The new chief of the Social Security Administration outlined for senators Wednesday a plan to tackle overpayments and clawbacks, which affect millions of beneficiaries and, he said, have caused grave injustices and left people in dire financial straits.
This story is part of the Overpayment Outrage series onCox Media GroupTV stations. It can be republished for free. Overpayment Outrage
Social Security has been overpaying billions of dollars to people, many on disability then demanding the money back, even if the government made mistakes, an investigation by KFF Health News and Cox Media Group revealed. The reporting has triggered harsh criticism in Congress and led to an investigation by the agency.Read More Share Your Story
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As a joint investigation by KFF Health News and Cox Media Group television stations reported in September, the agency has harmed people it is supposed to help by reducing or halting benefit checks to recoup billions of dollars in payments it sent them but later said they should never have received.
Testifying at two Senate hearings on March 20, Social Security Commissioner Martin OMalley said he is taking several steps to address the problem.
Starting next week, OMalley said, the agency will stop that clawback cruelty of intercepting 100% of a beneficiarys monthly Social Security check if they fail to respond to a demand for repayment.
Instead, the agency will default to withholding 10% of the recipients monthly benefits to recoup the debt, he said.
That would have helped Denise Woods, a Savannah, Georgia, woman who ended up living in her car after the SSA clawed back her entire monthly benefit to recoup a $58,000 overpayment. The agency restored some of her benefits after KFF Health News-CMG reported her story in December.
People like Denise and others shouldnt be penalized for situations they did not create, Sen. Raphael Warnock (D-Ga.) said during one of the hearings. I think it’s always important that we center the people as we discuss policy, remember the human face of the issues we talk about.
On the question of who caused an overpayment the beneficiary or someone at the agency the burden of proof will shift from the beneficiary to the agency, O’Malley said.
The agency will make it much easier for people who believe they werent at fault or cant repay the debt to seek a waiver, OMalley said, which he later clarified means simplifying the form people must submit.
(WPXI-TV, Pittsburgh)
(WSB-TV, Atlanta)
OMalleys plan also includes making notices to beneficiaries easier to understand. Now, theyre like Mad Libs designed by mad lawyers, he testified.
In addition, the agency recently changed a policy to allow most beneficiaries to arrange repayment plans of as long as five years, up from three years, he said.
Millions of people a year have been hit with clawbacks, including retirees, people receiving Social Security disability benefits, and the poorest of the poor. The alleged debts can stretch back years or decades and reach tens of thousands of dollars or more.
At the end of the last fiscal year, uncollected overpayments totaled $23 billion. Email Sign-Up
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In December, KFF Health News and Cox Media Group television stations obtained an internal agency document showing that more than 2 million Americans each year are subjected to overpayment demands, out of about 70 million beneficiaries.
OMalley, a former Maryland governor who was sworn in as commissioner in December, had previewed his planned changes in a recent interview with KFF Health News.
On Wednesday, he appeared before the Senate Special Committee on Aging in the morning and the Finance Committee in the afternoon.
In hours of testimony, OMalley said nothing about one of the reforms he heralded in the interview: limiting how far back in time the agency can reach to recover overpayments.
In an interview between the hearings, OMalley said, Thats still being unpacked and may well require a change in regulation. He said he expected an announcement within a few months.
OMalley said he didnt know how far back the limit would go but noted that other agencies tend to have a look-back period of four years.
Establishing a statute of limitations is one of the most important steps the government can take to address overpayments, Boston University economist Laurence Kotlikoff, who has studied and written about clawbacks, said in an interview.
If Social Security can’t figure out its mistakes within 18 months, it should be on them, Kotlikoff said.
Having to repay a year and a half of benefits could cost people their homes, Kotlikoff said.
Rebecca Vallas, who has helped beneficiaries navigate overpayments as a legal aid attorney and has called for reform of clawbacks, said the steps OMalley announced are nothing short of historic.
Shifting the burden of proof is a dramatic change, said David Camp, chief executive of the National Organization of Social Security Claimants Representatives. While a lot is riding on the details and how OMalleys plans are implemented, that change alone should lead to a very different experience for anyone challenging a clawback, Camp added.
(WSOC-TV, Charlotte)
In the past, there has been a gap between what the agency says and what it does. OMalley said 10% has been the default withholding rate in one of the Social Security programs, Supplemental Security Income. But KFF Health News and Cox Media Group have found people whose entire SSI benefit checks were suspended on account of alleged overpayments.
The changes announced wont apply automatically to people already on a repayment plan or whose monthly benefits are already being docked, OMalley said outside the hearings. To take advantage of the new terms, beneficiaries would have to contact the agency and request relief, he said. The agency will notify people that they have that option, he added.
OMalley implored lawmakers to increase funding for the agency. On average, customers trying to reach the agency by phone wait 38 minutes, he said. Most who call the 800 number hang up in disgust after waiting far too long, he said in written testimony.
Trouble getting through to anyone at the agency can contribute to overpayments and make it harder for recipients to resolve them.
Sen. Bob Casey (D-Pa.), chair of the Special Committee on Aging, said that unless Congress provides adequate funding for the agency, fixing problems will be really difficult.
Sen. Mike Braun of Indiana, the top Republican on that committee, called for looking at how the agency is run before we throw more money at it. He suggested focusing on what can be done to prevent overpayments rather than forgiving them once they occur or trying to claw them back, which is insult on top of injury.
OMalley noted that the Social Security Administration recently sought public comment on a long-delayed plan to reduce overpayments by automatically obtaining monthly wage and employment data on beneficiaries.
Finance Committee Chairman Ron Wyden (D-Ore.) praised OMalley for tackling what Wyden called the scourge of overpayments.
I think youre really off to a strong start in terms of righting wrongs, Wyden said. David Hilzenrath: dhilzenrath@kff.org, @DavidHilzenrath
Jodie Fleischer, Cox Media Group: @jodieTVnews Related Topics Aging Health Industry Biden Administration Disabilities Georgia Homeless Invesigation Overpayment Outrage U.S. Congress Contact Us Submit a Story Tip