Overpaid Social Security? New Boss Vows to Help You Keep More of Your Money

The new head of the Social Security Administration has pledged to restructure the agency's process for recovering billions of dollars that it believes were incorrectly disbursed to recipients, stating that the current method "just doesn't seem right or fair."

SSA Commissioner Outlines Plans to Address Overpayments and Financial Hardship

In an interview with KFF Health News, SSA Commissioner Martin O'Malley stated that he would be putting forth proposals in the near future to assist people in avoiding crippling debt, which has led to homelessness for some and created financial difficulties for the most vulnerable citizens in the country: the poorest of the poor, those with chronic illnesses or disabilities, and those who are at least 65 years old.

O'Malley, who assumed office in December, emphasized that tackling the issue of unjust overpayments and the harsh methods of recovery is a key focus for him. He outlined specific measures he intends to take, including implementing a statute of limitations, shifting the burden of proof to the agency, and imposing a 10% cap on clawbacks for certain beneficiaries. O'Malley expressed confidence in the SSA's authority to address these issues independently, suggesting that congressional action may not be necessary for progress.

The announcement follows an investigation by KFF Health News and Cox Media Group television stations, which found that the Social Security Administration (SSA) often cuts or stops monthly benefit checks in order to recover billions of dollars that it provided to recipients and subsequently claimed they shouldn't have.

Years would often elapse before the government realized its error and proceeded to impose on those who couldn't afford it debts that occasionally totaled tens of thousands of dollars. It was found by KFF Health News and Cox Media Group that over 2 million consumers get overpayment requests annually.

The majority of overpayments are connected to the Supplemental Security Income program, which pays benefits to those who are blind, crippled, or at least 65 years old and have little to no income. The Social Security Disability Insurance program, which provides assistance to disabled workers and their dependents, is linked to others.

O'Malley said the agency plans to cease efforts to claw back years-old overpayments and halt the practice of terminating benefits for disabled workers who don't respond to overpayment notices because they did not receive them or couldn't make sense of them.

"Overpayment Outrage" Sparks Congressional Action and SSA Response

Following the publication of the "Overpayment Outrage" series by KFF Health News and Cox Media Group, hundreds of disability beneficiaries came forward with alarming stories about how the government had threatened to abruptly stop their primary source of income and sent them overpayment notices without providing any justification.

Congressmen made it known that they wanted SSA to address the issues. Oregon senator Ron Wyden, a Democrat, said he would meet with agency representatives once a month "until it is fixed."

Michigan Democratic Senators Gary Peters and Debbie Stabenow penned a letter to the SSA dated February 29, expressing concerns about the high number of overpayments attributed to the agency and requesting clarification on the underlying causes of these issues. In response to an interview request, Senator Peters emphasized the importance of the agency accurately administering benefits, citing instances of financial distress reported by constituents in Michigan due to erroneous payments.

According to its most recent annual financial report, the agency recovered $4.9 billion in overpayments for the fiscal year 2023, with an additional $23 billion in overpayments outstanding.

O'Malley did not disclose details but stated he expected plans will be implemented this year. He stated he wants to address overpayment clawbacks as part of a bigger attempt to fix SSA's "customer service crisis."

Government representatives have long admitted that the federal disability system suffers from protracted backlogs and malfunctions. According to a letter signed by several members of Congress, some persons experience homelessness or worsening health conditions while they wait for an initial determination on their application, which took an average of more than seven months in 2023.

According to O'Malley, some recipients of clawback letters have their disability payments terminated by the agency if they don't get in touch with the SSA.