'I Assumed It Was A Scam Letter At First!' Social Security Claims Woman Was Overpaid By $20,491 After Making $275K Last Year

When a retiree received a letter from the Social Security Administration claiming she owed over $20,000 due to excess income in 2024, her family thought it had to be a scam. The letter stated she earned $275,367 during the year — an amount her family says is impossible. The woman hasn't worked in over a decade and lives with her son on a fixed income. Now, her family is left trying to understand what happened and what steps to take next.

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A Shocking Overpayment Notice

The letter, sent by the SSA, claimed that the woman was overpaid by $20,491 due to income exceeding program limits. But according to her son, who shared the story on Reddit's r/SocialSecurity forum, she hasn't been employed for years. In fact, she was a stay-at-home parent and has been retired since her children were in school.

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The figure on the notice — more than a quarter of a million dollars in income — doesn't align with any known income sources in the household. "She would have absolutely noticed if she received an extra $20K last year," the post said. Her son suspects the income was either reported in error or potentially tied to identity theft.

Could Identity Theft Be the Cause?

Some commenters suggested a possible explanation: someone else may have been working under her Social Security number. With widespread data breaches in recent years, millions of SSNs have been exposed. If someone fraudulently used her number for employment, that income could have been mistakenly attributed to her SSA record.

In situations like this, a credit check is often recommended. It may reveal suspicious accounts or employment activity. If identity theft is suspected, both the IRS and credit bureaus should be notified.

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How to Respond to an SSA Overpayment Notice

Receiving an overpayment letter — especially one with such a large number — can be confusing and overwhelming. The SSA encourages recipients to review the notice carefully and respond using one of several options:

• Request Reconsideration: If the individual believes there was no overpayment or that the amount is wrong, they can file Form SSA-561.
• Request a Waiver: If the overpayment wasn't their fault and they can't afford to repay, Form SSA-632 can be submitted to request that the amount be waived.
• Request a Payment Plan: If the person agrees they were overpaid but can't pay the full amount at once, Form SSA-634 allows them to propose a different repayment schedule.

The SSA will pause collection while these requests are being reviewed.

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What to Do Next

The original poster said he encouraged his mother to visit a local SSA office. That's often the best first step, especially for complex or unclear cases. Due to limited staffing, getting an in-person appointment may take time, but it can help clarify what triggered the letter and how to resolve it.

In the meantime, reviewing her Social Security earnings record, running a credit report, and checking with the IRS for any unusual wage reports can help identify the root of the issue.

Final Thoughts

Overpayment letters from Social Security can be frightening — especially when the numbers don't add up. But there are established steps for appealing or resolving these claims. Whether the issue is a data error or possible identity theft, acting quickly can help protect benefits and avoid further stress.

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