Updates to the Social Security Administration’s Procedures for Recovering Overpayments

by Jesse Shirek and Kyle Walls

From the Editor: When the National Federation of the Blind was founded, one of our first goals was to see that blind people were provided with a monthly income that would allow for some independence, the ability to contribute to the income of the family, or perhaps to live alone and even start their own families. Social Security and other aid programs have made that possible for tens of thousands of blind people, but with this blessing has come the curse of the overpayment: the difficulty of disputing it and negotiating repayment if that is necessary. In this article, two of the brightest minds I know have taken up the task of explaining the recent changes that bring a bit more compassion and understanding to the regulations under which the Social Security Administration operates. Here is what they have to say:

For decades, the Social Security Administration (SSA) has sent out monthly payments to adults and children with a disability, and to adults aged seventy-five and older, who have limited income and resources. The Administration does an admirable job to ensure that the right amount is paid out to deserving recipients. However, there are occasionally miscalculations due to changes in a recipient's financial circumstances, which cause the SSA to send someone more money than they are entitled to receive. In these instances, the SSA is required by Congress to get that money back. As some of you undoubtedly know, the Administration has a history of being rather heavy-handed and often impractical in how it has sought to recover these funds in the past. Recent announcements by the Commissioner of the SSA, Martin O'Malley, have us optimistic that the Administration may take a more mindful approach moving forward.

On March 20, 2024, Commissioner O'Malley testified before the United States Senate Special Committee on Aging and the United States Senate Committee on Finance. In his remarks, he noted that efforts to recover SSA overpayments "without regard to the larger purpose of the program can result in grave injustices to individuals, as we see from the stories of people losing their homes or being put in dire financial straits when they suddenly see their benefits cut off to recover a decades-old overpayment... Innocent people can be badly hurt. And these injustices shock our shared sense of equity and good conscience as Americans." Commissioner O'Malley also noted that the SSA is "continually improving how we serve the millions of people who depend on our programs, although we have room for improvement."

It is refreshing to hear the Administration acknowledge, first and foremost, that the past overpayment recovery measures have resulted in harm and injustice to recipients and that there is still room for improvement in the services the SSA provides. It was doubly refreshing to hear the Administration announce new procedures, which went into effect on March 25, 2024, regarding the qualification for benefits and the recovery of overpayments going forward.

What changes are now in effect? The Social Security Administration is now limited to withholding no more than 10 percent of your total monthly benefit check. Prior to this change, some beneficiaries found themselves feeling rattled after receiving a notice in the mail stating that the Social Security Administration paid too much in benefits and will now withhold 100 percent of their benefits until the overpayment is recaptured.

If you are dealing with an overpayment situation and need to have the amount withheld from your benefit check reduced or if more than 10 percent of your benefit check is being withheld as a result of an overpayment, please reach out to the Social Security Administration to request that they reduce the amount being withheld.

You can now request a repayment plan lasting up to sixty months, or five years. According to the Social Security Administration, the only information that is necessary is a verbal summary of your income, resources, and expenses. Previously, repayment plans could be extended for no more than thirty-six months, or three years.
 
How about a hypothetical example of how the difference in duration of repayment can affect your monthly benefits. Imagine you receive Social Security Disability Insurance (SSDI) monthly benefits totaling $1,800. During the pandemic you worked extra hours, which temporarily put your income level above Substantial Gainful Activity (SGA), which is the income threshold limit for SSDI beneficiaries. SGA in 2024 is $2590. So, you receive notice that the Social Security Administration overpaid you $10,000. Under the old system, to recoup the $10,000 in thirty-six months, you must pay back $277.78 a month. If we stretch out the repayment plan to sixty months, you must pay back $166.67 a month, which would also put you under the 10 percent limit.

The Social Security Administration has also made it easier to request a waiver of overpayment. If you believe that the overpayment of benefits is not your fault in any way, or if you do not have the resources to pay back the Social Security Administration, you may request a waiver. The burden of proof is now on the Social Security Administration to prove that the beneficiary is responsible for the circumstances that led to the overpayment. Previously it was the beneficiary's responsibility to prove that they are not at fault for the circumstances leading to the overpayment.

An example you may want to take into consideration is a young person receiving Supplemental Security Income (SSI), because they are blind, and their family does not have many resources. If the parent starts receiving child support for the blind individual receiving SSI, that could alter the SSI benefit amount, causing an overpayment. The question that emerges is this: Is the SSI beneficiary responsible for repaying the overpayment, or is the parent responsible for the overpayment? The technical answer is that the beneficiary and the parent are both responsible, but this is a scenario in which the beneficiary can file a waiver of overpayment, because they did not have any control over the circumstances contributing to the overpayment.

The Social Security Administration also published a final rule that affects SSI recipients. Food given to beneficiaries no longer counts as In-Kind Support and Maintenance (ISM). Previously, if you were provided with food from a friend or family member, you were supposed to count it as a resource, and under SSI your resource limit is $2,000 for a single individual and $3,000 for a married couple. This rule reduces the burden in two ways: It lessens the stress when accepting food from other individuals, and it may help to reduce the total number of overpayments, as not reporting donations of food can result in an unexpected overpayment.

After reading this article, you may have learned that your individual circumstances have changed. Where can you turn for help? You can call the Social Security Administration directly at 800-772-1213. Alternatively, you can reach out to government affairs specialist Jesse Shirek at 410-659-9314, extension 2348, or email [email protected].