Call Now. Free Consultation (479) 340-0002

What Are Penalties for Failure to Report Income to SSA?

As we have reported previously on this blog, those receiving SSDI benefits can work in certain situations. For example, beneficiaries have a 9-month Trial Work Period, where they can make more than the Substantial Gainful Activity threshold and still receive benefits. But workers over the SGA threshold for any given month will not receive benefits outside this work period.

Beneficiaries also have a duty to report their earnings to the Social Security Administration. Anyone who fails to report can face serious consequences. In this article, an experienced Arkansas SSDI lawyer looks at some of the most serious.

How SSA Finds Out About Your Income?

The Social Security Administration has many ways of finding out if you are earning income. For example, if your employer withholds FICA taxes, they will send them to the government. SSA will see quite clearly how much you are earning.

Some workers might be tempted to get paid under the table, meaning they get paid in cash, which they don’t report. As a beneficiary, however, you have aduty to report your earnings or income to SSA. If you don’t, then you could face some dire consequences.

Withheld Benefits for Failure to Report

SSA canwithhold benefits as a sanction if you fail to report income. For a first violation, they can withhold up to six months of benefits. For a second violation, they can withhold benefits for up to a year, and additional violations can result in withheld benefits for 24 months (2 years).

Repayment of any Overpayments

Any benefits paid which you are not entitled to will count as overpayments. Consequently, you will need to pay them back. If you have stopped receiving SSDI benefits, then the government might demand immediate repayment of the full amount.

If you are still receiving benefits, then SSA can withhold some of your future payments until you pay back everything you owe. Overpayments sometimes happen through no fault of the beneficiary, in which case SSA might only withhold a small percentage each month. However, if you deliberately failed to report income, then SSA can keep your entire monthly check.

Monetary Penalties for Failure to Report Income

 Someone receiving Supplemental Security Income can be fined for failure to report. The fine isn’t much–$25 for a first violation—but the amount increases with each violation.

Criminal Charges for Social Security Fraud

Social Security fraud is a federal crime. The government rarely brings criminal prosecution, primarily because the burden of proving an intentional failure to report is so high. A mere mistake isn’t enough for a criminal conviction.

However, if convicted of Social Security fraud, you could face criminal fines and up to 5 years in prison. SSA can also permanently bar you from benefits. There is no reason to draw attention to yourself. 

Let Us Help You

Gallo, Cazort & Co. is an established Arkansas SSDI law firm. We have helped clients apply for and receive benefits. If you have a question about working, let us help. We can answer your questions so you don’t run afoul of SSA income reporting rules. Our consultations are free!