I think you are saying you NEVER collected any SS benefit before age 69?
Then you are right. There is no bar to earning unlimited amounts of money - once you are of full retirement age, which you were.
So either they may be mixing you up with someone else OR, is it possible this is not actually from the SSA? Do you want to redact your private info and upload, fax or email me that letter? I am just concerned that with the widespread scams going on, often using the IRS name, it is only a matter of time until a con decides to do the scare tactic with the SSA name.
I also wonder about the statement you made about "reducing [your] SSA", which may conflict with any language that they are taking it in lump sum. You don't get 7000/mo, so how can they even withhold in lump sum. If legit, at best they could stop your checks until 7k is paid off, but that language doesn't jive.
But bot***** *****ne, you can work from 66 one unlimited, while collecting, so this is erroneous at best or fraud at worst. I can take alook at your letter if you want (just black out your name/address/SS number etc.) or, if not, I'd take a trip to the local office with the letter and inquire. Mistake on their part, or fraud, if they are claiming you can't work and collect without penalty.