What if social security owes me money?

Social Security represents a substantial portion of income for millions of Americans, with at least one in every six Americans receiving Social Security benefits. With the huge number of active beneficiaries, there is a risk of mistaken Social Security payments such as overpayments or underpayments. If you believe you were underpaid, it may mean that Social Security owes you money.

The Social Security Administration (SSA) may owe you money if you were underpaid, meaning you received fewer Social Security payments than the actual benefits you are due to receive, based on your age and earnings history. Underpayments may occur due to clerical errors, missing earnings, or incorrect entries in your earnings record or personal information. If you believe you were underpaid, you should check your Social Security statement for any discrepancies, and report any errors or omissions to Social Security. 

What does it mean when Social Security underpays you?

If you receive a Social Security benefit payment that you believe is less than what you qualify to receive, it means that were underpaid, and Social Security owes you money. Typically, underpayments may occur due to clerical errors when reporting earnings or preparing your benefits statement.

If you believe you were underpaid, you should check your earnings record on your Social Security statement to see if there are discrepancies. If you identify any errors or omissions of earnings, you should report the errors to Social Security for correction. If the error is confirmed and corrected, you will receive the benefits owed in a lump sum payment or increased monthly benefits.

However, if SSA is unable to verify the claim, you may be required to provide additional evidence of your earnings. Examples of evidence you may provide to back up your claim include pay stubs, W-2 Forms, tax returns, and other documents to show you worked.

What causes Social Security Underpayments?

The primary cause of Social Security underpayments is clerical errors, which may be due to the employer’s wrong reporting or SSA’s own fault. 

If earnings from earlier years are missing from the earnings record of your benefits statement, it may mean that your employer reported your earnings using the wrong Social Security Number, or the employer reported your earnings incorrectly. Also, if you changed your name due to a divorce, marriage, or other reason, and you never reported the new legal name to SSA, it could result in missing earnings.

How to check for errors in your Social Security Statement

Checking your Social Security statement can tell you how much Social Security owes you. You can access your statement by logging in to your My Social Security account.

Here is how to read your Social Security statement:

Page 1: Personal information

The first page of your Social Security statement shows an overview of your personal information i.e. your name and mailing address. It also displays your estimated benefits at the full retirement age. You can find links to online SSA tools that you can use to estimate or apply for Social Security benefits.

If you have previously changed your legal name, confirm that the name shown is your current legal name. If the name is incorrect or misspelled, you should note down the error.

Page 2: Estimated benefits at various ages

The second page of the Social Security statement shows a breakdown of the estimated benefits you will receive if you claim benefits at 62, full retirement age, or age 70. This page will display your specific full retirement age, which can fall between 66 and 67.

Apart from retirement benefits, the Social Security statement also shows the benefits you would receive if you become disabled as well as the survivor benefits that your dependents would receive if you die.

At the bottom of the second page, the statement will show your date of birth, your estimated taxable earnings per year, and partial digits of your Social Security number. Confirm if this information is correct since the wrong date of birth could affect the benefits you receive.

Page 3: Earnings record

The last page of your Social Security statement shows your earnings record over the years. It lists your earnings history from the year you started paying Social Security taxes to the most recent year with earned income. If you have kept a record of your earnings, you can verify the earnings history to make sure it matches your record.

Your monthly Social Security benefits are based on your highest 35 years of earnings. Make sure that all earnings are correctly reported on the benefits statement. If you worked for 40 years, Social Security will only consider the 35 highest earning years, while the other 5 years will not count in your benefits calculation. If you have 30 years of earnings, your earnings could be reduced since the five years you did not work will be counted as zero earnings.

How to correct an error in your Social Security statement

If you have identified clerical errors, missing records, or inaccurate entries in your Social Security statement, you should gather sufficient proof before reporting the error to Social Security. Some of the proof you can gather include your SSA statement, W-2 Form, pay stubs, tax return, wage records, etc.

You can inform Social Security about the error by calling the SSA’s helpline at 1-800-772-1213 from 7.00 am to 7.00 pm, Monday through Friday. This helpline is an automated service, and it may have long waiting times if you call during busy hours. You should have the documents ready when speaking to the SSA representative.

If you prefer in-person service, you can book an appointment with your local Social Security office. Use SSA’s Field Office Locator to find the nearest Social Security office. You can also visit the local Social Security office without a prior appointment, but you may have to queue for a long time to speak to the SSA representatives. Remember to bring the evidence you have gathered to support your claims of underpayment.

Once you report the error, Social Security can correct the error either immediately or after some time if they need more information. You may be required to furnish SSA with additional evidence to support your claim. Social Security may also contact your employers directly to seek information about your earnings.