Social Security Cracking Down On Overpayments
The Social Security Administration is reversing its policy on overpayments. (Disability Scoop)
The Social Security Administration is reinstating a more aggressive policy on recovering billions of dollars mistakenly paid to beneficiaries, which could lead the agency to cut off benefits to some.
The agency will soon default to withholding 100% of an individual’s monthly benefits in cases where they were overpaid.
The move comes about a year after Social Security decided to cap withholding for overpayments at 10% amid backlash in response to an investigation by KFF Health News and Cox Media Group television stations.
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The news outlets spotlighted several cases where the agency demanded that beneficiaries, including those with developmental disabilities, repay money that they shouldn’t have received, sometimes in as little as 30 days. Overpayments were due to government errors or failures on the part of beneficiaries to comply with complicated rules, according to the investigation. In some circumstances, overpayments went unnoticed for years and grew to tens of thousands of dollars before Social Security sought repayment.
The Social Security Administration said that it will begin imposing the 100% withholding rate on new overpayments starting March 27. There will be no change to beneficiaries with overpayments prior to that date, officials said.
The update will not affect the withholding rate for Supplemental Security Income overpayments, which will remain at 10%, the agency said.
The change is expected to increase overpayment recoveries in the next 10 years by about $7 billion, according to the Social Security Office of the Chief Actuary.
“We have the significant responsibility to be good stewards of the trust funds for the American people,” said Lee Dudek, acting commissioner of Social Security. “It is our duty to revise the overpayment repayment policy back to full withholding, as it was during the Obama administration and first Trump administration, to properly safeguard taxpayer funds.”
If beneficiaries with overpayments after the effective date cannot afford to have all of their benefits withheld, the Social Security Administration is advising that they call the agency or visit a local field office to request a lower recovery rate.
Individuals also have the right to appeal an overpayment decision or amount. And, beneficiaries can request that overpayment collection be waived if they think it’s not their fault and they can’t afford it, officials said.
The agency indicated that it “does not pursue recoveries while an initial appeal or waiver is pending.”
The overpayment policy change is part of a broader overhaul at the Social Security Administration under the Trump administration. The agency recently announced plans to shed 7,000 employees as part of a massive restructuring.
Over 73 million Americans receive Social Security, SSI or both each month, including more than 11 million people with disabilities.
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