How does SSA typically recover an overpayment while the individual is in pay status?

The correct answer indicates that the Social Security Administration (SSA) typically recovers an overpayment by deducting a specified amount from future payments. This method allows the SSA to gradually recover the excess funds without placing an immediate financial burden on the individual. By implementing this approach, the SSA ensures that individuals can continue to receive their benefits while they are making repayments.

This deduction is usually a set percentage of the individual's monthly benefits, which helps the agency balance their collection efforts with the recipient's financial needs. It also allows individuals to stabilize their financial situation while they pay back the amount owed, rather than requiring them to make a lump sum payment that could be difficult to manage.

The other options present less practical approaches to managing overpayments. Demanding a lump sum payment can lead to financial strain, while stopping benefits entirely could leave individuals in hardship, and requiring documentation does not directly address the overpayment recovery process.