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The Social Security Administration is changing its overpayment recovery policy.
CNN
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If Social Security recipients accidentally overpay, their repayments will be significantly reduced.
The Social Security Administration announced Friday that it will no longer automatically deduct 100% of overpayments from recipients’ monthly benefits. Instead, we will collect 10% or $10, whichever is greater, to recoup the overpayment.
There are limited exceptions, such as overpayments due to fraud.
Social Security Commissioner Martin O’Malley said in a statement: “Social Security has taken a very important step towards the goal of ensuring that overpayment policies are fair and equitable and do not unfairly harm anyone. “There is,” he said. “It is unconscionable that someone is left homeless or unable to pay their bills because Social Security has withheld full payments to recover overpayments.”
The change applies to new overpayments, but people who have already had 10% or more of their benefits withheld can contact the Social Security Administration to discuss reducing their tax rate.
Beneficiaries seeking an interest rate of less than 10% will be approved if the overpayment is collected within 60 months instead of the traditional 36-month deadline.
The Social Security Administration has recently come under fire for accidentally overpaying beneficiaries and then getting the money back. Multiple news outlets have reported on the issue, and the House Ways and Means subcommittee held a hearing on the issue last fall.
Republican Rep. Drew Ferguson of Georgia, who chairs the subcommittee, said, “Many improper payments occur through no fault of the person receiving the improper payment; It imposes a huge burden on recipients,” said Georgia Representative Drew Ferguson, a Republican. Hearing. “That’s why we need to do more to prevent this from happening.”
A report released last fall by the Comptroller’s Office found that the vast majority of recipients who receive Social Security disability benefits and earn enough to affect their benefits are overpaid. The agency cited a 2019 study by the Social Security Administration and research and consulting firm Mathematica that found overpayments typically lasted nine months and totaled nearly $9,300.
An average of about 72 million people received monthly payment Benefits from the Social Security Administration will be distributed in fiscal year 2023, according to the Social Security Administration’s latest financial report. Distributed more than $1.4 trillion in benefits.
Of the $1.3 trillion paid to seniors, survivors, and people with disabilities in fiscal year 2022, the agency estimated that $6.5 billion, or about 0.5%, was an overpayment. It also estimated that of the $57.6 billion paid in Supplemental Security Income to low-income seniors and people with disabilities that year, $4.6 billion, or 8%, was overpaid.
The Social Security Administration recovered more than $4.9 billion in overpayments in fiscal year 2023, but still ended the year with a total uncollected balance of $23 billion.
In its independent auditor’s report for fiscal year 2023, Ernst & Young cited “deficiencies” in overpayments, including “deficiencies” in documenting and calculating benefit overpayments, recording overpayments and tracking long-term installments. There were “serious deficiencies in internal controls.”
In October, then-acting Director General Kiroro Kijakazi began a review of the agency’s overpayment procedures and policies.
