Will Power, age 63, became entitled to retirement benefits in March 2005. He earned
$9,000 in January and February. The AET for 2005 is $12,000 per year for a person
who will not reach full retirement age (FRA) during the year.
His employer reported earnings of $21,000 for 2005 on his W-2, which resulted in an
overpayment of benefits for 2005. Development revealed that Mr. Power misunderstood
the retirement test and believed he could earn the allowable limit ($12,000) in the
months after his entitlement began.
To determine if this policy applies, subtract the amount Will earned before his entitlement
to retirement benefits began, from the total earnings for the year:
Will earned $12,000 in the months in which he was also entitled to retirement benefits.
Since this amount does not exceed the annual earnings test, we can assume that Will
misunderstood that the SSA annual earnings test also included his annual earnings
before he became entitled to retirement benefits.
SSA can deem that Will is not at fault for causing this overpayment, based on GN 02250.150. In addition, SSA would find that recovery of this overpayment is against equity
and good conscience, and therefore the overpayment would be waived.