I got a letter saying that I had been overpaid on my SSI BENEFITS, due to the fact that I sold my house and put the money in a savings account until I was able to buy another home with that money. I did use all of it to purchase another home, but it was in a savings account for a little over 6 months, until the purchase of my new home was finalized. Will I lose my SSI benefits? Will I have to pay Social Security back? I had no idea this was against the rules! What should I do?

Hi. It doesn't sound like you'd lose your Supplemental Security Income (SSI) payments permanently, but you may have to pay back the overpayment. A home in which you live is excluded from counting toward the $2000 asset limit for SSI eligibility, but if you sell your home and the proceeds from the sale put you over the $2000 limit then it makes you ineligible for SSI benefits. If you subsequently buy a new home that brings your countable assets back down below $2000 you can potentially resume your SSI eligibility, but you aren't eligible for SSI payments during the months that your countable assets are over the $2000 limit.

There is a special SSI rule that can exclude proceeds from the sale of a home from counting as an asset, but only if the proceeds are used to purchase a new home within 3 calendar months of receiving such proceeds (https://secure.ssa.gov/apps10/poms.nsf/lnx/0501130110). It sounds like you exceeded that time limit, so the SSI overpayment that you were notified of is probably correct.

You could request an appeal of the overpayment, but that won't change your liability for repayment unless the overpayment is incorrect in fact or amount. Or, you could file for waiver (i.e. forgiveness) of the overpayment. Social Security will only waive an overpayment if they consider you without fault in causing the overpayment, and if you're unable to repay the overpayment or recovery of the overpayment would be unfair for some reason.

If you aren't successful in appealing the overpayment or getting it waived and assuming that you've resumed your eligibility for SSI now that you've purchased a new home, Social Security will recover your overpayment over time by withholding 10% of your monthly SSI payments.

Best, Jerry