When Social Security becomes a debt collector

Kree Flowers had recently gotten married and decided to log into her account on the Social Security Administration website in February to check the status of her retirement benefits. She was surprised to see a big red number at the top of the page. According to the agency, she had been overpaid $17,121.21.

“At that moment, my mind immediately goes to fraud,” he said. “Someone collected benefits in my name, that’s what I was thinking.”

The next morning, when Ms. Flowers called the agency, a representative told her that she had been overpaid for benefits between 1995 and 2003 and that she was expected to pay the balance. This didn’t make sense to her: she was 10 years old when the disputed payments began. “My first instinct was to laugh and correct him,” she said.

But Ms. Flowers said the representative seemed unfazed by her age and told her to fill out a form to dispute the charges. A few days later, her sister realized that she had been overpaid the same amount.

Each year for the past four years, the SSA has sent between $6 billion and $10 billion in overpayments for various benefit programs, according to federal disclosures. The agency has a balance of uncollected overpayments of $23 billion as of October. This is a small fraction of the more than $1.4 trillion the agency pays to about 71 million people each year.

A recent investigation report of KFF Health News and Cox Media found that while overpayments are sometimes the result of errors made by the agency or beneficiaries, “much of the blame lies with the system.” Benefit rules are difficult to follow, the SSA is understaffed, and there are often long lags between changes in beneficiaries’ income and adjustments to their benefits. All of this can lead to overpayments that can go undetected for years.

Flowers, 38, called the agency dozens of times seeking answers. “No one could really tell us what happened,” he said. The previous notices about the overpayment were sent to an old address, which is why Ms. Flowers had to discover it on her own. She suspects the problem stems from disability payments the agency made to her estranged father. (Social Security representatives told her they were not allowed to reveal her father’s private information.)

In the 1990s, when her parents were separated and living in different states but still married, Ms. Flowers’ father applied for and received payments through the Social Security Disability Insurance program, which can cover children. of the beneficiaries. Her mother recalled receiving monthly payments of $100 or $120 for about a year, but nowhere near $34,000 for eight years.

People receiving Social Security disability benefits cannot earn more than $1,470 per month in additional income after a nine-month trial work period; Beyond that threshold, their benefits are usually cut off. But there is often a lag between when people become ineligible for benefits and when their payments stop, either because they don’t realize they have to report a change in circumstances or because the administration takes time to process your case.

In an interview, Ms. Flowers’ father said he believed she had been entitled to benefits during the overpayment period and that it was unclear to him what had happened. He said it was “outrageous” that the SSA was trying to recover money from people who were children when the payments were made.

The overpayment was not the Flowers brothers’ fault, and it may not have been their father’s fault either. However, the sisters were in trouble for it.

“I would say that work-related overpayments are the rule, not the exception,” said Denise Hoffman, a senior researcher at Mathematica, a research and data analytics consultancy. Her research has found that while overpayments are rare in disability insurance in general, people whose income exceeded the threshold received overpayments about 80 percent of the time. Ms. Hoffman found that the average overpayment lasted nine months and amounted to $9,282.

Depending on agency rules, dependents or spouses listed on the recipient’s records may be held responsible for overpayments. Individuals may also be held liable if they arrange payments on behalf of another person, such as a minor child or an elderly relative with dementia.

It is unclear how often the agency attempts to recover overpayments from account holders’ family members. An SSA spokesperson said its system was not designed to easily determine this information and that efforts were being made to clarify the issue. According to a 2016 report According to the Government Accountability Office, about 30 percent of people whose overpayments had been canceled in the previous tax year were under 18 when their parents received benefits.

In 2015, when Sarah Benavidez’s daughter was 2 months old, Ms. Benavidez and the child’s father visited the local SSA office to inquire about receiving benefits for the child. They were told her daughter was entitled to payments because her father, a former police officer, had been injured on the job and qualified for disability insurance. Ultimately, Ms. Benavidez received about $300 per month.

“It helped me a lot, especially when I was in diapers,” he recalled.

The girl’s father left soon after, Benavidez said, but continued receiving checks for his daughter. In 2020, she received a letter from the SSA stating that the father had been receiving workers’ compensation payments and at the same time receiving disability checks, resulting in an overpayment.

Parents had reported workers’ compensation from the beginning, but overpayments can still occur if “nobody at Social Security budgeted properly,” said Anne Callagy, director of the Legal Aid Society’s government benefits practice in New York. York. “And years later, they get an overpayment notice.”

As a result, Ms. Benavidez’s 5-year-old daughter owed the Social Security Administration $12,768. “I thought, is this a scam?” Ms. Benavidez said.

The letter said she had 30 days to return the money or else her daughter’s Social Security payments would stop. Ms. Benavidez asked that the charge be reconsidered, but she was unsuccessful. It was not enough to prove that her overpayment was not his fault; To win the appeal, she would also have to prove that she couldn’t pay back the money, said Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities.

“Almost no one completes the process successfully,” he said of overpayment waiver requests.

Ms. Benavidez’s daughter was still eligible to receive $120 per month, which the SSA is withholding and crediting to the overpayment balance. If nothing changes, her daughter’s overpayments will be considered repaid in 2030. According to the 2016 GAO report, more than 75 percent of recovered disability insurance overpayments are collected through withheld payments.

“I just feel like they will take the money until they feel like they have paid the money,” Ms. Benavidez said. “I don’t even know if I want it back. “I’m going to be paranoid.”

Sometimes beneficiaries receive overpayment letters long after they have stopped receiving benefits, and the SSA tries to recover the money in other ways.

Queens resident Temi Aina learned she was being overpaid when she didn’t receive her expected tax refund. A few weeks later, she received a letter from the SSA saying that she had received overpayments into her father’s account totaling $11,681 over four years beginning in 2005, when she was 13 years old. Her brother also owed money.

She fought the case and presented evidence showing that her father had not used the money for his benefit. The case dragged on for two years. She lost two tax refunds totaling about $1,000 and, at one point, she received a letter stating that the SSA would begin garnishing her wages. But she had already changed jobs when the agency contacted her former employer, so the change did not take effect immediately.

Ms. Benavidez, Ms. Flowers and Ms. Aina attempted to fight the overpayment of their debt through the standard appeals process.

After Ms. Flowers filed her appeal paperwork, she saw a TikTok video posted by someone in a similar situation. The person had contacted the local representative in Congress about the issue. Ms. Flowers, who lives in Norcross, Georgia, contacted Rep. Lucy McBath, whose office contacted the SSA. Ms. Flowers appeared at a hearing this summer and was told that the financial information she had presented showed she could not pay back the money. . Her overpayment of $17,121 was deducted from her account. Her sister’s case continues.

mrs flowers did a viral TikTok video about his experience and said he had heard from hundreds of people with similar stories.

Benavidez, who lives in Louisiana, watched Flowers’ video and tried to contact his House representative, Clay Higgins. He is hoping to get help resolving the overpayment. The SSA continues to withhold her daughter’s $120 payments.

An agency representative said it worked with people to navigate the overpayment process. People have the right to appeal any overpayment or follow a payment plan with options as low as $10 per month.

Ms. Aina eventually contacted a lawyer from the Legal Aid Society who helped her. In July 2021, she waived the remaining balance of the overpayment.

Ms. Aina said she cried with joy when she learned that the remaining debt had been settled. “I’m so glad it worked out in my favor, because I feel like no one should have to go through that if it’s not their fault,” she said. Her brother’s overpayment remains unresolved.