Could This Sort Of Thing Happen Here? It Already Is!

     From Government Executive:

...  In Australia, the government set off on a radical plan to reduce overpayment of government benefits in 2016. ...

The Australian government had been manually searching for overpayments in programs for retirees, people with disabilities and students, among others. The 2016 program used algorithms to search out overpayments and send the bills. Christened “Robodebt,” the algorithm checked each individual’s payment against the average income of people in similar circumstances. If the algorithm determined that the person was likely overpaid by the government, it generated a bill.

Robodebt allowed the government to review 20,000 cases per week, instead of the 20,000 cases per year in the manual system it replaced. Government officials no longer had to contact employers to obtain data on employment history and payroll amounts, and the government no longer had to prove an individual had been overpaid. Instead, individuals had to prove that they had received the correct amount. If individuals didn’t pay quickly, debt collectors went to work.

The government launched Robodebt fast and claimed credit for catching recipients who had benefited from mistakes in the system. But many people receiving the notices were distraught. They often had to come up with big payments in just a few weeks. Some people had to sell their cars or take out loans, which was a huge burden on some of the country’s neediest residents. Others drained their meager savings. At least three people committed suicide, a Royal Commission found in a devastating 1,000-page report.

An investigation revealed that some repayment notices were incorrect. Some simply were false. Moreover, a 2019 court challenge found that Robodebt had violated important provisions of Australian law.

In July 2023, the Royal Commission pointed to “Robodebt’s unfairness, probable illegality, and cruelty.” When problems surfaced along the way, the commission concluded, “the path taken was to double down, to go on the attack in the media against those who complained and to maintain the falsehood that in fact the system had not changed at all” from the previous system. ...

    Could this happen here? To a great extent, it already is happening. Republicans, abetted by Social Security's Office of Inspector General, have long implied that all overpayments are the result of fraud and that the agency must be merciless in collecting these debts. Recently they have been blaming the agency for not creating overpayments automatically based upon data from payroll companies. Already, there is no statute of limitations, those informed of alleged overpayments are given no information about how the alleged overpayments occurred, and all benefit payments are seized until the desperate claimant asks for a repayment schedule. It's harsh by design despite the fact that the agency often has no basis in fact for asserting an overpayment and many overpayments are due to mistakes made by Social Security. The current attitude is that if the computer says there's an overpayment, there must be an overpayment. It could all get worse with artificial intelligence.

Seizure Of Social Security Benefits To Satisfy Student Loan Debt Suspended Until November

      From CNBC:

The U.S. Department of Education has suspended the seizure of tax refunds, Social Security and other government payments to satisfy defaulted student loans until November, the agency said.

About 9 million people have a federal student loan in default, which means they’ve fallen at least 270 days behind on payments.

     Why is it that the government has the power to seize Social Security benefits to collect on a student loan debt? We don't allow collection of other debts in this way. For that matter, why is it nearly impossible to discharge a student loan debt in bankruptcy? 

     I ask clients if they have outstanding student loan debts. I'd say that 90% have no student loan debt and are surprised at the question. The other 10% are surprised to find out that being disabled may have an effect on their student loans. It's like asking about disabled children. Most of my clients don't have disabled children so the question doesn't matter to them but for that minority of my clients who have disabled children, it matters a lot.

Seizing Social Security Checks To Pay A Hospital Bill

     From a San Antonio television station:

Texas passed laws this year to protect patients from surprise medical bills. But some hospitals can still hit you with huge charges, take money from your paycheck, even confiscate your tax refund. News 4 Trouble Shooter Jaie Avila shows us how it's devastating some local families.

Government-owned hospitals like Brooke Army Medical Center can save your life in an emergency. But they are not part of any insurance network and will not negotiate charges with them. If your insurance doesn't pay the bill in-full the government goes after you.

Back in 2015 Frank Hooker suffered a fall that fractured his skull and caused bleeding in his brain. He was flown to Brooke Army Medical Center for several days of treatment.
“To this day I don't know why the bill wasn't paid because he had really good insurance," said Frank’s daughter Jana Gentry. ...

Frank worked for the City of Devine for decades, but now suffers from Alzheimer's and his wife recently passed away. His daughter Jana says she had no idea there was an unpaid hospital bill for $60,000 until January of this year.

“I got a letter from the Department of the Treasury saying if it wasn't paid in-full they were going to take it out of his social security," Jana recalls.

And that's what they did....

So, we contacted Humana, and BAMC, on Frank's behalf.

Brooke Army Medical Center says after hearing from us they immediately called Jana.

“We provided a copy of the bill to her for her records. As a courtesy to Ms. Gentry, we rebilled her father's insurance carrier," BAMC officials said in an email.

Humana also told us it would look into Frank's bill, adding: "We work diligently and with our members to research and resolve their personal situations."

A few days went by and then, Humana called Frank's daughter Jana with fantastic news: it is covering the hospital bill. ...

We've heard from numerous other families who are struggling to pay off large bills because their insurance companies will not cover charges from BAMC. We've asked to interview someone with Brooke Army Medical Center and the Treasury Department about their collection methods, We hope to bring that to you soon.

