3 Ways Social Security Overpayments Have Been Simplified To Save You Money
The Social Security Administration has taken a lot of heat for its handling of overpayments to Social Security beneficiaries, and now the agency wants to make things easier on seniors. Among other things, the SSA recently announced that it will decrease the default overpayment withholding rate for Social Security beneficiaries to reduce their financial hardship.
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The announcement came after months of criticism from lawmakers, senior advocates and Social Security customers about the way the SSA dealt with overpayments.
“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,” Social Security Commissioner Martin O’Malley said in a March 29 press release. “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.”
As previously reported by GOBankingRates, the SSA’s latest Agency Financial Report revealed that the agency made about $11.1 billion worth of new overpayments to Social Security beneficiaries during federal fiscal year 2022, the most recent year data are available. That figure represents an increase of more than 65% from the prior year, according to KFF Health News. Normally, the SSA distributes between $6 billion and $7 billion in new overpayments each year.
Many of those impacted by the so-called “clawbacks” are poor and disabled — and many of the mistakes run into very high dollar figures. One woman had to repay more than $300,000 because of a mistake the SSA made. Another woman got stuck with a repayment notice totaling more than $60,000. A woman in Florida got hit with a demand letter for $121,000, payable in 30 days.
In its recent press release, the SSA said it “works to pay the right people the right amounts at the right time,” and in most cases, it issues correct payments.
“However, there is room to improve, as people count on the agency to prevent overpayments from happening and make it easier to navigate the recovery and waiver processes when they occur,” the SSA stated.
Here are three ways the SSA aims to simplify overpayments and help Social Security recipients save money:
Lower repayment. As of March 25, the SSA will collect the greater of $10 or 10% of the beneficiary’s total monthly Social Security benefit to recover an overpayment. That’s way down from 100% previously. There will be some exceptions, such as when an overpayment resulted from fraud.
Longer recovery period: If a beneficiary asks for a rate lower than 10%, the SSA will approve the request as long as the new rate will pay back the overpayment within 60 months, up from 36 months before the changes.
Simpler appeal process: If a Social Security recipient believes the overpayment was not their fault and they’re unable to repay it, they may appeal the overpayment decision and/or the amount and ask the SSA to waive collection. “The agency does not pursue recoveries while an initial appeal or waiver is pending,” the press released noted. The SSA has also introduced new, more affordable repayment options.
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This article originally appeared on GOBankingRates.com: 3 Ways Social Security Overpayments Have Been Simplified To Save You Money
