• Chris Stein, CFP®

Should I Appeal a Skipped Benefit Check?

This week we have a Social Security question regarding whether to appeal a skipped benefit check , supposedly because the beneficiary earned additional income.

“I have been receiving Social Security benefits since November 2018. I retired October 31, 2018, and have not worked at all since then. I was just informed that Social Security is not giving me a benefit check this month, and will only give me a check for $76 next month due to “overpayment” from my work! They made me get a detailed letter from my employer stating that the checks I received in November 2018 were payment for wages earned prior to October 31, plus unused vacation time. It does not seem right that Social Security is taking away checks with very little notice. In fact, I don’t think they are correct in taking them away at all! I would like to appeal these actions, but I need to know if I have a good basis for appealing.”

Well, as your story is described, it does look like an error may have occurred on Social Security’s part. You indicate that your final work for which you were being paid was in October, and you didn’t start receiving benefits until November.

However, going deeper, you may not have realized that there is a lag in benefits payments. Payments received in November would be for an October benefit. By making a November payment, Social Security would have considered that your benefits started in October. Your October wage earnings could very well have eliminated a benefit for which you were paid. In that case, Social Security may be correct. It really depends on when you truly started receiving benefits.

A lot of people say, “Well, I started receiving it in November,” thinking the November payment was for a November benefit. On the other hand, had you said your benefits started in November and the first check was received in December, then Social Security would be incorrect.

You may have told Social Security, “I’m going to retire in October and I want my first check in November.” To them, that meant you needed to file for your benefit in October. That, in turn, caused this overlapping month where you were working and earning above the monthly earnings test. That may be where you ran into a little trouble.

When they asked you for documentation, that’s what they were looking for. And based on that, they are trying to take back money that they previously paid to you in error. That’s how it happens. Social Security sends you a letter that says, “We’re not going to send you a payment this next month and only a partial payment the following month. This is to make up for some month in the past where we did pay you when we shouldn’t have.” That’s essentially what they’ve advised you.

The issue was not ‘when’ you received payment from your employer. Once you had stopped working and earning, it didn’t matter that the money from your employer came in later. When you are an employee, Social Security counts earnings when you earn them, not when you receive them. (They do not apply the earnings test in the month that you received the check.)

So, if you have commissions or back pay or something like that, as long as it was for work you did in a month prior to the period for which you filed, you’re fine.

Social Security should be able to clearly explain this to you if you go in and talk to them. I would definitely make an appointment to go talk to a person face-to-face. Have them pull out and look at your records.

At that point, if there is an error, they will usually say, “Oh, yes, this is a mistake. I’ll go get this fixed in the system.” Or they’ll be able to clearly show you why they’re withholding that benefit payment this coming month.

While Social Security does make mistakes, there’s a good chance that they are right this time because of an October 2018 overlap issue.

#socialsecuritybenefits

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