Renewed Emphasis on Overpayment Recovery Announced - MSN,com; AMAC Foundation
Social Security Administration Acting Commissioner Lee Dudek yesterday announced a return to a previously abandoned agency policy on the recovery of overpayments. Beginning later this month, new overpayment cases will be subject to a default overpayment withholding rate of 100% of a person’s monthly benefit. Overpayment cases of record prior to March 27 will retain the capped rate of 10%, a policy change enacted last year following public outrage over the full benefit reclaim policy.
The Senate Finance Committee last year drew 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.
The Finance Committee’s attention follows an October House Ways and Means subcommittee hearing in which the agency’s then-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 unrequested to recipients, followed by repayment mandates, often years later and often amounting to tens of thousands of dollars.
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.
CBS News correspondent Aimee Picchi recaps yesterday’s announcement in a post on msn.com, which you can read in full here.