From a press release:
Social Security Commissioner Martin O’Malley today announced he is taking four vital steps to immediately address overpayment issues customers and the agency have experienced. ...
- Starting next Monday, March 25, we will be ceasing the heavy-handed practice of intercepting 100 percent of an overpaid beneficiary’s monthly Social Security benefit by default if they fail to respond to our demand for repayment. Moving forward, we will now use a much more reasonable default withholding rate of 10 percent of monthly benefits — similar to the current rate in the Supplemental Security Income (SSI) program.
- We will be reframing our guidance and procedures so that the burden of proof shifts away from the claimant in determining whether there is any evidence that the claimant was at fault in causing the overpayment.
- For the vast majority of beneficiaries who request to work out a repayment plan, we recently changed our policy so that we will approve repayment plans of up to 60 months. To qualify, Social Security beneficiaries would only need to provide a verbal summary of their income, resources, and expenses, and recipients of the means-tested SSI program would not need to provide even this summary. This change extended this easier repayment option by an additional two years (from 36 to 60 months).
- And finally, we will be making it much easier for overpaid beneficiaries to request a waiver of repayment, in the event they believe themselves to have been without any fault and/or without the ability to repay. ...
You may recall that on January 4 I posted on What Can Social Security Do About Overpayments If It Really Wants To? There's much similarity between what I posted then and what the Commissioner announced. I doubt that my post had anything to do with what Social Security decided to do. Both they and I were looking at statutes and regulations to see what could be done about the overpayment problems that were on the news and on the minds of members of Congress. We both came to much the same conclusion that there was plenty that could be done, especially with the "against equity and good conscience" provision in the statute.
By the way, I've read comments saying that Social Security is required by statutes and regulations to collect 100% of the benefits of an overpaid individual until they collect the overpayment, making the Commissioner's announcement illegal. Look at what I posted on January 4. There's ample wiggle room to default to a 10% repayment schedule as the Commissioner announced. It's pretty straight forward.
15 comments:
O’Malley has served as. commissioner for almost 3 months and I have to credit him with doing a good job so far. He is making changes in his tool box to attempt to reduce certain onerous workloads. Taking someone’s full social security check results in hardship and results in phone calls and visits to the office. I give him credit for trying.
If nothing else, I hope that #2 ("shifting away" the burden of proof) will inspire those sending out OP notices to be a little less cryptic as to the cause of the overpayment. I have yet to see an OP notice that actually explains it well, and sometimes there is not even an attempt to explain--just, "you owe us $50k, please send it back in the enclosed envelope.'
Isn't #2 simple due process? SSA sends out the overpayment letter, computer generated and probably without a human being looking at the letter before mailing it! If I am involved in an appeal of an overpayment, that is the first question I ask--what months does the overpayment cover, how much each month, and what is the reason for the overpayment? This is especially important in the overpayent cases happening 10-20 years ago! If SSA cannot tell me this information, how can I present an argument to them? This is simply a matter of common sense and due process.
Overpayments are a very good target for new commissioner intervention. If implemented correctly, these changes should reduce SSA employee and claimant rep workloads. It is also a fundamental issue of fairness and due process. Expecting disabled persons to navigate this process on their own is completely unrealistic and cruel--especially given the quality of new FO employees and staff shortages. I have been working on an over-payment waiver request for 12 months and gotten almost nowhere. The FO simply refuses to respond.
And given cost of living increases, it common sense that a 80%+ withholding defeats the purpose of the program for most overpaid individuals. I have another client whose family is entirely dependent on his 2k SSD benefit. His 70k over-payment resulted from 2 months of income in 2019 that were less than $200 over SGA. (his other slightly over SGA earnings months were way back in 2014). But due to a CMS approved medical annuinty from a 2012 Workers Comp settlement, SSA expects him to spend all of this money down, which could jeopardize his future medical coverage if health costs increase. Is he partially at fault for not reporting monthly earnings? Sure, but he clearly has mental deficits that require me to handhold him at every step. We offered a $45k lump sum offer to settle the remaining balance of 59k. SSA rejected this offer with no counteroffer. They ignored the CMS medical set-aside issue, and seem to expect him to drain his entire medical annuity that he needs for self-pay medical treatment for chronic impairments.
Also, after winning back his SSD benefits in 2022, SSA sent him a NOA that stated "we will withold $125 each month for 584 months..." How did they manage to give him a repayment period 15x the 36 month repayment cap? -- no idea, but of course they reverse a few months later to 100% witholding, with no explanation. Meanwhile his rent was increased over 1k per month last year.
@Drew C There is an unfairness in some large disability SGA overpayments. If someone should be terminated for exceeding SGA after the TWP, EPE, etc, SSA frequently doesn't terminate the person for a few years while the overpayment builds up. The person may request expedited reinstatement and be found disabled back to when they were terminated. But SSA is not able to repay for 3 or 4 years so person has large overpayment when they should only really be overpaid for a few months. It is fair to waive these type of overpayments as they would not exist if SSA were able to immediately work these cases. I waived them if they didn't require review at a higher level.
Lisa Reins Washington Post.
The two-year probe into a little-known anti-fraud program discovered particularly stark due process violations starting in 2018, with investigators finding no evidence that the government ever sent written notice to some of those hit with massive penalties, which at times reached more than $100,000. Even when the inspector general’s office, which runs the program, did send notification letters in previous years, investigators found it often failed to properly serve people with notice of the proposed fine.
