold Social Security Professionals, LLC, and NSSA® harmless from any claims or liabilities arising from its content. For personalized guidance, contact an NSSA® professional.