What Can Social Security Do About Overpayments If It Really Wants To?

     Recent press reports about the harshness of Social Security's treatment of overpayments remind me of the character Inspector Javert from Les Miserables by Victor Hugo. In the novel, Inspector Javert ruthlessly pursues the fugitive Jean Valjean. Javert's actions are strictly speaking legal but fundamentally unjust as a less rigid man than Javert would realize. 

    I think the attitude at the Social Security Administration has been that there's nothing they can do about overpayments other than to do everything possible to collect them and to put nearly the entire burden on claimants to appeal the overpayments or to seek out repayment schedules or waiver but what could they do if they really wanted to make overpayments less harsh? Below are some ideas that occur to me. They boil down to telling the agency to stop trying to be Inspector Javert. You don't have to administer the Social Security Act in the most harsh manner possible.

    Make a repayment schedule the default mode for collecting overpayments. One huge problem now is that Social Security's default mode in Title II cases is to seize 100% of the claimant's benefits until the overpayment is satisfied. This leads to disastrous situations for claimants who don't know where to turn. Some end up homeless. Many are subjected to huge amounts of stress. Yes, the notices tell claimants that they can appeal the overpayment and request waiver and also that that they can get a payment schedule but let's face it, a substantial number of Social Security claimants are functionally illiterate or so overwhelmed by their life circumstances that they can't comprehend any notice they receive. Notify claimants that unless they appeal or request waiver that their benefits will be reduced by a certain amount each month. That heads off the worst problems associated with overpayments. The statute says that Social Security must "decrease any payment" to an overpaid claimant but it doesn't say that the decrease must be 100% until the money is recovered. A repayment schedule is certainly a "decrease" in payment. The Title II regulations say that no benefit is payable until an overpayment is collected but gives the exception for cases where "withholding the full amount each month would defeat the purpose of Title II." There is no reason why this exception cannot be applied generally until the regulation is amended. There is nothing in the regulations requiring that an individual apply for a repayment schedule. The regulations say that a notice of an overpayment must include "an explanation of the availability of a different rate of withholding when full withholding is proposed" suggesting that there are cases where the notification will not say that less than 100% of benefits will be withheld.

    Invigorate the application of the statutory provision allowing waiver of overpayments when recovery would be "against equity and good conscience." Social Security has interpreted the "against equity and good conscience" provision almost out of existence. Let's apply it to these situations:

• Overpayments to those who had a representative payee at the time they were overpaid. Try to get the money from the representative payee but quit trying to collect it from those who were minors or under such disabilities that they needed a representative payee at the time they were overpaid. You will notice that many of the media pieces on Social Security overpayments feature those who were overpaid when they were children. These stories get reported exactly because they seem to be against equity and good conscience. Acknowledge that fact and act accordingly. Quit declaring overpayments in the first place to those who had a representative payee. Waive them for all existing cases.
• Very old overpayments. There is no statute of limitations on collection of overpayments by administrative offset. Cases where the Social Security Administration is trying to collect ancient overpayments are often featured in media pieces, again because these cases seem to be against equity and good conscience. Just adopt a policy that the agency regards attempts to collect debts older than 10 years as generally being "against equity and good conscience." Who cares that Congress didn't tell you explicitly that you can do this? They've told you that they expect you to administer the programs in a way that isn't "against equity and good conscience." Act accordingly.

    Give staff more discretion to waive overpayments without the claimant filing an application for waiver. Many times I see a demand that claimants provide detailed information about their financial situation on a waiver form when it's obvious that the overpayments will be waived. The waiver forms themselves are a deterrent to obtaining waiver. They're too long and difficult for many claimants. Dispense with the form when it's appropriate.

 

    I guess that Social Security has been wary of doing anything other than rabidly pursuing collection of overpayments because they've been concerned that the Inspector General (who always conflates overpayments with fraud) will criticize them. Who cares what this Inspector General has to say?

 

    By the way, many Social Security employees say that it's OK to treat overpaid individuals harshly because so many of them failed to properly report work activity. Really? What would make anyone confidant that all those claimants failed to report the work? Most overpaid claimants tell me that they did report the work but nothing was done about their report. Does anyone at the agency believe that records are routinely made of such work reports and that appropriate adjustments are made in a timely manner? I never see that happening. Never. The agency has a mess in its field offices and teleservice centers. Don't pretend that the agency is delivering service as it might have 50 years ago.