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The Social Security Administration (SSA) says it will change its approach to recouping past benefit overpayments to recipients, easing policies that have left many older Americans and people with disabilities in dire straits after getting notices that they owed the agency tens of thousands of dollars.
Testifying before a U.S. Senate committee March 20, SSA Commissioner Martin O’Malley said the reforms would end the “clawback cruelty” of demanding that beneficiaries immediately repay excess benefits the agency says they received, in some cases decades ago and often through no fault of their own.
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“When that happens, Congress requires that we make every effort to recover those overpaid benefits. But doing so without regard to the larger purpose of the program can result in grave injustices to individuals,” O’Malley said. “Innocent people can be badly hurt.”
Among other steps, O’Malley announced that starting March 25, the SSA will no longer cut off monthly payments to beneficiaries who fail to respond to an overpayment notice. Instead, the agency will continue paying benefits but withhold 10 percent to put toward repayment.
The issue drew heightened public attention and congressional scrutiny last year after an investigation by KFF Health News and Cox Media Group spotlighted Social Security and Supplemental Security Income (SSI) recipients who got out-of-the-blue bills from the SSA seeking five- and six-figure sums. AARP issued a call for congressional leaders to work with the agency to address the problem.
“We are really pleased to see Commissioner O’Malley really taking on these customer service challenges at Social Security,” says Bill Sweeney, AARP’s senior vice president for government affairs. “It’s critical that Social Security works closely with families who are being impacted by overpayments, especially in cases when it was the agency’s fault to begin with, to make sure they can pay back the money in a fairer way, if required.”
‘A big step in the right direction’
The SSA collected $4.9 billion in past benefit overpayments in the 2023 fiscal year but some $23 billion is still outstanding, according to a November 2023 report by the agency’s Office of the Inspector General.
O’Malley, the former governor of Maryland who took office at Social Security in December, has identified overpayment procedures as one of three customer service issues he aims to address this year, along with record waits for decisions on disability benefit applications and lengthy hold times on calls to Social Security’s national help line.
Limiting how much Social Security can withhold from benefits to recoup past overpayments is “a big step in the right direction,” says Rebecca Vallas, a senior adviser with the National Academy of Social Insurance. “I saw firsthand during my years as a legal aid lawyer the needless suffering this can cause.”
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