What happens when the state says you were paid too much
If you received a notice from California's Department of Social Services saying you were overpaid on State Disability Insurance (SDI), you have the right to dispute it. The state must prove the overpayment happened before they can collect it back from you. You do not have to accept the amount they claim you owe, and you can request a hearing to challenge their calculation.
An overpayment notice usually means the state believes you received benefits for weeks you were not actually disabled, or that you earned income during weeks you reported as unable to work. Sometimes the overpayment is their error—a data entry mistake, a miscommunication with your employer, or a processing delay. Other times it reflects a real change in your situation that you did not report in time. Either way, you have steps you can take to contest it.
Key Takeaways
- You have 30 days from the date on the overpayment notice to file a written objection with the state, or you lose the right to a hearing.
- The state must send you an overpayment notice that explains which weeks they believe were overpaid and why; if the notice is unclear or missing information, that is grounds to challenge it.
- At a hearing, you can present evidence that you were disabled during the weeks in question, that you reported income correctly, or that the state made a calculation error.
- If you cannot pay back the overpayment all at once, you can request a payment plan even while disputing the amount.
- The hearing is conducted by a state administrative law judge, not a court, and you can represent yourself or bring someone to help you.
The 30-day window to object in writing
Your overpayment notice will have a date on it. You have 30 calendar days from that date to file a written objection. This is a hard important date—if you miss it, you cannot request a hearing and the state can begin collecting the overpayment through wage garnishment, tax refund intercept, or other means.
Send your objection in writing to the address listed on the notice. You can use a straightforward letter that says you dispute the overpayment and want a hearing. You do not need legal language or a specific form, though the state does provide a form called the Request for Hearing if you prefer to use it. Keep a copy for your records and consider sending it by certified mail so you have proof of the date you mailed it.
If you are close to the important date and unsure whether you want to dispute it, file the objection anyway. Filing does not commit you to anything—it straightforward preserves your right to a hearing. You can decide later whether to proceed.
What the overpayment notice must contain
Before the state can collect an overpayment, they must send you a notice that explains what they believe happened. The notice should identify the specific weeks you were overpaid, the amount for each week, and the reason—usually either that you were not disabled during those weeks, or that you earned income you did not report.
If the notice is vague, does not list the weeks, or does not explain the reason, that is a problem with the notice itself. You can challenge it on those grounds alone. For example, if the notice says "overpayment of $2,000" but does not break down which weeks or why, you have grounds to object that the notice is defective.
Read the notice carefully and compare it to your own records. Check the weeks listed against your calendar. If you worked during a week the state says you were disabled, or if you reported income that the notice does not mention, gather that documentation now—you will need it for the hearing.
Gathering evidence before the hearing
Once you file your objection, the state will schedule a hearing, usually within 30 to 60 days. Use that time to collect documents that support your position. The strongest evidence is anything that shows you were disabled during the weeks in question, or that you reported income correctly.
Medical records are the most important. If you have doctor's notes, hospital records, or treatment records from the weeks the state says you were overpaid, those documents prove you were under medical care and unable to work. Bring anything dated during those weeks. If you saw a doctor or therapist regularly, ask for a letter stating you were under their care and unable to work during the specific dates.
If the overpayment is about unreported income, gather pay stubs, employer letters, or bank statements showing what you actually earned. If you reported income but the state did not process it correctly, bring copies of the forms you submitted. If you did not report income because you did not know you had to, bring any communication from the state that explains the reporting requirement—sometimes the state's own instructions are unclear.
Also gather any written communication between you and the state: emails, letters, or notes from phone calls. If someone at the state told you something that led to the overpayment, that conversation is relevant to the hearing.
What happens at the hearing
The hearing is conducted by a state administrative law judge, not a court. It is usually held by phone or video conference, though you can request an in-person hearing if you prefer. You will have the chance to explain your side of the story and present your evidence. The state will present their case, and you can ask questions.
You do not need a lawyer, though you can bring one if you want. You can also bring a friend, family member, or advocate to help you. If you cannot afford a lawyer, contact the California Disability Rights Advocates or a local legal aid office to see if they can help you prepare.
At the hearing, explain clearly which weeks you believe you were disabled, or which income you reported. Walk through your evidence piece by piece. If the state's notice made an error—a wrong date, a wrong amount, a misunderstanding about when you reported something—point it out. The judge will decide whether the overpayment is correct based on what you and the state present.
After the hearing, the judge will issue a written decision. If you disagree with the decision, you have 30 days to appeal it to the state's appeals board.
Requesting a payment plan while you dispute
Even if you are disputing the overpayment, the state may ask you to begin repaying it while the hearing is pending. You do not have to agree to this. You can request that repayment be held until after the hearing is decided. Write to the state and ask them to suspend collection efforts while your dispute is being heard.
If you lose the hearing and the overpayment is upheld, you can request a payment plan to repay it over time instead of in a lump sum. The state will work with you on a schedule based on your income. A payment plan does not erase the overpayment, but it makes it manageable.
Common reasons overpayments happen
Understanding why the state believes you were overpaid can help you prepare your case. The most common reason is that you returned to work but did not report your earnings in time, or reported them incorrectly. SDI allows you to earn a small amount while collecting benefits, but if you earn above that threshold, your benefits are reduced or stopped. If you did not report the income, the state paid you as if you were still fully disabled.
Another common reason is that you continued to collect benefits after your doctor cleared you to return to work. If your doctor's note says you were able to work starting a certain date, but you continued to file claims after that date, the state will say those weeks were overpaid. This often happens when there is a delay between when your doctor clears you and when you actually stop working.
Sometimes the overpayment is the state's error. A claims processor may have failed to record income you reported, or may have processed a claim for a week you were not may be able to access. Data entry mistakes happen. If you believe the overpayment is the state's error, say so clearly at the hearing and bring evidence of what you reported and when.
Frequently Asked Questions
Can the state garnish my wages while I am disputing the overpayment?
Not while your dispute is pending. Once you file your objection, the state must hold off on collection until after the hearing is decided. If you lose the hearing, they can then begin garnishment or other collection methods. If you win, there is no overpayment to collect.
What if I cannot find the medical records from the weeks in question?
Contact your doctor's office and ask them to search their records for the dates you specify. If records are lost, ask the doctor to write a letter stating that you were under their care during that period and were unable to work. A letter from your doctor is strong evidence even if you do not have the original records. If you saw multiple providers, contact all of them.
Do I need to hire a lawyer to dispute an overpayment?
No. You can represent yourself at the hearing. Many people do. However, if the overpayment is large, if the facts are complicated, or if you are unsure how to present your case, a lawyer or advocate can help. Legal aid offices and disability rights organizations sometimes help with these cases for free or low cost.
What if the state says I owe money but I never received the overpayment notice?
Contact the state when ready and ask them to send you the notice. You cannot file an objection until you have received the notice and know the important date. If the state cannot locate a notice they sent you, ask them to issue a new one. Keep records of all your communications with the state about this.
Can I appeal the judge's decision if I disagree with it?
Yes. You have 30 days from the date of the judge's decision to file an appeal with the state's appeals board. The appeal is based on the written record from the hearing, not on new evidence. If you believe the judge made an error in interpreting the law or the facts, the appeals board will review it.