Undue Hardship Exceptions for SSI and Social Security Benefits

A Social Security overpayment waiver is a formal request asking the SSA to forgive money it says you were paid in error. The agency can grant it only if two things are true: the overpayment wasn’t your fault, and repaying it would either leave you unable to meet basic living expenses or be fundamentally unfair given how you relied on the money. There is no filing deadline for a waiver, and you request one by submitting Form SSA-632-BK.¹

Why Timing Still Matters

Even though a waiver has no deadline, respond within 30 days of the notice date. For overpayments determined after March 27, 2025, the SSA withholds 100% of your monthly Social Security benefit by default until the debt is repaid, and that collection can start about 30 days after your notice.² Filing the waiver request stops collection while the SSA reviews your case, and that pause lasts through any appeals.³

One point of confusion worth clearing up before you file: a waiver is not the same as a reconsideration. If you think the SSA got the math wrong or that no overpayment happened at all, that’s a reconsideration (Form SSA-561-U2), and it has a 60-day deadline. A waiver accepts that you were overpaid but asks for forgiveness.⁴

The Without-Fault Requirement

Before the SSA looks at your finances at all, you have to pass a threshold test: were you at fault in causing the overpayment? The regulation doesn’t use “good faith.” The standard is whether you were “without fault,” and the SSA weighs three specific kinds of conduct.⁵

You are considered at fault if you gave the SSA information you knew or should have known was wrong, if you failed to report a change (a new job, a change in living arrangements, marriage, and so on) that you knew mattered, or if you accepted a payment you knew or should have suspected was too high. The SSA weighs your age, intelligence, education, language ability, and any physical or mental limitations when deciding whether you reasonably should have caught the error.⁵

For SSI overpayments, the analysis is similar but broader. The SSA considers your understanding of reporting requirements, whether you agreed to report changes, whether you knew about events that should have been reported, and your actual ability to comply, including any language barriers.⁶

This is the gate that stops most waivers. If the SSA finds you at fault, your financial hardship becomes legally irrelevant. It does not matter how little money you have. A common trap: people assume that because the SSA itself miscalculated, they must be without fault. Not necessarily. If your deposits jumped and you spent the money without asking why, the agency may decide you should have known something was wrong.

The Two Financial Standards

Once you clear the without-fault hurdle, you need to meet one of two financial standards. Not both.

Recovery Would Defeat the Purpose of Your Benefits

The first standard asks whether repaying would leave you without the income you need for ordinary and necessary expenses: food, rent, utilities, medical care, insurance. The regulation frames it as needing “substantially all” of your current income to cover those costs.⁷ Most waivers rely on this standard, and the SSA applies specific numbers to it.

Recovery Would Be Against Equity and Good Conscience

The second standard is narrower but doesn’t require you to be financially strapped. It applies when you changed your financial position for the worse, or gave up a valuable right, because you relied on the payments. Signing a long-term lease, making a major purchase, or retiring early on the assumption that the benefit amount was correct can all qualify. Under this standard, forcing repayment can be deemed unfair even if you have savings.⁸ It also covers situations where you lived in a separate household from the overpaid person and never actually received the money.

The Financial Thresholds the SSA Actually Uses

“Defeat the purpose” sounds subjective, but the SSA plugs your finances into concrete numbers. These thresholds were updated in late 2024 and apply to both Social Security (Title II) and SSI (Title XVI) waiver decisions.⁹

The SSA will presume you cannot afford to repay if your household income is at or below 150% of the Federal Poverty Level and your liquid assets fall within these limits:

Individual: no more than $6,000 in liquid assets
Individual plus one household member: no more than $10,000
Each additional household member beyond the first: add $1,200 to the limit

Even if your income is above 150% of the poverty level, you can still qualify if your monthly income does not exceed your monthly household expenses by more than $250. That $250 margin is where the SSA draws the line between having something to spare and not.¹⁰

These numbers drive the outcome more than anything else. If your liquid assets exceed the limits, the SSA generally expects you to draw them down to repay, regardless of your monthly cash flow. If your income runs more than $250 above your expenses, the agency treats that surplus as available for repayment.

