Here’s How Social Security Administration Aims to Counter Overpayments

Social Security beneficiaries who owe money to the Social Security Administration (SSA) may see lower default withholding rates, following the new policies that are set to go into effect. SSA is reportedly capping clawback of benefit overpayments at 10% of benefits checks instead of 100%.

As per Social Security Commissioner Martin O'Malley, the SSA is taking "Vital Steps" to immediately address overpayment issues customers and the agency have been going through.

"For 88 years, the hard-working employees of the Social Security Administration have strived to pay the right amount, to the right person, at the right time," the statement read . "And the agency has done this with a high degree of accuracy over a massive scale of beneficiaries. But despite our best efforts, we sometimes get it wrong and pay beneficiaries more than they are due, creating an overpayment," the statement continued.

The statement then talked about how the agency is working on how it serves millions of people who depend on the program. The official statement then sheds light on the course of action that the SSA has decided to follow.

"Starting next Monday, March 25, we will be ceasing the heavy-handed practice of intercepting 100 percent of an overpaid beneficiary’s monthly Social Security benefit by default if they fail to respond to our demand for repayment. Moving forward, we will now use a much more reasonable default withholding rate of 10 percent of monthly benefits — similar to the current rate in the Supplemental Security Income (SSI) program," reads the first point.

Secondly, the agency strives to reframe its "guidance and procedures" in the hope of shifting the burden of proof "away from the claimant in determining whether there is any evidence that the claimant was at fault in causing the overpayment."

The agency has also worked out a repayment plan, where they plan to change their policy so that they approve repayment plans up to 60 months. To qualify, the beneficiaries would need to give a verbal count of all the resources and expenses.

Lastly, the agency will be making it easy for the "overpaid beneficiaries to request a waiver of repayment, in the event they believe themselves to have been without any fault and/or without the ability to repay."

SSA says that all these changes that they have made are the "direct result of the ongoing review." Earlier last month, Sens. Gary Peters and Debbie Stabenow urged SSA to crack down on overpayment errors.

"We have heard from numerous Michiganders regarding the impact unexpected overpayments that were sent by the SSA have caused on some of the most vulnerable beneficiaries of Social Security," the senators wrote in a letter earlier in March 2024.

"Overpayments can pose incredibly difficult hardships on beneficiaries who've committed no wrongdoing and are now responsible for repaying improper payments. Because of their devastating impact, the agency must improve its processes and controls to reduce the number of overpayments for beneficiaries who rely on these critical benefits," they stated.

However, it's important to note that beneficiaries are still affected by the old policy for a short period. Affected beneficiaries can call the Social Security Administration at 1-800-772-1213 to lower their withholding rate. As of 2023, the SSA paid more than $1.4 trillion in benefits to more than 71 million people annually.