Social Security’s Latest Financial Report: The SSA’s Overpayment Problem Tops $23 Billion

A new financial report from the Social Security Administration (SSA) shows that the scope of the agency’s overpayment problem has continued to grow. As of October 1, the SSA had an uncollected balance of $23 billion in overpayments—money the agency has determined it mistakenly paid to beneficiaries across the country but has not been able to claw back, despite repeated attempts to do so.

In September, a series of investigative reports by KFF Health News and Cox Media Group television stations first revealed the magnitude of the problem and shared the experiences of dozens of people who’ve received letters from the federal agency demanding repayment, sometimes in the tens of thousands of dollars. At the beginning of fiscal year 2023, the agency’s uncollected balance of overpayments was $21.6 billion.

Its latest “Agency Financial Report” also revealed that the SSA made approximately $11.1 billion in new overpayments to beneficiaries during federal fiscal year 2022, the most recent year of data available. That figure represents more than a 65 percent increase in overpayments from the previous year. For the past several years, the agency has routinely distributed between $6 billion and $7 billion in new overpayments each year.

The report shows the majority of the 2022 overpayments occurred within the Old-Age, Survivors, and Disability Insurance (OASDI) programs, an estimated $6.5 billion. Those programs provide retirement and survivors’ benefits to qualified workers and their families, or support workers who become disabled and their families.

In prior years, most of the overpayments occurred within the Supplemental Security Income program, which provides financial support to aged, blind, and disabled adults and children who have limited income and resources. In 2022, overpayments within the SSI program topped $4.6 billion, which is similar to previous years.

The SSA has not responded to a request for an explanation of the significant increase in overpayments within OASDI.

The report said $1.6 billion of the OASDI overpayments and $287 million of the SSI overpayments were within the agency’s control, meaning they weren’t the beneficiaries’ fault.

In recent weeks, beneficiaries have told KFF Health News–Cox Media Group TV reporters that they had no idea they were receiving too much money in their monthly checks until they received a letter from Social Security demanding repayment, often within 30 days.

“I almost threw up when I opened that letter,” said Lori, a Florida woman who didn’t want to publicly disclose her last name. She received a notice saying she owed $121,000, a debt she said was later erased following a multiyear fight with the SSA.

The notices often arrive years after the alleged overpayments occur, and by that time, the money owed can balloon to dollar amounts impossible for beneficiaries to repay. “It’s just scary to my husband and me. Where are we supposed to come up with this money?” Ohio resident Tammy Eichler told WHIO-TV.

When beneficiaries can’t repay the money, the agency may lower their monthly benefit checks, even when the overpayments were the government’s fault. “Taking that benefit away from me will make me homeless,” Florida resident Jesse Greatorex told WFTV-TV.

SSA spokesperson Nicole Tiggemann said the SSA is required by law to attempt to recover overpayments once they are detected.

“We will be doing a top-to-bottom review to see how we can further reduce the error rate,” said SSA acting commissioner Kilolo Kijakazi, who directed an agency-wide review of overpayment policies and procedures following the reporting by KFF Health News and Cox Media Group TV stations in September.

Members of the Social Security Subcommittee of the House Ways and Means Committee held a hearing in October citing the joint reporting and demanding answers from Kijakazi regarding the number of people affected by overpayments and what the agency plans to do to address the problem.

A group of senators also wrote to Kijakazi asking about overpayments caused by government-issued stimulus checks during the Covid-19 pandemic. KFF Health News and Cox Media Group TV stations profiled beneficiaries who believe the agency erroneously counted those payments against their asset limit, in violation of SSA policy.

Sen. Sherrod Brown (D-Ohio) and other members of Congress are considering several legislative changes that could make it easier for people to avoid overpayments: for example, raising the cap on how much money they’re allowed to save.

“I want [the legislation] to fix the people that it’s already happened to. I want it to stop it from happening in the future,” Brown told WHIO-TV.

Ohio resident Addie Arnold, who cares for her disabled niece and received a letter saying they owed the government more than $60,000, wrote to the SSA saying, “I truly do hope and pray that she is allowed to stay on SSI … because she has to continue to live, and without it she will be in a very bad place.

“Social Security should be to help people, not to destroy them,” Arnold said.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

From: BenefitsPRO