Apparently he sent out a one minute video to SSA employees which, while not saying much, basically acknowledged that Direct Express is his next target.
One question: if SSA defaults to 10 percent withholding, why would anybody negotiate a 60 month repayment plan?
If I receive $1600 monthly and owe $16,000 overpayment, it would be more advantageous to have $160 per month taken out over 8.33 years. No negotiation needed. Why even reach out to SSA to effectively increase my monthly withholding?
lol “THREE STRIKES!!”
Says nothing about direct express except how employees state they hate having to use them and that “Direct Express leadership will be hearing from him (O’Malley) soon. *finger wag*”
10:51 Agree that fewer people will ask for a payment plan. According to the Commissioner's testimony, over 90% of people whose Title II benefits are withheld at 100% request a payment plan. That's a big workload for SSA. So I wonder if they see a reduction in this workload as being a benefit of the change. I also wonder whether this will lead to more debts by former beneficiaries being sent for tax refund or administrative offset.
8:48 and 11:06, the government is rebidding the Direct Express contract now https://www.fiscal.treasury.gov/news/prepaid-debit-card.html so I wonder what role the Commissioner plans to have in that.
@10:51am,
I would encourage every SSA debtor to at least complete the SSA-634. They don't have to submit it to SSA if it isn't advantageous to them, but it is worth at least looking at the numbers to see if they can justify less than the default 10% withholding. Many can (especially those who are not working).
@11:06am,
Our office had long ago begun discouraging claimants from using Direct Express. We were of course required to mention it, but had begun telling claimants if they chose it they would be on there own when they (eventually) had problems. Same thing for other debit cards, cash apps, and Internet-only virtual banks.
Down the road, I can see issues with the Comissioner's plan shifting burden of proof. The agency has begun using what they call "bots" to run overpayment calculations from the month of entitlement to present. The data shown in the notices is completely convoluted, and all reconsideration appeals of the numbers are by default just rubber stamps of the initial decisions. As a result, the agency doesn't end up actually explaining why the overpayments it claimed occurred in the notices beyond stating "we paid you $XXXXX when we should have paid you $YYYYY" from entitlement to current month. And, the really bad thing is that these things are subjective -- if two different employees run the same record, they'll often come up with different overpayment totals simply because they have to exercise judgement about what events to count as properly paid versus events that represent overpaid money versus events that don't count either way. The process is called a Single Copy Folder Reference (SCFR for short). The training on doing these things is haphazard at best. They are very difficult to do because you have to jump back and forth between the Master Beneficiary Record (MBR) payment records (which shows how payments should have been paid) and the Payment History Update System (PHUS) that shows how actual payment events made deviated from the MBR. Doing those things is an absolute nightmare for anyone who doesn't have years of experience.
@10:51: Depending on circumstances, the 60 month rule may result in lower monthly withholding than the 10% default. For example, benefit is $2000/month, $2000 overpayment. Using new 10% default rate, withholding would be $200/month, repaid over 10 months. But if they call, withholding could be as little as $34/month, repaid over 60 months.
@12:23pm
Exactly correct about overpayment calculations. Also the automated system (T2R) only uses MBR data to compute paid vs payable. The PHUS record data is not accessible to T2R and would require a lot of additional coding to include interpreting the data for T2R formatting and processing. I suspect the modernization effort will address that since no further project updates to the old code are being approved. It's one of the more "Phustrating" things with automating payment computations. So when the notice is generated from T2R it uses the MBR data sent from T2R to post the payments made and payments due. I was BA for many years before in Systems and trained new BA hires on SCFR preparation. It was an uphill battle and part of why is because the complicated postings on PHUS record are not easily interpreted. Consider the many Medicare payment and refund issues with forward/retro payment dates, lump sum retroactive payments, deductions that are treated as paid to the beneficiary, etc. I'm sure you know the drill, and all those would need to be coded for in automated processing to get the computations correct.
@1:35pm,
@12:23 here. That is so true. While I actually worked in an FO (I spent the last half of my career as a T2 TE), I spent a lot of time and effort locating training materials for SCFRs on the intranet and puzzling the things out (a lot of which was done unpaid on my own time before and after shifts). Comparing the training materials I found from different PSCs and OCO revealed that they were often incomplete and contradictory to each other. One would tell you to count a certain event as paid or payable or as a non-countable event, while the others would tell you just the opposite. Some would be completely silent regarding certain types of events, to the point it was very difficult to tell what to do. Crazy.
Now, the last few years, they have just begun running those automated "bots" on the records and useing the numbers it generates in the notices. They format them so that it is impossible to compare payable to paid in the notices. Further, the numbers are treated as gospel by the reconsideration reviewers, even in cases where they were clearly incorrect. I remember one poor guy that they did four different SCFRs on over 9 years. Every one of them was discrepant, and they kept charging him overpayment after overpayment that couldn't be explained and were clearly incorrect. Recons didn't go anywhere. I bet we ended up waiving over $10k in imaginary overpayments on him by the time I retired a few years ago.
I eventually gave up trying to fight the issue because it became a hopeless cause with the staffing issues and management indifference.
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