Not sure if there is such a thing as a "Grace Year", but there can be
a problem with what SS calls "special payments".
They try to explain the issue at this web page
http://www.socialsecurity.gov/pubs/EN-05-10063.pdf
Basically vacation and sick pay for previous years should not affect
your benefits. Here is the example they give at this webpage:
"Example of a special payment
This example shows how we apply a special
payment under Social Security rules.
Mr. DeSilva retired at age 62 in November
2014 and began to receive Social Security
benefits. In January 2015, Mr. DeSilva receives
a check from his employer for $17,000 for his
leftover vacation time. Because this is for
vacation pay he earned before he retired, Social
Security will consider it a special payment and
will not count it toward the earnings limit
for 2015."
To correct this, you need to contact SS, either in person or by phone.
Again, quoting:
"If you get Social Security and your total
yearly earnings exceed the limit and these
earnings include a special payment, you should
contact Social Security. Tell us you think you
received a special payment. If we agree, we will
not count the special payment as part of your
total earnings for the year."
Also, the notice you received should have info on how to appeal the
"overpayment".
Good luck........