Title: Social Security Overpayments: A Hardship That Seniors Don’t Need
Guest: Kathleen Romig, Director of Social Security and Disability Policy, Center on Budget and Policy Priorities
Release Date: 1/4/24



Announcer:  It’s You Earned This, the Social Security and Medicare podcast, brought to you by the National Committee to Preserve Social Security and Medicare, and now your host, Walter Gottlieb.

HOST:  So let’s say you’re a worker with disabilities, and you collect a modest Social Security disability insurance benefit every month. That is, if you are one of the lucky 40% that gets approved for SSDI. And one day in the mail, you get a notice from the Social Security Administration saying that you have been overpaid, and that you owe a chunk of change to the federal government. That is a hardship for beneficiaries on fixed incomes, or really anyone who doesn’t have a lot of disposable cash sitting around. So how bad is this problem, and what do we do about it? Well, we have just the person in the studio with us today to break it all down for us. She is one of the leading experts on Social Security. She’s the Director of Social Security and Disability Policy at the Center on Budget and Policy Priorities, right here in Washington, DC, Kathleen Romig. Hey.

GUEST:  Thanks so much for having me.

HOST:  And thank you for traveling such a great distance to be with us. How far was it?

GUEST:  Three blocks.

HOST:  Three blocks. Okay. Well, if it had been four, that would have been a deal killer.

GUEST:  Absolutely.

HOST:  You would have been like, no way. So we are here to talk about a serious topic that does affect millions of people. The Social Security Administration, or the SSA, sends out overpayment notices to beneficiaries, most of them on disability, I believe, rather than retirees.

GUEST:  That’s right. Although a lot of retirees also get these notices that tell them that they have to pay back money to the Social Security Administration.

HOST:  And what is the extent of the problem? We’ve been hearing a lot about it in the news. How bad is it, Kathleen?

GUEST:  That’s right. We’re just learning more about it. There’s been a lot of attention in the press and on Capitol Hill, and they’ve been asking a lot of questions about how many people are affected by this problem. And at recent congressional testimony, the Acting Commissioner of Social Security said about 1 million Social Security beneficiaries are affected, and then subsequent investigation by the press found there’s another million SSI beneficiaries who are affected by overpayments each year.

HOST:  So Kathleen, what happens when a beneficiary is overpaid? What kind of a bite does it take out of their income?

GUEST:  That’s a great question. So it really depends. It depends on what the nature of the overpayment was, and it especially depends on how much time has passed until SSA detects the overpayment and then notifies the beneficiary.

HOST:  Until they get around to telling you.

GUEST:  Exactly. And so in most cases, that is many months. And by that point, overpayments have typically accrued to the thousands of dollars, and often into the tens of thousands of dollars. So people find getting these notifications extraordinarily stressful. They didn’t realize they were getting overpaid in most cases, and then they owe the government money that in most cases they’ve already spent, thousands or even tens of thousands of dollars.

HOST:  Must be quite a shock. Now, just to be clear, and to put it in plain English, whose fault is it? Is it something the beneficiary did that they were overpaid, or is it simply the government’s fault?

GUEST:  That’s a great question, and it’s often pretty complicated. It might be that somebody just doesn’t understand the rules, and that’s why they haven’t fully complied with them. Or it might be that they told SSA about a change, say, in their earnings, and SSA did not act promptly on that information. There’s a lot of different reasons, but I think it’s fair to say in most cases, beneficiaries are doing their best to comply with the rules, and often it’s because of innocent mistakes that these overpayments pile up.

HOST:  Obviously, these overpayments, or the government’s attempt to claw back the overpayments, are causing hardships for beneficiaries of modest means, who may be living on fixed incomes. Have you heard any stories about beneficiaries who have been impacted by this?

GUEST:  Yeah, so there’s been a lot of great press reporting lately on this topic. There was a wonderful story on 60 Minutes that profiled a number of beneficiaries who have been affected by very large overpayments, and how it’s impacted them and their families. Like you said, the thing about Social Security is we know it is the main source of income for most retirees in this country. Having those checks withheld can cause real hardship, and that’s a really important point. When a beneficiary is overpaid in Social Security, the default is for the agency to hold back their entire check until the overpayment is repaid.

HOST:  Oh my goodness. The whole… So you not only owe all this money, but now you’re going to stop getting your monthly checks?

GUEST:  Exactly. Since the overpayments are typically thousands of dollars, that’s several months worth of checks that just don’t come. We know how much seniors rely on these benefits in order to pay their bills.

HOST:  I’m sure the last thing that any of these beneficiaries needs or wants to see is an overpayment notice, because it’s obviously a hardship. But what can beneficiaries do if they get one of these overpayment notices?

