Social Security Overpayment Reimbursement Would Be Limited by New Bill

A new bill could make major changes to the way the Social Security Administration (SSA) deals with overpayments.
Social Security checks are sent to seniors and those living with disabilities each month, but occasionally, the agency overpays Americans in their benefit amount.
However, many of these errors aren’t discovered until years later, and the SSA ends up sending an overpayment for thousands of dollars.
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But a new bill would help recipients who have been served overpayment notices. Under the Protecting Americans from Social Security Claw Back Act, the SSA would only be able to ask for overpayments back for three years.
“What we’re saying is, listen, if you couldn’t get your act together and notify these people within a three-year window, then you’re going to have to waive that,” Republican Representative Mike Carey of Ohio told WHIO TV.
“Your network has done a very good job. Your reporting on this issue, notifying many members of Congress. We had many of these constituents reach out to our office about these overpayments … These are people that have been playing by the rules. They’ve been doing everything that they thought they were supposed to do.”
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Roughly 1 million people receive overpayment notices each year, and many have no way to pay the agency back, as they rely on their Social Security checks as their full income.
Carey said the bill, if passed, would help those beneficiaries who find themselves in that conundrum while facing financial hardship.
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Democratic Representative Emilia Sykes of Ohio is also co-sponsoring the bill, and Carey said with bipartisan support, it could make it through both the House and Senate.
“I think this is the first step and I do think we need to make sure that Social Security has the tools that they need to make sure that this doesn’t happen again,” Carey told WHIO.
Newsweek reached out to Carey and the SSA for comment via email on Thursday.
“Social Security is taking a critically important step towards our goal of ensuring our overpayment policies are fair, equitable, and do not unduly harm anyone,” SSA commissioner Martin O’Malley said in a statement previously. “It’s unconscionable that someone would find themselves facing homelessness or unable to pay bills because Social Security withheld their entire payment for recovery of an overpayment.”
In February, the SSA backlog hit an “all-time high” of 5.2 million pending actions, which caused $1.1 billion in improper payments, according to findings from the inspector general.
“The improper payments have to be gotten under control,” Alex Beene, financial literacy instructor for the University of Tennessee at Martin, told Newsweek. “The issue is that’s more easily said than done. So far, underpayments and overpayments remain key concerns, leading to issues where recipients either receive too little or too much and are in some cases asked to return the money, which causes even more complications.”
For the many recipients who find themselves served an overpayment notice each year, Beene said the bill would be a “step in the right direction.”
“Overpayments aren’t the result of seniors maliciously taking additional money from Social Security, but more often than not miscalculation and faulty distribution on the part of the administration,” Beene said. “It’s legal for Social Security to attempt to reclaim those payments, but at the same time, waiting to do so after so long could cause financial hardship for those who received them.”
The SSA has previously attributed its overpayment errors to low staffing levels.
The agency has lost many employees over the past few years, operating with about 650 less workers in processing centers than in 2016. At the same time, the number of Americans on Social Security has increased from 64 million to almost 72 million, the SSA said.
Based on these numbers, the agency looks to be severely understaffed, with only one worker per every 1,200 recipients, said Kevin Thompson, finance expert and founder/CEO of 9i Capital Group.
“One can presume that more people apply for Social Security each day than are subsequently hired, so it is a statistic and dynamic that will likely get worse over time,” Thompson told Newsweek.