About 50 years ago, Harry and Gladys Samonds owned Ferrell’s Corner, a tavern, and the Illini Court Motel at Clear Lake and Dirksen. Harry was pretty well-known in Springfield when he died in 1969. He left behind Gladys and his son, Mike, at their home on Ridge Avenue.
Mike was only 15 when his father died. As a minor, he qualified for survivor benefits through Social Security. Monthly checks were sent to Gladys since Mike was a minor. ...
Today, Mike and his wife, Brenda, live in Glenarm. After filling out their federal tax return for last year, they were due a refund. A few weeks ago the refund check arrived. But it was $189.10 light.
Mike and Brenda thought that was odd and were wondering what the explanation could be. They soon found out. A letter to them from the U.S. Department of the Treasury’s Financial Management Service out of Alabama said money was being deducted from the Samonds’ refund and would be taken by Social Security to satisfy Mike’s debt to said agency. ...
The notice from Treasury says, and I quote, “The Agency has previously sent notice to you at the last address known to the Agency.” (That would be Gladys’s 40-year-old address) “That notice explained the amount and type of debt you owe, the rights available to you, and that the Agency intended to collect the debt by intercepting any Federal payments made to you, including tax refunds.”
A letter, dated April 10, arrived from the folks at Social Security. It says, “We recently received $189.10 of a Federal payment you were due and used it toward the overpayment of Social Security benefits paid to you.”
Social Security says, then, that over 40 years ago it overpaid $189.10 in Mike’s survivor benefits and it took that amount from the Samonds’ tax refund to make it good. ...
The letter to Mike and Brenda from Social Security included a Chicago phone number for Mike to call if he had any questions. Of course he did. But I don’t even need to tell you what happened when Mike called the number.
“I was on hold for 45 minutes,” he says. “I put the phone down but could hear the music playing. When it stopped, I picked it up.”
He might as well have called Mars for all the assistance he got.What happened here was not some weird accident. It's official policy. There is no statute of limitations on collection of overpayments by administrative offset. Not even 50 years.
Is this reasonable?
yes. The government should have charged interest, too.
ReplyDeleteWhy would it not be reasonable? Of course everyone who gets overpaid by SSA thinks its incorrect. I also agree that interest should accrue as well.
ReplyDeleteIt's a debt owed to the government. Why would anyone expect it to be discharged? By the way, Mike had an affirmative obligation to notify SSA of any change in address or phone number.
ReplyDeleteAdditionally, this story actually makes me happy to know that IRS and SSA are cooperating on some level. This should be more widespread. It would save SSA a lot of money/resources if the IRS would simply dock refunds to collect overpayments.
Some good news for the USA! Of course, government should have charged both interest and penalties for non-payment of debt. It is great to read that two government agencies work together. We need more of this effort, and apply it to all who are overpaid any type of federal or State benefits (including any type of welfare benefit) or government subsidized loans or grants, etc. Perhaps we can get some money back from the executives of Solendra and GM and other government subsidized bankrupt businesses and banks when they expect tax refunds!
ReplyDeleteThe issue is not the debt itself, but the lack of notice and lack of any statute of limitations. HUD does the same thing - there is no requirement for the agency to request an updated address from USPS or reclaim its debt within any time frame at all. Is it reasonable to try to collect on a 40 year old debt by sending letters to a 40 year old address? Surely, there could be improvements in how this works without putting any undue burden on the government.
ReplyDelete"By the way, Mike had an affirmative obligation to notify SSA of any change in address or phone number"
ReplyDeleteMike was 15 when his father died in 1969, and he received benefits while a minor. So his benefits ceased around 1972 (age 18).
Was Mike, who had not received benefits in nearly 40 years, under an ongoing, lifelong obligation to update his address with SSA based on his receipt of child's benefits as a minor that ceased about 40 years ago?
anon 12:45 and 12:36,
ReplyDeleteThanks for your comments. Until I saw your remarks, I feared all the personnel at the Personality Disorder Institute were on strike.
I'm a benneficiary. If the overpayment
ReplyDeletewas legit then it should be collected but no interest. The government is not the private sector.
It is not uncommon for an individual to be assessed with an overpayment, be unable to pay at the time (no longer on benefits, no income, whatever), but when the individual obtains benefits again (maybe is found disabled years later, maybe when reaches retirement age), SSA begins withholding to reclaim the overpayment. I have seen OPs in the tens of thousands of dollars "resurrected" after ten, twenty, thirty years. It is certainly reasonable for SSA to collect outstanding debts, especially since it knows that most people will eventually reach retirement age and collect old-age benefits, providing a source of income for withholding.
ReplyDeleteNot just SSA. Student loans have no statue of limitations and can grab past benefits or tax refunds:
ReplyDeleteIt is important to note that there is no statute of limitations that applies to the collection of student loans. The Department of Education (DOE), initiates collection by providing notice of intent to collect past due student loans to the benefits recipient.
This notice of offset will provide hearing rights and limited remedy information. The recipient has the right to request a hearing to challenge the offset or to set up a
repayment plan to avoid offset. Hearings and repayment plans must be made with DOE.
The Social Security Administration (SSA) has no authority to modify or terminate DOE offsets. DOE must certify the debt to the Department of Treasury (Treasury). After
which, once all notice time periods have run and hearings have ocurred, Treasury will order SSA to assign a portion of the recipient’s monthly Title II benefits to DOE.
Notices from Treasury will come from the Financial Management Service (FMS).
http://www.missourinet.com/2013/04/23/house-committee-digs-into-welfare-contract/
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ReplyDeleteFrankly, this is a scam. The did the same thing to us and even though we have updated all of our addresses years ago; we were never notified. Try to collect from the government on an old debit. Isn't going to happen. Secondly; the collected from a joint return which mean it was someone elses money as well. Just more wonderful sanctioned theft from the government with no controls or liability.
ReplyDeleteI would be the first to say that anyone overpaid for benefits should have to pay it back. However, I had $1400 withheld from my tax refund for an alleged overpayment made in 1981 when i graduated from college. While I don't believe I was overpaid, it they provided evidence that I was, or even had first reached out to me to ask for repayment before taking my refund, I would not be so outraged. I was never even once contacted about the debt in the past 34 years.
ReplyDelete