Social Security Mistakes: Why Your Checks May Be Wrong and How to Correct Them

Social Security payments are a critical source of income for millions of American retirees. However, many recipients face an unexpected problem: the government often miscalculates the payments, resulting in either overpayments or underpayments. These errors can cause significant financial stress and confusion for those who rely on these funds to meet their daily needs.

The Social Security Administration (SSA) handles millions of benefit payments each month, and even a minor mistake in their calculations can impact thousands of people. Some beneficiaries have even faced the loss of their homes when the SSA tried to recover overpayments. Ed Weir, a former Social Security manager, recently highlighted this issue in a video on his YouTube channel, offering advice to Americans on how to ensure they receive the correct benefits.

In response to pressure from Congress earlier this year, Social Security Commissioner Martin O’Malley implemented a series of measures to address the overpayment issue. According to the SSA, payment errors can occur for a variety of reasons, including data entry mistakes, incorrect wage reporting, and misunderstandings of the complex rules governing benefits. These errors can also result in recipients receiving less money than they are entitled to. So, what steps can you take if you suspect your Social Security check is incorrect? Here are three common reasons why your payment might be wrong, along with suggestions on what you can do about it.

Incorrect Earnings Record

Your Social Security benefits are calculated based on your lifetime earnings, specifically the average of your highest 35 years of income. Errors in your earnings record can occur for several reasons, such as clerical mistakes, incorrect reporting by your employer, or even identity theft. For example, if your employer mistakenly reports your earnings under the wrong Social Security number, your record may show lower earnings than you actually made, which can significantly reduce your benefits.

To avoid this, it’s essential to regularly check your Social Security statement, which you can do online through the SSA website. If you find any discrepancies in your record, you should contact the SSA immediately to correct them. This proactive step can help prevent long-term issues and ensure you receive the correct amount of benefits.

Applying for the Wrong Program

The SSA offers several different programs designed to meet various needs, such as retirement benefits, disability benefits, and survivors’ benefits. Applying for the wrong program can lead to a denial of benefits or result in receiving less money than you are entitled to.

A common mistake occurs when individuals apply for Supplemental Security Income (SSI) instead of Social Security Disability Insurance (SSDI). Both programs provide financial assistance to disabled individuals, but they have different eligibility criteria and payment amounts. SSDI is based on your work history and earnings, while SSI is need-based and intended for people with limited income and resources. If you apply for SSI when you qualify for SSDI, you could receive lower benefits since SSI payments are generally less than SSDI payments.

Life Changes

Changes in your personal life, such as marriage, divorce, the death of a spouse, or the birth of a child, can also impact your Social Security payments. For example, if you get married, your benefits may change depending on whether you are receiving your own Social Security benefits or spousal benefits. Similarly, if you divorce, you may be eligible for spousal benefits based on your ex-spouse’s earnings. However, failing to report these life changes to the SSA can result in incorrect payments.

Overpayments might occur if you continue to receive benefits you are no longer eligible for, while underpayments can happen if you do not apply for benefits you are now entitled to. For instance, widows or widowers may qualify for survivor benefits, which are often higher than the benefits they were receiving on their own record.

How to Ensure You Receive the Benefits You Deserve

Relying on the government to get everything right might not be the best approach. Here are some steps you can take to maximize your Social Security benefits and correct any errors:

1. Regularly Monitor Your Social Security Account:

Create an online account with the SSA to access your Social Security statement, track your earnings record, and estimate your benefits. Regularly monitoring your account can help you spot and correct errors early, reducing the risk of financial issues in the future.

2. Review Your Earnings Record Annually:

It’s a good idea to check your earnings record at least once a year to ensure all your income has been accurately reported. If you notice any discrepancies, report them to the SSA immediately to prevent long-term problems and ensure that your benefits are calculated correctly.

3. Understand the Impact of Your Retirement Age:

The age at which you choose to retire can significantly affect the amount of your Social Security benefits. Understanding how retiring early or delaying retirement impacts your benefits can help you make more informed decisions and plan accordingly to maximize your payments.

By staying informed and proactive about your Social Security benefits, you can avoid many of the common errors that lead to incorrect payments. Whether it’s checking your earnings record regularly, applying for the correct program, or understanding how life changes affect your benefits, taking these steps can help ensure you receive the money you deserve.