FEMA Overpayments & Recoupment

A FEMA overpayment is when FEMA later decides that it gave someone more disaster assistance than they were eligible to receive, and the extra amount becomes a debt that FEMA tries to collect.

What is FEMA recoupment?

Recoupment is when FEMA takes action to collect on an overpayment of benefits.

What can cause an overpayment of FEMA benefits?

• Insurance later pays for the same damage If FEMA pays first and insurance pays later, FEMA counts that as a duplicate benefit.
• FEMA made a mistake This includes calculation errors, data‑entry mistakes, or approving the wrong type or amount of assistance.
• The person wasn’t actually eligible Sometimes FEMA later decides the damage wasn’t disaster‑related or the person didn’t meet program rules.
• The money was used for something FEMA didn’t allow. For example, using home‑repair funds for unrelated expenses.
• Missing or incorrect information If FEMA later finds that documents were incomplete or didn’t match, they may classify the payment as improper.

How does FEMA tell me if they think I was overpaid?

If FEMA thinks that you were overpaid disaster assistance, FEMA will send you a Notice of Debt letter. [Sometimes called Notice of Potential Debt.]   The letter will say: 

• That FEMA believes you were overpaid disaster assistance benefits
• Why FEMA thinks there was an overpayment
• How much FEMA says is owed
• That that you must repay the debt
• What the deadlines for appeal or asking for a waiver are
• When interest and penalties start

FEMA will send the letter to your last known address. It is important to let FEMA know your current address.

If I get a letter saying I was overpaid and have to pay the money back, what should I do?

• Don’t ignore the letter.
• Read the letter carefully. It will say
  • How much FEMA says you owe
  • Why FEMA thinks you were overpaid
  • Your deadline to appeal
  • Your deadline to request a waiver
  • Where to send documents

Keep the envelope and all pages.

If you believe FEMA is wrong, you have the right to appeal.  You may want to contact your local legal aid office to help with the appeal.  If someone claims to be “legal aid,” but asks for money, they are not from a legal aid program.

Can I appeal a decision that says I have to pay money back (a recoupment decision)?

Yes. You must send your appeal in writing within 60 days of the date on the letter. You may ask for a hearing. If FEMA agrees to a hearing, it will be held by phone. A FEMA hearing officer will listen to you, review your documents, and hear from witnesses before deciding. You should receive a decision from FEMA 45 days after the hearing.

What if I lose the appeal?

If your appeal is denied, you will need to pay the money back. You may be able to:Set up a payment plan.Ask FEMA to reduce or eliminate the amount, if paying would cause hardship.You may want to contact your local legal aid office to help try to work things out with FEMA. If someone claims to be “legal aid,” but asks for money, they are not from a legal aid program.

What if I made a mistake on my FEMA application for individual assistance?

For Individual Assistance, FEMA normally allows corrections without withdrawing the whole application — you simply update your file.

You can fix things like:                                                        

• Wrong address or phone number
• Incorrect insurance information
• Missing or incorrect household details
• Wrong damage description
• Incorrect bank account info
• Missing documents

How do I correct my application for individual assistance?

• Go to DisasterAssistance.gov
• Log in using the email you registered with
• Select your application
• Choose “Make Changes” or upload corrected documents
• Or call FEMA at 800‑621‑3362
• Tell them you need to correct your application
• Have your FEMA registration number ready
• Or visit a Disaster Recovery Center
• Staff can correct the application for you
• Find a DRC at https://egateway.fema.gov/ESF6/DRCLocator 
• Or use the FEMA App
• Go to your application and update information

You should talk to an attorney or your local legal aid office about your options. 

You should deal with the mistake as soon as possible. You should NOT wait to see if FEMA notices.