Social Security Is Overpaying, Now Demanding a Refund — What To Do if It Happens to You

What Are Consumers Cutting Down on To Combat Inflation?

Just as you thought the cost of living crisis couldn’t get worse, the Social Security Administration (SSA) has thrown thousands of consumers a huge curveball. Many U.S. citizens awoke to the news this week that they had been overpaid in social security credits — some of them for decades. 

Consequently, the administration is now attempting to recall billions of dollars from those who received too much, with many being poor and vulnerable. This story comes after the SSA inspector general’s report explaining how they reclaimed $4.7 billion, with a further $21 billion still outstanding.

The subsequent fallout is the agency paying for expensive collection efforts and private citizens enduring traumatic demands. One account is from an unnamed part-time kitchen porter suffering debilitating cerebral palsy and heart problems. The employee earned $862 monthly, with Social Security paying a further $1,065.Payment Was Expected in 30 Days

Payment Expected in 30 Days

However, the individual received a letter explaining how the SSA had been overpaying and that they wanted the outstanding fees back. Shockingly, what she owed amounted to over $60,000, while payment was expected within 30 days. The employee is just one of many people on disability who are facing the same heartbreaking scenario.

Disability benefits are intended for those who cannot work full-time and have a cap on the amount they can earn per month. However, not only bank balances affect the payment system. Surprisingly, even family assistance in the form of accommodation or food counts as ‘in-kind support’ factored into repayments.

Blamed On Staff Shortages

Of course, there are oversights on all sides, though the claims system needs reform due to rules being too complex for some people to understand. Furthermore, inflation hasn’t been factored into this equation, with payments over the years not matching relative inflation rises. In addition, with the SSA suffering staff shortages, many of the beneficiaries’ income levels were not accurately monitored.

Astonishingly, it appears that through the agency’s flawed ‘payment integrity scorecards’, reviews that indicate how any mispayments are managed in any fiscal year, $265 million was under agency control. In short, the agency was to blame for the mismanaged outgoings. Their most recent scorecard explains how they were “aware of information but failed to take action, or we took incorrect action when the recipient or third-party provided requested information.”

Beneficiaries not disclosing new employment salaries or income from other sources, such as inherited life insurance policies, have added to the overpayment crisis. What makes this scenario so dangerous is how many of those affected by this are retired, living on little or no income, and suffering from blindness or disabilities.

Appeals Recommended

The National Disability Rights Network (NDRN) has recommended that beneficiaries appeal and ask the SSA to cancel their repayment. NDRN representative Cheryl Bates-Harris believes if the demand is unfair, if any overpayment wasn’t their fault, or that repayment would lead to financial ruin, affected consumers should appeal their notices, as they could be inaccurate.

It remains to be seen what reforms the SSA has planned, though this overpayment issue must be high on their list of priorities.