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Jan 4, 2024

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.

25 comments:

  1. lol just wait until word gets out if these were the changes made. Why even have work limits for DIB/SSI? Just get on benefits, go back to work, get your free, interest free government loan and then pay it back at $10 a month automatically. People who don’t work for the agency are just clueless about how people try to game the system NOW, let alone if the rules were loosened. I can’t tell you how many claims I’ve seen where someone cries they are unable to work SGA, they get approved, and then immediately go back to work (over SGA) thinking they are slick lol, never fails.

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    1. Nobody is suggesting waivers for the types of people you're describing. Nobody.

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    2. lol you sure about that? How could you prove it? Like every article/comment posted here, all they have to say is “I didn’t know I had to report my work! And I can’t afford to repay that!” And bam, it should be waived. Read every article or comment and it generally says the same thing. So who are you to determine whether something is waiverable or not?

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    3. @1:42

      Exactly. It’s almost like each case needs individual examination to see what happened. It’s almost like that what SSA does already. Nobody is going to openly admit that they are gaming the system, they are going to give their sob story to the news/public about how the system is rigged against them! They are just poor and disabled! And you know what, for the a fair amount of overpaid people, that is likely what happens, honest mistakes/clerical errors on SSA’s part. SSA’s processing times delay things, or there are computational errors, it happens and it does need corrected, absolutely. And you also know what? There are people who deliberately don’t report wages or immediately go back to work after getting approved, but they aren’t going to flat out tell you they are doing that. The number of people who do that are small. Maybe 1% of claimants? If even that high. But again, only 1%~ of T2 claimants are overpaid also. Weird coincidence. (T16 is a whole different conversation with ism, offsets, partial payments, etc)

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  2. Other options:
    * increase the tolerance for administrative waiver above the current $1000
    * provide administrative waiver for overpayments resulting from benefit continuation during CDRs, as long as the appeal was made in good faith
    * finalize pending regulations removing food from ISM and expanding the definition of public assistance (PA) household
    * devote more resources to figuring out who is in a PA household so they don't need to be charged inside ISM
    * devote more resources to processing wage reports from beneficiaries, IRS, and FICA paid to SSA
    * ask questions on the wage reporting forms to develop work incentives like IRWEs, subsidies, and special conditions. If a DI beneficiary is actually under SGA, there's no overpayment. And SSI overpayments can be smaller if there are IRWEs.
    * implement the datasharing arrangements with payroll processors (note: this will also cause problems, as lots of wages are being paid on the wrong SSN and lots of people have the same names....there are going to be beneficiaries who don't work charged with overpayments)
    * create a presumption that a second car owned by a two-parent household (in child SSI cases) or married couple is "property essential to self support"

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  3. SSA employee here. Most overpayments that I see are due to work.

    If they report the work but benefits continue: Many claimants who work and continue to receive benefits know they are no longer due the full SSA benefits, and they will eventually have to give it back to SSA. . But instead of setting the SSA money aside, they continue to spend it.

    As for old overpayments: The claimants are really only having to pay back a fraction of the value of what they were overpaid in benefits, as the repayment amount is not adjusted for inflation.

    The trust fund is already threatened to be depleted in a few years. We just can't afford to push that date forward by writing off legitimate overpayments.

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  4. @9:41

    Out of approximately $1.4 trillion in benefits paid out per year, SSA's reported overpayments for 2023 were $11.1 billion. That's an error rate of about 0.79%. I would be curious how much in administrative costs are expended on recovering overpayments, cause that seems significant given these circumstances.

    Also, not sure why anyone would assume a recipient who DOES report their work activity would assume the benefits they receive would not be the accurate amount. I'm not on benefits, but my presumption would be that SSA correctly reduced my benefits based on my work activity and if my benefit amount did not change, I would assume my work activity must not be enough to make a difference. Don't get me wrong, I recognize any work activity is basically going to impact the benefit amount in most circumstances, but the reality is SSA's education on that is pretty bad. SSA's focus is on educating beneficiaries on the need to report, not on understanding the system itself.

