Social Security: Will Program’s Overpayment Issue Get Worse Before It Gets Better? Protect Yourself Now
Written by
Vance Cariaga
Edited by
Daria Uhlig
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While the Social Security Administration continues to deal with blowback from its overpayment scandal, some worry that the problem will get even worse in the coming weeks and months. At issue is how many Social Security beneficiaries have been affected — and how many more might be affected as additional data comes out.
As previously reported by GOBankingRates, the SSA’s latest “Agency Financial Report” revealed that it made about $11.1 billion worth of new overpayments to Social Security beneficiaries during federal fiscal year 2022, the most recent year data are available. That figure represents an increase of more than 65% from the prior year, according to a report from KFF Health News. Over the past several years, the SSA has usually distributed between $6 billion and $7 billion in new overpayments each year.
The SSA report also revealed that most 2022 overpayments — an estimated $6.5 billion — occurred within the Old-Age, Survivors, and Disability Insurance (OASDI) programs. Those programs provide retirement and survivors’ benefits to qualified workers and their families, or support workers and their families when the workers become disabled.
Overpayments in previous years were typically sent to Supplemental Security Income (SSI) recipients, KFF Health News reported. SSI provides financial support to older, blind and disabled adults as well as children who have limited income and resources.
According to the SSA report, about $1.6 billion of the OASDI overpayments and $287 million of the SSI overpayments are within the agency’s control, meaning they weren’t the beneficiaries’ fault.
As of Oct. 1, 2023, the SSA had an uncollected balance of $23 billion in overpayments.
KFF Health News partnered with Cox Media Group on a series of investigative articles that exposed the magnitude of the overpayment problem and also revealed the experiences of Social Security recipients who got letters from the SSA demanding repayment. Those demands — which sometimes total tens of thousands of dollars — have drawn criticism from Social Security advocates, lawmakers and the general public.
Spokesperson Nicole Tiggemann told KFF Health News that the SSA is required by law to attempt to recover overpayments once they are detected. When beneficiaries can’t repay the money, the agency can lower monthly benefit checks, according to KFF Health News — even when the overpayments were the government’s fault.
There has been considerable confusion over how many people have been affected, and how much money is involved. The SSA has already “clawed back” about $4.7 billion in overpayments, while another $21.6 billion remains outstanding.
In October, SSA Acting Commissioner Kilolo Kijakazi told a congressional hearing that her agency has been sending about 1 million people a year notices that they were paid benefits they weren’t entitled to. But as Newsweek recently reported,KFF Health News and Cox Media said the total figure under all programs is more than 2 million.
During the October hearing, U.S. Rep. Mike Carey (R-Ohio) asked Kijakazi how many people had been affected by payback demands. Kijakazi responded with the figures for fiscal years 2022 and 2023, indicating that about 1 million people encountered overpayments each year, according to Newsweek. Kijakazi then clarified that that figure did not cover SSI.
Tiggemann told KFF Health News that the numbers given by Kijakazi — and those left out — are “unverified.”
“We cannot confirm the accuracy of the information, and we have informed the committee,” Tiggemann said.
Also unknown is the total number of beneficiaries who owe money to the SSA. The SSA previously told Newsweek that it does not disclose those figures.
Recipients who received overpayment letters can submit a request for waiver or reconsideration before 30 days have passed by following the instruction on SSA’s overpayment information page. If that happens, the SSA “will not begin collection of the overpayment” until a decision is made on the request.
Those who request to repay in smaller monthly payments are advised to fill out the Request for Change in Overpayment Recovery Rate (Form SSA-634) and fax or mail the form to your local Social Security office.
If you can’t afford to pay the money back, and you believe the error wasn’t your fault or is unfair, you can ask the SSA to waive repayment. If you don’t agree that you’ve been overpaid, or you believe the overpayment amount is incorrect, you can request a reconsideration.
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