Why would SSA take my income tax refund if I already have a signed agreement to pay back my overpayment over a three year period.

The reach of the government arm is a long one. Although you have an agreement with the Social Security Administration, it was the United States Treasury that would have issued a refund.  The computers wouldn't allow the refund to issue because of the debt owed. Verify with your local office of SSA https://secure.ssa.gov/apps6z/FOLO/fo001.jsp that the refund was applied to your repayment plan, and that you are now closer to paying off that overpayment.