Social Security Disability & SSI: Cessation of Benefits, Appeal, and Overpayments

Legal Author - Travis Hansen, Esq.
Updated - September 1, 2025

Bases for Cessation of Benefits

After you are awarded Social Security disability benefits, Social Security will monitor your case. You may continue to receive your disability benefits with no issues for years, perhaps until full retirement or the rest of your life. You may have your benefits terminated. There are six main reasons Social Security will terminate your benefits and issue a cessation notice:

You engage in SGA/earn too much income;
You receive SSI disability benefits and acquire too much in assets;
You are confined in a public institution for more than 30 days;
You do not cooperate with Social Security;
Fraud; or
Social Security determines you are no longer medically disabled.

You Receive SSI and Aquire Assets

Social Security will terminate benefits if you are receiving SSI disability benefits, and you aquire more than $2,000 in assets. SSI is a needs based program. You cannot make more than about $1000 per month or have more than $2,000 in assets. A more detailed discussion of SSI financial criteria can be read here - SSI Non-Medical Criteria.

You Are Confined

Social Security will terminate benefits if you are receiving either SSDI or SSI disability benefits, and you are incarcerated or confined to a public instituion for more than 30 days. This generally includes jail, prison, or a mental health facility.

You Fail to Cooperate with Social Security

Social Security will terminate benefits if you are receiving either SSDI or SSI disability benefits, and you fail to cooperate with it. This usually occurs when you are asked by Social Security to either furnish requested information or fail to appear for a physical or mental health examination. Very commonly, a person fails to cooperate because they have unreliable mail service or have moved residences, and they do not get a notice from Social Security. Of course, they are unable to respond to it's request. All notices from Social Security will be by mail. Therefore, it is very important you inform Social Security if you have an address change. It would not hurt to also notify it of a phone number change.

Fraud

Social Security defines fraud as misrepresenting information which includes false statements, misrepresentations, or omitting important facts about your eligibility for benefits. If fraud occurs, the Social Secuity's Office of Inspector General (OIG) will investigate and, potentially, prosecute such a case. A finding of fraud is a rare but very serious situation. Consequences of fraud certainly means a reduction or cessation of benefits and an overpayment. Sometime fines/penalties are levied. In severe case, criminal charges are filed.

You Engage in SGA/Income

Social Security will terminate benefits if you are receiving either SSDI or SSI disability benefits, you return to work and engage in "trial work period substantial gainful activity" (TWP SGA), and you exhaust your trial work period.

TWP SGA means you are working and making more than a certain amount of income per month. The TWP SGA amount increases every year, and the yearly amount can be reviewed here - TWP SGA.

If you are receving disability benefits, and you return to work, you are entitled to a nine-month trial work period wherein you can make as much money as you like. During the trial work period, you are allowed to recieve both your Social Security disability benefits, and your earnings. After your trial work period, you are usually entitled to a three-year Reentitlement Period wherein for any month you are over TWP SGA, you are allowed to keep your earnings but not your disability benefits, and for any month you are under TWP SGA, you are allowed to receive your disability benefits AND your earnings. However, it is often the case that after your trial work period, Social Security will find that you are no longer disabled. Here's what typically happens, 1) you exhaust your trial work period, 2) you continue to earn more than TWP SGA, 3) Social Security determines you have medically improved at the end of your trial work period, and 4) and Social Security does not send you a cessation notice until months after your trial work period ended. All those months after your trial work period ended (when Social Security found you were not disabled) until Social Security terminates your benefits are overpayment months. A more detailed discussion of a trial work period and the reentittlement period can be read here - Trial Work Period/Reentitlement Period.

You Are No Longer Disabled

Social Security will determine you are no longer medically disabled in one of three ways: 1) You engage in TWP SGA (discussed above) and Social Security determines your work activity demonstrate you are no longer disabled; 2) it conducts a Cooperative Disability Investigation Unit (CDIU) investigation wherein it will determine your activities of daily living demonstrate you are not disabled; 3) it conducts a scheduled Continuing Diability Review (CDR) wherein it reviews your medical records, medical conditions, symptoms, and functional abilities and determines you are no longer disabled.

