42 U.S.C. § 404 — Overpayments and underpayments

(a) Fixing wrong payments (1) If the Commissioner of Social Security finds that someone got more or less than the correct amount, the Commissioner must fix it, following rules the Commissioner writes. (A) Overpayment: The Commissioner can fix an overpayment by lowering the person's future benefits; requiring the person (or their estate) to pay back the extra amount; lowering benefits owed to the estate or to someone else who qualifies on the same earnings record; recovering the money by reducing the person's tax refund (under section 3720A of title 31); or using any mix of these methods. Special rule: if a payment was made because the Department of Defense wrongly reported that a service member died on active duty, that payment does not count as "incorrect" for any month before the Department tells the Commissioner the person is actually alive. (B) Underpayment: The Commissioner must pay the person the balance they are owed. If the person dies before getting the full balance — or before cashing checks that were already correct — the money goes out following the order set in subsection (d) instead. But there is a limit: no back payment can be made for any month a person's benefits are unpaid because of section 402(x)(1) — the rule about certain fugitives and prisoners — or would be unpaid under that rule if the benefits had not already ended for some other reason, until that rule stops applying. This limit does not stop the Commissioner from otherwise withholding, adjusting, or recovering amounts that would normally be taken out of what the person is owed. (2) Special rule for direct deposits after death: If a payment to someone who has died goes out by direct deposit into a joint bank account, and the other person on that account also qualified for a monthly benefit on the same earnings record for the month before the death, then the extra amount is treated as an overpayment to that other person — not to the estate. If a "representative payee" (someone managing benefits for another person) gets an overpayment after the beneficiary's death, that representative payee must repay it, tracked under the payee's own Social Security number. (3) Special rule for foster children: If a State is acting as representative payee for a child in foster care, and an overpayment happens for a month the child is in foster care, the State — not the child — must repay it. (The term "represented minor beneficiary" is defined elsewhere, in subsection (j)(11)(B)(iii), which is not included in this excerpt.) (b) Checking finances before forgiving an overpayment (1) If someone was overpaid but was not at fault, the government will not adjust their future payments or try to recover the money — as long as doing so would either defeat the purpose of Social Security or be unfair. (2) In deciding whether someone was "without fault," the Commissioner must consider any physical, mental, educational, or language limitation the person has — including not speaking English well. (3) To decide whether recovery would "defeat the purpose" of Social Security, the Commissioner can require the person to authorize access to their financial records at any bank or similar institution. This authorization stays valid until either a final decision is made, or the person cancels it in writing. Several technical rules make clear that this kind of authorization satisfies the Right to Financial Privacy Act's requirements without extra paperwork to the bank. The Commissioner must tell the person how long the authorization lasts and what it covers. If someone refuses to give this authorization, or cancels it, the Commissioner can treat that refusal as a reason to decide that recovering the money would not defeat the purpose of Social Security. (c) Government employees are not personally liable No government officer who certifies or pays out benefits is personally liable for money involved in a case, if the recovery is later waived under subsection (b), or if the collection was never completed before everyone whose benefits could be reduced has died. (d) Who gets money owed to someone who died If a person dies before their Social Security payment is finished (including uncashed checks), the money goes, in this order, to whichever category below has someone who qualifies: (1) a surviving spouse who either lived with the deceased when they died, or who qualified for a monthly benefit on the same earnings record for the month before the death; (2) if no spouse qualifies, the deceased's children who qualified for a monthly benefit on the same record for that month, split equally; (3) if no one in (1) or (2) qualifies, the deceased's parents who qualified for a monthly benefit on the same record for that month, split equally; (4) if no one in (1)–(3) qualifies, any surviving spouse, even one who does not meet the special conditions above; (5) if no one in (1)–(4) qualifies, the deceased's children, split equally, even without those special conditions; (6) if no one in (1)–(5) qualifies, the deceased's parents, split equally, even without those special conditions; (7) if no one in (1)–(6) qualifies, the legal representative of the deceased's estate. (e) Supplemental Security Income adjustments If a person's payment is being adjusted because they also get Supplemental Security Income, the rules for that are in a different law — section 1320a–6 of this title. (f) Collecting old unpaid amounts (1) For amounts that are "delinquent" (defined below), the Commissioner can use the same collection tools the government uses generally — specific sections of title 31 and title 5 — as those tools worked right after April 26, 1996. (2) A "delinquent amount" is money that: (A) is more than the correct payment amount; (B) was paid to someone after they turned 18; and (C) the Commissioner decides, by regulation, cannot otherwise be recovered once the person is no longer a Social Security beneficiary. (g) Recovering overpayments across programs If someone was overpaid under Social Security but the government wants to recover it from a different program the Commissioner runs, the rules for that are in section 1320b–17 of this title.