“Clawback” Matter Rises on Congressional Priority List - Cox Media/KFF Health News
The Senate Finance Committee last week announced its intent to accelerate attention to the Social Security Administration’s massive overpayment problem…the problem through which more than two million Americans each year are subject to demand letters for repayment of benefits they’ve received erroneously from the agency. In the words of Sen. Ron Wyden (D-Ore), the cause of the mistaken payments will be the subject of monthly sessions with the agency “until it is fixed,” and the systemic problems that created the situation will likely be addressed coincident with the increased Congressional attention. Cox Media Group reporters David Hilzenrath and Jodie Fleischer, in a post KFF Health News offer commentary on the Finance Committees position on the issue. Check it out here.
The Finance Committee’s attention follows an October House Ways and Means subcommittee hearing in which the agency’s acting commissioner Kilolo Kijakazi acknowledged the problem’s magnitude, reporting that just over a million people were subject to overpayment demand letters–a figure that was later found to be twice that level. Central to the issue is the conundrum that the payments were often generated erroneously by Social Security through agency mistakes and issued unknowingly to recipients, followed by repayment mandates–often years later, and often amounting to tens of thousands of dollars–while the agency adopts a stance that says, “Under federal law, the agency must try to recover overpaid amounts.” Acting commissioner Kijakazi noted in the October hearing that “there is no statute of limitations. To collect debts, the SSA can reach back decades and across generations.”
For background, note that the repayment demand letters may result from the recipient of Social Security benefits exceeding the earnings limit imposed on those working and collecting benefits before reaching their full retirement age, or they may occur because Social Security isn’t notified of a beneficiary’s death and continues to pay monthly benefits which are fraudulently used by a family member. Another cause could relate to a divorced spouse remarrying and thus becoming ineligible for benefits from a former spouse. Some are also linked to Supplemental Security Income (SSI) payments issued to recipients whose assets exceed limits, while others are reported to be related to misunderstanding–or misapplication–of the rules on how the 2020 and 2021 Economic Impact Payments (a.k.a., “stimulus payments”) affected the accounting of income levels for SSI recipients. Whatever the reason, it’s a big problem for Social Security – to the tune of many billions of dollars in overpaid benefits, much of which cannot be recovered, and many of which induce severe financial hardship on unsuspecting beneficiaries.
The months ahead will likely yield frequent Congressional updates as the pressure builds on the Social Security Administration to address the problem, so stay tuned to this website for progress reports.