TWP SGA

The TWP SGA is discussed above.

CDIU

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CDR

How a CDR Works. At the time of you are awarded benefits, a Social Security analyst/case manager at your local Social Secuirty office (nearest to where you live) who is assigned to your case will schedule a continuing disabilty review which is a review of your case wherein Social Security will determine whether you are still medically disabled. A continuing disabilty review date is set one to seven years after you are awarded benefits, and the timing of a continuing disabilty review is up to the discretion of the analyst/case manager.

Social Security will notify you by mail that it is conducting a continuing disability review. It will generally send you two forms to fill out to obtain necessary information such as your medical providers, medical treatment, medications, general acitivies, and any employment:

Social Security may ask you to attend a consultative examination (CE) by one of their medical providers, but this is rare. Social Security will then review your medical records, your Social Security forms, and your CE, if any. Social Security will mail you a decision whether you continue to be eligible for disability benefits.

Unfavorable Decision. If Social Security determines that you are no longer medically disabled, it will send you a letter that it has terminated your benefits. In the notice, Social Security will give you 60 days to appeal the decision (it presumes it took 5 days in the mail to get to you, so you really have 65 days from the date of the cessation letter). In the same notice, and this is extremely important, Social Security will also give you 10 days to elect to continue your benefits while your cessation is on appeal. That's right, Social Security will continue to pay your your benefits on appeal. What this means is that you really need to appeal your cessation notice in 10 days. If you elect to continue receiving your benefits on appeal, and you lose your appeal, Social Security will charge you with an overpayment (Social Security will have "overpaid" you), and you must pay the overpayment back.

Appealing the CDR Decision - Requesting an Informal Hearing. If you receive a cessation letter, you can appeal the cessation. To appeal your case, you will file Form SSA-789 Request For Reconsideration - Disability Cessation Right to Appear or a Form SSA-561 Request For Reconsideration - Disability Cessation Right to Appear. Either form is fine. On either form, you will need to write the following, "I do not agree with the cessation of my disabilty benefits. I am disabled." You do not need to write a long explantion as the previous sentence is sufficient; understand, you will have a hearing later to explain yourself. If you want to continue receiving your disabilty benefits, you must write on either form the following, "I request that my disability benefits continue throughout the appeals process."

Informal Hearing. You will be scheduled for an informal hearing which is nearly always done by phone and conducted by an adjudicator (an employee at your local Social Security office). This person is not an administrative law judge. For any Social Security hearing, I strongly advise you to hire an attorney. The hearing is very casual. You (and your representative) if you have one, will argue for continued disability. The adjudicator will have obtained and read your medical records prior to the hearing. The adjudicator will ask you questions. Your representative will ask you questions (if you have one). Questions generally pertain to your medical conditions, your daily activities and functioning, and work activity (if any). The hearing will last about an hour. A decision will be issued in writing about 45 days after the informal hearing.

Appealing the Informal Hearing Denial - Requesting a Formal Hearing. If you win your reconsideration appeal/informal hearing, Social Security will have found you continue to be disabled, your benefits will continue, and you will have another continuing disability review in one to seven years.

If you are denied at your informal hearing, you can appeal your case. You will file Form HA-501 Request For Hearing By Administrative Law Judge. On the Form 501, you will need to write the following, "I do not agree with the determination that I am not disabled. I am disabled." Again, you do not need to write a long explantion as the previous sentence is sufficient; understand, you will have a formal hearing later. Once again, if you want to continue receiving your benefits, you must write on Form 501 the following, "I request that my disability benefits continue throughout the appeals process."

Formal Hearing. You will be scheduled for a formal hearing with an administrative law judge at a Social Security hearing office - Office of Hearing Operations (OHO). These hearings are nearly always done by phone. The hearing will be somewhat formal. You (and your representative) if you have one, will argue for continued disability. At this stage, you will need to obtain and submit your own medical records as OHO will not do this for you. At the hearing, the judge will have read your medical records prior to the hearing. Both the judge and your representative Iif you have one will ask you questions. You should hire an attorney for this heariing. The hearing will last about an hour. A decision will be issued in writing about 60 days after the hearing.