GUEST:  That’s a great question. People really do have some options here. First of all, if you think the overpayment is an error, then you need to contact the Social Security Administration and appeal it, or ask for a reconsideration, as they call it. If you’re going to have a hard time repaying an overpayment, you can request a waiver. You can say, look, I just can’t afford to do this. And so you can, if it’s not your fault, and if you can show that you need that check to get by, then SSA can grant you a waiver. So you need to apply for that. The third option is you can ask for a repayment plan. Forgoing your entire Social Security benefit is just too much for a lot of people. So, for example, if you are receiving extra help from Medicare, you automatically qualify for a $10 repayment plan, but all you have to do is ask. So, you need to contact the Social Security Administration and ask, or ask if you can pay the overpayment over a longer period of time, or a smaller dollar amount per month.

HOST:  That sounds like a lot of hoops for these beneficiaries to jump through, but how long does it take the appeal or waiver process to play itself out, and how likely are these beneficiaries to actually get what they want?

GUEST:  Oh, my gosh. That’s such a good question, because it is actually a very burdensome process, except for there are a couple of exceptions, like asking for a $10 repayment plan if you receive extra help from Medicare. That one is pretty straightforward, but otherwise, it requires a lot of paperwork, a lot of documentation, and it does take SSA a long time to process it. The good news, though, is while they’re processing it, SSA should not be withholding your benefits in the meantime. So, it gives you a reprieve while they’re making a decision about whether they’re going to grant your appeal or your waiver or give you a repayment plan.

HOST:  And I feel like we have to talk about the elephant in the room at this point, which is SSA funding. The Social Security Administration, as you know, has been chronically underfunded since the Tea Party took over the House in 2011. And certainly, some of this overpayment problem comes from underfunding and understaffing at SSA because Congress hasn’t appropriated the amount of money that the agency actually needs.

GUEST:  That’s such a great point, Walter, and I’m so glad you raised that, because like you said earlier, it’s not just that people are overpaid in the first place, but it’s that the overpayments just really build up over time. So, say a person says to the Social Security Administration, look, I’ve earned this amount of money per year, and they’re subject to the annual earnings test. Well, it can take SSA months to process that, and in the meantime, those overpayments build and build. And so, it’s a much bigger debt that the beneficiary owes to the agency. And then likewise, it takes a long time to process these different forms of relief. And so, it’s really difficult for beneficiaries to access these forms of relief that could really help them when they’re dealing with a really difficult overpayment.

HOST:  And you’re from the Center on Budget and Policy Priorities. What is the CBPP’s position on SSA funding, given that the House Republicans seem to want to cut it by several hundred million; President Biden would like to see it increased by $1.3 billion? Where do you guys stand on that?

GUEST:  At the Center on Budget, we support at least the level of funding that President Biden has proposed. We think it’s really important that SSA get adequate funding, not just this year, but sustained funding, so that the agency is able to rebuild after so many years of underfunding, leading to staffing lows and customer service problems at the agency.

HOST:  And what could SSA do in the meantime, before or until they get the proper amount of funding, to mitigate the overpayment problem?

GUEST:  Yeah, that’s a good question, because there are things they can do. They could make it easier for beneficiaries to access waivers, for example. Right now, the paperwork is 10 pages long and requires all kinds of documentation.

HOST:  10 pages?

GUEST:  10 pages long.

HOST:  That sounds like a lot for your average disabled worker who’s already dealing with so much?

GUEST:  Exactly. And so people find it really difficult to complete the process, let alone complete it successfully and get a waiver. And so they could make it easier for people to access relief. And I think that’s really important. And they could help people understand when they might qualify for one of these waivers or even an appeal.

HOST:  Now SSA is poised to get a confirmed commissioner, the first one appointed by a Democrat since Bill Clinton was in office. And this commissioner will be former Maryland Governor Martin O’Malley. Are we hopeful that Commissioner O’Malley will be able to address this overpayment problem?

GUEST:  Yes, I’m very hopeful, because this subject of overpayments came up at Governor O’Malley’s confirmation hearing in the Senate. And he said that this is going to be a high priority at SSA during his tenure there. And he’s very focused on customer service and also on just analyzing the data and making progress on problems just like this one.

HOST:  We’ve supported Governor O’Malley’s nomination from the get-go, and we do hope that everything you just said comes to pass. Before we go, tell us a little bit more about Center on Budget and Policy Priorities and how your organization advocates for Social Security and Medicare.

GUEST:  The Center on Budget is very focused on pocketbook issues affecting lower and middle-income people. And of course, few programs are as important to so many people as Social Security and Medicare. And so that’s central to what we do at the Center, trying to make sure that those programs stay fully funded and strong and help people just like they’ve been doing for decades.

HOST:  And if I were to ask you in the future to walk three blocks to come back here to talk about this again or something else that you might want to talk about, would you do it?

GUEST:  I would be delighted. This has been so much fun.

HOST: You would do it?

GUEST:  Yes. It’s been fun.

HOST:  Yeah, it has been. It’s great to see you.

GUEST:   Great to see you, too.

HOST:  Well, thank you, Kathleen, and good luck with everything at CBPP. Thank you. And if you’d like to join us in our fight to preserve Social Security and Medicare, become a member by visiting our website, ncpssm. org. That’s ncpssm.org. And find out more about what we do here at the National Committee. You can also subscribe to our blog and our morning newsletter for all the latest news on Social Security and Medicare. And don’t forget, you earned this!