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June 10, 2024 at 02:42 PM
What You Need to Know
- The Social Security Overpayment Fairness Act would extend the period before collection begins to 120 days from 30 days.
- News reports in late 2023 that the SSA had socked seniors with big bills for what were often the agency's mistakes led to an outcry.
- The bill would also give beneficiaries a clearer path to challenge wrongful overpayment notices, its sponsors say.
New legislation would give Social Security beneficiaries who receive notice that they have been overpaid 120 days to respond before clawbacks begin, up from the current 30 days.
The bill, the Social Security Overpayment Fairness Act, was introduced on May 7 by Reps. Yadira Caraveo, D-Colo., and Colin Allred, D-Texas, in an “effort to protect American seniors from facing financial hardship due to incidental Social Security benefit overpayments.”
About a million people a year are billed by the agency for benefit overpayments, often thousands of dollars, 60 Minutes reported in late 2023.
In response to an outcry over the clawbacks, Social Security Commissioner Martin O’Malley told Congress March 20 that SSA was ceasing the practice of withholding 100% of benefits, effective March 25.
Those who do not respond to repayment notices now have their benefits withheld at a rate of 10%, or $10, whichever is greater.
The SSA says 10% is a ”much more reasonable default withholding rate,” similar to the current rate in the Supplemental Security Income (SSI) program.
‘Devastating Overpayment Issues’
“In Colorado, there are over 939,000 Social Security recipients who receive $1.6 billion in monthly benefits,” Caraveo said in the statement introducing her bill. “However, over 2 million Americans are affected by Social Security overpayments each year, which occurs when a beneficiary receives more money than they should have received in a given month.”
While the Social Security Administration is required by law “to attempt to recover overpayments, Colorado’s seniors are being negatively impacted by overpayment notices that aren’t always their fault,” Caraveo said.
Caraveo explained that her office “has seen devastating overpayment issues, such as constituents being told they are over the gainful employment threshold when they clearly aren’t, yet they’re still compelled to repay a large sum of money.”
The bill, Caraveo continued, “will address this issue head-on by extending collection periods and establishing a clear process for beneficiaries to challenge wrongful overpayment notices.”
The legislation would also improve “the process of reviewing changes in information reported by beneficiaries,” including expanding efforts to limit discrepancies in accuracy from beneficiaries self-reporting information, prevent and track overpayments to beneficiaries, the lawmakers said in a statement.
