The Social Security Administration (SSA) said it is resurrecting a strategy to collect 100% of overpayments to recipients, a policy the agency dropped last year in response to public criticism over incidents when the practice resulted in shock bills totaling thousands of dollars for some Americans.
Late Friday in a statement, SSA announced that it will raise the default overpayment withholding rate for Social Security recipients to 100% of a person’s monthly benefit, the same level it had in place before to last year’s change. Law mandates the government to recover overpayment payments.
Public reaction over the 100% recovery policy caused the government last year to limit the withholding rate for someone who had been overpaid at 10% of their monthly benefit. While the withholding rate for persons with overpayments before March 27 will remain at 10%, the SSA said on Friday it will start claiming 100% of benefit checks to cover new cases of overpayments, while the rate for overpayments for Supplemental Security Income, a program for low-income seniors and disabled Americans.
The government said, “people who are overpaid after March 27 will automatically be placed in full recovery at a rate of 100% of the Social Security payment.”
Following cases in which recipients were slapped with unexpected bills demanding payback within 30 days, the 100% clawback policy has caused uproar. Sometimes the bills came in for tens of thousands of dollars. According to “60 Minutes,” KFF Health News and other media sources, the agency might dock their whole monthly Social Security check if claimants were unable to pay the fee immediately, therefore rendering some individuals financially destitute.
Many times, SSA was the cause of the overpayments. Lack of “effective controls over benefit-computation accuracy,” according to a 2022 report by the agency’s inspector general, accounted for almost 73,000 overpayments that year.
SSA Acting Commissioner Lee Dudek stated in the agency’s latest statement it is its “duty to revise the overpayment refund policy back to full withholding.”
The agency indicated that increasing the clawback rate from its present 10% to 100% will result in $7 billion more recovered monies over the next ten years. SSA benefits each year roughly $1.6 trillion.
