Social Security’s $8.6 Billion Accounts Receivable Problem -;

Yesterday, in a Latest News post on this site, we provided a link to an article describing staffing and budget issues at the Social Security Administration and their impact on client service levels at the agency. Today, we explore an analysis of another issue, potentially related to SSA’s relationship with its client base, dealing with calculation mistakes made through the years that have led to Social Security carrying an $8.6 billion “asset” on its books in the form of overpayments to beneficiaries. Writing in a post on, Laurence J. Kotlikoff and Terry Savage examine the impact of SSA’s efforts to recover these overpayments via “clawback letters demanding immediate repayment under threat of recouping their mistakes by taking the money out of workers’ future benefits.”

On a total system basis, recovering $8.6 billion is not that major of an issue–it’s less than 1% of the total annual benefits paid. But what’s a more significant issue is the character and tone of the recovery effort itself. As Kotlikoff and Savage explain, the clawback letters themselves offer no explanation of the mistake that led to the overpayment and no apology, and are written with a style “hard as nails and as cold as ice.” And the audience for these letters is estimated to involve hundreds of thousands of the most vulnerable Americans, including for example retirees, survivors, and disability recipients, all left to deal with the difficulties of resolving the claims. Appeals are allowed but, as the article points out, the absence of an explanation makes it pretty difficult to develop grounds since the basis for the overpayment isn’t explained.

The article, which you can read in full here, closes with a plea for “everyone in government, starting with the president, the chief trustee of Social Security, Treasury Secretary Janet Yellen, members of Congress and Social Security’s Acting Commissioner, Kilolo Kijakazi, to sit down and fix this mess.”

Laurence J. Kotlikoff is a professor of economics at Boston University and a Research Associate of the National Bureau of Economic Research, while Terry Savage, a syndicated personal finance columnist, is the author of “The Savage Truth on Money.” Their article “Social Security’s big blunders: Retirees are being bullied into paying back thousands in miscalculated benefits” also appeared previously on

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