How to File the Waiver

You file a waiver by completing Form SSA-632-BK, “Request for Waiver of Overpayment Recovery.” You can submit it online through your my Social Security account, or download the PDF and mail or fax it to your local field office.¹¹

The form asks for a detailed picture of your finances. List every household income source, including wages, pensions, and government benefits. Itemize your monthly expenses line by line: rent or mortgage, utilities, food, insurance premiums, medical costs, taxes, installment payments. Section 4 asks you to list every household member and whether they contribute to household expenses.¹²

Be thorough. Attach bank statements, utility bills, medical receipts, and anything else that backs up the numbers you list. Include unusual expenses like court-ordered support or costs tied to a medical condition. Because the reviewer compares your income and assets to the thresholds above, documentation is what decides close cases. Underreporting income or leaving out assets will get the waiver denied outright.

What Happens After You File

Once the SSA receives your waiver request, it pauses collection until a decision is made. The pause applies whether the agency was withholding from your monthly benefits or pursuing other recovery, and it lasts through any appeal.³

The SSA first does a paper review of your form and documents. If the reviewer can approve the waiver on the paperwork alone, you get a written approval and the debt is forgiven. If the reviewer cannot approve it, the agency must offer you a personal conference before issuing a final denial. That step is not optional on their end. The conference is handled by a decision-maker who was not involved in the initial review, and you can bring additional evidence and explain your situation in person.¹³

If the waiver is denied after the personal conference, you receive a written decision explaining why. From there, you can appeal to an administrative law judge. The full review process typically runs several months depending on case complexity and field office workload, so keep copies of everything you submitted.

If a Full Waiver Isn’t Realistic

If you know you were at fault, or your finances don’t clear the thresholds, you still have options short of paying at the default rate.

Request a Lower Repayment Rate

You can ask for a lower monthly repayment without filing a waiver at all, using Form SSA-634-BK. The SSA can accept payments as low as $10 per month.⁴ For Title II beneficiaries, the SSA can reduce the default 100% withholding to as little as $10 per month if full recovery would deprive you of income for basic needs, though it will not offer a reduced rate if the overpayment resulted from fraud or intentional misrepresentation.¹⁴ For SSI recipients still receiving payments, the default recovery rate is already capped at 10% of your total monthly income (countable income plus your SSI payment), and you can request a lower rate if 10% causes hardship.¹⁵

Offer a Compromise Settlement

A compromise lets you pay a lump sum less than the full balance to resolve the debt entirely. The SSA will consider a compromise when you are unable or unwilling to pay in full, when enforced collection would cost more than the amount recovered, or when there is genuine doubt about the SSA’s ability to prove the full amount in court. Your offer must be in writing and signed, and payment is typically due within 30 days of acceptance, or 90 days if you need installments.¹⁶

Two limits: the SSA cannot accept a compromise if the overpayment resulted from fraud, and balances over $100,000 go to the Department of Justice. If the SSA rejects your offer, normal recovery resumes.¹⁶

1
Social Security Administration. Overpayments
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Social Security Administration. Social Security to Reinstate Overpayment Recovery Rate
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Social Security Administration. Form SSA-632BK – Request for Waiver of Overpayment Recovery
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Social Security Administration. Overpayments Fact Sheet
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eCFR. 20 CFR 404.507 – Fault
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eCFR. 20 CFR 416.552 – Waiver of Adjustment or Recovery — Without Fault
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eCFR. 20 CFR 404.508 – Defeat the Purpose of Title II
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eCFR. 20 CFR 404.509 – Against Equity and Good Conscience Defined
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Social Security Administration. View Our New and Updated Overpayment Waiver Policies
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Social Security Administration. POMS – Defeat the Purpose (Ability to Repay) of Title II and Title XVI – Waiver Determination
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Social Security Administration. Ask Us to Waive an Overpayment
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Social Security Administration. Request for Waiver of Overpayment Recovery
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Social Security Administration. POMS GN 02270.003 – Overview of the Personal Conference – Title II and Title XVI
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eCFR. 20 CFR 404.502 – Overpayments
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Social Security Administration. 20 CFR 416.571 – 10-Percent Limitation of Recoupment Rate — Overpayment
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Social Security Administration. Supplemental Security Income Overpayment – Compromise Settlement