Social Security Disability Insurance (SSDI) is a safety net program administered by the Social Security Administration (SSA) for workers with disabilities and their dependents. As much as this program can be an essential lifeline for beneficiaries, overpayment of benefits can create challenges for beneficiaries and SSA alike. Overpayments occur when SSA issues a benefit to which a beneficiary is not entitled and, in most cases, beneficiaries are required to repay the overpayment debt to SSA.

Overpayments can occur for many reasons, but work-related overpayments account for the largest portion of all SSDI overpayment dollars.1 The median work-related overpayment amount is over $9,000, which can be large relative to beneficiary income and qualitative evidence suggests that they can be distressing for beneficiaries.2,3,4,5,6 Furthermore, work-related overpayments amount to an average of nearly $800 million per year over a five-year period; they are not always recovered; and there is an administrative cost for overpayments that are recovered. 7,8,9

Because benefit entitlement is contingent on an inability to engage in substantial gainful activity (among other factors), benefits are generally not payable if a beneficiary engages in substantial gainful activity. In 2023, substantial gainful activity is measured as monthly earnings over $1,470 for non-blind beneficiaries; this threshold is indexed and changes in most years. However, there are SSDI work incentives that allow beneficiaries to test work without affecting benefits. Specifically, beneficiaries can test their ability to work for 12 months—not necessarily consecutive—without any effect on their benefits, but after that point beneficiaries are not entitled to benefits in months in which they engage in substantial gainful activity. For up to 36 months benefits are withheld for substantial gainful activity on a month-by-month basis. After that point, entitlement to SSDI benefits is terminated for substantial gainful activity.

Beneficiaries are at risk of work-related overpayments when they engage in substantial gainful activity after exhausting SSDI work incentives that allow them to test work. If SSA pays benefits for such months, beneficiaries will experience work-related overpayments. Estimates suggest that 71 percent of beneficiaries at risk for a work-related overpayment were overpaid in a three-year period. Because a minority of SSDI beneficiaries work (less than 2.7 percent in an analysis from 2010-2012), this represents a small proportion of beneficiaries (1.9 percent). However, policymakers and SSA have focused considerable attention and resources on this population and beneficiary return to work.

Work-related overpayments most often occur because SSA does not have access to the earnings information needed to suspended benefits in real time. Beneficiaries are required to report their earnings to SSA promptly, but often neglect their reporting responsibility. Indeed, 83 percent of SSDI beneficiaries with work-related overpayments were overpaid because they failed to report earnings to SSA timely.10,11 Qualitative evidence suggests that many overpaid beneficiaries are unaware of the earnings reporting requirements.12 Similarly, a Government Accountability Office (GAO) report noted that SSA work reporting requirements are unclear and beneficiaries may “receive inadequate and inconsistent guidance” on earnings reporting.13

SSA has a strategic goal to minimize work-related overpayments. Indeed, SSA tested modified earnings reporting reminders under another program the agency administers: the Supplemental Security Income (SSI) program. SSI is a means-tested income support program that provides benefits to working-age people with disabilities, as well as other populations.

The Office of Evaluation Sciences and SSA collaborated to send letters to SSI recipients to remind them to report earnings.14 The study, which included 50,000 beneficiaries, found that receiving any one of four reminder letters led to an increased rate of earnings reporting, though this effect decayed over time. In this article, we review the written communications that SSA uses to remind beneficiaries to report their earnings, drawing on lessons from the behavioral economics literature.

The literature suggests several approaches to encourage reporting or, more generally, compliance. At the most basic level, reminders have been found effective in promoting desired behavior.15,16,17,18,19,20 In addition, making the requested action salient and the content less complex can encourage the desired response.21 Presumably because people react strongly to potential losses,22 there is also evidence suggesting deterrence approaches that highlight the possible consequences of action (or inaction) are effective.23,24,25,26 There is mixed evidence about the effectiveness of non-deterrence approaches including those that promote social norms, such as noting that many people have engaged in the desired response.27,28,29,30,31,32,33,34 Finally, reducing the steps a person must take to comply can increase responsiveness35 as can the use of deadlines.36

The broader behavioral economics literature has identified specific behavioral strategies for effective communications, including reducing the complexity of the message, heightening salience, and using a positive, personal tone. For example, because people have limited attention, they use conscious and subconscious heuristics to decide which stimuli to notice.37 People tend to focus on headings, boxes, and images, often ignoring detailed text.38 In addition, the use of blank space can reduce cognitive burden.39 This suggests the use of headings and formatting to draw attention to important context.