A girl was disabled and became entitled to child’s social security disability benefits beginning in January 1958 when she was 13 years old. Her uncle was her representative payee for her social security benefits.

Her benefits continued to be paid until October 1962, when she was eighteen years of age and her disability ended.

However, she had gone to work in June 1962 and had sufficient earnings that year that work deductions were required from her social security benefits. Neither she nor her uncle, however, had reported her earnings to social security.

It was determined that work deductions were required and that there had been an overpayment of the girl’s benefits in the amount of $280 (the five months worth of benefits from June through October 1962, at $56 per month).

Under certain circumstances a beneficiary and a representative payee may be held jointly and individually liable for an overpayment. It was held in this situation that the representative was not liable for the refund because he had believed in good faith (though erroneously) that he did not need to report his niece’s earnings. He believed that as long as her earnings for the remaining period of her disability in 1962 did not exceed $1200, that no work deductions were required.

This $1200 threshold was correct, but it applied for the entire year, and because his niece had earnings of over $1200 for the entire year (including November and December) work deductions were required for previous months during the year in which his niece earned more than $100.

The girl also mistakenly believed in good faith that she was not required to report her earnings to social security. Thus, she was not at fault for the overpayment. However, recovery of the overpayment from the girl was proper because it would not defeat the benevolent purposes of the Act in that she earned more than enough money to meet her reasonable and ordinary living expenses. Nor would recovery have been against equity and good conscience because she had not relinquished valuable rights or changed her position for the worse in reliance upon the incorrect payments. Thus, she was required to pay back the $280 overpayment.

See Social Security Ruling (SSR) 64-7.

This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.