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  5. I love your suggestion of changing the initial demand from refunding the entire amount to another figure. I'm thinking 10% of their monthly benefit amount. This may actually help to reduce the number of waivers or SSA-634s that we have to process.

    I wonder how many times someone has refunded the entire amount? I mean, who has $30,000 sitting around that they'll just turn over?

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  6. I see folks coming from a place of policy and others from "what's right" . Valid positions. But IMHO what is the primal driver of SSA's "Inspector Javertness" is the bad publicity and the fact that the IG, the GOP and others all point to OPs and declaim about misuse and bad management and taking money from the needy widows and ignore most facts that don't support this view. SSA is powerless to prevent this, it's the recipients and benes who are most often the cause, and SSA is powerless to meaningfully rebut in the court of public opinion. OPs are the IGs most common "go to" and it's something there is no real defense against. So, you cannot just "let it go" or go soft, or point out that it's a small % because the consequences are more beating up in the public (and Congressional) square. The declaration SSA cannot steward the money and more brutal attacks essentially force SSA to be hard line because anything less is sold as bad stewardship.

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  7. 9:41- Keep an being a "protector of the social security trust fund." Is that how management gets subordinates to feel all right about the draconian actions taken against claimants? I know "protector of the social security trust fund" is the term management uses to make ALJ's feel a little less small. I've got news for all of you, screwing disabled people is not going to save the Social Security trust fund.

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    Replies
    1. If the overpayment is due to working over SGA, how is that screwing the poor disabled people?

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  8. The way we recover OPs from claimants, especially T2 is really unfortunate. However, if Congress had such an issue with it, change the law. SSA is obligated to recover them. Keep in mind, the top 3 causes of SSI OPs are the claimants fault (Financial account over the limit, wages, not reporting ISM changes) and two out of the top 3 T2 causes are also the claimants fault (wages, failure to make timely work reports). So yes it is sad when SSA takes so much at once and that needs to change. If the government can forgive over a trillion bucks in pandemic funds we can also work to forgive or lower some of the OP balance. Or, in the GOP going to take the student loan approach and say it isn’t fair to everyone who doesn’t get an op or who pays theirs back to forgive or adjust new ones.

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  9. I changed my address from California (where the state issues extra benefits to compensate for the cost of living there, comes from the state, but distributed by Social Security (or it was at the time, this was 2005-ish). Well, I changed my address via the 800 number. They did change my address, but only for SSDI, NOT SSI. So, I received an overpayment of almost $5000 because someone didn't change my SSI address to another state. I got a waiver, and they agreed it was not my fault. I didn't have to pay it back, but I doubt it did any harm to the trust fund. It's not ALWAYS the claimants fault. I will NEVER change my address on the 800 number again, and I rarely call it. I will go into the office and sit down and put it in writing, or if the office is too far, Certified mail, return receipt. I'm not playing that game again. Stressed me out so much, I was throwing up every morning until my waiver appointment. Too much blame is going on the claimant (unless they don't report work).

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  10. Didn't see it mentioned so maybe no longer an issue but when I worked disability claims many LDO's (vs IP's) were due to Workers Compensation payments involved (WC Offset). Every state has its own laws for WC and Public Disability payments so the computations and periodic reconsiderations can become complicated.

    For clarification, LDO's are Legally Defined Overpayments which get due process with waiver rights, while IP's are Incorrect Payments which can legally be recovered immediately with no due process rights. Both are considered improper payments. The source of IP's for example can be due to retroactive Medicare premium changes or AERO rate changes due to working.

    Most of the 'old overpayments' were likely initially LDO's but after the 60-day period for due process expired way back when with no resolution they became immediately recoverable by law.

