Social Security clawed back overpayments by docking 100% of benefits. Now it's capping it at 10%.

[BumRushDaShow]

Source: CBS News

Updated on: March 20, 2024 / 6:36 PM EDT


The Social Security Administration said it's reforming how it recovers overpayments of benefits following an outcry over policies that drove some Americans into financial distress, and even homelessness.

By law, the agency must claw back overpaid benefits, but SSA's policies had sparked outrage and concern after some Social Security recipients reported surprise bills that demanded payment within 30 days. Sometimes the bills mounted into the tens of thousands of dollars. If they couldn't immediately pay the bill, the agency could dock their entire monthly Social Security payment, leaving some people financially destitute, as reported by "60 Minutes," KFF Health News and other media outlets.

In a statement issued Wednesday, Social Security Commissioner Martin O'Malley said the agency will cease "the heavy-handed practice of intercepting 100% of an overpaid beneficiary's monthly Social Security benefit" if they failed to respond to a demand for repayment. Instead, he added, the agency will limit the clawback to 10% of an overpaid beneficiary's monthly benefit.

Additionally, the Social Security Administration will extend repayment plans to 60 months, up from its prior limit of 36 months, giving recipients an additional two years to repay the money.

Read more: https://www.cbsnews.com/news/social-security-overpayment-clawback-reform-10-percent-of-benefit/

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Link to Social Security Administration PRESS RELEASE - Social Security Announces Four Key Updates to Address Improper Payments

[OAITW r.2.0]

1. That'seems reasonable. I can see how these situations can come up and, in most cases, there was no intent to

deceive/defraud the USG. It's going to help a lot of people deal with their situation in a way that doesn't ruin them in the short term.

[ProfessorGAC]

4. Back In Early 2020...

...SSA wanted repayment from me. That was right after my first full year of retirement.
As someone who computed that waiting until full retirement didn't make sense (details left out), I was limited as to how much I could earn in a year.
Having retired with 33 days of vacation on the books, my last month of pay & my final management bonus, I "earned " about $13,000 over the limit in 2019. Plus around $6,000 from subbing. They wanted $9,500 back. All at once.
The letter informing me of this, however, specifically stated that pay in lieu of vacation accrued during or bonuses earned in the prior year did not count.
I got a letter from corporate HR explaining that that was earned in '18, but not paid until '19.
With that letter, one short email & a 1 minute phone call it was completely resolved.
I wonder how many of these overpayments are the result of accounting & timing issues. I know for sure it happens, because it happened to me.

[OAITW r.2.0]

8. Exactly my point.

You try to figure what the rules are and do the best you can to pay your fair share of taxes. I used to use Turbo-Tax, but, due to special tax situations, I started using H&R Block. I have a good relationship with the folks in this office and I like they are on the line for any IRS penalties, based on my submission of relevant docs.

[ProfessorGAC]

9. That's Why I Posted It

I was in agreement and wanted to use my example to amplify your point.
My only add was the pondering how often it's all a misunderstanding or miscommunication.

[OAITW r.2.0]

10. A lot. I think. There are two classes of situations - willful and not understood.

This realignment by the IRS on issues that effect a large number of Americans makes sense and should be be something Biden should champion...especially during tax season.

[Roy Rolling]

14. Had the same thing

SSA wanted over 10k because my income was erratic but when averaged created a technical overpayment. I was given mercy. 😁

[SouthernDem4ever]

2. How does the SSA prove over-payment?

If it is a case of fraud, then I can understand a judgement against someone. But if it's not, they shouldn't be able to just garnish what possibly could be someone's only source of income. They are so administratively backlogged that they should also be subject to a statute of limitation of not more than six months.

[Timewas]

3. Really?

Changing to 10%, that is what the maximum has always been, they over paid me several years ago, they wanted it all back within 36 months but they told me they could not take more than 10% so we were at a standoff, I finally agreed to $100 a month for whatever time it took and they agreed...

[central scrutinizer]

5. Lot of inflexible deadlines

My wife was on SSA disability due to a terminal cancer diagnosis. She passed on March 1. Had she passed a few hours earlier on February 28, we would have had to repay the entire $2500 February benefit because she didn’t live through the entire month of February.

[GreenWave]

6. Sorry to hear that.

SSI is also over a month delayed from initial request date.

[babylonsister]

7. My condolences to you,

central scrutinizer.

[OAITW r.2.0]

11. Sorry for your loss and the financial situation you were faced with.

Timing on deadlines are reality. Not sure how we deal with these kind of isolated situations, but pro-rating benefits by days vs. months would be a start.

[AllaN01Bear]

12. ss said when i was first on ssi. i didnt get back pay. i got back pay throught an oversight by THEM., the ssa

ssa wanted it back and ssa was going to ding me for it if i didnt return it back to them. i appeald and won. they messed up and they should choke it.

[Thunderbeast]

13. My disabled son was overpaid by SSA on 2019 benefit.

No fault of his own. SSA made the mistake. They clawed back two full months of benefits to settle. I had to write checks to cover his rent and utilities.

He appealed, but lost the case.

[2naSalit]

15. I experienced a different kind of docking...

In Feb and March this year, without notice, I was charged double medicare premiums because I got kicked off medicare by the state in January. I was getting