• Supplemental Security Income beneficiaries were supposed to get stimulus checks with no strings attached.
• Three U.S. senators say the extra income has compromised benefits for some and are asking the Social Security Administration for an explanation.

When Covid-19 stimulus checks were deployed to millions of Americans, the government reassured Social Security and Supplemental Security Income beneficiaries they were eligible for payments.

But some beneficiaries, who include retired and disabled Americans, may have gotten more than they bargained for — lost benefits.

Some SSI recipients have seen their benefits suspended or have been assessed overpayments as a result of stimulus checks, which were worth up to $3,200 per individual or $6,400 per married couple over three rounds of payments. Social Security beneficiaries have also reportedly received overpayment notices.

Those reports prompted three Democratic leaders — Sens. Ron Wyden, D-Ore.; Sherrod Brown, D-Ohio; and Bob Casey, D-Pa. — to send a letter to the Social Security Administration last week stating they are "deeply concerned."

Stimulus funds clashed with strict SSI asset limits

Supplemental Security Income, or SSI, provides benefits to adults and children who are disabled and blind, as well as elderly individuals age 65 or older with little income or resources.

The size of the monthly payment beneficiaries receive depends on their income, living circumstances, assets and other factors. Each month, beneficiaries must report their income and wages, as well as any changes to their resources or living arrangements.

That oversight is aimed at making sure beneficiaries still qualify under SSI's strict rules. Notably, that includes a limit of $2,000 in assets of any kind per individual beneficiary, or $3,000 for married couples or two-parent families with children who are SSI beneficiaries.

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SSI beneficiaries tend to have few resources and limited income, and therefore likely qualified for full stimulus payments. But the low asset limits means those payments may have caused complications.

The Social Security Administration announced in 2021 that the stimulus checks would not count toward eligibility and payments of SSI benefits, regardless of how long beneficiaries held onto the money.

Benefit suspensions have 'profound negative impact'

"SSI benefits, while modest, have a substantial impact in the lives of the people who rely on them," the senators wrote to Kilolo Kijakazi, acting commissioner of the Social Security Administration. "Benefit suspensions and overpayment notices — regardless of the cause — can have a profound negative impact in their lives."

"Further, losing SSI eligibility risks a lengthy bureaucratic process to restore eligibility and also risks beneficiaries' access to Medicaid coverage," the senators wrote.

The lawmakers are asking the Social Security Administration to provide more information on the number of beneficiaries who saw their benefits reduced or suspended between March 2020 and July 2021; August 2021 and December 2022; and January 2023 to September 2023.

Additionally, the leaders are seeking to find out how many of those individuals saw their benefits reinstated without an appeals hearing; how many were reinstated due to an appeals hearing; the number of appeals that have been denied; and the number of appeals that are still pending.

The senators are also seeking to find out the number of claimants who have been denied SSI benefits because of the stimulus checks, among other details.

Notably, Brown and other lawmakers are working on a bipartisan bill to update SSI's asset limits.

The errors come as no surprise to Darcy Milburn, director of Social Security and health-care policy at The Arc, an advocacy organization for people with intellectual and developmental disabilities. The group was hearing about this issue "fairly frequently" during the depths of the pandemic.

"It's honestly trailed off a bit now," Milburn said. "But some people are still having issues."

One reason for that is it can be a challenge for the Social Security Administration to communicate guidance all the way down to the local level, she said.

There are 7.6 million people on SSI, and each one of those people's assets are checked very frequently by the Social Security Administration, according to Milburn.

"If at any point in time, one of those SSI beneficiaries had assets over the $2,000 limit, it would have been flagged internally," Milburn said.

When SSI beneficiaries should file an appeal

The general advice for situations with overpaid Social Security benefits is to communicate income and asset changes to the Social Security Administration as quickly as possible, according to Milburn.

Notably, the disability community worked very hard to communicate that the stimulus payments should not count against income or assets for SSI beneficiaries, she said.

"If you receive an overpayment notice from the Social Security Administration, and believe that it was due to a Covid stimulus payment or another error that was made by the Social Security Administration, you should file an appeal," Milburn said.

Stimulus checks 'are not counted as income'

Social Security Administration spokeswoman Nicole Tiggemann confirmed to CNBC on Monday that the agency had received the senators' letter and plans to respond directly to them.

The agency has also instructed its employees to ask about the receipt of stimulus checks, formally referred to as economic impact payments, including how much was received, how much had been saved and where, Tiggemann said. Social Security Administration employees were instructed to deduct the saved amounts from a beneficiary's financial account balance until they reported having spent the funds completely.

Additionally, the Social Security Administration provided information on the stimulus checks on web pages, blogs, social media, emails to SSI beneficiaries with my Social Security accounts, letters to advocates, and mailed notices to people who received or were eligible for SSI in 2020 and 2021, Tiggemann said.

"We included information that [economic impact payments] are not counted as income when received and will not be counted against SSI applicants or recipients' resource limits no matter how long they keep those funds," Tiggemann said.