If you lose your formal hearing, Social Security will have found you are no longer disabled, and your benefits will end. If you elected at the time of your cessation and/or your informal hearing denial/appeal to continue receiving your benefits, you will now owe an overpayment for the time your case was on appeal, and you are required to pay this money back to Social Security.

An example. You are receiving disability benefits including monthly benefits of $1,500. You are notified with an April 1, 2025 letter that Social Security is reviewing your case as part of a continuing disability review. You are then notified with a cessation letter dated June 1, 2021, that Social Security has terminated your benefits, and you have the right to appeal the decision and elect to have Social Security continue your benefits. You appeal your case and elect to continue receiving benefits. You then have an informal hearing on August 1, 2025, and you are denied. You appeal requesting a formal hearing and elect to have your disability benefits continue. You are denied after your formal hearing on July 1, 2026. Social Security will charge you an overpayment for 20 months form April 1, 2025 to July 1, 2026, in the amount of $30,000 [10 months x $1,500 (an average monthly amount) = $30,000].

Overpayments

An overpayment, very simply, is when Social Security pays you too much money - it "overpays" you. This situation is always of significant concern because you now owe the government money, and nearly always, one way or another, they recover the overpayment.

How an Overpayment Occurs

It takes Social Security awhile to learn about one of the six above-discussed situations that resulted in the termination of your benefits. So, by the time it sends you a cessation notice, some time will have passed since you engaged in activity causing the cessation. For example, Social Security learns you are engaging in TWP SGA and have been for four months. Social Security will take about a month to send you the cessation letter. Social Security will terminate your benefits as of the date you began engaging in the activity causing the cessation - in this case, five months prior the the cessation letter. You will have an overpayment of five months.

Overpayment Fault and Repayment

An overpayment may be your fault or Social Security's. Even if an overpayment is the fault of Social Security, it will recover the overpayment. This is usually achieved by 1) reducing your ongoing benefit amount (if you continue to receive benefits) to zero until the overpayment is paid off in full, 2) reducing your eventual old-age retirement Social Security benefits to zero until the overpayment is paid off in full, or 3) confiscating tax refunds, or any combination of the three. Generally, option two and three are used if you are not entitled to ongoing disability benefits. I have never been aware of Social Security seeking a court judgment. Begining March 27, 2025, Social Security demands immediate 100% repayment of the overpayment. Prior to this date, Social Security would only withhold 10% of your benefits each month. That means, as of March 27, 2025, Social Security will withhold 100% of your disability benefits until the overpayment is paid. If you are no longer entitled to disability benefits, Social Security is happy to play the long game reducing future benefits and future tax refunds to recoup the overpayment.

Your Rights if You Have an Overpayment

You have three options if you have an overpayment.

Appeal. First, as I discussed at length above, you can appeal by filing Form SSA-561, Request for Reconsideration. Again, you are appealing the basis of the cessation and resulting overpayment.

Waiver. Second, you can request a waiver of the overpayment by filing Form SSA-632, Request for Waiver of Overpayment Recovery. Social Security rarely waives an overpayment. But, two factors are absolutely necessary to exercise this option. First, you cannot be at fault for the overpayment; it must be the fault of Social Security. Second, you must show an extreme hardship financially if you were repay the overpayment; you must show an inability to pay your basic bills: food, rent, mortgage, utilities, medical bills, car payment, etc. You will need to submit a detailed itemization of your income and your bills.

Requesting a Lesser Recovery Rate. Third, if you agree with the overpayment, and you are willing to pay it back, but you cannot afford to pay it back at the new 100% repayment rate, you can request a different repayment rate by filing Form SSA-634, Request for Change in Overpayment Recovery Rate. However, this option is currently in question since as of March 27, 2025, the repayment rate changed from 10% to 100%. Because of the recent change, it is unclear moving forward how Social Security will respond to a recovery rate change request.

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