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  11. Believe it or not, some people actually do have the money to pay back large overpayments and do so when they are notified they are overpaid. It's not rare but why either waive or collect a very small amount when the claimant may have the ability to repay all at once.

    Some people may not know to file an appeal or a waiver but that wasn't the majority in my experience. Some people try to file waivers on the same overpayment multiple times.

    Re very old overpayments, I assume you don't mean when a DIB claimant goes over SGA and is overpaid say in their 30s but does nothing to repay until they file for retirement in their 60s. Overpaid children from 30-40 years ago should be handled differently. I was able to waive those due to being against equity and good conscience.

    The rules may be draconian but I found most fellow T2 CRs tried to be rather generous in applying the regulations, waiving when they could and accepting low repayment amounts when a waiver couldn't be approved. I realize that differs from person to person but many of us can see how unfair some overpayment recovery is. Recovering overpayments for work isn't usually unfair.

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  12. Get rid of benefit continuation for dib cess appeals. How can people promise to repay if denied when they have no other income? How can they promise their minor child can repay when there’s no other money? It’s asinine.

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    1. Agree, that is just an OP waiting to happen.

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  13. 8:18, and yet about half of CDR denials that are appealed get reversed--see Appendix A at https://www.ssa.gov/legislation/FY%202016%20CDR%20Report.pdf

    Why should thousands of people have to go without their earned benefits just because the DDS got it wrong in their cases? What do you want them to do during the months it takes for a DHO and/or ALJ hearing?

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    Replies
    1. They have something called payment continuation so they don’t have to go without their benefits.

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  14. So, the language and thought process seems to be that of an accountant looking at how he can help next quarter's profits by deferring maintenance and suggesting more of that. But, what is the true cost to the people being removed, especially when there's no new work history that could, to SOME extent, support the conclusions?

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  15. SSA needs to change their rules so that a reasonable attorney fee could be paid on overpayment cases.

    Overpayment appeal cases are not eligible for fee agreements.. Even if a reasonable fee is authorized through the arduous fee petition process, the attorney has to collect it directly from the claimant. Since they usually can't afford to repay their overpayment the claimant are unlikely to be able to pay a fee.

    Same principle for appeals of workers' compensation offset and other post entitlement issues.

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  16. I don't have much sympathy for the person who worked without reporting or thought they could file a tax return to get earned income credit and thought they could just do a little repayment to SSA. I always discuss work with my claimants when we are approved. However, children whose payee was overpaid should not have to repay overpayments. I have also seen overpayments so old that the claimant really can't remember what was happening 15 years ago. Equity and good conscience are seldom applied. I've had a hard time even getting my waiver requests acknowledged, and it's something that I just can't devote a lot of time to.

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  17. I see so many comments on here sympathizing with the homeless or the poor people who have to wait while SSA does their job or how cruel SSA is and that’s why claimants need representation. How come besides the obvious lack of financial incentive nobody represents claimants on OPs? Is it a lack of knowledge on the process? Lack of time? Or simply because there is no money in it? We just represented a veteran with a total disability in his OP after he claimed 7 reps refused his case including local legal aid. If there is so much sympathy when it comes to wait times, not getting forms back from SSA, poor phone service, isn’t it a little disingenuous to claim SSA needs to get their act together when almost nobody will represent a client if there is no money in it?

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  18. I believe some of the comments here (you know who you are) stem largely from 3 things. First. it's being jaded from sering a handful of people actually game the system and then see someone failing to report and make the leap that that I'd what is happening ing a particular case. Second, the belief that disabled could still work, "if they just would try hard enough." Third, the complete inability to truly comprehend what some people are going through. This is particularly true if they haven't had a friend or family member with that disabilty. Often, their own friends, family, and even doctors really don't truly understand. That's before SSA puts 2, 3, 4 or more years of stress on top of the disabilities.

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  19. Time

    What makes one person disabled from back pain, depression and a bad shoulder but makes a wheelchair user or blind person go to work every single day?

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