      No, I don't know why why Brooke Army Medical Center would have been treating a civilian. (I've actually had a client who had a heart attack while visiting a relative who was an inpatient at a VA hospital. The visitor was admitted to the VA hospital even though he wasn't a vet. That's not the situation here, however. I remember that there was an insurance problem in that case but it was only because the situation came up so seldom that the VA hospital had trouble producing a bill.) I do know that if this had been a hospital owned by anyone other than the federal government that they could not have taken his Social Security check.

Lawsuit On Student Loan Debt Collection

     From the New York Daily News:

The feds are ripping off disabled Social Security recipients by skimming their benefits in order to pay back defaulted student loans — but not saying enough on what people can do to avoid it, a lawsuit alleges.

“Instead of focusing on getting disabled borrowers the relief they are entitled to under federal law,” the suit says, the Department of Education uses debt collection methods like the Social Security disability benefit offset “to collect money from disabled borrowers.” ...

The plaintiffs say their benefits are getting trimmed by loan debt that could be forgiven “if the defendants simply told them about the existence of the disability-based discharge.” ...

The suit wants Social Security recipients to get a better notice about the availability of the disability discharge and better government tracking so disabled recipients don’t get a lopped-off payment in the first place. ...

OIG Wants Social Security To Keep Trying To Collect Those 50 Year Old Debts

     Social Security's Office of Inspector General (OIG) has done a study on the agency's practice of collecting ancient debts -- many over thirty years old and some as old as fifty years -- via offsets of tax refunds. OIG doesn't see any problem with this and basically urges the agency to keep doing it, regardless of the age of the debt. 

     The report says that "for all debts, SSA’s beneficiary records contained detailed information to establish how and when the overpayment occurred." Any field office employees want to comment on this statement?

     The lack of a statute of limitations on collection of overpayments by administrative offset is a disgrace in my opinion. This needs to be addressed by Congress.
     Update: The Washington Post is reporting on this issue.

"Concerned About The Public Perception"

     From CBS News:

People who owe old debts to the Social Security Administration are getting a reprieve this tax season: The federal government won't be seizing their tax refunds.Acting Social Security Commissioner Carolyn Colvin suspended a debt collection program last spring in which thousands of people had tax refunds seized to recoup overpayments that happened more than a decade ago. ...

Following a review, the agency said Monday it will continue suspending the program this tax season while officials explore possible changes.

"The commissioner is concerned about the public perception about the way we're running this program," said Pete Spencer, Social Security's deputy commissioner for budget, finance, quality and management. ...

Disability Discharges Of Federal Student Loan Debt Made Less Difficult

     Federal student loans may be collected out of Social Security benefits. However, federal student loan debtors can qualify for a "total and permanent disability" discharge of their debts. An increasing number of Social Security disability recipients have student loan debts collected out of their benefits. A new Department of Education website now includes information on how to get a "total and permanent disability" discharge of federal student loan debt and there's an online application. Until recently, the Department of Education didn't even have a paper form specifically for applications for "total and permanent disability" discharge!

     I still say that the Department of Education and the Social Security Administration should do a data match and the Department of Education should summarily discharge student loan debts for Social Security disability recipients whom Social Security puts in the category "Medical Improvement Not Expected" which the Department of Education accepts as being "total and permanent disability." When this can be done automatically, why put everyone, including the agency, through the trouble of an application process?

I've Been Talking About This For Years. It's Absurd. It's Abusive. Why Don't People Care?

     From the Washington Post:

A few weeks ago, with no notice, the U.S. government intercepted Mary Grice’s tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government — a very old debt. 

When Grice was 4, back in 1960, her father died, leaving her mother with five children to raise. Until the kids turned 18, Sadie Grice got survivor benefits from Social Security to help feed and clothe them 

Now, Social Security claims it overpaid someone in the Grice family — it’s not sure who — in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter. Why the feds chose to take Mary’s money, rather than her surviving siblings’, is a mystery. ... 

The aggressive effort to collect old debts started three years ago — the result of a single sentence tucked into the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam.

Is This A Good Idea?

     From the Montgomery Advertiser:

Michelle Clampit expected financial relief to arrive soon in the form of an income tax refund check. She was counting on it, in fact. ...

But no deposit was made, and when she checked the IRS website to find out what happened, she was referred to the Social Security Administration.

The Wetumpka resident said she had no idea she possibly could have owed money to the SSA. After all, she had never received a single Social Security check in her life. ...

Eventually, however, the actual reason for the debt became clear: Social Security payments made to her now-deceased mother 29 years ago. ...

The tax refund was diverted by way of the Treasury Offset Program, which until recently was not authorized to collect on debts that were more than 10 years old, SSA spokesman BJ Jarrett said.

A law passed in 2008 eliminated the 10-year statute of limitations, and in June 2012, the SSA began to inform people about its intention to collect those older debts, Jarrett said. ...

The agency has sent about 185,000 notices to people with debts that are more than 10 years old, Jarrett said.